NZX Release
1 March 2018
Methven Limited (MVN) New Zealand tapware underperforms, international sales accelerate, and Fit for the Future on track to deliver. RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2017 New Zealand’s leading shower and tapware designer Methven Limited today reported that its sales for the six months to 31 December 2017 finished at $52.8m, a 5.7% increase year-on-year and a 2.9% increase in constant currency. As forecasted, Net Profit After Tax (“NPAT”) finished at $3.2m, flat yearon-year, with normalised NPAT (excluding Fit 4 the Future (“FFF”) investment) increasing by 11.8% reported and 7.2% in constant currency. Tapware underperformance and normalisation of demand in the Canterbury region caused New Zealand market sales to fall by 10.4%, with 73% of this decline in Q1. Methven Chair Alison Barrass commented “Our absolute focus remains on delivering our tapware plans in New Zealand so that the business can benefit from our positive momentum in international markets and the ongoing upside of our FFF programme.” International sales accelerated year-on-year, increasing by 10% to $36.8m in this period and international EBIT by 58% to $3.1m. This represents 70% of Group revenue and 61% of Group EBIT, as FFF initiatives ensured that the top-line sales and market share growth flowed through to earnings. Net debt reduced by $2.2m or 8.6%, and cashflow from continuous operations improved by 56% due to improved inventory control and SKU reduction activity supporting organisational simplification. Group CEO David Banfield stated “At the Annual Shareholder Meeting, we set out our plan to fix the issues in the New Zealand tapware market, transform and simplify our core operations through our Fit 4 the Future programme, and deliver growth through international markets. Our Fit 4 the Future programme is on track, and we are extremely encouraged by our strong international performance. This proves our ability to deliver profitable international growth - a key pillar of our Methven 130 strategy, and reduces our reliance on the New Zealand market for earnings.” Mr Banfield added “Plans are in place to deliver strong tapware innovation late in this financial year and into the start of FY19, a key component of fixing our performance in the New Zealand market. We are excited about the potential of our new range launching in June 2018, and have received strong initial customer feedback.” The Directors declared a dividend of 4.0 cents per share payable on 29 March 2018 and full year guidance was maintained. - ends – For queries, please contact: Jannine Mountford, Group CFO, +64 9 829 0418,
[email protected] About Methven: Methven is an NZX-listed market-leading designer and manufacturer of showers, taps and valves. Our business is headquartered in Auckland where we design, develop and manufacture many award-winning products and technologies. Our international operations see our products distributed in Australia, China, UK, Middle East, USA and Europe in addition to our home market of New Zealand. In 2016 we celebrated 130 years of innovation and shared our long term growth plans, Methven 130 - the aim to grow sales to $130 million by June 2020. Our business transformation plan, Fit 4 the Future, kicked off in July 2017 to ensure we have a simplified and strong platform for long term growth. For more company information, visit http://www.methven.com/nz
