MVN Methven

[Omega]

Earnings announcement is overdue and share price dropping markedly - suggests annoucement is unfavourable and people with prior info?

[Anna Naum]

Earnings announcement is overdue and share price dropping markedly - suggests annoucement is unfavourable and people with prior info?

I believe that Macquarie released a research report recently highlighting that MVN's major UK account is up for renewal soon and MVN is not thought to be able to renew this supply agreement.

[PointyHat]

Methvens press office told me last week that MVN hope to release results 30th Nov

[Penfold]

I am trying to work out if his is a value buy now. Anyone else have any thoughts?

I would appreciate any input.

Disc. Holding MVN

[K1W1G0LD]

I emailed the Financial officer of Methven today regarding the sharp fall in their shareprice over the last few weeks . This is their reply (and I quote)


"The guidance that we provided at the July AGM has not changed and we are not aware of any material factor requiring notification to shareholders or the market.

We are aware that MacQuarie Securities released a research paper on Methven and believe that this has caused the market activity. I must stress that the views in this paper are MacQuarie's and not Methven".

they are due to report Monday 30th November, no reason was given for the delay . So it may be a case of reading between the lines here . Kiwigold

[Kryptor]

Performance Summary

- Methven Group outperforms half year guidance
- Net Debt down 47.4% from $35.0M to $18.3M, better than 30% forecast
reduction
- Underlying NPAT down 3.2% on prior corresponding period from $4.3M to $4.2M
(reported NPAT down 15.4% from $5.0M to $4.2M)
- EBITDA down 11.5% from $9.6M to $8.5M and Operating Revenue down 5.1% from
$71.8M to $68.1M
- Fully imputed interim dividend of 5.5 cps to be paid on 31 December 2009,
same as June 2009 final dividend and in line with guidance

[Penfold]

Seems MacQuarie was right on the money.

Strange though how MVN and media do not seem worried at all about losing this major retailer. Looks like they were supplying with tight margins. I still find it a bit concerning but have faith in what is a great company.

Hopefully will have some luck with new distribution channels.

Disc. Holding MVN

[winner69]

I believe that Macquarie released a research report recently highlighting that MVN's major UK account is up for renewal soon and MVN is not thought to be able to renew this supply agreement.

Probably now wish that they weren't able to renew this supply agreement

Looks like Focus was on a slipepry slope back then anyway
http://www.guardian.co.uk/business/2011/may/29/focus-diy-collapse-sparks-anger-private-equity-firms

[rabcat]

What is up with this company? They put out there anual report and every thing looks good. There UK business is recovering. They announce to the market that they expect profits to increase dramatically yet there share price falls?
Surely this company has plenty of up side? i.e as world markets recover and Asia grows Methen will be in a good position to take advantage of that?

Or am I missing something? Does this company have good management? Are there some issues with the board?

Can any one shed light on this company for me?

[Penfold]

Been holding for about four years. In that time I have never worked out why the market ignores the great yield from a great company. If I was to have a stab at what the issue is, I would say the low volumes of shares traded makes it lumpy as hell, and the capital gains are slow and unpredictable. I have been thinking lately of picking up more if they fall back to the low $1.30's again.

[percy]

What is up with this company? They put out there anual report and every thing looks good. There UK business is recovering. They announce to the market that they expect profits to increase dramatically yet there share price falls?
Surely this company has plenty of up side? i.e as world markets recover and Asia grows Methen will be in a good position to take advantage of that?

Or am I missing something? Does this company have good management? Are there some issues with the board?

Can any one shed light on this company for me?
I was interested in investing in this company about 3 or 4 years ago.I had some questions I wanted to ask the CEO.Fella or something like that.Secretary said he would ring me back.Taking his time,as I still have not heard from him.Sort of put me off the company.I do not think they are as clever as they think they are.They are in a competitve market,should they come out with a good product,it will soon be copied and sold cheaper by an Asian competitor.A company on the road to no-where in my opinion.

[p2r]

Methven does a Fletchers... updates the market and loses 10% market valuation.

[PJK]

OK Gents - this lot have been on my radar for a couple of months as being an "out of favour" stock getting priced very cheaply.

As I read the numbers on the Methven site investor centre ( http://www.methven.com/nz/investors/five-year-summary ) they make profits every year and seem to be distributing most of it as dividends.

Recent announcements suggest a $6m full-year profit forecast (within cooee of the last two years) and probably a 6-8c annual dividend still on the cards ... and yet they've dropped to buy/sell range of 100/104.

I like their products and think that the company is still profitable and likely to get a boost from eventual Chch rebuild - but I'm rubbish at picking a share price bottom - and feel I must be missing something obvious.

What's the feel with Methven here? Are they a solid share for a 3-5 year hold? Or should I stay away?

[percy]

The company is,and has been in a massive down trend since march.Buying down trending stocks is a sure way to loose money.I would delay any purchases until markets settle,and MVN downward trend has turned.Trying to pick the bottom is impossible,and it is more profitable to buy once the uptrend is confirmed.
Stay away.

[buns]

PJK

2 things:

1: Bottom picking – Is a great strategy, although don’t get to fussed on being at the bottom as only one can do that. We bottom pick every time we go shopping as one tends to buy that extra can of baked beans when they are at a one off special. Because it is trending down doesn’t make them worth less. If baked beans start all of a sudden killing people, the lower price is justified, although when the underlying product is the same, it’s worth should be equal so any lower prices creates more value. Unlike supermarkets, shares can go on sale once every decade..

Trending down should only be at the forefront for a short term trader. Sensibly you are looking over a long period of time which will enable the companies real returns to show in your holdings performance rather than the markets trading.

2: MVN – Remember, you are buying the company, not there taps/showers. I agree that their products are very good, however that is a huge market and there is no reason why Methven can produce better valued taps than some stranger from overseas. I know the company quite well, and do not think the brand is strong enough to hold them up when it competes on price. Quite a few NZ brands have gone this way of late, have a look at the performance of Pumpkin Patch and Fisher and Paykel – it’s a shame but that’s how it works. Also, Methven's profits are declining and the Returns on equity are falling even faster.

Bottom picking only works if the underlying company is still similar to what it use to be when it had a higher price. Stop thinking about picking a share at the bottom, rather than a company’s price at the bottom.

Restaurant Brands right now is a great example, they have had some (what I consider) short term troubles from the EQ and the market has smashed them. This is merely a short term blip as it will not change how people eat KFC in 5 years time. They also pay a big dividend as well. There dividend probably won’t reduce, unlike Methven's which is sure to if they keep up this performance.

Don’t be scared to stay on the side-lines and really consider the ins and outs of this strategy.

Do not lose money.

[corlemar]

I'm impartial on this subject and don't hold the stock, however..... whilst their overall performance has not been spectacular, they have maintained their dividend. In addition, they do appear to be sorting their issues out from the UK operations side, yet all along they're reducing their debt which it would appear to put them in a favourable position compared to others. Don't forget, the NZX announcements I think at the beginning of December.....noting director purchases. I agree it is near impossible to buy at the bottom, but hopefully some of the above info would tell you this company will be around for sometime to come !

[buns]

Cash flow from operations is lowering all the time, and so is debt – that creates a huge hole in your cash balance unless you raise cash back of shareholders, not an ideal situation or sustainable.

Imagine your income lowering, whilist you are paying down your mortgage - cash is being burnt from both directions.

If this equation carry’s on Methven simply won’t have cash to pay shareholders or won't have enough cash in the business to maintain its capital commitments.

This isn’t a deposit, there are many things to consider before the yields. The yields are merely a function of the business. If the business stops, so will your yields.

[winner69]

Any more thoughts on Methven? I am beginning to wonder if it is getting into the deep value play (like F&P).

Going to be kicked out of the NZX50 soon ..... so if any insto's hold for the sake of keeping close to the benchmark might be a bit of selling ..... though I reckon many would not have bothered holding and taking a chance

[Under Surveillance]

Any more thoughts on Methven? I am beginning to wonder if it is getting into the deep value play (like F&P).
Looks like a sick puppy to me, the only thing deep about it being the doo doo it is in.
Has an open register, so might be a takeover play when the rot is fully evident, the shareprice fully reflects the realities, and a "white knight" offers a 30% premium to a price more like 70? But who would want it?

[percy]

Sir Ron Brierley ?

[winner69]

Admired MVN for quite a while now for recognising a few years ago that just making ordinary old taps and things wasn't a sustainable model ..... so they started designing and making some decent stuff .... a bit of style and some eco stuff ...... put a nice story around it ..... good innovation


But like many similar companies are finding out today that is not enough to survive .... esp if you design and make stuff but rely upon others to sell them for you. MVN, like others, need distribution (others shops etc) and architects and the like to specify their stuff for building projects ..... and that is not always a good place to be in ..... and they have to compete with all the other suppliers .... and at the end of the day no matter how good the stuff is price is a key driver

Does MVN have anything special ..... one that competitors don't have .... answer is NO. I don't see them offering anything that gives consumers real added value, something that players in mature markets need to do if they want to create for themselves a new market segment .... just for themselves to play in.

If I was to invest in MVN for the long term I would be looking for them to create one's own competitor-free market as blue ocean strategists say ..... otherwise the question is will they survive in the blood-streaked oceans of competitive markets (another blue ocean strategy phrase)

No doubt they will survive and still be making taps and showerheads and other stuff in 50 years time .... and no doubt make a few bob .... and no doubt give most of that back in divies .... and no doubt want to buy something but will need to go to shareholders to do that .... so in summary at best a solid little company at the mercy of the ups and downs of the building cycle. If thats what you want to invest in wait until the shareprice offers a bit more value ... buy heaps .... and get you divies every years .... and if lucky enough might get a bit of capital gain

The plumber took the wife down to Plumbing World the other day to pick out some new taps and shower heads for the bathroom ..... she said she got some Italian ones (cheaper than Methven she said) .... plumber said they are Ok ..... just have to wait for him to come back and install the buggers now .... but gee whizz taps and things are not cheap are they

[Under Surveillance]

A company on the road to no-where in my opinion.
Loved your suggestion of Brierley as possibly a prime mover behind a takeover, percy. A has been taking on a company on the road to no-where has poetry about it.

[percy]

Glad you enjoyed my humour.!!! Poetry ? Closest I will ever get.!! Could not help myself with the Brierley suggestion.!!!!!!
What pleases me is my warning was right.I posted "on the road to no-where" comment on 2/9/11 when share price was $1.42.It has since fallen 28% to $1.02,so I hope I saved some posters a few dollars.

[Lizard]

I bought Methven tapware a few years ago when re-doing the bathrooms... been a bit disappointed as had not realised that lots of "metal" these days is silver coated plastic... and even the real solid chrome stuff started corroding within the first year.

Wish I could still get the old ones like in the kitchen...can even still get the parts for them when I need to change o-rings, or fix a spindle. Love all that old solid stuff that can be maintained instead of ripped out and thrown away every 10 years.

[winner69]

Quite often the headlines on company announcements give you an idea of the general direction in which the comapny is heading .... and sometimes they tell a story about whether the company is living a dream or not.

Here's the last fews in the life of MVN (luckily they don't make many announcemets to the NZX) -

May 07: Methven to Buy UK Tap and Showerware Distributor
Global expension makes MVN a really big company - cost $59m - need money from share holders and a pile of debt

Nov 07: MVN Half Year Result Slightly Up On Expectation
good news - but after spending all that money you would hope a good story

May 08: Methven Profit Surges on back of UK Acquisition
great stuff .... but surging .... after all it only surged against what a little company was doing eh

July 08: Methven still targeting growth in 2008-09
thats good .... thought you would like to know even though we don't usually make announcements in July

Oct 08: Methven lifts HY result despite tough Market Conditions
well done

May 09: Full Year Results for the period ending 31 March 2009
could not have been exciting as didn't give us an exciting headline to salivate over

July 09: Methven Re-affirms Satinjet Technology as Leading Edge
no news for a while ... something good for the shareholders to keep them interested

July 09: Methven Forecasts Lower Full Year Profit .
whoops .... told you about the leading edge technology .... but now you need to know profit will be down


Nov 09: Methven Group Interim Results Outperform Guidance
but it wasn't has bad as we thought it was going to be .... good stuff eh ... forgive us

May 10: Methven 2009-10 Results Close to Target
still doing OK ..... or just OK


May 10: Methven Brings New Luxury to Hotel Guests
but there is good news .... this will give you the warm fuzzies .... just imagine how many taps and things if every hotel in Asia used ours

July 10: Methven Forecasts Reasonable Lift in Full Year Profit and No Increase in Debt
told you we would be OK .... all on track .... esp from the global acquisition a few years ago

Oct 10: New Ultra-Low flow shower wins 2010 Sustainability Award
must be some bad news coming up ... here's the good bits first

Oct 10: Methven Fined
oops ..... we told some porkies about how much water was saved from our whizz bang shower heads ... but never mind cause no consumers actually complained .... prob just the nasty competitors


Oct 10: Respected Industry Leader Takes Up Reins as Methven UK
need to get the UK up and firing

Oct 10: Interim Results Demonstrate Earnings Resilience in Recessionary Times
its the economy stupid .... but we still making money

Mar 11: Earnings Update
nothing good in the headline so must be a downgrade .... yep 10%-15%

May 11: Focus (DIY) Limited - Updated Guidance
bugger - one of biggest customers goes broke .... just bad luck


May 11: Innovative Designs and Operational Efficiencies Key to Turnaround
well a turnaround of sorts

July 11: Methven Predicts Major Profit Lift in Difficult Climate
great stuff .... everycome coming to fruition .... acquisition coming good and all that sort of stuff

Oct 11: Methven Profit Update
not a +ve heading is it .... update means down .... earnings down 25% plus .... oh why did we say what we did in July


Nov 11: Interim Profit Down but Cashflow Up
have to +ve about something so lets forget about profit and concentrate on cashflow


So thats the life of MVN in their own words .... methinks they paid too much for that UK business but hope remains it might pay its way ...... and too a large extent MVN are dreamers .... they do some good stuff around innovation etc but that good stuff just keeps them in the game

[winner69]

That was the MVN story .... the chart tells the market sentiment

Wonder if there be an anouncement in March .... good one of course .... prior to the full year announcement

[percy]

Winner69,Great posts,thanks for sharing your wisdom.

