KEY POINTS:
F&P Appliances
Fisher & Paykel Appliances (FPA) plans to greatly increase its European sales through a partnership with a Turkish whiteware manufacturer and distributor. The deal with Arcelik will enable distribution of FPA branded appliances in Eastern Europe and the Middle East through Arcelik's network. FPA is looking for significant growth in Europe over the next three to five years, and this is obviously the deal it needed to get there. FPA's primary markets are New Zealand, Australia and the United States, but Europe is the fastest growing segment with revenue up over 600 per cent last year to $98.6 million. Strangely, the FPA shares remained unaffected by this announcement, showing that concerns about FPA's exposure to a strong NZ currency and its vulnerability to a global economic slowdown trumps everything else. However, FPA is an excellent company paying a good dividend and its performance at a time of overvalued local currency has been creditable.
Brickworks
Australian brickmaker Brickworks has reported headline net profit after tax rose 5.2 per cent f to A$107.5 million. It was a good result some 6 per cent above the market's A$96.5 million estimate and again reaffirms the importance of geographic and operational diversification. The results were also creditable, given the pressure on the Australian home building industry. However, the steady sale of its extensive land holdings, which are a legacy of primary brick manufacturing activities, will play an increasing role in earnings over the next decade. Similarly the major investment in investment house WH Soul Pattinson provides non-cyclical diversification from the building products operations.
