Good start for Fisher & Paykel

By Yoke Har Lee

Whiteware group Fisher & Paykel said the first two months of its current financial year met internal forecasts for healthcare and finance divisions while whiteware is running behind budget.

Compared with the same period last year however, whiteware's performance was ahead, the company said in its latest annual report.

It said it was budgeting to spend $27 million on a new healthcare production facility out of a total capital expenditure provision of $72 million.

Chief executive Gary Paykel said the company's short-term capital expenditure would be focused on new products. As the company had the manufacturing capacity in place to match foreseeable demand, it could easily increase capacity with relatively little additional capital expenditure.

Included in the company's recent restructuring was the closure of its subsidiary Screencraft and the regrouping of its whiteware division. The company also had to absorb redundancy costs for 300 staff.

"We believe the company is now focused in the areas of business where it has both significant competitive advantages and international potential," Mr Paykel said.

In terms of growth prospects, Fisher & Paykel disclosed that its healthcare bread-and-butter business was in respiratory humidification, which accounts for 65 per cent of the division's sales revenue.

A new area within the healthcare business that was starting to see growth was the radiant warming of hospital patients, which now accounts for 10 per cent of sales.

"We are seeing growing opportunities as clinical awareness of the benefits of radiant warming increases," said Mike Daniel, general manager of healthcare for Fisher & Paykel.

During the last financial year, healthcare products turned in revenues of $118.65 million and made profits of $40.42 million. This compared with whiteware's profit of $23.10 million on revenues of $530.82 million.