15 Jul 2015

Methven confident with three-year plan

9:36 am on 15 July 2015

Shower and tapware maker Methven has told disgruntled shareholders it is confident of lifting its sagging share price and dividends under its new three-year plan.

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Photo: RNZ

The company, which marked 130 years in business at its annual meeting in Auckland yesterday, unveiled a plan which aims to expand sales by 30 percent in three years from $96 million to $130 million.

It is working towards a longer term target of raising its profit to 10 percent of revenue.

That did not stop shareholders criticising Methven for poor profits and a weak share price.

Methven chief executive David Banfield said the company had halted revenue and profit decline and was now focused on growth.

"We've put in a firm foundation that actually then sets us fair for the following three years, and [for] most businesses around the world, 30 percent over three years would be considered to be an excellent target."

Methven's share price has languished between $1.05 and $1.26 for the last year - a far cry from the heights of $2.55 experienced in 2007.

Mr Banfield said he knew the company had to deliver.

"It'll all come out of us delivering our plan, which is why we were so pleased that last year we delivered in line with our expectations and we invested $3.9 million in future-focused projects."

Shareholder Bruce Sheppard - a former head of the Shareholders Association - said Methven's plan was boring and would only return sales to the same level they were 10 years ago.

"I do think they will deliver... out of the acquisition of their Chinese manufacturing operation. Over time that will turn into about $2.5 million to $3 million of additional profit...

"Beyond that, I struggle to see that anything that has changed that will improve thier market presence."

Mr Sheppard said he wanted the long-standing directors to resign and more women appointed to the board.

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