Methven has seen its annual profit fall by 17.5%, but has recorded a rise in sales in both New Zealand and Australia and an “encouraging start" to hotel sector sales.The tapmaker saw its net profit after tax for the year ending March fall 17.5%
Methven has seen its annual profit fall by 17.5%, but has recorded a rise in sales in both New Zealand and Australia and an “encouraging start" to hotel sector sales.
The tapmaker saw its net profit after tax for the year ending March fall 17.5% to $8.3 million, right in the middle of its half-year guidance of a drop between 15% and 20%, although this did not include impairment costs of $481,000
Group operating revenue was also down 5.5% to $129.8 million, while there was a 15.6% fall in ebitda to $16.7 million.
Its UK sales continue to struggle, down 14.0% from £21.7 million to £18.7 million, while ebitda was down an anticipated 44.5% from £3.0 million to £1.7 million.
Despite this, the listed company (NZX: MVN) still managed to reduce debt by 35% to $17.4 million with Australasian sales also holding up during the past 12 months.
New Zealand domestic sales were up 3.8% to $38.4 million, with the company crediting the rise to a growth in market share that came despite a 0.6% decline in combined new build and renovations, although ebitda was down 5% to $10.1 million
The revenues were flowing more freely across the Tasman, where Methven saw ebitda rise by 88.9% to $4.2 million, on the back of a 7.1% sales jump to $A36.6 million.
Chairman Phil Lough said the results demonstrated earnings resilience, wide brand appeal across geographies and the ability to create new market niches for the company’s proprietary technologies and products.
Group Chief executive Rick Fala said Methven had achieved “promising sales” from its new initiative targeting the hotel sector.
He also warned that the New Zealand economy was expected to remain fragile and that the company would compensate for this by targeting modest top line growth and margin improvements, while also further consolidating domestic market leadership with the continued release of product innovations and enhancements.
Mr Fala said the UK and wider European economic outlook “remained uncertain” and Methven expected performance to be weaker due to the loss of the Wickes account.
“We have undertaken a significant downsizing of Methven UK and are investing in repositioning the operation to support growth areas, including hotels and higher margin products, specifically Methven branded bathroomware which will be introduced this year.”
The company’s directors confirmed that a fully imputed final dividend of 5.5 cps will be paid, the same as last year’s dividend.
