Methven lifts half year net profit 14pc

Bathroom products manufacturer Methven said today it lifted its September half year net profit 14 per cent to $3.5 million.

Turnover rose 7.1 per cent to $29.8m and pre-tax operating profit rose 8.5 per cent to $5.36m.

CEO Rick Fala said earnings before interest, tax, depreciation and amortisation increased 7.1 per cent to $6.4m despite additional planned investment and sales team expansion in Australia. Earnings per share rose to 6.9c from 6.0.

The company announced a 4.12cps dividend to be paid on December 16. It has a policy to pay out 60 per cent of net profit and the interim dividend equates to an annualised gross dividend yield of 8.7 per cent.

Mr Fala said sales in Australia rose 13.6 per cent despite challenging trading conditions while New Zealand sales rose 2.5 per cent.

He said Methven had a strong balance sheet and positive outlook for sales growth and profitability.

"We believe we are on track and well positioned for the future."

"We've continued to grow turnover and profit in the face of challenging trading conditions in Australia and New Zealand."

Sales in Australia rose to $10.2m from $9.0m but profitability there was affected by "essential increased investment expenditure, combined with the margin impact of successfully defending our position in the commodity end of the showerware market".

"We believe that we now have the platform in place in Australia to sustain the revenue growth and achieve improved profitability in the second half of this financial year," Mr Fala said.

New Zealand sales rose to $18.8m from $18.4m. Mr Fala said sustainable growth would come from remaining focused on the solid alteration and replacement market and continuing to develop distinctive products.

Elsewhere, sales to luxury Italian bathroomware supplier, Visentin, were achieved ahead of schedule in September. Research and feasibility studies were underway in the US and UK "to ensure a planned and orderly entry to these markets", Mr Fala said.

Methven shares last traded at $1.27. The 119-year-old company raised $36m last year when it went public after issuing shares at $1.43 each. They listed in November at $1.64 and traded as high as $1.72.

- NZPA