Methven shares lift 5% on China deal for shower, tapware
By Rebecca Howard
Aug. 6 (BusinessDesk) - Tapware designer Methven's shares lifted 5 percent after news it has inked a deal with China's Jiangsu RuiZhiShang Building Materials Company to use its shower technology in a series of key projects over the next decade.
By adding Methven showerware and tapware into RuiZhiShang's project deals, Methven is targeting annual sales of between $8.5 and $10.5 milion by 2020/21, the Auckland-based company said in a statement to the stock exchange.
The shares advanced 5 cents to $1.05 and have shed 9 percent so far this year.
Methven, whose history stretches back to an iron and brass foundry started by George Methven in 1886, is pursuing international growth in countries like China as it seeks to benefit from its investment in proprietary shower and tap technology.
The Kiwi firm increased Chinese sales to $507,000 in the six months to Dec. 31, 2017, from $81,000 a year earlier, delivering earnings of $3,000 compared to a loss of $89,000 a year earlier and said it was in final negotiations with a number of new distributors to expand its presence in Asia's biggest economy.
Today, Methven chief executive David Banfield said the company has delivered over 1 million Chinese yuan, or $217,000, in sales per month for the last four months and this current deal together with a national retail distributed it signed in March "further secures consumers’ confidence in our brand, and enables us to deliver long-term profitable growth in China.”
"The opportunity to bring our award-winning showerware and tapware into hundreds of premium hotels and high-end apartments allows us to tell our compelling brand and technology story to discerning Chinese consumers," Banfield said.
RuiZhiShang was set up in 2001 in China and specialises in supplying bathroom fittings. According to Methven, it signed its first distribution agreement with the company in November 2017, and they quickly brought Methven products into two large projects right after that.
"This success, utilising RuiZhiShang project expertise and passionate commitment, enabled elevation of their regular distribution to a strategic partnership across China," said Banfield.