Methven Group lifted half-year net profit despite falling revenue, as strong profit growth in Australia offset a decline in Britain while this country held its own.Net profit for the six months to the end of September was up 8.3 percent to $4.5 million, b
Methven Group lifted half-year net profit despite falling revenue, as strong profit growth in Australia offset a decline in Britain while this country held its own.
Net profit for the six months to the end of September was up 8.3 percent to $4.5 million, before taking into account restructuring costs in Britain of $264,000. Including the restructuring costs, net profit was up 2 percent on a year earlier, the showerware and tapware company said today.
Operating revenue fell 7.7 percent to $62.8m, while the company is to pay an interim dividend of 5.5c per share.
Methven Group chairman Phil Lough said the company expected to deliver a full year profit in line with last year, but with momentum for improved performance in the 2011-12 financial year.
Britain had been the most depressed of Methven's three key markets during the latest half year, while the market in this country remained stagnant at historically low levels and was showing few signs of recovery, Mr Lough said.
Australian conditions had eased but remained the bright spot.
"New Zealand market conditions, and to a lesser extent Australia, are not expected to improve to the degree that we had thought in July 2010."
Britain was now forecast to end the year close to break-even as the company implemented turnaround strategies that would create sustainable profitability, Mr Lough said.
In Australia operating revenue rose 10.1 percent to $A20.4m ($NZ26.3m) in the half year, while earnings before interest, tax, depreciation and amortisation (ebitda) were up from $A700,000 to $A2.3m.
Margins continued to improve in Australia, where showerware sales were up 20 percent and tapware sales rose 60 percent.
In this country total operating revenue for the half year fell 2.6 percent to $21.9m, ebitda was unchanged at $5.5m as cost reductions offset the revenue loss, Methven said.
In Britain, operating revenue fell 29.7 percent to stg7.1m ($NZ14.7m), with ebitda before restructuring costs falling from stg800,000 to stg100,000.
Methven chief executive Rick Fala said repositioning of the British business to become a high value, premium, Methven branded operation was an "absolute focus".
"Success in turning around our UK operations will reduce the drag on earnings and set the course for strong growth in group profitability," Mr Fala said.
