29 Nov 2012

Methven profit down

12:25 pm on 29 November 2012

Half year profit at Methven was down by more than a quarter, due to its loss-making British business and a slump in demand in Australia.

The tap and showerware designer made a profit of $2.3 million in the six months to September, a decrease of 27% compared with the same period a year ago. Revenue fell 7% to $50 million.

Radio New Zealand's business editor said Methven had already flagged a lower profit, and the result shows demand for its tapware and showerheads remains tepid, particularly in Australia.

But the company managed to boost earnings in Australasia through keeping costs contained.

Britain remains a problem though, losing money, but Methven chief executive Rick Fala remains committed to the poorly performing market, saying that returning its UK operations to profitability is a key priority.

It is also continuing to invest in growing economies like China, where it has a small toehold.

Looking ahead, Methven is betting new products will result in strong second half sales, while it expects keeping costs down should also flow into the bottom line.

Despite its cashflows turning negative, meaning it.s paying more than it's taking in, the company will pay a dividend of 4.5 cents per share.

Methven's stock has risen 1 cent to $1.36 per share.