[Lizard]

Great work there, Winner... love the headline analysis.

And, yes, what is it with using "Update" in the headline these days when it's a downgrade... noticed it on a host of ASX shares this season... just think all traders are dyslexic and will hit the buy button when they see the "up" bit? When will Investor Relations bods wake-up and realise spin is not "in" when it comes to getting investor confidence?

[Hoop]

Thxs Winner for your time and effort to produce these recent great postings..much appreciated

[winner69]

Something gone wrong since 2007

Mar 07 MVN shareholder funds were $23m with little debt and making $7.3m. Market cap was $111m

Come acquisitions they got $30m extra off shareholders and borrowed the best part of $30m

Nearly 5 years on shareholder funds are $50m (expect it to be about this cause of the $30m raised but no earnings retained) .... debt still over $20m ......... making ever so slightly more profit ... and market cap is only $68m

May have grown the company with the acquisition ........ but shareholders are not any richer ..... they pumped $30m new cash in ...... over the next 4 1/2 years got that back in divies .... but heck the market cap is more than $40m down the gurgler (and they know that a chunk of future earnings go to the bank)

Acquisition not working .... bad timing .... been a GFC and maybe worse to come ..... but heck does that explain such a destruction in shareholder wealth

[Lizard]

Maybe. Maybe just typical of how groomed and pumped companies get for listing... and maybe one of the reasons so few listings go ahead these days is that investors are fed-up with most listings taking 5-10 years to get back to justifying the price they paid for them.

[percy]

A poor business can have good years,while a good business can have bad years.Often hard to tell which is which.
So I think Lizard is right about grooming and pumping a company for listing.I do think MVN is a poor business and winners69's analysis of shareholder wealth destruction confirms this.
I do not know the company well enough to have an opinon of Rick Fala,but he never returned my phone call,which is always a sign of laziness,or poor office [management] skills.

[Silverlight]

I seem to be playing contrary on a few threads recently.

While Methven has had disappointment in the past few years, it has a dominant position in NZ, and growing recognition in Australia. 10 cents EPS forecast with 90% payout, places the yield at current prices very well. We are at historic lows in the building sector, and with significant spending expected in future from Christchurch alone, Methven seems to be well positioned, just a bit out of favour because of the cyclical nature of the construction industry.

Last 6 months, ACC buying more, directors buying more. Good entry level price.

[percy]

[QUOTE=Silverlight;367576]I seem to be playing contrary on a few threads recently.

Makes the threads more interesting.
I always enjoy and learn from your posts.

[Snoopy]

I do think MVN is a poor business and winners69's analysis of shareholder wealth destruction confirms this.


Everyone seems to be having their own rant, so I thought I would add mine.

I think there is a lot of over-engineered tapware about. Suppose I had a time machine with just a few dial dates. Say I was allowed to go back in time; but purely in the interests of bettering the future of the human race. Using one date on the dial, I would take a modern day stealth firearm and go back to about 1910. Taps, baths and showers for the middle class masses were IMO pretty much perfected by then. I think the old two bar and four bar ended tap handle plated metal design of that era was pretty well spot on: functional, elegant to look at, practical. And they hadn’t started to go down the path of cheapening everything in the material sense, and unnecessarily complicating things in the design sense (think mixers).

Having traveled back to 1910, I would systematically go around all the tap manufacturers and quietly rub out all of tap designers of the day. Then I would TNT the design offices to freeze tap technology at that point. But given I don’t have a time machine and don’t have a real appetite for intergenerational murder, I will give you my take on how to deal with the tap situation today.

Lizard is getting all-nostalgic about the downgrading of product to plastic. I say that for many applications plastic is fine. And if you don’t like it then pay more for the real (metal) thing. You can still get it from Methven at a cost. About five years ago I bought a single new pair of (Methven) taps for my bathroom sink. Cost $550 before installation. Outrageous you say? Superficially yes. But they still look as good as when they were new (they are stainless steel) and I’ll never have to replace a washer inside them. Given these taps are used many multiple times per day, I think it was money well spent. Another source for good older style taps, if you don’t want to spend the money I did, is demolition yards. Polish them up, stick new washers inside and you are away.

I hope Winner gets a good run from his Italian taps. Good stuff comes out of Italy but the Italians are equally known for building stuff down to a price. ‘Italian’ and ‘metal’ is not always a happy adjective noun pairing. But if it looks good in the showroom it must be ok – eh. Amazingly Italy still seems to get away with subsidizing some of their production as well (even if they don’t publicly use the ‘s’ word). So we can’t guarantee the Italians will always be as competitive as they seem.

I have visited Europe, the US, Argentina, Australia and Hong Kong (some of those albeit stopover briefly) over the last few years. After fiddling with various hotel shower and tap systems on three different continents I have come to he conclusion that no-one can do tapware and showers better than Methven. Methven IMO really are a world class supplier. But because most sharechatters don’t get exposure to or don’t pay attention to the worldwide alternatives, they just don’t realize it.

OK, here ends my rant of the day. I am not a good enough student of the business model of Methven to know if diving into the UK market in the way they did was a good idea. But if you have a world class product, I would think restricting your market horizon to Oceania is selling yourself short. I will spend the rest of my day hanging out at the World War One flying ace café sipping a root beer. 1914 was still a good year for tapware.

SNOOPy

[Silverlight]

The current price still looks great to get in at, to mimic my post on the Pumpkin Patch thread, insiders know more than we do about the business, and are not likely to throw away there hard earned cash.

5/01/2012 Nigel Darbyshire 18k @ 1.05
8/12/2011 Deidre Campbell 25k @ 1.1360
2/12/2011 Richard Cutfield 25k @ 1.1227
2/12/2011 Peter Stanes 20k @ 1.0993
2/12/2011 Phil Lough 25k @ 1.13
10/10/2011 ACC 769k @ 1.37
10/06/2011 David Mair 50k @ 1.55
10/06/2011 Phil Lough 100k @ 1.55
10/06/2011 Rick Fala 280k @ 1.54

Not the only factor, but an excellent indicator.

[Lizard]

Tidy result from MVN today. Doing well to hold the divs and still looks reasonably good value at $1.21.

[winner69]

A couple of months ago they were pretty positive and said half year npat might be lower than last year

But heck they didn't say it was going to be 20% down ......bloody poms not buying enough taps etc

Only made $3.2m last year so the 20% only a few bob

Looks like the share price was jousting getting ahead of itself .....punters just a little too excited


No doubt good news for some .....buy on the dips eh ......but they wouldn't want to cause too many dips though would they

Good company .....more innovative than FPA in my opinion .....but don't get te same kudos

[winner69]

You'd have to assume that revenues for H1 are down on pcp. ....or heck something really wrong

I know things are tough but heck 8 consecutive half years of sales decline is starting too push credibility a bit too much ......ESP as the consistent message is always the next half is looking good

H2F12 revenues were nearly 30% less than in 2008 ......heck


However buy on the dips ....like all innovative companies we'll be ok

[percy]

[QUOTE=winner69;381856]


However buy on the dips ...

With a tap manufacturer is it ;buy on the drips,or a drip to buy on the dips.Either way you end up taking a bath,while the SP goes down the plug hole.!!! lol.

[winner69]

[QUOTE=winner69;381856]


However buy on the dips ...

With a tap manufacturer is it ;buy on the drips,or a drip to buy on the dips.Either way you end up taking a bath,while the SP goes down the plug hole.!!! lol.

One of your better come backs .....sunny spring day in Chch is it and all full of the joy of life eh

[ratkin]

While on holiday in th UK , was dragged around the big homeware stores by the other half (B and Q, homebase etc)
Couldnt move for taps and bathroom fittings , massive competition in that space, hard to see how a company in
NZ would have any competitive advantage

[percy]

[QUOTE=percy;381860]

One of your better come backs .....sunny spring day in Chch is it and all full of the joy of life eh


You have that right,a sunny spring day and could not help myself.

[Silverlight]

While on holiday in th UK , was dragged around the big homeware stores by the other half (B and Q, homebase etc)
Couldnt move for taps and bathroom fittings , massive competition in that space, hard to see how a company in
NZ would have any competitive advantage

It won't be easy you are right, it will be hard, and it has been hard, but its a bigger market, and if you look at sales, almost the same as NZ, just on razor thin margins while they establish the business.

If we extrapolate the current data, just to get a ball park of potential, in NZ they have almost half the market, $35m in sales, so if we assume in the UK tapware is based on the same spend, maybe higher maybe lower, and population is 60m, then total market is circa $1.2b. Methven have $20m sales in the UK currently, so maybe 1.5% of the market.

If they can grow to 10% of the UK market, ambitious, then revenues will be $120m in the UK alone, that doubles their current total revenue, and on 10% margins currently an additional $12m in profit.

The recent run was driven by ACC buying more, see the SSH notices, would add more if its fall back to sub $1.20, but for now happy to have got in during February, and have been paid a 6 cent dividend already with credits.

[winner69]

Quite often the headlines on company announcements give you an idea of the general direction in which the comapny is heading .... and sometimes they tell a story about whether the company is living a dream or not.

Here's the last fews in the life of MVN (luckily they don't make many announcemets to the NZX) -

May 07: Methven to Buy UK Tap and Showerware Distributor
Global expension makes MVN a really big company - cost $59m - need money from share holders and a pile of debt

Nov 07: MVN Half Year Result Slightly Up On Expectation
good news - but after spending all that money you would hope a good story

May 08: Methven Profit Surges on back of UK Acquisition
great stuff .... but surging .... after all it only surged against what a little company was doing eh

July 08: Methven still targeting growth in 2008-09
thats good .... thought you would like to know even though we don't usually make announcements in July

Oct 08: Methven lifts HY result despite tough Market Conditions
well done

May 09: Full Year Results for the period ending 31 March 2009
could not have been exciting as didn't give us an exciting headline to salivate over

July 09: Methven Re-affirms Satinjet Technology as Leading Edge
no news for a while ... something good for the shareholders to keep them interested

July 09: Methven Forecasts Lower Full Year Profit .
whoops .... told you about the leading edge technology .... but now you need to know profit will be down


Nov 09: Methven Group Interim Results Outperform Guidance
but it wasn't has bad as we thought it was going to be .... good stuff eh ... forgive us

May 10: Methven 2009-10 Results Close to Target
still doing OK ..... or just OK


May 10: Methven Brings New Luxury to Hotel Guests
but there is good news .... this will give you the warm fuzzies .... just imagine how many taps and things if every hotel in Asia used ours

July 10: Methven Forecasts Reasonable Lift in Full Year Profit and No Increase in Debt
told you we would be OK .... all on track .... esp from the global acquisition a few years ago

Oct 10: New Ultra-Low flow shower wins 2010 Sustainability Award
must be some bad news coming up ... here's the good bits first

Oct 10: Methven Fined
oops ..... we told some porkies about how much water was saved from our whizz bang shower heads ... but never mind cause no consumers actually complained .... prob just the nasty competitors


Oct 10: Respected Industry Leader Takes Up Reins as Methven UK
need to get the UK up and firing

Oct 10: Interim Results Demonstrate Earnings Resilience in Recessionary Times
its the economy stupid .... but we still making money

Mar 11: Earnings Update
nothing good in the headline so must be a downgrade .... yep 10%-15%

May 11: Focus (DIY) Limited - Updated Guidance
bugger - one of biggest customers goes broke .... just bad luck


May 11: Innovative Designs and Operational Efficiencies Key to Turnaround
well a turnaround of sorts

July 11: Methven Predicts Major Profit Lift in Difficult Climate
great stuff .... everycome coming to fruition .... acquisition coming good and all that sort of stuff

Oct 11: Methven Profit Update
not a +ve heading is it .... update means down .... earnings down 25% plus .... oh why did we say what we did in July


Nov 11: Interim Profit Down but Cashflow Up
have to +ve about something so lets forget about profit and concentrate on cashflow


So thats the life of MVN in their own words .... methinks they paid too much for that UK business but hope remains it might pay its way ...... and too a large extent MVN are dreamers .... they do some good stuff around innovation etc but that good stuff just keeps them in the game

Needs a continuation

MAY 12; Positive Earnings Growth Delivers Dividend

With another tough year now behind us, confidence is high that we have the strategy, the team, the products and more importantly the resilience to thrive and prosper in tough economic conditions and deliver sustainable returns and growth to our shareholders.” Jeez that was a really tough year but we did bloody well didn't we but next year will be pretty good .... but we shouldn't really take a guess as to what the profit might be

July 12: Methven Focuses on Future Growth

AGm - repeats how tough it has been but “We have repositioned the business for the current economic climate and are now poised for growth. We 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.” OK we still have our rose tinted glasses and hope is our strategy but we will do OK but better not guess how much

Sept 12: Half Year Profit Update
...., the first half NPAT is expected to be down on last yearbut things are getting by quarter so we will be OK come year end .... and by the way debt isn't coming down Whoops we cant say we can't guess ... we need to tell the bad news sorry guys

[gv1]

What do you think of the results...

