MVN Methven

[BlackPeter]

Don't know ......but been no downgrades or sad stories this year so result must be going to be a stunner

What you hoping for?

Revenues were dropping for a long time now. A trend change would be nice ... say 5%+ up on last years 97m revenue in combination with paying a similar divvie like last year (but this time EPS hopefully larger than the divvie again). I am easy to satisfy

[sammiesmiles]

I have just started to look at MVN's tapware products on the market. They look like the premium products. I am wondering how the madness of (AKL) housing market impacts on such premium tapware sales.

[BlackPeter]

Looks like percy got it sort of right when describing MVN as serial underperformer ...

Sales basically flat (slightly down in NZ$ terms).
EBITDA and NPAT somewhat more rosy: up (NPAT +20%)
Divvie 4cts, fully imputed (no surprises)
NZ slightly down, Australia doing ok-ish (but nothing outstanding), UK earnings up (from a low base) and China experiment was a flop (though factory doing o.k.).
Net debt up by 57% - though liabilities to assets hardly changed at 47.6% (due to added Chinese factory - and again: high inventories);

What we get for free is again a cautiously optimistic outlook for a super long (15 months - they change the balance date) FY2016:
revenue up 5+ plus
Earnings up 15 ... 25%

Not sure, though whether that's just because they know the next FY will have 15 months?

[BlackPeter]

Just went through the reports and updated my spreadsheets:

On the plus side:
+ forward P/E now 11.8,
+ earnings increased by a healthy 20%
+ reliable (and not too bad) divvie
+ earnings higher than divvie - i.e. they seem to be able to afford paying it.

On the less positive side:
- this is not a growth, but a shrink company! 2011 revenue was 122m, and after consistent and reliable year after year revenue drops we now ended at 96.3 m annual revenue. This is a CASR (Cyclical Annual Shrink Rate) of 6%, not the promised (and hoped for) trend change.
Ah well - the shrink rate seems to drop - you could call the shrink/growth in FY2015 nearly flat - so maybe it is the bottom this time (still hoping).
They promise a 5% plus revenue growth for next year (but I think, they did that before )
- inventories have been too high last year - and continued to climb (now $22.5m) - that's nearly 1/4 of the total assets!
- huge amount of intangibles ($41.8m) on the balance sheet - that's 44% of the total assets - and the NTA continues to be quite low (at 11 cts / share). How much is the brand of a shrinking company (even if the products look really flash) worth?

[winner69]

BP, what you make off dividends paid being more than free cash flow (not counting the Invention Sanitary acquisition cost)?

[BlackPeter]

BP, what you make off dividends paid being more than free cash flow (not counting the Invention Sanitary acquisition cost)?

I knew there must have been a reason for the increase of the net debt ?

[percy]

BlackPeter,
How does the result compare to the 30th July presentation?
Sorry I have not had time today to read the result.

[BlackPeter]

BlackPeter,
How does the result compare to the 30th July presentation?
Sorry I have not had time today to read the result.

Good question. Lets see:

They promised "modest" sales revenue and earnings growth. They delivered flat sales revenue "growth", but quite acceptable earnings growth.
They promised FY2015 NPAT growth between 15 and 25% - and delivered on that (+20.9%).
They promised increased net debt (but to stay within bank covenants) - and delivered on both of these promises as well.
They promised a new website - and delivered (though I can't really say that I am overwhelmed by performance and design) and
They promised a new product generation and delivered (the future will tell, what the markets think ...)

So I guess - not too bad (but for the flat sales revenue). They certainly disappointed a number of analysts who assumed already for FY 2015 some meaningful (and positive) revenue growth.

[percy]

I guess you will have to decide whether you think the new products will drive sales.
Just seems to me another case of "after all said and done,there was more said, than done."
I see Norah Barlow is joining the board.Can't see that as positive.They need some one like Sarah Ottrey with "brand" and marketing expertise.

[tim23]

Happy with the result got my 4c Barlow on board ok by me was a winner with Summerset.