Waters signals plan to quit F&P chair

Ralph Waters says shifting F&P Appliances' manufacturing to low-cost countries was the right move. Photo / Glenn Jeffrey

Fisher & Paykel Appliances chairman Ralph Waters says he will retire next year provided a suitable replacement for him is found.

Waters, who has been on the F&P Appliances board since 2001, became chairman late last year when his predecessor, Gary Paykel, stood down suddenly.

He was re-elected at yesterday's annual shareholders meeting.

The former Fletcher Building chairman and CEO has steered the listed whiteware-maker through some of the most challenging times in its 76-year existence.

"I agreed to do it [become chairman] - but I said to all my colleagues at the time I would only do so as long as it took to get some succession arrangements in place," Waters said.

"I'm not un-enjoying it but I didn't seek to do this. This was something that just had to be done for a short period of time and it's only a temporary task."

Market conditions remain challenging for F&P Appliances, which yesterday announced that current quarter sales were down 11 per cent on the same period last year.

But at the same time margins were up, with the company attributing the gains to the successful re-organisation of manufacturing operations to low-cost countries Thailand and Mexico.

"There is no question that shifting manufacturing to low-cost countries was the right strategy for the company," said Waters.

He said F&P Appliances' "rehabilitation" was well advanced, following the company reducing its net debt from its peak of $502 million last year to $171.1 million in May.

F&P Appliances chief executive Stuart Broadhurst said New Zealand sales had been affected by de-stocking in the firm's former exclusive dealer outlets during May and June this year. The company's previous Exclusive Dealer Arrangement - under which retail chains such as Farmers and Noel Leeming were only allowed to stock F&P whiteware products - expired on July 1.

"Retail competition in New Zealand remains intense and the first quarter of our financial year was characterised by the ... new distribution arrangements," said Broadhurst.

At yesterday's meeting shareholders voted in favour of the aggregate amount paid to the board of directors being increased from $900,000 to $1,250,000 annually.

Waters said the extra money was required to pay the two representatives of Haier who joined the board after the Chinese appliance-maker bought a 20 per cent stake in F&P Appliances last year. It would also pay two independent directors soon to be required by Reserve Bank regulations to join the board of Fisher & Paykel Appliances Limited.

Waters said the existing directors who had been on the F&P Appliances board for many years would not get "a penny" of increased payment until their retirement.

Peter Lucas and Waters were yesterday re-elected to the board of directors, while Simon Botherway and Philip Carmichael (of Haier), who were appointed as directors during the year, were elected. Waters said F&P was now concentrating on product development and putting "significant effort" into growing market share in New Zealand and Australia.

F&P Appliances' share price closed up 1c at 52c last night.