Fisher & Paykel financial results show a positive reversal in fortunes

By Claire Reilly

After announcing a 90 per cent decline in half-yearly profits September last year, Fisher & Paykel yesterday issued a trading update for the four months ended 31 July 2012, announcing group net profits after tax (NPAT) of $12.3 million, compared to $4.7 million for the same period in the previous year.

The company also announced earnings before interest and tax (EBIT) in its appliances business of $9.1 million for the four months, which was up from the same period in 2011 when the company broke even. The finances business saw a slight increase in EBIT, rising from $10.2 million in 2011, to $10.9 million in 2012.

“The board is encouraged by the solid start to the financial year so far, however remain acutely aware of the potential for economic conditions to change suddenly in our key markets, especially in Australia and the USA,” the update report read.

“The second half of the year has traditionally provided the majority of the full year earnings. The second half of this financial year will also benefit from sales from the new motor contracts and, after a gap of several years, from the release of new products to the market.”

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Speaking at Fisher & Paykel’s annual shareholder’s meeting, F&P chairman Keith Turner said Fisher & Paykel continued to perform well, despite subdued trading conditions in Australia (including the effects of a “two speed” economy) and volatility in the global markets.

“Fisher & Paykel has done exceedingly well over the last twelve months to hold its own,” said Turner. “The appliances business continues to operate in an environment where retail spend in most markets is still muted and the retail sector is undergoing considerable change and transformation. We have adapted well to these market conditions and the company is constantly adapting to ensure it competes effectively.

“In Australia, the total whiteware market was down slightly [in the last financial year], but Fisher & Paykel increased market share in cooking. However, we were slightly down in other categories.”

Turner also noted that F&P had increased market share and maintained gross margins in the New Zealand market, and worked to reverse last year’s $9.8 million loss in the North American market to “generate a positive profit of $916,000”.

“At the same time as we have considerably improved the strength of our balance sheet, the company has continued to invest over the last year in new product development to rebuild the product portfolio,” said Turner.

“This year will see the release of a number of new products in the laundry, refrigeration and cooking categories. We know the market is eagerly awaiting these new products and we expect them to lift sales across all categories.”

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