Methven taps into Italian market

Shower and tap maker Methven said today it was on track to meet the sales, profit and cashflow forecasts set in last year's prospectus.

The company also said it had signed an exclusive licensing agreement with Italian luxury bathroomware supplier Visentin, which will see the Italian company manufacture, distribute and sell showers using Methven's new shower range.

As well, Methven said it was making "good progress" expanding in Australia.

Managing director Rick Fala said the Italian deal would not initally reap material financial rewards, but added the deal was significant.

It would take Visentin time to come to grips with manufacturing Methven's Satinjet products, he said.

Visentin will pay an upfront licensing fee and as it got into production it would pay royalties on each unit produced.

"Like all licensing agreements, you need time for that partner to establish a product into the market. They have done their own market research and the signs look very promising," Mr Fala said.

Methven expected it to be a long-term relationship.

"We think in the scheme of things it is quite significant."

Visentin will have exclusive rights to sell Satinjet technology in Italy and France, where it is a market leader and and will have non-exclusive rights to sell in Greece, Turkey and Russia where it also has a presence.

Mr Fala said Visentin taking on Satinjet would help Methven sell the range to other potential markets and merchants.

Methven is looking to market the range under its own Methven brand and saw good potential in Britain and California, where there were problems with both waterflow and availability of water, which gave Satinjet an advantage because of its ability to control flow.

Methven shares were down 3c to $1.40 in late trading today in a weak market. They were issued at $1.43 in November and listed at $1.64.

- NZPA