F&P stock soars after profit upgrade

By ELLEN READ

Fisher & Paykel Appliances shares hit an all time high yesterday on news of a profit upgrade and a branding and distribution deal with US giant Whirlpool.

Strong sales and a good contribution from newly acquired Farmers Finance saw the company lift its forecast full year net profit to $80 million to $85 million.

Previous indications were for a result in line with last year's $73.5 million profit.

The shares rose 38c to close at a record $4.38 yesterday.


Managing director John Bongard said the strong sales were widespread across New Zealand, Australia and the US markets.

He added that the new finance business was making more money faster than initially expected.

F&P Appliances bought Farmers Finance for $189 million in November.

The company also yesterday announced a deal with Whirlpool in which the US giant will market and distribute F&P's Dishdrawer in North America under its own brand.

The appliances - made in F&P's Dunedin factory - are the same double-drawer design but carry differentiated features and styling.

F&P will continue to sell its own branded single and double Dishdrawer in the US.

"The market is large enough for both companies," said Bongard.

New Zealand's largest appliance-maker formed a global strategic alliance with Whirlpool, the largest US home appliance manufacturer, last August.

The company will release its annual result for the year to March 31 on May 20.

Bongard said he would update the market on future developments then.

Brokers were positive about the profit upgrade, saying the company was going from strength to strength, with yields above average and a price/earnings ratio below average.