[percy]

What do you think of the results...

No surprises there !!!!
Revenue down.
Profit down.
Debt up.!!!!!!
I suppose the market expected a worse result.

[winner69]

Needs a continuation

MAY 12; Positive Earnings Growth Delivers Dividend

With another tough year now behind us, confidence is high that we have the strategy, the team, the products and more importantly the resilience to thrive and prosper in tough economic conditions and deliver sustainable returns and growth to our shareholders.” Jeez that was a really tough year but we did bloody well didn't we but next year will be pretty good .... but we shouldn't really take a guess as to what the profit might be

July 12: Methven Focuses on Future Growth

AGm - repeats how tough it has been but “We have repositioned the business for the current economic climate and are now poised for growth. We 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.” OK we still have our rose tinted glasses and hope is our strategy but we will do OK but better not guess how much

Sept 12: Half Year Profit Update
...., the first half NPAT is expected to be down on last year but things are getting by quarter so we will be OK come year end .... and by the way debt isn't coming down Whoops we cant say we can't guess ... we need to tell the bad news sorry guys

Continuing the story

Nov 2012 Methven Maintains Profitability and Delivers Dividends .... interesting use of the word maintain ..... jeez we just avoided making a loss ..... just we said we would a few months ago .... but even though we can't really afford it we will still give you a divie .... and we remain committed (3 times they said that in half a page) to doing all the things to get a better result next time ..... but we won't be making any guesses this time around because we not very good at that

[percy]

winner69.
thanks for another one of your "classic" posts.
Most enjoyable and right "on the money" as usual.

[gv1]

Thanks guys...much appreciated.

[winner69]

Going through the presentation there is a glimmer of hope for better results in the next year. Market in nz should be better ....there are signs that building and construction is going to be positive ....even outside Chch ...... Aust might just hang in there .....and we'll the rest of the world get any worse for mvn.

Maybe they sold a good story to the analysts ....and soe saving a dabble

[gv1]

With FBU share rise... What are the opinions on MVN?

[tim23]

Have to rise I reckon, Milford have recently increased holding, as a long shot FBU could gobble them up? I do hold shares.

[gv1]

Thanks tim23.

[percy]

Another negative headline for Winner69s wall of Methven shame.

https://www.nzx.com/files/attachments/173577.pdf

NPAT excluding one offs to be down 12% on last year.

Milford clearly don't get all their decisions right.

Been a lot of warning signals.
Methven have in the past have talked the talk,but never been able to walk the walk.!
[hope I got that right?]
A long time ago I pointed out Rick Fella failed to return my phone call.I said at the time that was bad business practice.
Sorry to see Milford get it wrong,but they are not the only ones,as I think there are other intos on MVN's registry.
Again thanks to winner69 for his great posts that have kept us away from this underperformer.

[BIRMANBOY]

Underperformer ? Depends what you are looking at I suppose..lOOK AT THE DIVIDEND YIELDS LAST 5 YEARS.

Five Year Summary


2012
$000
2011
$000
2010
$000
2009
$000
2008
$000


Financial performance







Group operating revenue
106,202
122,087
129,822
137,321
114,759


EBITDA
13,8801
12,4211
16,6622
19,752
18,927


Net profit after tax
6,462
4,749
7,820
10,056
9,757


Financial position







Total equity
48,211
50,547
53,309
58,008
54,931


Total assets
90,244
99,999
100,958
119,564
11,9092


Intangible assets
35,708
38,315
38,306
45,932
46756


Net (debt) / cash
-11,746
-19,074
-17,446
-26,840
-32,596


Capital expenditure
3,651
3,659
2,209
2,611
4,313


Equity ratio
80.4%
72.6%
75.3%
68.4%
60.1%


Shareholder statistics







Number of shares
66,606,265
66,606,265
66,606,265
66,606,265
66,606,265


Dividend per share
10.00c
10.00c
11.00c
11.75c
11.70c


Share price at year end
$1.09
$1.56
$1.58
$1.20
$1.42


Earnings per share
9.70c
7.13c
11.70c
15.10c
18.30c


Net dividend yield
9.20%
6.40%
7.00%
9.80%
8.20%


Gross dividend yield
11.30%
8.30%
9.90%
14.30%
12.20%


Net tangible asset value per share
18.77c
18.36c
22.50c
18.10c
12.30c



Been a lot of warning signals.
Methven have in the past have talked the talk,but never been able to walk the walk.!
[hope I got that right?]
A long time ago I pointed out Rick Fella failed to return my phone call.I said at the time that was bad business practice.
Sorry to see Milford get it wrong,but they are not the only ones,as I think there are other intos on MVN's registry.
Again thanks to winner69 for his great posts that have kept us away from this underperformer.

[buns]

Even though the current yields are higher than they were when dividend payouts were 15% higher? Gotta look at the capital value bud. The TSR there is about 6% over 4 years, annual compound growth you could just about get from Jap bank deposits.. Yes, this is an under-performer.


Underperformer ? Depends what you are looking at I suppose..lOOK AT THE DIVIDEND YIELDS LAST 5 YEARS.

Five Year Summary


2012
$000
2011
$000
2010
$000
2009
$000
2008
$000


Financial performance







Group operating revenue
106,202
122,087
129,822
137,321
114,759


EBITDA
13,8801
12,4211
16,6622
19,752
18,927


Net profit after tax
6,462
4,749
7,820
10,056
9,757


Financial position







Total equity
48,211
50,547
53,309
58,008
54,931


Total assets
90,244
99,999
100,958
119,564
11,9092


Intangible assets
35,708
38,315
38,306
45,932
46756


Net (debt) / cash
-11,746
-19,074
-17,446
-26,840
-32,596


Capital expenditure
3,651
3,659
2,209
2,611
4,313


Equity ratio
80.4%
72.6%
75.3%
68.4%
60.1%


Shareholder statistics







Number of shares
66,606,265
66,606,265
66,606,265
66,606,265
66,606,265


Dividend per share
10.00c
10.00c
11.00c
11.75c
11.70c


Share price at year end
$1.09
$1.56
$1.58
$1.20
$1.42


Earnings per share
9.70c
7.13c
11.70c
15.10c
18.30c


Net dividend yield
9.20%
6.40%
7.00%
9.80%
8.20%


Gross dividend yield
11.30%
8.30%
9.90%
14.30%
12.20%


Net tangible asset value per share
18.77c
18.36c
22.50c
18.10c
12.30c

[percy]

The business is and has been a poor performer for years.
Nothing special about it.
Tap manufacturers are two a penny.
The balance sheet is very "heavy" with intangible assets.I think they are worthless,so equity ratio is very poor,with debt rising all the time.The bank will most probably put a stop to dividend payments.
Be prepared for a cash issue sometime.

Get out while you can.

[BIRMANBOY]

Do not agree at all..I'm interested in what it pays into my bank a/c every year and that is well over most other shares on the nzx. If you are after growth in share price thats a different matter. This was referred to as an underperformer so please do it the courtesy of being accurate and specifying what it was and where it was underperforming. Clearly it is NOT underperforming when you look at it as a dividend producer.
Even though the current yields are higher than they were when dividend payouts were 15% higher? Gotta look at the capital value bud. The TSR there is about 6% over 4 years, annual compound growth you could just about get from Jap bank deposits.. Yes, this is an under-performer.

[BIRMANBOY]

By your definition maybe..by mine no. Successfull businesses dont have to be "special" .they just have to do the business. Intangibles dropping each year. The fact that you think they are worthless is probably not supported by accountants who prepare the reports. Debt is decreasing. Your view of what the bank may or not do is purely speculative. Companies should be looked at from all possible perspectives and not just from a viewpoint of some particular bias.
The business is and has been a poor performer for years.
Nothing special about it.
Tap manufacturers are two a penny.
The balance sheet is very "heavy" with intangible assets.I think they are worthless,so equity ratio is very poor,with debt rising all the time.The bank will most probably put a stop to dividend payments.
Be prepared for a cash issue sometime.

Get out while you can.

[gv1]

My suspicion came true. Who is this guy Rick Fala? I think once a new(better) CEO comes on board, things would improve quickly...

[buns]

Well if you want to put it that way, you are swapping $1 something (price of a share) for about 10c (dividend)? Of course you need to take into account the share price/underlying asset.

If you own a $5m house which returns $500k in rent (10% return), would you be happier if the price of that house dropped to $4m with $450k rent (12% return)? The yield has gone up but you have just lost $1m and another $50k a year which could again be invested and so on.

I also covered this in the TSR calc, that shows that if you purchased the share 4 years ago and then sold this year, you would now have $1.06 cents in your bank account for every $1 invested. If you left that $1 in your bank account (ignored MVN), you would have over $1.10 and could have saved a bunch of time.


Do not agree at all..I'm interested in what it pays into my bank a/c every year and that is well over most other shares on the nzx. If you are after growth in share price thats a different matter. This was referred to as an underperformer so please do it the courtesy of being accurate and specifying what it was and where it was underperforming. Clearly it is NOT underperforming when you look at it as a dividend producer.

[buns]

Just on these guys. They are a good company, however will eventually become chicken feed to China manufacturing at some point in time. They haven't done too much wrong (maybe 1-2 bad decisions overseas), just the mat has been pulled out from under them as this kind of business simply can't survive in a game where the playing field (manufacturing economics in NZ v China) is this skewed.

It's a shame because it is a top notch product (Kiwi bias), they will remain sustainable but not a big growth engine they once aspired to. Chch and Auckland house building will help them in the short term.

[BIRMANBOY]

You are undoubtedly sincere in your opinion but are working off a false premise. This false premise is that underlying share(house) price is of material importance. If you never sell its immaterial and the facts remain that the return is predicated simply on the dividend as a percentage of your buy in price. If you buy as a growth/dividend share as you say the dividend benefits are negated by the share price....IF YOU SELL at a lower amount than you buy in for. Share price recently was 1.50...now at 1.20...I own at 1.11. The trick is to buy dividend producers at low points in the cycles so you are not only getting strong dividends but are also protected from SP erosion. Your vision is impeded by selective interpretation of the facts. It would be akin to me saying....RYM, DIL and XERO are underperformers. To a dividend seeker they are because they produce bugger all to little dividends. Growth stocks they most certainly are and would never be referred to as underperformers by me since I see the big picture. All I am saying is apply the same courtesy in return and recognise that some stocks are good for some and not for others ...but that does not neccessarily make them "underperformers".
Well if you want to put it that way, you are swapping $1 something (price of a share) for about 10c (dividend)? Of course you need to take into account the share price/underlying asset.

If you own a $5m house which returns $500k in rent (10% return), would you be happier if the price of that house dropped to $4m with $450k rent (12% return)? The yield has gone up but you have just lost $1m and another $50k a year which could again be invested and so on.

I also covered this in the TSR calc, that shows that if you purchased the share 4 years ago and then sold this year, you would now have $1.06 cents in your bank account for every $1 invested. If you left that $1 in your bank account (ignored MVN), you would have over $1.10 and could have saved a bunch of time.

[percy]

I had a friend who worked for them twenty years ago.
Hopeless outfit then,so some things stay the same.!
I doubt they will be in a position to keep paying dividends as the business is facing increasing competition and is clearly going backwards.

[BIRMANBOY]

Twenty years ago I had hair, boundless energy and some flexibility...how times change.;) If they stop paying dividends I'll sell. Meanwhile I'll keep socking away the hefty dividend. If you own it youd be appreciating them too...if you dont I dont know why you are bothering would seem like a waste of energy to me.
I had a friend who worked for them twenty years ago.
Hopeless outfit then,so some things stay the same.!
I doubt they will be in a position to keep paying dividends as the business is facing increasing competition and is clearly going backwards.

[percy]

Twenty years ago I had hair, boundless energy and some flexibility...how times change.;) If they stop paying dividends I'll sell. Meanwhile I'll keep socking away the hefty dividend. If you own it youd be appreciating them too...if you dont I dont know why you are bothering would seem like a waste of energy to me.

I waste a lot of energy watching a lot of companies in Australia and New Zealand.It is a most enjoyable and profitable hobbie.I am aware that some companies do well,through good management,while other companies are poor performers.Like you, some lose their hair and energy,while others grow hair and find extra energy.Some companies are in the right space at the right time.Energy spent doing good research stops me loosing money in poor companies who are going backwards.

[BIRMANBOY]

IF.......IF......IFFFFF. Thats why they call it a share MARKET Sparky. A market is somewhere where people gather to buy, sell and trade. Everyones trying to make a margin in all sorts of different ways. If you know your area of expertise, stick with what you know and arent too greedy or speculative them you should "beat the averages". No-one gets all their selections right ..thats why I have 22 different shares/bonds. It would be unreasonable for me to expect all of them to continue delivering the way I want. You could be right, Methven may be heading to the dark hole of no return. Everyone makes their own decisions based on available data and their own requirements. At the moment I am very happy with the yield especially given the shrinking pool of other dividend monsters. I have a cushion of protection because of my buy price so for me its all good. Press articles and media reports are always just a small (and possibly misleading) window into an unknown situation so I prefer to wait and see what happens in real life not be swayed by journalists writing pieces for entertainment of the masses.
Two schools of thought.

