F&P posts big gain but fails to satisfy

By ELLEN READ

Fisher & Paykel shares dropped from an all-time high yesterday after the company failed to reach market expectations for its half-year profit.

F&P posted a $37.53 million net profit in the six months to September 30, the last result the company will report before the healthcare and whiteware divisions split.

The profit is 62 per cent higher than the previous corresponding period's $23.1 million but below analysts' forecasts of around $44 million.

The company paid a 20c per share dividend on September 28, together with a special dividend of 25c a share, compared with 12c a share for the same period last year.

Fisher & Paykel shares hit a high of $14.90 early yesterday but eased after the result to close at $14.80. Revenue increased 10 per cent to $473 million, compared with the previous corresponding period.

Healthcare had an operating revenue of $101.5 million and trading profit of $40.5 million, representing an operating margin of 40 per cent.

Appliances' trading profit of $17.1 million grew by 26 per cent, reflecting both international growth strategy and improved operating efficiency, following last year's restructuring into a single business unit.

F&P is in the process of splitting its two divisions into separately listed companies, with the healthcare business to be partly floated and listed on the US Nasdaq Exchange.

F&P said the separation arrangement remained on course, with the indicative price range of $US16-$US18 ($39-$44) per American Depositary Share (ADS) contained in the US prospectus.

Each ADS will represent four Fisher & Paykel Healthcare Corporation shares. The actual price at which ADS are sold under the US Healthcare Offer would be determined by the level of market interest in the offer, F&P said. Brokers have said the price is too low.

The date for establishing entitlements to take part in the separation of the Fisher and Paykel Group has been set at next Friday.

F&P's share price has nearly doubled from a low of $7.80 at the beginning of the year.