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Methven Charts Journey for Sustainable Growth

30 July 2014

Methven Charts Journey for Sustainable Growth

New Zealand’s leading shower and tapware designer Methven held its Annual Shareholder Meeting this morning in Auckland. Chairman Phil Lough said that while results for year-end 31 March 2014 were disappointing, Methven’s outlook remains positive.

“While we achieved modest revenue growth overall, when translated to NZ dollars revenue was down 1.7%. NPAT was down 8.6% from $5.2 million to $4.7 million and, excluding significant items, down 1.8% from $5.5 million to $5.4 million,” said Mr Lough.

Mr Lough said the underlying health of the business remains sound. “The decrease in debt of 16.1% from $17.2 million to $14.5 million and our cash flow strength highlights our sound control environment. The business remains profitable and financially sound and we are confident that we will continue to pay sustainable dividends.”

The meeting was an opportunity for new Group CEO David Banfield to address Methven’s shareholders for the first time since he took the helm in January 2014. Commenting on 2014 performance Mr Banfield said “Our current performance is not in line with our capability or expectations and actions are underway to address this.” Mr Banfield re-iterated that the business was financially sound with many existing strengths and is ready to embark on the next stage of its journey. “We are in the process of implementing a three point plan - 1; Thinking, acting like the market leader 2; putting consumer understanding and insight at the heart of the business and 3; delivering a clear three year strategic plan to ensure organisational focus and alignment.“ he said.

At the meeting Mr Banfield welcomed Methven Heshan to the Group, telling shareholders the move will further enhance Methven’s cost competitiveness, give Methven a more flexible supply chain and create an additional quality driven manufacturing base in China. Methven completed the acquisition of its Chinese manufacturer on 30 June and welcomed the team into the Methven Group. Confidence remains high that Heshan will contribute $2million US dollars per annum in incremental net profit after tax from September 2014.

Methven has committed to the final phase of investment in its next break-through showering system, which will be launched early in 2015. The system will be manufactured in New Zealand and consumer research shows that purchase intent with Australian consumers ranks New Zealand designed and made product second in the world after Australia. “We are aware of the importance of translating technology and product advantages into profitable top line sales growth.” said Mr Banfield. “This is our absolute focus.”

Looking forward, Mr Banfield told shareholders that aside from Invention’s contribution, the Group expects overall revenue and earnings growth to be modest in FY15. Mr Banfield said “We will reinvest incremental margin to build the brand further in our core markets, improve the retail experience, especially the online experience for our consumers, deliver new products and set the foundation for long term sustainable earnings growth.”

About Methven:
A pioneer in bathroom and kitchen plumbing for over 125 years, Methven is New Zealand’s oldest and largest designer of shower and tapware to builders, plumbers and home renovators. Today, Methven is a world-class international business with our proprietary technology, shower systems and tapware ranges earning a reputation for innovation, high quality, and water and energy efficiency. Methven has won prestigious design awards worldwide for the innovative functionality and water and energy saving aspects of our products including the prestigious Red Dot and Good Design Awards.

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