MVN Methven

[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