Fisher & Paykel Appliances 2010 Full Year Profit Analysis

The 2010 Full Year result for Fisher & Paykel Appliances [FPA.NZ] out this morning should leave shareholders feeling a little green around the wallet.

In relation to the 2009 Full Year result of $33 million the 2010 $83 million loss on revenue down 15%, while possibly better than most thought it would be, is nonetheless a testament to management failure.

Both the 2009 and 2010 full years were marked by one off "restructuring costs" and there are probably more of those to come but normalised profit (which FPA like to point out) has almost halved from 2009.

Revenue in Australia has improved significantly and New Zealand revenue has stopped falling.

Notably though North American sales have collapsed over the last half, while European revenue has more than halved in the 2010 6 months.

These markets were trumpeted by management as high growth and while other appliance makers sales have improved in these markets as the economy is stimulated by taxpayer handouts the more expensive and unreliable FPA product has been languishing on the shelves.

A plant built in Mexico to meet this demand has been underutilized and value of it written down this year.

Net debt, while reduced significantly because of a capital raising and bailout by Haier in 2009, at $179 million is still way too high and likely to increase and need further attention in the medium term, especially if sales don't improve.

The outlook for 2011 remains bleak in my opinion and further losses look to be on the cards even if sales improve.



Fisher & Paykel Appliances @ Share Investor

Stock of the Week: Fisher & Paykel Appliances
Fisher & Paykel Appliances future looking bleak
Fisher & Paykel downgrade continues fine tradition
Fisher & Paykel Appliances looking fair value
Fisher & Paykel: A Tale of Two Companies
Fisher & Paykel Appliances: In a spin over nothing

Fisher & Paykel Healthcare @ Share Investor

Fisher & Paykel Healthcare Ltd: Where is it Going?
Fisher & Paykel Healthcare Ltd:  Should I Buy Now?
Fisher & Paykel Healthcare Ltd: The Time to Buy
Share Investor's 2012 Stock Picks
Global Market Sell-Off Stocks: Fisher & Paykel Healthcare
Resmed takes market share from Fisher & Paykel Healthcare
Resmed kicking Fisher & Paykel Heathcares butt?
Share Price Alert: Fisher & Paykel Healthcare Ltd
I'm Buying: Fisher & Paykel Healthcare Ltd
Share Investor's Total Returns: Fisher & Paykel Healthcare Ltd
Share Investor's 2011 Stock Picks
Stock of the Week: Fisher & Paykel Healthcare Ltd
Fisher & Paykel Healthcare & the US Dollar
Mondrian Investment Partners take stake in Fisher & Paykel Healthcare
Fisher & Paykel Healthcare: 2010 Full Year Profit rests on Foreign exchange movement
Long Term View: Fisher & Paykel Healthcare
Stock of the Week: Fisher & Paykel Healthcare
Analysis - Fisher & Paykel Healthcare: FY Profit to 31/03/09
Schroder Investment Management takes big Fisher & Paykel Healthcare stake
Long VS Short: Fisher & Paykel Healthcare
Big Fisher & Paykel Healthcare trades a curious tale
Why did you buy that stock? [Fisher & Paykel Healthcare]
Drinking and Trading
Share Investor's 2008 stock picks
Fisher & Paykel: A tale of two companies
FPH downgrade masks good performance

Discuss FPH @ Share Investor Forum
Download FPH Company Reports



c Shareinvestor 2010

TSB Bank VS Kiwibank

The fuss made from the left over a possible part sale of Kiwibank would be easy to understand if the bank was a roaring success but the bank that was set up in the early 2000s to buy votes for Labour and Jim Anderton has been a drain on taxpayer funds since then.

You will read the exact opposite in the mainstream left media but this particular Government Department just doesn't cut it.

A $NZ 125 million set up cost and continued subsidization from New Zealand post means Kiwibank has been a big failure.



Some forget what happened last time politicians got involved in banking in New Zealand, with the BNZ having to be bailed out by the taxpayer in the late 1980s after it went belly up. Why do some insist we keep something because it makes Kiwibank customers feel all warm and fuzzy while the rest of us subsidise them with our taxes?

A possible float of Kiwibank would ameliorate the demands of Kiwibank management for more taxpayer dosh for expansion of the bank.

I am of the view that the bank be sold outright and the money returned to taxpayers but any float, partial or full would benefit the bank and the company in one fell swoop.

We have a smaller bank, TSB Savings Bank, that is community owned and it has powered ahead the likes of Kiwibank without taxpayer handouts, growing business a real and sustainable way by using largely customer deposits to lend to other customers (you know, how a real bank operates)

By subsidising the likes of Kiwibank we stifle real private business like TSB. When their competitors have the advantage of taxpayer funding it really isn't a level playing field. The only winners are the bureaucrats working at the bank.

So, lets float or sell Kiwibank. In the long-term it is going to save us alot of money.

TSB have just announced their 23rd consecutive annual record profit of $51.2 million, up 19% on last year. This compares with a $23.4 million half year 2009 profit (bolstered by NZ Post & taxpayer funding) by Kiwibank, down 9% on last year. TSB have acheived their results on less than half the assets that Kiwibank has on its balance sheet.

Figures don't lie.


