By James Wells
AUCKLAND: Fisher & Paykel Appliances chief executive officer, John Bongard, has forecast a stronger focus on overseas markets, even though the Australian market grew by 8 per cent in the six months to the end of September.
Commenting on the first six months of the company’s financial year in an interim report to shareholders, Bongard said high prices for commodities used in raw materials such as steel, plastics and copper continued during the first half.
“Although raw material price levels appear to have reached a plateau, the outlook still remains uncertain. A continued strong focus on ‘cost down’ cushioned the full impact of these exceptionally high prices during the half,” he said.
With the inclusion of sales from the Elba cooking factory acquired from De’Longhi for $A132 million, Europe and the UK generated revenue of $46.213 million up 503 per cent. Excluding Elba, sales exceeded the previous corresponding period by approximately 62 per cent.
“Our European operation, including the UK and Ireland is currently progressing through a restructuring phase. With the purchase of Elba in June, Europe now offers a major opportunity for expansion and the realisation of synergies related to product, distribution and manufacturing,” Bongard said.
“The purchase of Elba in Italy has positioned the Appliances Group for expansion in Europe. Early in the new calendar year, we will be commencing direct distribution in the Italian market,” he said.
Bongard said there are now nine Fisher & Paykel operated warehouses in North America providing distrubution to over 4,400 stores.
“Sales growth has slowed in the USA, in line with the general market conditions. We continued to increase our presence in this strategically important market. The SmartLoad dryer line and motor manufacturing plant were recently transferred ahead of schedule to our factory in Clyde, Ohio, which now manufacturers washers, clothes dryers and motors for the North American market.
“North American sales have slowed. There is a well documented softening of the USA market driven by higher interest rates and a slow down in new housing starts. However, growth in North America continued with sales up 10.3 per cent to $US152.117 million," Bongard said.
In New Zealand, the company implemented a price increase in September and retained the market share gains achieved in the second half of the last financial year, despite the overall market being down on the previous year. Overall sales increased 0.8 per cent to $NZ120.011 million in the six months to 30 September 2006.
In Australia, Fisher & Paykel reported an increase of 8 per cent in value to $A166.053 million.
“In Australia, retail competition remains intense,” Bongard said.
“Australian sales showed good growth in a slow market,” he said.