1) Owning MVN may be a very profitable investment because its dividend more than adequately compensates for potential downsides which may never materialise - meaning profits!
2) Owning MVN may be akin to owning a risky bond or finance company debenture as the market is telling you something by the nature of the yield and risk - IE, owning a slice of the underlying asset is not wise.

The problem is, should the dividends cease or decline, then the share price could easily drop beyond the point where the higher yield is illusory and you lose money.

For example, buying at $1, with a 10% yield means 10c a share dividend.

But if the dividends stop because the company is struggling, and the share drops to 80c, which is possible, then you have lost two years of income. Even if it drops 10%, you have no gain.

It you thought MVN was on the up, then obviously its a good deal. but the recent press release suggests it still has issues.

[gv1]

Very gracious of your STC. I appreciate your opinions and comment. I made some investment few mths ago when I saw other property related co's share spike etc. I have to reassess now and decide, maybe wait for the new CEO. Thanks

[BIRMANBOY]

No need to apologise and no offense taken. Everyone see things through their own set of glasses...some glasses have blinkers ,some are tinted, some are sand blown and some magnify what they see. Some are 20-20 and some are based on prescriptions that are well out of date. The best way of getting optimum vision is to accept that different scenarios require different specs and sure as hell you can guarantee that one set will by virtual guarantee provide very limited perpective. My original point is still worthy of keeping at hand. Judgements based on our own opinions are only valid to ourselves and room should always be left for possibility of other options being worthwhile. I try and remember one thing above all else. Dont get married to an investment...just enjoy its company for as long it makes sense.
I apologise. I didn't mean to offend you by having a negative outlook on Methven , which by proxy might be construed as a criticism of your investment choice and decision-making in Methven.

I merely wanted to point out that the premise for which you invested in, being a superior yield, would become self defeating if the reason for the superior yield was a dividend that was out of sync with the realities the company faced. Clearly if Methven can address their issues and maintain the dividend, you will have cause to be very happy with your choice.

Completely agree that press and media can provide insufficient insight, which is why I like to meet with company management before investing. Though I note in the case of Methven in the last couple of days, it is not media commentary, but actual statements from the company.

Nevertheless, you have conviction in the share, which is excellent. You may well have a competitive advantage over others in this company from your research, in which case, you would then probably be proven right.

[POSSUM THE CAT]

GV1 left Brisbane in mid 2006 at that time Methven tap ware was only considered suitable for Budget Housing it is an entirely different Market there. this may help you to understand the different markets

[gv1]

GV1 left Brisbane in mid 2006 at that time Methven tap ware was only considered suitable for Budget Housing it is an entirely different Market there. this may help you to understand the different markets
Sorry didn't understand this one.

When we build our house, our plumber insisted on Methven products, which we thought were pricey. Have seen close friends and family putting entirely different products, all tapware falling apart in few years. Ours still going strong after 10yrs. Have few little ones giving a hard time on those products, still solid and in one piece. One place maybe Methven should look at is having that relationship with the plumbers.

[POSSUM THE CAT]

GV1 When we were in Brisbane January 1998 to July 2006 the only houses we saw (and we saw a lot as part of our occupation) with Methven tap ware were the ultra low budget ones. It was a totally different market in Brisbane to here.

[gv1]

k.

Thanks PTC

[winner69]

Just on these guys. They are a good company, however will eventually become chicken feed to China manufacturing at some point in time. They haven't done too much wrong (maybe 1-2 bad decisions overseas), just the mat has been pulled out from under them as this kind of business simply can't survive in a game where the playing field (manufacturing economics in NZ v China) is this skewed.

It's a shame because it is a top notch product (Kiwi bias), they will remain sustainable but not a big growth engine they once aspired to. Chch and Auckland house building will help them in the short term.

I agree buns - they are a good company ...good products .....good amount of innovation ....and solid profits.

What's got them into trouble (perceived) is because as they are listed they need to meet the demands of the 'market' .....maybe only one or two instos .....they say GROW GROW GROW and if you don't you are a failure. So we make all these promises and are forced to make all these silly acquisitions so we can grow,
.
Heck - if they were a private company and just carried on doing what they did well they would stil be generating the returns that Birman shares in and the owners would be happy as larry and getting richer every year.

MVN are only a failure cause they were forced to set unrealistic expectations and didn't met them ...that's failure these days

But sadly they have been performing solidly and making decent money ...just not enough for some greedy shareholders .....most who wouldn't even know what mvn do ...they are more than a line on a chart

Yes one day prob the world will produce things so cheap mvn will suffer but that's another story

[golden city]

profit forecast looks solid

[gv1]

profit forecast looks solid

Yeah one stock looking cheap in NZX. One to look out for..

[percy]

Go very carefully.
This company has a very checked history.
SP has been up and down like Whore's draws for years.
This time it's different?! Yeah right.!

[Under Surveillance]

Go very carefully.
This company has a very checked history.
SP has been up and down like Whore's draws for years.
This time it's different?! Yeah right.!
You're just miffed because that fella Fala didn't return your call.

[BIRMANBOY]

This is a solid performer...look at its dividend history. I wouldn't be buying it at its high price now but owning it at 1.11 has been very well rewarded. Its purchase of previous Chinese partners factory will secure its viability for a while and buying some shower products recently I was given a good selection of price points and qualities to choose from.
http://www.dividendyield.co.nz/viewdetails.php?id=67

Go very carefully.
This company has a very checked history.
SP has been up and down like Whore's draws for years.
This time it's different?! Yeah right.!

[percy]

You're just miffed because that fella Fala didn't return your call.

Yeah Right!!!!
Not returning my call ended up saving me a lot of money.!!

[percy]

This is a solid performer...look at its dividend history. I wouldn't be buying it at its high price now but owning it at 1.11 has been very well rewarded. Its purchase of previous Chinese partners factory will secure its viability for a while and buying some shower products recently I was given a good selection of price points and qualities to choose from.
http://www.dividendyield.co.nz/viewdetails.php?id=67

Be interesting watching to see whether new CEO can deliver.?
A very competitive market.Bunnings,Mitre 10,Plumbling World,Mico Wakefield,Oakleys,Carters,Placemakers etc are experts a screwing manufacturers/suppliers. No profits =no divies.
A growing company in a growing sector has more safety in paying increasing dividends.
I do not see MVN as either a growing business nor is it in a growing sector.

[_Michael]

Be interesting watching to see whether new CEO can deliver.?
A very competitive market.Bunnings,Mitre 10,Plumbling World,Mico Wakefield,Oakleys,Carters,Placemakers etc are experts a screwing manufacturers/suppliers. No profits =no divies.
A growing company in a growing sector has more safety in paying increasing dividends.
I do not see MVN as either a growing business nor is it in a growing sector.

Do not agree with that summary percy.

Construction/rennovation are cyclical and we are at the start of a potentially decade long structural boom for NZ building industry. Definitely a growing sector.

They also have some interesting growth avenues in China with the hotel retro fitting business.

In regards to the retailers, Bunnings and co are where you buy cheap no brand taps. These guys have focused on the premium branded end of the market and have very good margins.

They have good shelf space at places like Reece/Chesters where the trade market tend to buy.

[_Michael]

Do not agree with that summary percy.

Construction/rennovation are cyclical and we are at the start of a potentially decade long structural boom for NZ building industry. Definitely a growing sector.

They also have some interesting growth avenues in China with the hotel retro fitting business.

In regards to the retailers, Bunnings and co are where you buy cheap no brand taps. These guys have focused on the premium branded end of the market and have very good margins.

They have good shelf space at places like Reece/Chesters where the trade market tend to buy.

I should add they definitely c0cked up the UK acquisition but the fact that after that big disaster they still have healthy ROE and low debt probably says something about the strength of the Australasian business

[percy]

I should add they definitely c0cked up the UK acquisition but the fact that after that big disaster they still have healthy ROE and low debt probably says something about the strength of the Australasian business

Michael.I agree with you there will be a lot of building going on in NZ,it I just that I do not think MVN will get their share.Too much competition.
I have felt for a number of years that they are a " poor" company.As you pointed out troubles in UK.I think they also had troubles in Aussie.They appear to attract troubles.!!!lol.
I am also mindfull of their failure to deliver on their targets.
They have paid out more in dividends than they have earnt over the last two years.
Low debt has/is the saving grace.

[_Michael]

Michael.I agree with you there will be a lot of building going on in NZ,it I just that I do not think MVN will get their share.Too much competition.
I have felt for a number of years that they are a " poor" company.As you pointed out troubles in UK.I think they also had troubles in Aussie.They appear to attract troubles.!!!lol.
I am also mindfull of their failure to deliver on their targets.
They have paid out more in dividends than they have earnt over the last two years.
Low debt has/is the saving grace.

Fair enough.

Its a shame there are not any really high quality ways to play the impending local building boom. I am a believer it will be a bigger driver of nz growth

Some would argue FBU and I am much happier with them under the current CEO than under Jonathan Ling but they too have some pretty big structural headwinds...

Welcome peoples ideas on playing the building theme.

The only two I currently have are MVN/CAV due to being kind of strong in their niche and having had high returns on capital (15-25%) until very recently

I am worried about CAV from a retailer-shafting-them perspective but do think there is a place for quality branded tapware, so MVN is pretty much my only NZ building play at the moment..

[forest]

Fair enough.

Its a shame there are not any really high quality ways to play the impending local building boom. I am a believer it will be a bigger driver of nz growth

Some would argue FBU and I am much happier with them under the current CEO than under Jonathan Ling but they too have some pretty big structural headwinds...

Welcome peoples ideas on playing the building theme.

The only two I currently have are MVN/CAV due to being kind of strong in their niche and having had high returns on capital (15-25%) until very recently

I am worried about CAV from a retailer-shafting-them perspective but do think there is a place for quality branded tapware, so MVN is pretty much my only NZ building play at the moment..


I see CDI as you cyclical pure NZ local building play. Liquidity is low but the cycle is easy to pick. You looking for high quality I see, how do you define quality Michael?

[percy]

Fair enough.

Its a shame there are not any really high quality ways to play the impending local building boom. I am a believer it will be a bigger driver of nz growth

Some would argue FBU and I am much happier with them under the current CEO than under Jonathan Ling but they too have some pretty big structural headwinds...

Welcome peoples ideas on playing the building theme.

The only two I currently have are MVN/CAV due to being kind of strong in their niche and having had high returns on capital (15-25%) until very recently

I am worried about CAV from a retailer-shafting-them perspective but do think there is a place for quality branded tapware, so MVN is pretty much my only NZ building play at the moment..

I agree with Forest's CDI as a company that is/will do well selling a lot of sections.
I sold out of FBU as there were always problems,ie Laminex in Spain,always sometime.Also thought Bunnings must be making Placemaker's life difficult.
I brought STU as they are well focussed,well run company in that sector.I brought at $2.53 and have had a good divie already.CAV,also faces challenges!!!

[percy]

Craig's have updated their research with a buy recommendation.12month target price $1.65.

[forest]

Thanks Percy, thats good to know.

[percy]

Thanks Percy, thats good to know.

That's for MVN,not CDI..!!!!!
Look forward to hearing your CDI valuation.!!! lol.

[Silverlight]

The best time to buy cyclical small caps is at the bottom of the cycle, we were there in Feb last year, good to see the analysts are now upgrading their targets though.

With 14.5 cents in divs plus credits, and almost a 50% capital gain, I would look to sell above $1.75 before the end of the year, definitely now more cautious, than 18 months ago, taking your side for a change percy! :p

[golden city]

looks solid.., should have a nice little trend comming next month..

[BlackPeter]

Soft earnings downgrade (now promising same as last year or up to 10% above - i.e. 8 to 9 cts/share, not the originally envisaged 10 cts). Still waiting for the Christchurch recovery?

https://www.nzx.com/files/attachments/188594.pdf

[winner69]

oops the much touted turnaround that was 'gathering momentum' on November 29th has more than stalled

Methven experienced softer than expected trading in December and January in Australasia, partly due to key customer stock reduction programmes. Consequently we now expect our full year net profit after tax result for the year ending 31 March 2014 to be around the same level or up to 10% up on last year’s reported result.

That means that H2 profit is way down on pcp ...... so a short sharp announcement because the details are really just a bad to make any further explanation

[percy]

oops the much touted turnaround that was 'gathering momentum' on November 29th has more than stalled

Methven experienced softer than expected trading in December and January in Australasia, partly due to key customer stock reduction programmes. Consequently we now expect our full year net profit after tax result for the year ending 31 March 2014 to be around the same level or up to 10% up on last year’s reported result.

That means that H2 profit is way down on pcp ...... so a short sharp announcement because the details are really just a bad to make any further explanation
No surprises there.!!! lol.

[Schrodinger]

Avoid this stock at all costs unless they can clearly show that their hardware is better then the Germans, Italians, Swedes, Chinese, Japanese ......

[winner69]

So H2 profit to be down 18% if lower end of their guidance is to be believed

The momentum in the turnaround seems to have run out.

