10 Apr 2013

Methven forecasts fall in profit

9:43 am on 10 April 2013

Tapmaker Methven is forecasting its profit will fall by a fifth to $5.1 million in the year to March, due to weak trading conditions in Australia and unbudgeted costs.

The company had flagged a downgrade in February, but had not specified by what amount its profit would decline from the previous year's $6.5 million.

Excluding one-off costs, Methven says the profit will fall 12%.

A decline in demand will hit Methven's second half gross earnings by 12%, more than offseting first half gains.

UK earnings have gained slightly and Methven is predicting a breakeven full year result, down slightly from a £300,000 gain in gross earnings last year.

It says there will be a small earnings loss in operations in China due to further investment.

In contrast, New Zealand's earnings grew solidly, and will be up 7% in the March year.

Net debt rose by nearly half to $17.2 million, though it remains well within its bank facility limits and commitments.

The company did not specify what the full year dividend will be. Its full year result will be released at the end of May.

Chief executive Rick Fala, who has led the company since 1998, will step down at the end of September.