Methven profits up 3.1pc to $10.1m

Bathroom products company Methven has reported a 3.1 per cent rise in net profit to $10.1 million, which the company said demonstrated the effectiveness of its strategy to diversify revenue sources.

Operating revenue for the year to the end of March was up 19.7 per cent from a year earlier to $137.3m.

A fully imputed final dividend of 5.5c per share is to be paid, down from 6cps a year earlier, taking the total dividend for the year to 11.75cps.

The company said profit growth was maintained despite incredibly challenging market conditions, particularly in the second half.

Chairman Phil Lough said the group result demonstrated the effectiveness of Methven's strategy to diversify its revenue sources across different markets and products and the company's inherent strengths.

The group reduced its debt to $26.8m from $32.6m and the potential for further debt reductions from trading cash flows left the company well positioned to weather continued economic uncertainties, said Lough.

The results reflected the full year contribution of Deva Tap Company in Britain, which produced an outstanding result.

The extent of the second half downturn in the Australian market meant Methven did not generate the contribution targeted to cover the additional spending in sales and marketing.

The company said trading conditions in all its key markets remained "extremely challenging".

"The directors therefore do not expect the company to replicate the relatively strong prior year first half performance this year."

But they had confidence in the company's business models, its ability to weather the current economic climate and to resume profitable growth in the future.

- NZPA