31 Jul 2013

Australia dampens Methven's profit picture

9:40 am on 31 July 2013

Tapware maker Methven says net profit has risen significantly for the first three months of the year.

The company says it expects debt to be lower, and turnover and profit to rise in the year ahead, because of improved performances in New Zealand, the UK and China.

But it says its biggest market, Australia, which contributes 40% of total sales, continues to struggle.

Retiring chief executive Rick Fala told shareholders at the annual meeting in Auckland on Tuesday that sales have fallen 29% and profit has halved in the last four years.

But he says the new financial year has had a promising start.

He says the indications are Australia will remain tight with competitors discounting and rebating to fight for market share.

"In that market we're already the dominant shower supplier and so it's our duty that we have to maintain our market share, but we look to see niche areas where we can improve our market share and grow against the tide - and that's certainly in the tapware side where our sales were up 2 %."

Mr Fala outlined a strategy to take the company into a new phase including a big push into marketing online.

The company's acquisition of the Premium tapware supplier in China is part of a plan to keep its costs internationally competitive and he says the company will launch a "breakthrough shower technology" next year.

Mr Fala will retire in September. The company is in the final stages of recruiting a new chief executive.