'Very pleasing' profit for Fisher & Paykel

By ELLEN READ

Strong global sales and the acquisition of Farmers Finance have pushed Fisher & Paykel Appliances further into the black.

The country's largest appliance manufacturer has recorded a net profit of $85.3 million for the year to March 31, up 16 per cent from last year's $73.4 million.

A final dividend of 11.5c a share will be paid on June 14, up from the 10c paid the year earlier. This brings the year's total dividend, fully imputed, to 41.3c.

The company upgraded its profit forecast to $80 to $85 million, from a previously flagged $73.5 million, in March.

Chief executive John Bongard said the "very pleasing result" came in a busy year, during which Appliances formed an alliance with US giant Whirlpool, bought Farmers Finance and sold its 19.3 per cent stake in Fisher & Paykel Healthcare.

The appliance division had a strong year despite intense competition in most markets. Appliance operating profit before interest and tax was $102.1 million, up from $91.3 million.

Appliance sales volumes rose 17.8 per cent to more than 1.19 million units for the year. Unit sales in New Zealand rose 13.9 per cent to 316,000, in Australia by 16.8 per cent to 658,000, and in the US by 37.6 per cent to 149,600 units.

Singapore and rest of the world unit sales declined slightly and Europe rose 49.4 per cent, although off a much smaller base.

Bongard said the Finance division also recorded a strong result. Earnings before interest and tax, which includes five months' earnings contribution from Farmers Finance, was $17.7 million from $7.8 million last year.

Bongard said the Australian and New Zealand appliance markets were expected to slow down during the current year, a similar prediction to one made by the company last year. "It's becoming pretty obvious demand is slowing a little. But it's slowing to a high level and it's a very, very hard call to make. As the board sees it today, there will be some easing in the Australian and New Zealand markets. I hope we're wrong," Bongard said.


The company has hedged 80 per cent of its forecast Australian dollar exposure.

Appliances has a natural hedge against the US currency as many sales are made in US dollars but raw materials are also bought in that currency.

Fisher & Paykel Appliances shares fell 7c yesterday, closing at $4.60 but had gained 15c on Wednesday in anticipation of the result.