Fisher & Paykel Appliances returns to profit

Fisher & Paykel's factory in East Tamaki. File photo

Fisher & Paykel Appliances has pushed back into profitability, despite pricing pressure contributing to a fall in revenue.

The East Tamaki-based company has announced a full-year net profit of $33.5 million, compared to a loss of $83.3 million on the prior financial year.

Shares had risen 4.5c to 60c by 11 am.

The 52-week high for the stock is 63c.

F&P Appliances chief executive Stuart Broadhurst said higher sales volumes in the firm's appliances division had been offset by price reductions - particularly in Australia - which led to a 5.5 per cent fall in operating revenues.

A strong Australian dollar, he said, had been forcing retailers across the Tasman to drop prices "substantially".

"But we've had a significant lift in volume and therefore market share in Australia," Broadhurst said. "Australia is probably the stronger part of the appliances result."

A group operating revenue of $1.12 billion was a 3.6 per cent reduction previous full-year result of $1.16 billion.

F&P spokesman Matt Orr said the translation of sales in offshore markets into New Zealand dollars had also had an impact on revenue.

Earnings in the company's finance division were up 20 per cent on the prior year's result to $34.7 million, the company said.

Broadhurst said F&P Appliances had faced two very challenging years, but was now strongly positioned to "march forward".

"We're in very good shape and improvements are taking place across all aspects of our business," he said.

He said "step changes" had taken place in product quality and development, as well as operational improvements.

Appliances division earnings were at the upper range of the $15 to $25 million forecast the company gave late last year, at $23.7 million.

Broadhurst said cash flow was very strong at $113 million for the full-year to March 31, compared to $88 million in the prior year.

Gross margins on sales increased 2 per cent to $292 million as a result of lower warranty costs, he said.

Broadhurst said a reduction group net debt of $73 million over the year to $100 million was a big improvement on the net debt of $500 million that hung over the firm in early 2009.

Broadhurst said F&P Appliances' market share in New Zealand was now higher than it was when the company terminated its exclusive dealer agreement in July last year.

Under the arrangement retailers such as Farmers, Smiths City and Noel Leeming had only been able to stock F&P products.

The company said last year that the termination of the agreement would allow it to stock product in a wider range of retailers.