Fisher & Paykel Appliances profit up but road is tough

By ELLEN READ and AGENCIES

Fisher & Paykel Appliances Holdings interim profit came in at the upper end of expectations, but the company yesterday warned of tougher trading conditions ahead.

The firm reported a $34 million net profit for the six months to September 30, up on a pro forma basis from $12 million for last's year period. Market reaction was positive after analysts had forecast a profit of $30 million to $34 million.

Revenue was $400 million, $30 million up on the same period last year.

"It looks a fantastic result ... They have to be given the big tick mark for it," said James Snell of First NZ Capital.

The appliance maker said it expected market conditions in NZ and Australia, which have had buoyant economies and robust housing markets, to weaken early next year.



The firm, spun off from Fisher & Paykel a year ago, announced an interim dividend of 27c a share for the six months ended September 30 and a special dividend of 7c, giving a total dividend of 34c a share, carrying a full imputation credit.

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

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

The Appliances business lifted its pretax operating profit by 129 per cent to $41.5 million.

Total operating profit before taxation interest and abnormal items was $50.5 million, up from $21.6 million the previous year.





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

New Zealand sales rose 8 per cent, reflecting strong growth in the overall market size despite cheaper imports from countries such as China, India and Thailand, which have low labour rates.