Maybe eps this years 8 cents - will they more than earnings out again this year, when debt not coming down in next 6 months. No doubt they will preserve the 9 cent divie to keep shareholders interested

EPS 8 cents and profits still going to be around what they were 3 years ago and a lot less than 5 years ago - so what a good indication of a share price? A PE of 12 maybe gives a $1. Keep the dividend at 9 cents and maybe $1.25 but cur that dividend back to 7 cents and maybe that $1 in view of increasing interest rates

Good story they keep telling .... but beginning to lack credibility

One knew it was going to be bad news in that announcement just from the heading .... Methven love telling good stories in the headings ... but alas a simple heading 'Full Year Results Forecast"

I think they have stuffed up .... maybe the cat is right with his perceptive comments

[BIRMANBOY]

You've been banging on with the same old, same old for years W69...this cat says MVN is giving me an 11% gross yield every year. What's your perception regards that?:bored:

[percy]

You've been banging on with the same old, same old for years W69...this cat says MVN is giving me an 11% gross yield every year. What's your perception regards that?:bored:

Dividend must be weighed up against capital growth.While you have enjoyed your dividends,you have lost capital.In fact 16.47% since December 2004.
Had you invested in any of the following you would have enjoyed more modest dividends,however you would rejoice in the capital growth ;EBO 164.87%..POT329.13%..FRE 155.74%..MFT.573% LPC.75.44%..MHI 325%.
In fact had you invested in FRE at issue [$1.60] your dividend 18,8cents per share would work out at 11.75% yield on your invested capital,and you would be rejoicing in the $4.68 share price.
It is worth remembering Warren Buffett's first rule of investing;"do not lose capital."

[BIRMANBOY]

You seem to be under the impression that there is only one type of investor.....bit simplistic, don't you think? If you have a look at my signature you might surmise ,if you were sufficiently astute, that my focus is on dividends not capital growth. I'm not looking at growing my wealth but preserving it and providing an annual stream of revenue to top up my super. This is on-going and so far has been reliable and requires very little work and tweeking. Have outperformed my benchmark of TD of 4% by having an overall gross yield of 9.3%. MVN is one of the regulars that make up that portfolio. Your examples of super growth are reliant on someone making all the right decisions and a certain amount of luck (or a lack of bad decisions). The investors who fit that profile are few and far between. I'm modest in that I don't believe I can beat the market so work with that as my back up philosophy. MVN has been a steady dividend producer.
Dividend must be weighed up against capital growth.While you have enjoyed your dividends,you have lost capital.In fact 16.47% since December 2004.
Had you invested in any of the following you would have enjoyed more modest dividends,however you would rejoice in the capital growth ;EBO 164.87%..POT329.13%..FRE 155.74%..MFT.573% LPC.75.44%..MHI 325%.

[Schrodinger]

You seem to be under the impression that there is only one type of investor.....bit simplistic, don't you think? If you have a look at my signature you might surmise ,if you were sufficiently astute, that my focus is on dividends not capital growth. I'm not looking at growing my wealth but preserving it and providing an annual stream of revenue to top up my super. This is on-going and so far has been reliable and requires very little work and tweeking. Have outperformed my benchmark of TD of 4% by having an overall gross yield of 9.3%. MVN is one of the regulars that make up that portfolio. Your examples of super growth are reliant on someone making all the right decisions and a certain amount of luck (or a lack of bad decisions). The investors who fit that profile are few and far between. I'm modest in that I don't believe I can beat the market so work with that as my back up philosophy. MVN has been a steady dividend producer.


For how long though? Their profitability is eroding or have I misread the results?

[percy]

Please note while you were posting I was adding to my post.
The companies I have used are just a broad selection off the top of my head.Each and all of them will continue to out perform MVN.
Others that I hold where you will enjoy both growing dividends and share price are AWF and HNZ.

[couta1]

I held 50k shares last year,grabbed a dividend and sold out for a small loss after researching the market methven are in and concluding that beyond the ChCh rebuild they have an unknown and difficult future,even Rym and Sum arnt using their products in their facilities

[stoploss]

I held 50k shares last year,grabbed a dividend and sold out for a small loss after researching the market methven are in and concluding that beyond the ChCh rebuild they have an unknown and difficult future,even Rym and Sum arnt using their products in their facilities

The satinjet, is a great product and a big watersaver. Not sure if others have replicated it ... but sad they do not have a following amongst locals like RYM and SUM.

[couta1]

The satinjet, is a great product and a big watersaver. Not sure if others have replicated it ... but sad they do not have a following amongst locals like RYM and SUM.
Don't get me wrong I think Methven have great and innovative products but the competition is now fierce and methven has lost the advantage it once had IMHO

[Schrodinger]

Just looked a little deeper into their business. Does anyone agree that they lack building/construction and hardcore product engineering experience at the board level? I point out building because I assume thats their key vertical.

I see a good representation of accountants, lawyers, fishing, biscuits, lawyers, accountants etc. I think Cutfield as some experience on the engineering side but not sure. I know the Germans love to stack their boards with engineers. Good to see a marketer there but I think its a weakness in the other areas. FPH looks more balanced in this regard with engineers and health vertical experience.

Also interested to know what their export markets look like. Is this a pure domestic play company?

[winner69]

You've been banging on with the same old, same old for years W69...this cat says MVN is giving me an 11% gross yield every year. What's your perception regards that?:bored:

I only bang on with he same old for years as much as mvn bang for years and years about being a growth company. As their performance shows they ain't

If they just said we are doing a lot of good stuff to stay in the game and make enough dosh to pay a decent divie every year I would respect them more. It's just this illusion of grandeur that is misleading. They are a solid company who gives every cent ( some years more) they make back to shareholders (stuff the bank). Good on them and good on you Birman for taking advantage of that.

And no matter what they will pay another 9 cent divie this year ....but if I had bought at 140 plus that's not a 11% yield

That is my perspective birman

[BIRMANBOY]

Not really that important to my thinking. Nothing I can control and no amount of research or hand wringing will answer those questions. Dividends are like buses....one stops...you get off it and get on another. if you buy at the right time in the dips its also unlikely to create a loss when you change buses.
For how long though? Their profitability is eroding or have I misread the results?

[percy]

I must prefer to travel on clean well kept buses going in the right direction, rather than smokey old clapped things going on the road to no where.

[percy]

But wait!!!!!!!!!!!!!!!!!!!!!!!!
Craigs have retained their buy recommendation with a target price of $1.52.

[winner69]

Birman - Isee you in good company as Milford have being buying up MVN lately. Topped up with 500,000 at 141 just before Xmas

I'm told Milford are pretty good and best in class so MVN must be growing in spite of the hiccup announced during the week

Also Salt have been buying and their last purchase of just under a mill share was at 141 as well

Where the gurus go others must follow

[BIRMANBOY]

Interesting.. I would imagine that these big funds like a few good dividend producers to back up the expected results their customers require. Give them (Milford customers) a good steady 7 to 8% return and everybody is happy. The type of person investing in a fund wants solid consistent returns, no bad years and a quarterly report they can read in 15 minutes. Gurus? nah...posterior fashion designers yes. Did they have CNU in the portfolio??
Birman - Isee you in good company as Milford have being buying up MVN lately. Topped up with 500,000 at 141 just before Xmas

I'm told Milford are pretty good and best in class so MVN must be growing in spite of the hiccup announced during the week

Also Salt have been buying and their last purchase of just under a mill share was at 141 as well

Where the gurus go others must follow

[percy]

I see Milford have brought into MGL, Mercer Group,as well as Methven.I will watch with interest, as I consider both companies to be poor investments.

[winner69]

So the "around the same level or up to 10% up on last year’s reported result" is now " to be 5% to 10% down on last year's reported result"

Whoops = didn't really have a handle on things six weeks ago did they

MVN say they are a growth company .... for that reason only Birman I will continue to bang on with the same old, same old for years

Hope for your sake they don't do anything to that dividend you are looking forward to

[percy]

So the "around the same level or up to 10% up on last year’s reported result" is now " to be 5% to 10% down on last year's reported result"

Whoops = didn't really have a handle on things six weeks ago did they

MVN say they are a growth company .... for that reason only Birman I will continue to bang on with the same old, same old for years

Hope for your sake they don't do anything to that dividend you are looking forward to

All I can say is "no surprises there!" [or is it here?] lol.
Share price is where it was a year ago,however?

[winner69]

Shouldn't rubbish them really

Times are tough out there and they are still making some money ....just not that much

[percy]

Shouldn't rubbish them really

Times are tough out there and they are still making some money ....just not that much


Really? Yeah right!!!
Times always seem to be tough out there for this company.!!!! Do not expect they will improve any time soon either.!

[winner69]

PE now over 17 but such an innovative company should be able to grow EPS by 25% or more so a PEG < 1 makes this a screaming buy ..... and divie yield of over 10%

And remember gurus like Milford and Salt bough in a few weeks at over 140 and Craigs have a target of 150 odd

Cant lose at these prices

[couta1]

PE now over 17 but such an innovative company should be able to grow EPS by 25% or more so a PEG < 1 makes this a screaming buy ..... and divie yield of over 10%

And remember gurus like Milford and Salt bough in a few weeks at over 140 and Craigs have a target of 150 odd

Cant lose at these prices
Remove your tongue from your cheek winner:cool:

[percy]

Remove your tongue from your cheek winner:cool:

Spot on.!!
Winner69.I see EPS growth [if any] at 2.5% not 25% so I think the PEG will work out between 1.5 and 2,which means avoid.!

[BIRMANBOY]

W69...if you bang on often enough for sustained periods....statistically you increase your chances of being right. I'm happy that you feel vindicated now. I don't read their results, don't care about their problems or wins....I just deposit the checks. KISS is my modus operandi. As previously stated my return on this is substantial and when it slows or stops its time to "turn off the taps". Until then you can be as right as you like. If it gets down to $1 .10 or so I'll probably buy some more. Its got a strong dividend history so it suits me well. She may not be the prettiest girl in the room but she loves me..what can I say.
So the "around the same level or up to 10% up on last year’s reported result" is now " to be 5% to 10% down on last year's reported result"

Whoops = didn't really have a handle on things six weeks ago did they

MVN say they are a growth company .... for that reason only Birman I will continue to bang on with the same old, same old for years

Hope for your sake they don't do anything to that dividend you are looking forward to

[percy]

Craigs have update their recommendation on MVN and have changed it from Buy to Hold.
"second profit warning indicates the earnings risk for the next 6-12 months is very much on the downside,and management does not appear to be in control of the situation."
No surprises there!!! ???? lol
BIRMANBOY; Hold your cheque book at the ready.!!

[BIRMANBOY]

I'm ready Percy...its just been topped up with my obscene profits from TRS so willing to add a few more on the dips.
Craigs have update their recommendation on MVN and have changed it from Buy to Hold.
"second profit warning indicates the earnings risk for the next 6-12 months is very much on the downside,and management does not appear to be in control of the situation."
No surprises there!!! ???? lol
BIRMANBOY; Hold your cheque book at the ready.!!

[winner69]

That's mean of Craig's to say ....and management does not appear to be in control of the situation."

It's not that consumers / tradies are buying Methven stuff .....it's just there were so many taps and shower heads sitting in the plumbing merchants stores that they haven't had to buy many later. Oops they were MVN sales last year and that's what paid Birmans dividend.

They are buggers those plumbing merchants the no doubt the big boxes as well .....they should be buying more and more and not reducing stck levels.

Craig's don't get it .....out of management control eh Percy ......equilibrium will soon come to reason ....and MVN will grow at 25% pa again ....oops 2.5% pa

Sorry Birman .....I have no need to be vindicated .....just that MVN continually set themselves up for this type of carry on.

[percy]

I'm ready Percy...its just been topped up with my obscene profits from TRS so willing to add a few more on the dips.

I do enjoy your posts.Just hope you will have the last laugh,and Winner69 and I will have to eat humble pie!!

[percy]

That's mean of Craig's to say ....and management does not appear to be in control of the situation."

It's not that consumers / tradies are buying Methven stuff .....it's just there were so many taps and shower heads sitting in the plumbing merchants stores that they haven't had to buy many later. Oops they were MVN sales last year and that's what paid Birmans dividend.

They are buggers those plumbing merchants the no doubt the big boxes as well .....they should be buying more and more and not reducing stck levels.

Craig's don't get it .....out of management control eh Percy ......equilibrium will soon come to reason ....and MVN will grow at 25% pa again ....oops 2.5% pa

Sorry Birman .....I have no need to be vindicated .....just that MVN continually set themselves up for this type of carry on.

I was very surprised by Craig's strong language.Would have thought they would have come out with a sell recommendation.Really think Craig's analysts was foolish with his last report.Must not read your posts here on sharetrader.I remember your wonderful post where you compared MVN's results to their talk.It was a classic.!
Was thinking to myself possibly the hardest rep's job would be trying to sell taps and shower units to the like's of Bunnings.

[winner69]

I was very surprised by Craig's strong language.Would have thought they would have come out with a sell recommendation.Really think Craig's analysts was foolish with his last report.Must not read your posts here on sharetrader.I remember your wonderful post where you compared MVN's results to their talk.It was a classic.!
Was thinking to myself possibly the hardest rep's job would be trying to sell taps and shower units to the like's of Bunnings.

Yep ..... Bunnings owned by Wesfarmers a la Coles and the grocer way of buying applies to Bunnings

We buy at this price / you stock the shelves up and put in a lot of merchandising / you come in the shop every so often to show our stuff they work / you give us rebate to stay in the shop

If they don't sell take your stock away

[BlackPeter]

Interesting discussion. Just looking at their 5 year summary:

http://www.methven.com/nz/investors/five-year-summary

Yes, there is a lot of consistent growth, but unfortunately into the wrong direction:ohmy:. Over the last 5 years revenue shrunk by nearly 30% and NPAT went down by nearly 50%.

