Ann: FORECAST: MVN: Methven Focuses on Future Gro

• Release Date: 19/07/12 13:11
• Summary: FORECAST: MVN: Methven Focuses on Future Growth
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MVN
19/07/2012 11:11
FORECAST

REL: 1111 HRS Methven Limited

FORECAST: MVN: Methven Focuses on Future Growth

Leading New Zealand shower and tapware designer Methven Limited [MVN], today
announced that despite the tough global economic conditions, the company is
targeting positive earnings and cashflow growth.

Addressing shareholders at today's Annual Meeting, Chairman Phil Lough said
that the sustained economic slowdown has had a significant impact on the
business, but through prudent management and steadfast determination the
company delivered a credible result.

"We're not delighted by any means, but we are proud of what we've achieved in
these tough conditions," Mr Lough said.

"We have repositioned the business for the current economic climate and are
now poised for growth. We are confident that our products and point of
difference can deliver continued positive earnings.  However, it still
remains imprudent to provide profit guidance on the level of growth we might
achieve."

Reinforcing confidence in achieving future growth, performance-based schemes
with built-in growth targets are being implemented for both the Board and
Executive Management Team.

"Today the Board announced an initiative for performance-based director fees.
 This innovative approach will see Directors' fees increased only if the
Company achieves a 20% or more increase on the prior year's reported Net
Profit After Tax," Mr Lough said.

"If we don't achieve the growth target, the Directors' fees will remain
unchanged.  This approach provides transparency and aligns Directors'
remuneration with returns to shareholders.  In addition, we are also
developing an Executive Incentive Scheme with share price targets."

According to Mr Rick Fala, Methven Group CEO, the Company is undeterred by
the gloomy sentiment around the Australian housing market and the financial
situation in Europe, advising that the business has a range of targeted ideas
and strategies to improve results and deliver growth.

"We are bursting with new ideas and innovations," Mr Fala said.  "Investment
in design and innovation continues to be a priority for the business,
ensuring that Methven remains at the forefront of industry with products with
a competitive edge."

"We have a pipeline of new shower and tapware products as well as further
enhancements to Methven's innovative proprietary Satinjet technology.
Delivering more shower for less water, the technology performs at much lower
flow rates, reducing water and energy consumption, without compromising the
shower experience."

"With the world suffering from water shortage stress, there are huge
opportunities for our proprietary technology, particularly in emerging
markets."

Mr Fala added that China represents a real growth opportunity for Methven.

"Off the back of attending the world's largest kitchen and bathroom trade
fair in Shanghai and the appointment of two new distributors, we will be
investing further in this emerging market," Mr Fala said.

Maintaining cost control disciplines and further improvements to operational
efficiency continues to be an important focus throughout the business.

"We are on a journey to simplify the business to achieve global efficiencies.
 Reduced duplication combined with product and supplier rationalisation will
contribute to reduced costs, however we will not see the true benefits of
some initiatives until the second half," Mr Fala said.

Phil Lough added that the Board has a continued positive outlook and
confidence to improve results and deliver profit.

"We expect to grow full year Net Profit After Tax and reduce Net Debt
further.  However, as a result of the current economic climate in the UK and
only a marginal improvement in Group Net Debt, we anticipate first half
earnings to be down," Mr Lough said.

"We are confident that we have the strategy, the team, the products and more
importantly the resilience to deliver sustainable returns and growth to
shareholders in these tough economic conditions."

For more company information, visit www.methven.com

- ends -
End CA:00225091 For:MVN    Type:FORECAST   Time:2012-07-19 11:11:17