KEY POINTS:
Earnings are up at listed showerware and tap manufacturer Methven despite losses suffered developing a US market.
Net profit for the year ending March 31 was $7.3 million, up from $6.8 million the previous year, while revenue was $70.4 million, up from $58.2 million.
Chief financial officer Deidre Campbell said it was a pleasing result given challenges including a rise in material costs which saw the price of copper double during the year.
Distribution start-up losses in the US were in line with expectations at $970,000 but reaching profitability might take longer than initially planned.
"But the work and the progress that we're doing in the US we're monitoring very closely and we've specific project milestones that we're monitoring against throughout the year," Campbell said.
Methven's share price closed up 14c yesterday at $2.40.
ABN Amro Craigs analyst Selwyn Blinkhorne said the bottom line was a little better than the market expected, given the previous guidance.
"Certainly the revenues in Australia were exceedingly strong and pretty good in New Zealand," Blinkhorne said.
Overseas sales accounted for 43 per cent of total revenue, with shower and tapware sales in Australia up 54 per cent at $23.7 million.
Campbell said the Auckland-based company would look to continue its momentum in Australia in terms of sales "but more importantly, the profit line and strengthening margins there".
"New Zealand is all about consolidating the leadership we do enjoy at the moment through new products and leveraging off the plumbers' support," she said.
Managing director Rick Fala said the company was gearing up for an exciting year.
"We're targeting continued growth in New Zealand and Australia, which remain the engine rooms for the company's sales and profitability," Fala said.
"Work will continue to gain traction in the USA and opportunities are progressing to gain a beachhead in the United Kingdom."
An expanded US market offering would include a new Satinjet product range to be launched late in 2007.
He said a strategy for sustainable and profitable growth would continue to be driven by the firm's ability to take proprietary branded and differentiated products into world markets.
