The earnings recovery of tapware maker Methven has been
confirmed with a 21% increase in the first-half profit on
better trading in New Zealand and the United Kingdom.
Forsyth Barr broker Andrew Rooney said the reported profit
for the six months ending September, excluding $300,000 of
non-deductible acquisitions, was $3.5 million, 35% ahead of
the previous corresponding period and in line with his
Forsyth Barr was retaining its full-year reported profit
forecast of $6.7 million.
Methven shares jumped about 5% to $1.48 on the news.
The manufacturer cut net debt by 25% to $14.4 million from a
year earlier and down 16% from March.
''On a regional basis, Methven is targeting areas where it is
clearly under-represented by product category.''
In Australia, where showerware accounted for 65% of sales and
tapware 20%, Methven had launched tapware ranges to
complement its showerware ranges.
In the United Kingdom, showerware represented only 20% of
sales and Methven was targeting increased direct Satinjet
sales through its website, he said.
Methven chief executive Rick Fala said the return of the UK
business to positive first-half operating earnings, from a
loss in the prior year, and improving trading conditions in
New Zealand, have been the main reasons for the substantially
''We are pleased with the improvement in our business
performance and are confident we can maintain this positive
momentum into the second half.''
Mr Rooney said Methven had entered into an agreement to
acquire the business and assets of Chinese tapware and valve
manufacturer Invention Sanitary.
Invention was established 12 years ago to supply product
exclusively to Methven.
Due to the impending retirement of Invention's founder and
owner, Methven had exercised its first right of purchase.
In the second half, no new product platforms would be
introduced. Instead, the strategy would be to refresh the
existing product range, Mr Rooney said.