By Fiona Rotherham
Methven, the NZX-listed tap and shower manufacturer, has set a target of raising annual revenue from $96 million to $130M by 2018 under a three-year strategic plan released at its annual general meeting in Auckland.
The plan aims to grow net profit after tax from 5.9 percent of revenue to 10 percent in the next three years by focusing on its three main markets in New Zealand, Australia, and the UK, lifting its online profile.
The Auckland-based firm turned around five years of revenue and profit decline this year, lifting annual profit for the year ended March 31 by 21 percent on a constant currency basis, in line with guidance, and lifting profit to $5.69M from $4.71M a year earlier.
The targets for the 2016 financial year include lifting revenue by five percent and net profit by between 15 and 25 percent.
The $130M target was criticised as not being aspirational enough by shareholder Bruce Sheppard, the former head of the New Zealand Shareholders Association.
He told Tuesday's meeting he'd been disappointed with the company's performance since he first bought shares six years ago and the turnaround in revenue decline was mainly due to last year's acquisition of a Chinese manufacturing plant rather than organic growth.
"This business is not growing as it should," he said.
He called for the resignation of chairman Phil Lough if next year's targets are not achieved.
Board member Norah Barlow, one of three directors re-elected at the annual meeting, said the board wanted to stretch management but still make the targets obtainable.
Chief executive David Banfield, who's been in the role for 18 months, said $130M was "not an easy target" but long-term sustainable profits were achievable providing there was reinvestment back into the business.
In response to a shareholder question around dividend forecasts, Mr Lough said he couldn't provide a figure although he expected it to be in line with previous years and that Methven would continue to be a "yield stock, rather than a growth one".