Methven shares drop to 15-month low on profit warning
Methven shares fell to a 15-month low after the company said it expects annual profit will fall by as much as 15 percent after steady investment didn't deliver the anticipated growth for the listed shower and tapmaker.
The Auckland-based company's earnings downgrade follows an earlier warning at the first half result when Methven said it expected annual profit to rise at the lower end of earlier guidance for profit to rise by between 10-and-20 percent in the year ending June 30, from $8.6 million a year earlier.
The shares sank 11 percent to $1.10, the lowest since February last year, and valuing the company at $80.8 million.
"Methven has changed its guidance due to forecasted growth in the second half not materialising as expected, despite continued incremental investment to deliver long term sustainable growth," chief executive David Banfield and chief financial officer Deidre Campbell said in a statement. "Methven continues to actively work on projects that support delivery of its Methven 130 goals, including the addition of new international distribution partners."
The manufacturer increased first-half profit 27 percent with its core Australasian businesses more than offsetting a decline in China, where it introduced a business model focusing distribution in Shanghai, Shenzhen and Guangzhou.