Methven, the NZX-listed tap and shower manufacturer and exporter, lifted annual profit 21 percent, in line with guidance, after the acquisition of a Chinese manufacturing plant widened margins.
Profit rose to $5.69 million in the year ended March 31, from $4.71 million a year earlier, the Auckland-based company said in a statement. That was in line with its expectation for annual profit growth of between 15 percent and 25 percent. Sales slipped 0.4 percent to $96.3 million, while earnings before interest, tax, depreciation and amortisation rose 12 percent to $12.7 million.
At balance date the tap and shower maker's debt increased to $22.75 million from $14.45 million a year earlier, after it finalised the purchase of its Chinese manufacturer, Methven Heshan, formerly Invention Sanitary.
At its annual meeting last June, chief executive David Banfield told shareholders that the Chinese acquisition would underpin Methven's profit growth and boost its competitiveness by securing supply and doubling margins. The company said debt levels were "comfortably within its banking covenant limits".
Methven said it was "cautiously optimistic" about the future, and expects full-year profit growth of 15 percent to 25 percent with sales growth of 5 percent as it benefits from the China acquisition. It will also look to reduce debt. The company said it is changing its balance date to June 30, so it can more readily predict sales and income.
