By Claire Reilly
Fisher & Paykel has announced its results for the year ended 31 March 2012, posting a group net profit after tax of NZ $18.4 million. While this was significantly lower than 2011’s profit of NZ $33.5 million, the second half of the fiscal year was a drastic improvement on the first half, when profits were down 90 per cent year-on-year.
Speaking about the company’s overall results was F&P chairman, Keith Turner.
“While the Group result is down $15 million on the previous year’s profit, the improved second half performance from both Appliances and the Finance business is encouraging,” said Turner. “Our balance sheet continues to strengthen with net debt down a third to $65 million and we have prudently managed working capital and reduced operating costs.
“For the second half the Appliance business reported a normalised operating profit before tax of $13.7 million compared to a first half loss of $2.4 million. The Appliances business reported a full year operating profit before interest and tax of $7.3 million compared to $28.8 million last year.”
F&P faced three significant costs that affected profits in 2012, including an onerous lease charge of $2.7 million before tax and a property valuation adjustment of $1.2 million before tax, both relating to the appliances business, as well as litigation costs of $6.8 million before tax that affected the company's finance group.
F&P’s managing director and CEO, Stuart Broadhurst, commented specifically on the company’s appliance business, noting that the end-of-year results were positive considering the soft market.
“As foreshadowed in November 2011, market conditions across our key markets remained difficult,” said Broadhurst. “In particular the Australian market slowed noticeably in the second half.
“Appliances industry sales in Australia, New Zealand and the U.S. all recorded negative growth compared to the previous financial year. In this context, the second half improvement in Appliances’ earnings is encouraging.
“Revenues were down 7.6 percent reflecting difficult market conditions and a rebalancing for profitable sales, in particular in the US. Despite this our product mix continues to improve along with our percentage gross margin.
“A key highlight of the result is the turnaround in the North American distribution business. The company achieved a $10.7 million turnaround in profitability, posting a $900,000 profit by focusing on profitable sales and overhead savings.
“We have also made good progress on our strategy for the Appliances business," he continued. "We have continued our release of new products with the launch of world-leading design in the DishDrawer dishwasher Phase 7, and the introduction of new product lines such as the gas on glass cook-tops and companion cooking products.
“Our new motor supply agreements will produce new revenue this year. The Haier motor supply contract went into production in April and a second contract to another customer will be in production by September.
“Our new product pipeline is strong with new refrigeration, laundry and cooking products to be released this year.
“While the earnings from the new motor contracts and new products have not yet flowed through to our financial results, they will start contributing over the next year.” said Mr Broadhurst.