F&P Appliances posts half year profit of $34 million

By NZPA

Friday 8th November 2002

Fisher & Paykel Appliances Holdings today reported a $34 million net profit for the six months to September 30, up on a pro forma basis from $12 million in the year ago period.

The company, which was spun off from Fisher & Paykel Appliances a year ago, announced an interim dividend of 27 cents per share for the six months ended 30 September and a special dividend of seven cents, giving a total dividend of 34 cents per share, carrying a full imputation credit.

The special dividend amounting to $4.6 million represents the dividend to be received from 20 percent owned Fisher & Paykel Healthcare on 29 November. It will be recorded as income in the second half.

Profit after taxation attributable to the Appliances and Finance businesses was $29 million compared to $12 million for the same period last year. The net profit was lifted to $34 million by a $5 million contribution from Fisher & Paykel Healthcare.

The Appliances business lifted its pre-tax operating profit by a 129 percent to $41.5 million ($18.1 million).

Total operating profit before taxation interest and abnormal items, which included the $5 million Healthcare dividend, was $50.5 million ($21.6 million).

Overall revenue, including the Healthcare contribution, was up by $30 million to $400 million compared to the same period last year.

The group generated net cash flow of $48.5 million. Timing differences in respect to tax inflated the operating cash flow by $5.3 million.

Earnings per share were 52 cents.

Inventory levels increased by $26.6 million during the half due to the normal seasonal build of finished goods ahead of scheduled factory shutdowns over Christmas. It said inventory levels were on target.

Capital spending was in line with the previously announced objective to average $25 million per annum over the next two years.

The company said it was becoming apparent that continued sales growth was placing demands on some production facilities and the capital expenditure target may need reviewing.

The growth in appliances sales came primarily in Australia and New Zealand, particularly from an increase in margins to 11.1 percent.

New Zealand sales rose 8 percent, reflecting strong growth in the overall market size despite cheaper imports from countries with very low labour rates, like China, India and Thailand. Appliance's market share remained steady.

Australian sales volumes were especially strong, increasing by 13 percent. It said that while strong growth occurred in most product categories although market conditions for washing machines continued to be "extremely difficult" due to strong competition from Korean imports, which are being investigated for dumping by Australian Customs.

Growth in the United States was a satisfactory 16 percent in a tight market.

Good growth occurred in the very competitive Singapore market, and from a low base, steady growth was experienced in the United Kingdom, the company said.

Appliances said its finance company continued to perform well.

The company expects market conditions to continue at similar levels up to Christmas and then soften in New Zealand and Australia. The US market is expected to remain tight. However, the release of a new range of cooking products should provide future growth at similar levels to the first half.

A new water softener version of Appliance's DishDrawer will be launched into the United Kingdom in November, "which should ensure strong growth from that market" and a product series launch in Europe should also boost sales growth.

Comments from our readers

No comments yet