F&P Appliances shares tumble on profit warning

Fisher & Paykel Appliances shares tumbled on opening today after it warned of a reduced full year profit and flagging New Zealand sales.

The whiteware manufacturer's shares fell 40c or more than 10 per cent to $3.59 in the first 30 minutes of trade this morning after it said it expects to post a full-year net profit of between $63 million and $68 million, about 14 per cent less than previously forecast.

The whiteware manufacturer said the operating environments in Australia and New Zealand had been "significantly more difficult than expected".

For the nine months to December 31, unit sales were down 7.9 per cent in New Zealand and 3.1 per cent in Australia.

The company said its Australasian unit sales had been hit by low-priced imports from China and Thailand.

F&P Appliances' currency hedging had negated the favourable effects of the appreciating New Zealand dollar its competing importers had enjoyed and price increases on raw materials had also had an effect, it said in a statement to the NZX.

Goldman Sachs JB Were institutional adviser Joe Gallagher said a 10 per cent fall in the value of F&P Appliances' shares this month indicated the market had been expecting a negative announcement from the company.

"The surprise came in the unit volume decline in New Zealand mostly. Most in the market were expecting the impact of the currency and raw materials.

"It's the unit volume decline which is the negative surprise so that's the reason the stock is being sold off so aggressively."

F&P Appliances said its overall unit sales volume had increased by 2.6 per cent over the period, with sales in the US up 50 per cent and up 46.9 per cent in the rest of the world.

Unit sales fell 10.5 per cent in Singapore and by 34.8 per cent in Europe.

F&P Appliances said its New Zealand finance business continued to trade at expected levels.

The company said while current trading conditions were expected to remain difficult, initiatives already well advanced will underwrite the long-term performance of the company.

- NZPA