Fisher & Paykel reports sales rise, but margins static

By Chris Nicholls

SYDNEY: Fisher and Paykel has announced a 17.2 per cent rise in local sales revenue on the back of new laundry and refrigeration products, but said it lost ground in both New Zealand and the US.

The results for the ten moths to 31 January 2008 saw higher new product prices help push the revenue figures up, the company said, while market share also increased across all their product lines. However, managing director and chief executive John Bongard said he was unable to quantify the market gains.  

Much of the refrigeration gain came from warmer summers in both Australia and New Zealand, he said, while the company’s AquaSmart top loader washer range had also helped.

While the company’s Thailand factory was on track, the New Zealand laundry factory’s shutdown had also been delayed until the eighth of February due to “overwhelming” orders, he said.

European sales rose the most, with a 29.1 per cent gain. However, while Italian sales rose, the recent weakness in the UK pound relative to the euro meant lower margins, he said.

Negatives came from both Fisher and Paykel’s home New Zealand market and the US. Much of the 2.1 per cent sales drop in the US (year-on-year) came from the economic slowdown resulting from the sub-prime crisis.

“It’s an extremely tough market up there. I was up there myself for a couple of days a few weeks ago and it is very, very difficult trading conditions [sic]. Under those circumstances, notwithstanding that we showed a negative comparison for the ten months, if you take out the parts of the business we have no real marketing control over, I was very pleased that the combination of DCS and F&P brands still growth of over five per cent.”

He said the market downturn in the US had meant they had ceased their advertising campaigns there until the markets improved, Bongard said.

Bongard said price competition meant margins also failed to rise, compared to a rise in the previous report. 

“I think overall, if we can get a flat performance in overall margins, we can be pretty happy. But the main margin pressure has really come out of North America.”

He said currency pressures had also caused problems, due to the strong Australian and New Zealand dollars. 

“When you put all that pressure together, including some currency issues between the euro and sterling we’ve had to deal with, those sorts of negative issues have really sucked up some of the cost down work that has been coming through the business vert strongly.”

As a result, he said, flat margin growth would be as good as could be hoped.

 

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