Birmanboy, appreciate your view on dividends, but it looks like they paid already last year a higher dividend than they can afford (earned 7.7 cts/share, but paid 9 cts per share dividend), which is clearly not sustainable.

I guess the big question is - are they likely to recover? NZ is likely to have over the next couple of years a building boom (general housing shortage and Christchurch rebuild), which is good for them. UK might recover as well (northern Europe doing quite well at current), Australia is in my view more a question mark. Asia might become an interesting market (growing middle class), but whether Methven gets their foot into this market is anybodys best guess.

Personally I would think that the market overreacted to the recent announcement (and I am still holding a smaller parcel) - but I probably wouldn't want to bid the bank on them staying a reliable dividend stock. The next annual report might be interesting reading...

[winner69]

Personally I would think that the market overreacted to the recent announcement (and I am still holding a smaller parcel) - but I probably wouldn't want to bid the bank on them staying a reliable dividend stock. The next annual report might be interesting reading...

The market seemed to take the 30/1 profit warning in its stride and even though the price went down 5 cents or so it soon recovered to be over 140. Not much reaction then (maybe Milford and Salt kept the price up)


Now 2 months later another profit warning. Market not forgiving this time around by the looks of it.

So I don't see the current fall as an over reaction - just 'punishing' them as they say for a pretty big downgrade now, one that wasn't punished in January.

You can only piss off the market so many times .... but if you bet on 9.5 cents dividend you'd be in boots and all at 119

[winner69]

The 2 announcements at end of Jan and this week are effectively a 20-30% earnings downgrade on the expectations set in September when they were "optimistic that the first half's improved performance can be sustained" (MVN Presentation). Recall the first half earnings were up 20% (before abnormals) and they proudly stated that the 'turnover gathers momentum'

Wow up 20% in first half and likel;y to be down 35% in second half -lets hope that type of performance doesn't 'gather momentum'

[BIRMANBOY]

So as always the SP is simply a reaction to and a reflection of market sentiment. So we have a less than promising outlook and report and we get a response that reflects that and a big SP drop. Now if I was a CEO/board member the last thing I would be thinking about is how can we accelerate that drop and piss off the remaining shareholders....Oh I know lets drop/cut the dividend as well... Yes its conceptually possible but highly unlikely. The market should be fed bad news in instalments interspersed with some good news as a counterbalance is the normal routine. As you said W69 at a 1.40 not returning 11% however currently at 1.19 its looking much more attractive. This, combined with historical dividend history, will IMHO see it give us a bounce back soon. You don't have to like, admire or agree with them but all in all could be a money earner. All it would take to get a bounce would be some reversal of the exchange rate which is at its current high for a while. My theory is Milford went in because of the dividends....and do believe that MVN will resist dividend cuts as a long as they can. Getting in at current levels LOOKS ATTRACTIVE TO ME ESPECIALLY LOOKING AT 5 YEAR CHART. As always just my thinking and not a recommendation.
The market seemed to take the 30/1 profit warning in its stride and even though the price went down 5 cents or so it soon recovered to be over 140. Not much reaction then (maybe Milford and Salt kept the price up)


Now 2 months later another profit warning. Market not forgiving this time around by the looks of it.

So I don't see the current fall as an over reaction - just 'punishing' them as they say for a pretty big downgrade now, one that wasn't punished in January.

You can only piss off the market so many times .... but if you bet on 9.5 cents dividend you'd be in boots and all at 119

[percy]

[QUOTE=BlackPeter;470514]. Just looking at their 5 year summary:

http://www.methven.com/nz/investors/five-year-summary

BlackPeter thank you for the link.
What one may call a reality check!!!
2009 compared to now, 2013,
Revenue 2009 $137,321,000 Now 2013 , $ 98,420,000 -28%
Nett Profit2009 $10,056,000 Now 2013, $5,150,000 -48.8%
EPS 2009 15.10 Now 2013, 7.70 -49%
Divie per share 11.75 Now 2013, 9.00 -23% Yet higher than earnings????
Summary.Lost cause.! Avoid.

[percy]

Yep ..... Bunnings owned by Wesfarmers a la Coles and the grocer way of buying applies to Bunnings

We buy at this price / you stock the shelves up and put in a lot of merchandising / you come in the shop every so often to show our stuff they work / you give us rebate to stay in the shop

If they don't sell take your stock away

Moosie 900.
This post of Winner69's "hit the jackpot".
Tapeware and shower market would be a "terrible business to be in."
Think Goodman Fielder trying supply bread and staples to supermarkets.This business is even tuffer.Impossible.!!

[BIRMANBOY]

My mind is not as "agile" as yours Moosie. There's several degrees of speculation, such as glass half full speculation ranging across to glass half empty speculation and then there's the 'woodlands creature" speculation which is hyper sensitive to every wind blown nuance floating in across the tundra. I choose to select the most probable outcome based on my understanding of human and corporate behaviour, (as I see it anyway). Regardless, its not really about who is right or wrong its about dealing with the reality that occurs. I'm prepared for anything so all good.
Wow those are some pretty scary figures Percy. Would be worth obtaining a Milford/Salt coverage sheet detailing why they bought.

As for dividend not beingcut at all. Come on Birman, really???

[couta1]

Although I no longer hold Methven shares I like the quality of their products and in the last 20 years have only seen one retirement village with Methven taps throughout which is a shame because imagine Methven NZ sales increases if Rym/Sum/Met all decided they were going to use Methven gear in their facilities and as its stands a lot of the alternative products they use especially in the care centers which get heavy use don't seem to be lasting that long from my observations,perhaps Methven should be making a big effort to capture this market?

[BIRMANBOY]

Its dropped too fast for their to be any "sane" people buying. Buy when its bottomed and turned ..even you should know that moosie;). Its been returning me a double digit gross div for years. Expand your horizon...oh wait, I forgot you want to trade. Ok look at charts...could be a decent trade here as you long as you have a bit of patience.
I'm just saying that's quite hard to fathom two downgrades and a fast slumping shareprice without a dividend cut. If it wasn't being cut it would be a screaming buy at 10%+ divvie with everyone buying in, thereby stopping the sp dropping right? hey, if I'm wrong, Salt and Milfie guys (as well as you if you're holding...) are going to be getting a big bonus this year right?!?

[winner69]

Gap between EPS and Dividends - I think percy used the term tooth fairy

Over the past 5 years MVN have actually generated more cash (operating less investment) the they have paid out in dividends. Just that cash flows are choppy and are either very good or very bad while dividends have been pretty steady. In the good years they repay some borrowings and in bad years they borrow a bit more to pay the dividend.

This is how things have panned out. First number is FCF and 2nd is dividend paid $000


2009 13,909 / 8,159
2010 13,974 / 7,327
2011 5,949 / 7,327
2012 12,676 / 5,993
2013 898 / 6,661

So over 5 years they have managed OK (only borrowed 2 out of the last 3 to pay the dividend) but goodness knows what this years cash flow is going to be like - need $6.6m to pay that dividend

Had it covered in the first half so I predict that this years divie is SAFE (bit worried about that statement that they might reduce debt this year but maybe another bit of confirmation)

See Birman - I have no barrow to push, neither do I have any need to be vindicated as you said yesterday.

Just wish they would stop raving on about being a growth company

[winner69]

Although I no longer hold Methven shares I like the quality of their products and in the last 20 years have only seen one retirement village with Methven taps throughout which is a shame because imagine Methven NZ sales increases if Rym/Sum/Met all decided they were going to use Methven gear in their facilities and as its stands a lot of the alternative products they use especially in the care centers which get heavy use don't seem to be lasting that long from my observations,perhaps Methven should be making a big effort to capture this market?

Wouldn't be good for MVN even if their taps and stuff went into Ryman

You should be proud of how Ryman screw suppliers / contractors and get a deal that suits them, not the supplier.

No doubt they have tried for this business but couldn't afford to supply and make a buck, at least for the good stuff.

Whose taps and shower heads and things you see couta

[couta1]

Wouldn't be good for MVN even if their taps and stuff went into Ryman

You should be proud of how Ryman screw suppliers / contractors and get a deal that suits them, not the supplier.

No doubt they have tried for this business but couldn't afford to supply and make a buck, at least for the good stuff.

Whose taps and shower heads and things you see couta
I see a mix of brands so starting next week I'm going to do a little survey recording the names of the brands in each facility and see if there is any other NZ brand used at all,Monday I work at an Oceania facility the only one with the Methven gear in as spoke of above,cheers

[BIRMANBOY]

All cool. I admire your search for the truth and always good to hear valid opinions. I'm a lazy investor so good to see others views.
Gap between EPS and Dividends - I think percy used the term tooth fairy

Over the past 5 years MVN have actually generated more cash (operating less investment) the they have paid out in dividends. Just that cash flows are choppy and are either very good or very bad while dividends have been pretty steady. In the good years they repay some borrowings and in bad years they borrow a bit more to pay the dividend.

This is how things have panned out. First number is FCF and 2nd is dividend paid $000


2009 13,909 / 8,159
2010 13,974 / 7,327
2011 5,949 / 7,327
2012 12,676 / 5,993
2013 898 / 6,661

So over 5 years they have managed OK (only borrowed 2 out of the last 3 to pay the dividend) but goodness knows what this years cash flow is going to be like - need $6.6m to pay that dividend

Had it covered in the first half so I predict that this years divie is SAFE (bit worried about that statement that they might reduce debt this year but maybe another bit of confirmation)

See Birman - I have no barrow to push, neither do I have any need to be vindicated as you said yesterday.

Just wish they would stop raving on about being a growth company

[couta1]

Getting Hammered today

[BIRMANBOY]

Some strong support building at around 1.17..wasnt fast enough yesterday....bugger.

[percy]

Some strong support building at around 1.17..wasnt fast enough yesterday....bugger.

Yes I see that strong buying support at $1.17. 222 wanted.!!!!!!!!!! lol.

[BIRMANBOY]

Read the instructions Percy......BUILDING AROUND...which means in the vicinity, near, close, in the area. Don't be so pedantic...you of all people should appreciate the nuances allowable under loose linguistic loquacity.:D
Yes I see that strong buying support at $1.17. 222 wanted.!!!!!!!!!! lol.

[percy]

Read the instructions Percy......BUILDING AROUND...which means in the vicinity, near, close, in the area. Don't be so pedantic...you of all people should appreciate the nuances allowable under loose linguistic loquacity.:D

Sorry about that,but I just could not help myself.!!!!

[couta1]

Got bold and bought a parcel of these again today at $1.15,see it slipped to $1.12 but as long as they don't turn off their divvy tap just yet looks pretty good value to me at these levels

[percy]

Some strong support building at around 1.17..wasnt fast enough yesterday....bugger.

Still strong at $1.12?

[couta1]

Got cajones on ya couta, nearing multi year lows right now.
Yep touching the bottom Bollinger line so as good a time as any to buy aye,plus the upcoming divvy hopefully:cool:

[couta1]

Still strong at $1.12?
We shall find out tomorrow, might have to double down at $1.05:scared:

[winner69]

I thought you guys were joking about this 112 but hey the share price is 112 alright

Not an all time low but getting close.

Went below 100 in March 2009 but just above 100 is solid report

Maybe if you view MVN as a bond a face value of $1 might seem about right

[percy]

I was interested in investing in this company about 3 or 4 years ago.I had some questions I wanted to ask the CEO.Fella or something like that.Secretary said he would ring me back.Taking his time,as I still have not heard from him.Sort of put me off the company.I do not think they are as clever as they think they are.They are in a competitve market,should they come out with a good product,it will soon be copied and sold cheaper by an Asian competitor.A company on the road to no-where in my opinion.

Posted 2/9/2011.
Share price at the time was $1.46.

[warthog]

Got bold and bought a parcel of these again today at $1.15

Couta has bought. Run for the hills.

[percy]

Couta has bought. Run for the hills.

My feelings exactly!!! lol.

[noodles]

My feelings exactly!!! lol.

Percy, did you know Couta holds HNZ. lol

[couta1]

My feelings exactly!!! lol.


Couta has bought. Run for the hills.
You guys are going to get super fit running for the hills every time I buy a share you hold, actually I used to like running up hills but now enjoy skiing down them, kinda like the sharemarket she goes up and down,up and down and the ski down is much more fun than the ride up:eek2:

[winner69]

Pretty determined selling today with most of sales down at the 110/109 mark

Maybe they the mugs?

[couta1]

Pretty determined selling today with most of sales down at the 110/109 mark

Maybe they the mugs?
Charts say oversold winner so maybe this level is pretty much the bottom for now hopefully,ready to double down at $1.05 though. PS-Tap survey activated from today re retirement facilities, will report back in a few weeks.

[percy]

Pretty determined selling today with most of sales down at the 110/109 mark

Maybe they the mugs?
Time will tell!
What is the old Buffett saying ? "time is the friend of a good company,yet the enemy of a poor company."
Percy asks "why take the risk?"

[percy]

Be interesting watching to see whether new CEO can deliver.?
A very competitive market.Bunnings,Mitre 10,Plumbling World,Mico Wakefield,Oakleys,Carters,Placemakers etc are experts a screwing manufacturers/suppliers. No profits =no divies.
A growing company in a growing sector has more safety in paying increasing dividends.
I do not see MVN as either a growing business nor is it in a growing sector.

