Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Methven FY profit drops 8.6% on strong currency, inventory

Methven annual profit drops 8.6% on strong currency, inventory woes

By Suze Metherell

May. 22 (BusinessDesk) - Methven reported an 8.6 percent fall in full-year profit as the tap maker and distributor struggles with retailers holding smaller inventories, and as the strength of the New Zealand dollar erodes exported earnings.

Net profit fell to $4.7 million in the year ended March 31 from $5.2 million a year earlier, the Auckland-based company said in a statement. Revenue fell 1.7 percent to $96.7 million.

Sales to Australian customers grew 5.8 percent to A$35 million, though that didn't translate to higher profits with Methven's margins squeezed by competitive pricing, the strength of the kiwi currency and increases in supply chain costs. Australian stock reduction programmes from retailers in the market continued longer-than-expected, causing it to cut full-year earnings guidance twice this year. High Australian stock levels led to a 48 percent increase in Methven's debt to $17.2 million in 2013.

The company has since reduced its debt 16 percent to $14.5 million but that's forecast to rise with the purchase of its Chinese production partner, Invention Sanitary mid this year. Methven will pay four times the manufacturer's profit for the 12 months ended June 30, 2014, up to a maximum of $8 million. The Chinese acquisition is expected to add an annual $2 million to net profit after tax from September.

New Zealand sales rose to $35.1 million from $34.9 million the previous year, slightly below its own expectations, the company said. UK earnings before interest, tax, depreciation and amortisation was $1.1 million, up from a break-even position as revenue showed "slight growth".

Methven's board declared a final dividend of 4.5 cents per share payable June 30.

Shares in the NZX listed tap maker fell 0.8 percent to $1.18 and have declined 3.3 percent in the past year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Retail: Pumpkin Patch Brand, IP Sold To Catch Group

The receivers of failed children's clothing retailer Pumpkin Patch have confirmed that the company's brand and intellectual property have been sold to Australian online retailer Catch Group. More>>

ALSO:

Oil: 2017 Block Offer Petroleum Tender Launched

New Zealand is well-placed to take advantage of the economic benefits of oil and gas exploration, Energy and Resources Minister Judith Collins announced today at the launch of the 2017 Block Offer petroleum tender. More>>

ALSO:

OECD And Zero Carbon Reports: Environmental Pressures Rising In New Zealand

New Zealanders enjoy a high environmental quality of life and access to pristine wilderness. However, New Zealand’s growth model, based largely on exploiting natural resources, is starting to show its environmental limits with increasing greenhouse gas emissions and water pollution ... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news