New product development and the effect of new acquisitions is expected to cause a 523 per cent explosion in revenue growth for publicly listed home appliance brand house McPherson’s, the owner of brands including Euromaid, Baumatic, Lemair and Fagor.
Appliances make up 17 per cent of McPherson’s annual revenue, behind Health & Beauty, Household Consumables and Housewares, but it is considered one of the most important because of its growth potential. The 523 per cent prediction is largely due to the full realisation of revenue from the newly acquired Think Appliances (worth $30 million annually) and Lemair ($2 million), though the growth not including these acquisitions is still a healthy 16 per cent, significantly more than McPherson’s other divisions.
McPherson’s plans on growing revenue by expanding the distribution of its home appliance brands through the electrical retail, hardware and commercial channels. The company is not just looking to grow its appliance business through acquisitions, however, with managing director Paul Maguire saying exciting new products are in the pipeline.
“The home appliance business will continue to grow this year due to the full effect of acquisitions, as well as new product development,” Maguire said.
Despite this optimism for McPherson’s appliance future, there is broad acceptance that the company remains in transition, best exemplified by all the images of caterpillars and butterflies in its annual report. The company recorded a $14.7 million operating profit after tax for the 2014 financial year, but due to an $80 million impairment, McPherson’s statuary profit after tax was a $66.5 million loss.
Although sales revenue has grown steadily since 2010 ($353 million compared to $290 million), profit has declined during that period ($14.7 million compared to $23.2 million). This fall is attributed to McPherson’s exposure to declining and low margin industries, from which it has sought to exit.