Posted 15/10/2013.
Share price was $1.48.
Share price has declined 26.4% since then !!!! Oh dear.!!
Disc.Do not hold.

[couta1]

Time will tell!
What is the old Buffett saying ? "time is the friend of a good company,yet the enemy of a poor company."
Percy asks "why take the risk?"
Hey Percy MVN has a history going back to 1886 so have stood the test of time yet they do face different challenges now in an age where quality of product comes second to price that's their dilemma, still worth a small holding and divvy is very good as long as the tap remains flowing.

[percy]

Hey Percy MVN has a history going back to 1886 so have stood the test of time yet they do face different challenges now in an age where quality of product comes second to price that's their dilemma, still worth a small holding and divvy is very good as long as the tap remains flowing.

Couta1.Stay away from them.!! They have a very checked history.20 or 25 years ago a friend worked for them.He said they were a poorly run company.History has shown he was correct.
You would get similar divvy from PGW,and most probably share price growth.Have a read of PGW thread.

[couta1]

Cheers Percy will look into PGW

[In4a$]

The company is,and has been in a massive down trend since march.Buying down trending stocks is a sure way to loose money.I would delay any purchases until markets settle,and MVN downward trend has turned.Trying to pick the bottom is impossible,and it is more profitable to buy once the uptrend is confirmed.
Stay away.

Well said Percy, I can tell you from experience you are more likley to get it wrong than right if buying on a down trend. Better to wait untill the company fundamentals change , or good news is released and the down trend is reversed. IMHO MVN is getting worse not better, declining profits etc. Dont think the bottom has been hit yet.
SCT on the other hand has been down for a while, IMHO they have recovery and growth potential, they rebounded yesterday its the stock I bottom picked a while ago. I think SCT will grow over next few years, MVN probably struggle.

[percy]

Well said Percy, I can tell you from experience you are more likley to get it wrong than right if buying on a down trend. Better to wait untill the company fundamentals change , or good news is released and the down trend is reversed. IMHO MVN is getting worse not better, declining profits etc. Dont think the bottom has been hit yet.
SCT on the other hand has been down for a while, IMHO they have recovery and growth potential, they rebounded yesterday its the stock I bottom picked a while ago. I think SCT will grow over next few years, MVN probably struggle.

Interesting enough I was looking at SCT sp yesterday and I think you are right.Also I agree with you on MVN.

[winner69]

Any tariffs / duties on imported kitchen and bathroom ware?

Government determinedly trying to stop local manufacturers from charging too much ....and taps etc specially mentioned as one thing that makes a new house so expensive

Methven affected?

[BlackPeter]

Any tariffs / duties on imported kitchen and bathroom ware?

Government determinedly trying to stop local manufacturers from charging too much ....and taps etc specially mentioned as one thing that makes a new house so expensive

Methven affected?

Don't think it will make a big difference for them. Sure, cheap Chinese tapware might still get a bit cheaper, but MVN never tried to compete with them anyway. If we look at the cost of building a good quality house - what difference do good quality taps make for the price (minor), but what a difference in the ongoing enjoyment of living there (huge).

Actually - just had a re-read of their latest half year report (Sept 2013), which was quite optimistic. Will be interesting to see whether the full year (ended March 2014) keeps what the half year promised. Financial results must be due anytime now. Maybe the start of a recovery?

Discl: holding - DYOR

[percy]

I thought Methven produce a lot of their products in China?
NZ designed.

[BlackPeter]

I thought Methven produce a lot of their products in China?
NZ designed.

The keyword you've overseen is "cheap". Methven well might produce some of their stuff in China, but they are not cheap :p;

The difference is quality control and materials ...
Apple products are made in China, but they don't classify as cheap electronics;
Adidas (and Puma) running shoes are made in China, but they are not cheap foot ware;

[BlackPeter]

Annual results are out.

https://www.nzx.com/files/attachments/194260.pdf

Another (small) drop in revenue (due to exchange rate), but they still delivered a reasonable NPAT (impacted by one-off's) and keep paying a good dividend (final divi - 4.5 cts after 5 cts at half year). Reduced net-debt and made money in all markets (well, but China). Making positive noises about the future.

[winner69]

Typical erratic Methven result. Maybe even one of their better years in that they actually generated sufficient cash to pay the dividend

You need to bear in mind that there is a $4-$5m depreciation and amortisation so NPAT is not really indicative of cash generation.

No reason why you shouldn't continue to get a 9-10 cent divie .... for new comers what upu pay for such a divie (only partly imputed)

Just wish they wouldn't tout themselves as a growth company ---- will only lead to tears

[BIRMANBOY]

I'll send you some hankies in time for the next dividend payment W69:p
Typical erratic Methven result. Maybe even one of their better years in that they actually generated sufficient cash to pay the dividend

You need to bear in mind that there is a $4-$5m depreciation and amortisation so NPAT is not really indicative of cash generation.

No reason why you shouldn't continue to get a 9-10 cent divie .... for new comers what upu pay for such a divie (only partly imputed)

Just wish they wouldn't tout themselves as a growth company ---- will only lead to tears

[winner69]

So the Chinese deal all tied up and put to bed - good

Good that the earnings for 2014 from this business exceeded the maximum threshold (had to pay full price) .......and will add $2m to profit in 2015

Good stuff

Should add 2 cents to eps .....at 15 times earnings so another 30 cents to the share price

Watch this space

[couta1]

So the Chinese deal all tied up and put to bed - good

Good that the earnings for 2014 from this business exceeded the maximum threshold (had to pay full price) .......and will add $2m to profit in 2015

Good stuff

Should add 2 cents to eps .....at 15 times earnings so another 30 cents to the share price

Watch this space
Careful winner your starting to sound bullish on this stock I might be convinced to buy a few more of them:cool:

[percy]

Careful winner your starting to sound bullish on this stock I might be convinced to buy a few more of them:cool:

Cool is the word.Any time you feel like that, just take a cold "Methven Satin Jet" shower.Keep repeating, until such time you cure your head of such evil thoughts.!!! lol.

[winner69]

Careful winner your starting to sound bullish on this stock I might be convinced to buy a few more of them:cool:

Just thinking like guru analysts .... sort off

Always see the +ve and build it in to your forecasts and targets

MVN say deal add $2m to bottom line ... that's 3 cents a share (even on the higher number with the ones they issued today) .... MVN been a PE of 15 or more for a while ,,,, so the new stuff should add 45 cents to the share price

I said a lower number before because existing eps is diluted by the new shares.

If I was a real bullish guru analyst I would underlying profits would increase as well in 2015 say to 10 cents (and that's pretty pathetic as well) .... add the 3 cents on and you get 13 cents .... PE of 15 and in years time share price of nearly $2 .... and a dividend of at least 12 cents so on todays price at least a 10% yield

Get it now .... very logical and easy peasy

[noodles]

Just thinking like guru analysts .... sort off

Always see the +ve and build it in to your forecasts and targets

MVN say deal add $2m to bottom line ... that's 3 cents a share (even on the higher number with the ones they issued today) .... MVN been a PE of 15 or more for a while ,,,, so the new stuff should add 45 cents to the share price

I said a lower number before because existing eps is diluted by the new shares.

If I was a real bullish guru analyst I would underlying profits would increase as well in 2015 say to 10 cents (and that's pretty pathetic as well) .... add the 3 cents on and you get 13 cents .... PE of 15 and in years time share price of nearly $2 .... and a dividend of at least 12 cents so on todays price at least a 10% yield

Get it now .... very logical and easy peasy

Trouble is that this news is already priced in. See the company forecast they gave at the full year. See pg 26
http://www.methven.com/yk-files/19c545aa30e1d06bee2e1112e16e5141/MVN+FY2014+-+Analyst+presentation.pdf

[winner69]

Trouble is that this news is already priced in. See the company forecast they gave at the full year. See pg 26
http://www.methven.com/yk-files/19c545aa30e1d06bee2e1112e16e5141/MVN+FY2014+-+Analyst+presentation.pdf

You are so right noodles

Guidance: NPAT from existing operations to be modest and 15%-25% up including benefits of our acquisition

Hardly exciting stuff is it. Acquisition to bring in an extra $1m in 2015 (half year) with the full $2m in 2016

So 2014 NPAT was $5.4m, guidance for 2015 then be $6.2m to $6.75m. Increase of $0.8m / $1.35m - modest increase in existing is indeed modest)

EPS then of 8.8/9.5 cents per share

PE on current price 12/13 ..... yield on 9 cent divie then about 8% (bloody good)

So no $2 coming up ... the market knew this all the time

But betcha some analyst will come up with $1.50 target sometime .... full year of acquisition to kick in in 2916 and one day MVN has to do better

What share of retirement home taps they have couta?

[couta1]

Winner reading your earlier bullish post you sounded like a former Amway salesman actually they had a pretty good showerhead amongst their products back in the day. Methven have a very small share of retirement home taps if the Wellington pattern is anything to go by so far just one home has there gear in it, perhaps I could become a methven salesman as a side job:cool: PS-Just got a nice MVN divvy in my bank account

[winner69]

Couta - maybe analysts/brokers are just like the Amway sales people after all!

[BlackPeter]

Bit funny - Rick Fala resigned as non-executive director from the board, effective immediately. He was CEO for a long time, but served after that for less than a year as director. They didn't even bothered to give a reason for the sudden exit ... trouble around the board table?

[percy]

Bit funny - Rick Fala resigned as non-executive director from the board, effective immediately. He was CEO for a long time, but served after that for less than a year as director. They didn't even bothered to give a reason for the sudden exit ... trouble around the board table?

May still have trouble returning phone calls?

[BlackPeter]

May still have trouble returning phone calls?

LOL - not sure ... but given that his CEO-time oversaw a long period of declining revenue, maybe the board felt that they don't need these specific skills anymore. Who knows, maybe they replace him with a director who is experienced in growing revenue?

[BIRMANBOY]

The shame and guilt associated with not returning Percy's phone call has become too much of a burden and the nightly psychic curse Percy has been sending on the PCL (Psychic Curse Line) has finally come to fruition. I did mention this to him when I spoke to him some time past and he said every time he called you were in the pub and he couldn't understand what you were saying.:p Seems rather sudden ...curious why no reason given? Guess will become apparent in a few days.
May still have trouble returning phone calls?

[percy]

THE GUNNA OF THE YEAR AWARD.[ie I am gunna do this,I am gunna do that,I am gunna to bring out new products,I am gunna increase net profit between 15 and 25%.I am gunna do it all!!!
Only one outstanding candidate.
So the winner is Methven's gunna CEO Mr.David Banfield for his agm presentation.
Well done David.

[couta1]

As long as they keep Gunning out those divvys we won't need to take too many cold showers aye. PS-I owe you a beer as I was fortunate enough to pick up a few parcels of PGW at 38.5c last week:cool:

[winner69]

THE GUNNA OF THE YEAR AWARD.[ie I am gunna do this,I am gunna do that,I am gunna to bring out new products,I am gunna increase net profit between 15 and 25%.I am gunna do it all!!!
Only one outstanding candidate.
So the winner is Methven's gunna CEO Mr.David Banfield for his agm presentation.
Well done David.


Oh how cynical Percy

I think he stole his script from the girls at pumpkin patch

Same strategy / same result

[percy]

Oh how cynical Percy

I think he stole his script from the girls at pumpkin patch

Same strategy / same result

Reminded me of Ron Boskell's "classic" first Postie Plus agm presentation.
Wonderful fighting gunna words.
I think the girls at Pumpkin Patch are on a steep learning curve too?

[percy]

As long as they keep Gunning out those divvys we won't need to take too many cold showers aye. PS-I owe you a beer as I was fortunate enough to pick up a few parcels of PGW at 38.5c last week:cool:

You will note "your" David did state he would have to increase debt.[Me thinks to pay your dividend]
Be careful he does not announce a capital raising. [so he can continue to pay your dividend.!!]
Pleased you brought PGW well.I think the weakness in the dairy sector has provided a good buying opportunity to invest in PGW.

[winner69]

Talking about his 3 point plan

We are the best ......but no increased profits for a while

http://www.radionz.co.nz/audio/player/20143758

[winner69]

Bit funny - Rick Fala resigned as non-executive director from the board, effective immediately. He was CEO for a long time, but served after that for less than a year as director. They didn't even bothered to give a reason for the sudden exit ... trouble around the board table?

Rick probably heard the new guy going on about his new three point plan and said holy **** I'm out of here

The new guy reading between the lines is blaming the past bosses poor execution and all that.

So methinks Rick just not going to stand in the way of letting the new guy getting on doing his thing. And prob said good luck mate as he left

[percy]

Rick probably heard the new guy going on about his new three point plan and said holy **** I'm out of here

The new guy reading between the lines is blaming the past bosses poor execution and all that.

So methinks Rick just not going to stand in the way of letting the new guy getting on doing his thing. And prob said good luck mate as he left

I think you would be "right on the money." lol.

[BlackPeter]

Oh how cynical Percy

I think he stole his script from the girls at pumpkin patch

Same strategy / same result

Hmm - the comparison might not be quite fair. Agreed - both companies have problems, but there is a huge difference in scale. MVN has still a great product, however some issues with effectively marketing it. PPL on the other hand try to push a quality brand without having the quality goods. It appears their supply chain prefers to source leftovers from 2$ shops.

