Retravision NSW collapse dents Fisher & Paykel profit

By Matthew Henry

AUCKLAND: Fisher & Paykel Appliances has suffered a 4.3 per cent drop in profit to $NZ61.2 million for the financial year ending 31 March including a $NZ2.3 million bad-debt write-off following the collapse of Retravision NSW in October 2006.

The company banked record sales of $1.29 billion from its appliances business and also saw its highest sales revenue in the USA, Europe and its ‘rest of world’ markets.

However, restructuring costs totalling $4.3 million and the $2.3 million bad-debt write-off from Retravision NSW hurt the bottom line, but were partially offset by the sale of surplus land in Australia worth $4.9 million.

Fisher & Paykel Appliances sales grew 19.5 per cent to $1.293 billion during the year, however a large portion of the increase was attributed to the acquisition of Italian appliance maker Elba, which F&P bought from De’Longhi in June 2006.

The US market continued as the company’s biggest revenue generator with over $455 million in sales for the year, followed by Australia with $425 million.

However, the appliance maker admits that it is battling against LCD TVs and iPods for a share of Australian consumers’ spending.

“Overall the total Australian market remains flat. The Christmas-NewYear sales period was unseasonably slower than usual, with a combination of cooler weather affecting refrigeration sales and consumers directing their Christmas expenditure towards digital products,” said Fisher & Paykel chairman, Gary Paykel, in today’s announcement.

“The release of new products in the fourth quarter, combined with retailers chasing annual target incentives, resulted in Australian sales finishing up 7.5 per cent in revenue terms over the previous year, resulting in a gain of market share."

Paykel highlighted the performance of the company’s new-release whitegoods products which he said helped fend-off growing competition from Chinese imports.

“The Aqua Smart water efficient washer has been extremely well received in the market by both retailers and consumers. Launched in December, this has become the single biggest selling washer model in Australia in just four months. The appeal of a low water consumption washer, combined with the ease of use that top loaders offer, have been contributing factors to the success of this product," Paykel said.

“The initial roll out of the Ice and Water and French Door refrigeration range has been completed. These models offer high feature levels and contribute to greater margin returns.”

The company expects the Australian market will remain stable in the coming financial year, while New Zealand continues to contract as rising interest rates quell consumer spending.

“Given the uncertainty surrounding the position of the New Zealand dollar, interest rates and the future trends in of raw material pricing, the directors have decided against giving guidance for the full financial year at this time,” said Paykel.

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