Tap-maker Methven's shares took a hit yesterday after signalling a downgrade of up to 15% for its annual profit, citing lack of anticipated revenue growth.
In a market update yesterday, chief executive David Banfield said first-quarter conditions which impacted on its first-half performance would not be recovered in the current financial year. After-tax profit was now expected to be down by up to 15%.
Methven shares became the NZX's top decliner following the announcement, tumbling 10.5% to $1.10, a 15-month low.
In its interim half year to December report, Methven said it had expected revenue growth of at least 5% and after-tax profit was expected to be at the lower end of earlier guidance, of 10% to 20% guidance range
''Methven has changed its guidance due to forecasted growth in the second half not materialising as expected, despite continued incremental investment to deliver long-term sustainable growth,'' Mr Banfield said in a statement.
Methven had stated recently it had wanted to grow the business to achieve $130 million revenue by June 2018, and yesterday said it was continuing to work on projects to support delivery of its ''Methven 130'' goals, including the addition of new international distribution partners.
Methven said in its half-year report a supplier management issue had constrained output at its Heshan factory in China, and, separately, there were manufacturing delays at its new plant in New Zealand, but those problems had been ''fully resolved''.
For its half-year, Methven posted sales of $49.9 million, up 1.9%. After-tax profit declined 21.3% to $3.2 million.
