Earnings announcement is overdue and share price dropping markedly - suggests annoucement is unfavourable and people with prior info?
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Earnings announcement is overdue and share price dropping markedly - suggests annoucement is unfavourable and people with prior info?
Methvens press office told me last week that MVN hope to release results 30th Nov
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
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
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
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
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/2...e-equity-firms
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?
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.
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.
Methven does a Fletchers... updates the market and loses 10% market valuation.
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?
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.
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.
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 !
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.
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?
Sir Ron Brierley ?
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
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.
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.
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
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
Winner69,Great posts,thanks for sharing your wisdom.
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?
Thxs Winner for your time and effort to produce these recent great postings..much appreciated
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
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.
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.
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.
[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.
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
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.
Tidy result from MVN today. Doing well to hold the divs and still looks reasonably good value at $1.21.
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
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
[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.
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.
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
What do you think of the results...
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
winner69.
thanks for another one of your "classic" posts.
Most enjoyable and right "on the money" as usual.
Thanks guys...much appreciated.
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
With FBU share rise... What are the opinions on MVN?
Have to rise I reckon, Milford have recently increased holding, as a long shot FBU could gobble them up? I do hold shares.
Thanks tim23.
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.
Underperformer ? Depends what you are looking at I suppose..lOOK AT THE DIVIDEND YIELDS LAST 5 YEARS.
Five Year Summary
2012
$0002011
$0002010
$0002009
$0002008
$000Financial 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
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.
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.
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.
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.
My suspicion came true. Who is this guy Rick Fala? I think once a new(better) CEO comes on board, things would improve quickly...
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.
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.
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".
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.
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.
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.
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
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.
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.
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.
k.
Thanks PTC
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
profit forecast looks solid
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.!
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.
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.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..
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!!!
Craig's have updated their research with a buy recommendation.12month target price $1.65.
Thanks Percy, thats good to know.
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
looks solid.., should have a nice little trend comming next month..
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
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
Avoid this stock at all costs unless they can clearly show that their hardware is better then the Germans, Italians, Swedes, Chinese, Japanese ......
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
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."