[winner69]

Hmm - the comparison might not be quite fair. Agreed - both companies have problems, but there is a huge difference in scale. MVN has still a great product, however some issues with effectively marketing it. PPL on the other hand try to push a quality brand without having the quality goods. It appears their supply chain prefers to source leftovers from 2$ shops.

C'mon Blackpeter, a taps a tap to most punters.

Don't PPL and MVN strategies sound very similar - great products and we need to get closer to consumers/customers and to fix everything up we do multi year strategic reviews

Maybe there is something in Fala leaving MVN and now the founder of Pumpkin leaving as well.

Either hey realise they stuffed up badly on their shifts are they just cope with all these new buzz words (and probably flash PowerPoint presentations) that are being used and threw their arms up in horror. We shouldn't forget it was those people who made both what they are.

Now both companies have laid out their plans and promises we follow progress with interest

[percy]

Now both companies have laid out their plans and promises we follow progress with interest

For me this is the great "interest" I enjoy about the share market.
Fantastic presentations,wonderful visions.
And we watch with interest, to see who can achieve these visions ,before we invest in their company,and laugh at the tossers who can always find excuses for failing.[including not returning phone calls.]

[BlackPeter]

C'mon Blackpeter, a taps a tap to most punters.



Well - yes, maybe to most punters ... the trick with selling luxury goods is to find just enough customers who see the difference and are happy to pay for it. Overall - I do take the CEO's presentation with a grain of salt, but I think that it might be anyway worthwhile to apply some "wait and see". MVN typically seems to go up after the AGM :t_up:- and comes down again in the March to June announcement :t_down:. I.e. plenty of time to watch how the new broom is working before I need to make a decision whether to stay or to go ...

Discl: holding

[percy]

I agree with you "plenty of time to watch how the new broom is working." Sensible.

[winner69]

Well - yes, maybe to most punters ... the trick with selling luxury goods is to find just enough customers who see the difference and are happy to pay for it. Overall - I do take the CEO's presentation with a grain of salt, but I think that it might be anyway worthwhile to apply some "wait and see". MVN typically seems to go up after the AGM :t_up:- and comes down again in the March to June announcement :t_down:. I.e. plenty of time to watch how the new broom is working before I need to make a decision whether to stay or to go ...

Discl: holding

Methven taps - luxury items?

Not like some French ones advertised a few years ago as 'shaped and designed to thrill' ......the promotional video was not suitable for family viewing

[percy]

SP $1.06 yesterday.
Will February 2012 price of $1.02 be tested?

[BlackPeter]

SP $1.06 yesterday.
Will February 2012 price of $1.02 be tested?

Good question, suspect most people will think twice before selling such a nice dividend earner at such a low price, but than - who knows? Its in my books with a forward P/E of 11.8 and a long term P/E of 12.2. Looking quite nice compared to some of the overpriced growth stocks with negative earnings.

Discl: holding. DYOR;

[percy]

Good question, suspect most people will think twice before selling such a nice dividend earner at such a low price, but than - who knows? Its in my books with a forward P/E of 11.8 and a long term P/E of 12.2. Looking quite nice compared to some of the overpriced growth stocks with negative earnings.

Discl: holding. DYOR;

Increasing their range,will cost.
The dividend yield is very high,compared to overpriced growth stocks I agree,yet I think a long term PE of 12.2 is too high for this under achiever.
Will continue to watch, from a safe distance, with interest?!

[BlackPeter]

SP $1.06 yesterday.
Will February 2012 price of $1.02 be tested?

quite nice upwards pressure - SP smashed through MA30, MA100 and keeps climbing. Lots of (like to be) buyers, even bidding above current price, but only small number of sellers. Does this count as start of an uptrend?

[percy]

quite nice upwards pressure - SP smashed through MA30, MA100 and keeps climbing. Lots of (like to be) buyers, even bidding above current price, but only small number of sellers. Does this count as start of an uptrend?

Could be,but will need to move above the 200ma at $1.20 to confirm.??

[BlackPeter]

Could be,but will need to move above the 200ma at $1.20 to confirm.??

this good enough? Looks like a nice little uptrend to me ...

[percy]

this good enough? Looks like a nice little uptrend to me ...

Well the EMA 200day is $1.17 and the share price has gone through it at $1.18,so hopefully you are at the beginning of a new uptrend.
I do note the EMA 200 day has not turned up,so it may need a few days to confirm the uptrend.
SCT has also turned up.
Must admit I am puzzled by both.

[BlackPeter]

given all the excitement around PEB and OHE nobody seems to have noticed that MVN released their HY results:

https://www.nzx.com/files/attachments/204414.pdf

Revenue (slightly) down; earnings (slightly) up. Quite positive outlook (expect FY results to be at upper end of 15 to 25% increase to last year - i.e. basically hinting 9 cts EPS for FY 15), and seem to be on track to release their new product range early 2015.

Still - even with the promised EPS, they would need to pay some of the dividend out of the cash flow ... but the gap is closing.

Market seems to like the announcement - the upwards trend received today another nice push ....

[couta1]

I noticed and read the report last night but it doesn't take much enthusiasm showed on here to bring out the knocking brigade. Disc-Happy to Hold

[percy]

Yes I saw the announcement.
Positive, as is the rising sp.

[winner69]

Still all about fixing things so business 'fit' for the future

Still 25% forecast increase in earnings this year good sign

Result just as expected and typical MVN performance

Your divie be OK

Head honcho on the radio this morning
http://www.radionz.co.nz/audio/player/20158681

[winner69]

if it is 'Fixed for the Future' you guys should be looking at (demanding) a divie of at least 12 cents this year, if not 13 cents

[BlackPeter]

if it is 'Fixed for the Future' you guys should be looking at (demanding) a divie of at least 12 cents this year, if not 13 cents

Why so greedy? 10 cents are still slightly more than the indicated EPS (up to 9 cents) and by the way no bad return at all (more than 8% at a share price of 1.24). Suspect however that the nice uptrend might continue :t_up:

[percy]

Craig's now have a "hold" recommendation with a target price of $1.30.

[BIRMANBOY]

Ho Hum...BB is still here and purchased another lot recently at 1.10...dividend yield is still over 10% for me. I see nothing much has changed posting wise:D

[percy]

A bit has changed with MVN.
More funds from cash flow and increased debt used for acquisition and increase stock holding,[which I take is the larger range of products they are now offering].
Ordinary equity of $42.9 mil looks a bit light should one take off the $33.6mil of intangibles they have on their balance sheet,leaving only.$9.3mil net ordinary equity?

[BlackPeter]

Why would anyone release their half year report on December 31st? Looks like they had to work overtime to the last minute to get the report (covering the first half to Sept 30) out in time.

Sales revenue slightly down (again), though with enough currency exchange acrobatic it is basically no change to last year. NPAT slightly up (good - but nothing sensational). Hardly any measurable inroads into UK and China market. They boost a 3 digit NPAT growth in the UK, but unfortunately based on a very small base (from $87k to $369k) - and NPAT in China is even going backwards and negative (but related to a still smaller base). Apparently all will be better in the second half with some major projects seeing completion.

So I guess what we are left with is a 4 cent divvie (as expected) and good vibes: FY result now expected to be in the upper half of the advised 15 to 25% growth compared to last year. Based on the stagnating first half, the second half ending in March 2015 better be amazing.

Balance sheet: debt ratio after purchasing their Chinese factory looks sort of o.k (47.3%), however only if we believe in the high value of the intangible assets on the balance sheet: $43.6M out of $98.2M are intangible (I suppose their IP)? If we deduct the intangible assets, than their net worth is quite minute.

Discl: holding, waiting (hopefully not again 3 full months after the end of the reporting period) and hoping for an amazing second half plus a great 2016 financial year ...

[percy]

Good vibes ?????? Yeah right!!!! lol.

[couta1]

Good vibes ?????? Yeah right!!!! lol.
I see Norah's been buying MVN shares must be a buy signal for Roger and maybe Percy also:eek2:

[percy]

I see Norah's been buying MVN shares must be a buy signal for Roger and maybe Percy also:eek2:

I can not speak for Roger,but her buying is not a buy signal for me.!!!

[Beagle]

I can not speak for Roger,but her buying is not a buy signal for me.!!!

:lol: :lol: More like a signal to sell.

[winner69]

Good to see a newly appointed director buying shares

Working for shareholders? Or as some say not really independent as she has a vested interest

Couta will be happy ...his beloved n the Board ......and maybe Methventaps in a summerset villages. Nice

[BlackPeter]

:lol: :lol: More like a signal to sell.

Well, I guess long term I see your point ... always somewhat uncomfortable to have a director on board with a less than impeccable record related to her judgement (referring to her selling SUM shares in April 2014 while having access to unfavourable sales figures not in the public domain).

On the other hand - I think there is enough evidence that she is well able to look after HER money, which means that short term her buying (though moderately) might be a sign that she thinks the share is undervalued.

[couta1]

Both Salt funds and Westpac have taken up substantial positions in MVN over the last week at near 8% each, interesting;)

[winner69]

Jeez after this fantastic piece of writing I hope they sell some of them

https://www.nzx.com/files/attachments/208301.pdf

[Snow Leopard]

I finished buying into Methven yesterday.

I actually have more shares than I would normally own given the actual daily turnover, but it appears I miscalculated and came out with a higher number.

So the share price has been on the up for quite a while. The divvy looks good for me and there is the chance of some upside to come.

If it misbehaves it will be gone.

Best Wishes
Paper Tiger

[BIRMANBOY]

Presumably they don't run this ad over in your neck of the woods......probably would cause some misbehaving. Ps Percy probably wont be joining you in the shower.
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I finished buying into Methven yesterday.

I actually have more shares than I would normally own given the actual daily turnover, but it appears I miscalculated and came out with a higher number.

So the share price has been on the up for quite a while. The divvy looks good for me and there is the chance of some upside to come.

If it misbehaves it will be gone.

Best Wishes
Paper Tiger

[percy]

Very interesting to see a couple of major brokers having MVN as a buy.
I am prepared to be proven wrong,but I feel MVN is still a proven serial under-performer.
Birmanboy;go to SEK thread!!

[Snow Leopard]

...If it misbehaves it will be gone...

Looking like one of my 'less successful' :lol: ideas at the moment.

Best Wishes
Paper Tiger

[tim23]

Result must be due any day, anyone know exactly when as website just says May?

[winner69]

Result must be due any day, anyone know exactly when as website just says May?

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?

[tim23]

4c dividend would be okay by me

[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 :sleep:

[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.

[winner69]

This years earnings looking good Up 15% to 25% on last years. Good

Going to increase sales from $96m now to $130m in 2018, and target 10% profit margin.

Pretty good eh

[winner69]

NPAT targeted to go from $5.7m to $13m in 3 years time .....thats some growth

Current PE of 14 not quite 'value' but heck 30%pa anticipated growth is tempting

Umm

[percy]

Astonishing.!!!!!
Yet I am left feeling as though I have just had a cold shower.!
Pity the revenue has stayed the same while the debt has gone up.

[BlackPeter]

This years earnings looking good Up 15% to 25% on last years. Good

Going to increase sales from $96m now to $130m in 2018, and target 10% profit margin.

Pretty good eh

Yes and no - depends whether they manage to turn talk into reality ...

Just looked into my wee database ... MVN used to have $130 m revenue back in 2010. If (and I think this is still a big IF) they manage to claw back all those revenue drops since then ... than MVN will have in 2018 a 8 yr CAGR of ZERO percent (vs a negative 6% at current back to 2010). A true growth company.

But hey ... I shouldn't be too cynical - I am holding myself (the divvie is not too bad, and it never felt like a good time to sell). Nice that they at least try to change the trend.

[winner69]

Hey Percy .... I see we are in the 'Silver Society" now

[percy]

Hey Percy .... I see we are in the 'Silver Society" now

If it was before page 14 I missed it.
I gave up at page 14.
Please give me the page number because I just can't bring myself to read the drivel again.
74 pages.Must be for the true believers.I am of very little to no faith,!!

[winner69]

NPAT targeted to go from $5.7m to $13m in 3 years time .....thats some growth

Current PE of 14 not quite 'value' but heck 30%pa anticipated growth is tempting

Umm

Sure was an impressive presentation and look at those numbers - $13m in 2018

What can one make out of it - maybe lots

Lets assume 5 outcomes -

1.- it all goes to plan and that $13m happens
2.- above but the market is in raptures and rerates Methven, ie a higher PE
3.- sort of goes to plan but they only get half way there
4.- its all pretty pictures and nice words and Methven struggle on as usual
5.- another GFC hits and it all turns to custard

Possible outcomes in graphic. Shows Total Shareholder Return over the 3 years and I have assigned some odds to each scenario

Could get a return of 42% pa over 3 years or lose 6% over the three years. But based on the odds I have assigned to each scenario an expected return of 20%pa

Bloody good eh

But then some of you might assign 90% to scenario 4 which ruins the story

Hmmm - have I been seduced

[winner69]

If it was before page 14 I missed it.
I gave up at page 14.
Please give me the page number because I just can't bring myself to read the drivel again.
74 pages.Must be for the true believers.I am of very little to no faith,!!

slide 37 mate

you should look at slides 38 to 40

slide 40 is something for us to look forward to percy ----- the bathroom is going to become the wellbeing room, the checking our blood pressure, glucose and body fat room.

[winner69]

percy - have a look at the spanking new HQ on page 55

you love posh offices for the head honchos eh

[winner69]

percy - slide 38 again

multi-generational and shared living going to the way of the future

told you the kids and grandkids would come to grandpa