Related

TSB Savings Bank - Services
Contact TSB - Support your local bank


Recent Share Investor Reading

• Mainfreight Ltd: Fully Year 2010 Profit Analysis
• Telecom maybe oversold
• Sky City Convention Centre Expansion a Money Loser...
• 2010 Budget a Good Start
• Telecom NZ Share Price has "Jumped the Shark"

Discuss this Topic @ Share Investor Forum




c Share Investor 2010

Mainfreight Ltd: Full Year 2010 Profit Analysis

Mainfreight Ltd [MFT.NZ] has had a very good 2010 full year profit result considering the state of the world economy and the subsequent slow down in world trade. The result is up 2.5% on the 2009 full year announcement.



Key Points

1. Total revenue (sales) decreased by 10.5% to $1.13 billion, from $1.26 billion last year

2. A net surplus after taxation and abnormals of $36.37 million for the twelve months of the 2010 financial year; an increase of 2.5% on the previous year’s result of $35.48 million.

3. Second half of year up more than 11% in revenue indicating a possible return to growth.

4. A big focus on cutting operating costs over the period of downturn in the business/economy, with more than $32 million cut.

5. A huge decline in North American revenues of nearly 25% in the first half but importantly showing signs of a recovery in the second half.

6. Australian operations steady.

7. New Zealand operations down in first half but improving in second.

8. Asian business under intense competitive pressure.

9. Cashflow down.

10. Debt decreased significantly from $115.28 million to $80 million.

Management have done well to come in with a higher full year profit. They did this by cutting back fat in the business and delaying capital expenditure and that is a testament to how responsive management are to trading conditions for them and the economic situation. Other listed NZX companies have continued to operate without these sort of economy measures and shareholders are paying the price.

Mainfreight have indicated to the market that while business for them is improving, any improvement could be tentative at best given the continuation of global economic problems and problems in Europe and elsewhere with high state debt levels.

I have to concur with these sentiments and I see any - if there is to be growth - short to medium term growth for Mainfreight that it comes for reasons of market share protection and that will impact on margins and therefore profit.

Hopefully that means there will be more expenditure cuts until the economic slowdown is a real one (the current "rebound" could be fueled by more State funded debt through stimulus packages) and sustainable growth and increased margins will once again be the order of the day for Mainfreight.

9 out of 10.


Mainfreight @ Share Investor

Long Term View: Mainfreight Ltd
Share Investor Interview: Mainfreight's MD Don Braid
Stock of the Week: Mainfreight Ltd
Questions to Mainfreight's MD Don Braid
I'm Buying: Mainfreight Management delivers the goods
Mainfreight Annual Report Packs a Punch
Analysis - Mainfreight Ltd: FY Profit to 31/03/09
Mainfreight VS KiwiRail: The Sequel
Long VS Short: Mainfreight Ltd
Why did you buy that stock? [Mainfreight Ltd]
Mainfreight 2008 Annual report worth reading
KiwiRail will cost Mainfreight
Mainfreight keeps on truckin
A rare breed
Share Investor's 2008 stock picks

Discuss MFT @ Share Investor Forum

Download Mainfreight Company Reports


Recommended Amazon Reading


The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
Buy new: $14.95 / Used from: $7.50
Usually ships in 24 hours




c Share Investor 2010

Telecom maybe oversold

Every market watcher is talking about it, just how low is the Telecom NZ [TEL.NZ] share price going to go.

Well at time of market close today the TEL share price is down 11c to a new all time low of $1.85 (see 2 month chart above) on lowish volume.

I don't want to discuss this today though.

I think the market has oversold the stock at this point and seems to be discounting the value that could be added to shareholders if the company decides to split up its various divisions so it can bid for 1.5 billion in taxpayer dosh to build a new fibre network for faster broadband in New Zealand.

The decision to split the company is by no means a definite one but beleaguered CEO Paul Reynolds indicated yesterday that this could be on the cards and the company is investigating the possibility of breaking Telecom into two parts - Chorus and Telecoms other divisions.

Depending on how a possible separation is executed, this could be a good move for existing shareholders as a split could realise them full value of the companies two parts by opening the Chorus lines/infrastructure business to the posibility of nabbing a slice of that taxpayer moola.

While there might be one-off and ongoing costs for the two separate businesses I think investors at these price levels will benefit from a separation, at least in the short term.


Telecom NZ @ Share Investor

Telecom NZ Share Price has "Jumped the Shark"
I was Wrong... sort of
Telecom NZ: TV3 60 Minutes Segment more like Corporate PR
Telecom Share Price Limbos but has it jumped the Shark?
Telecom NZ: Saint Gattung gets her Ya Ya's out
Telecom NZ: Bye Bye Paul Reynolds
Long Term View: Telecom NZ Ltd
Stock of the Week: Telecom Ltd
Revisiting Telecom
Getting cute and fluffy with Teresa Gattung
Telecom NZ Hangs up
Business Gobbledygook puts up barriers to communication
A Rare Breed
Telecom NZ facing a watershed period
Biology a major key in "glass ceiling" for women
Telecom rewards Gattung for mediocrity

Download every available TEL Annual Report Free


Discuss TEL at Share Investor Forum - Register free


From Fishpond.co.nz



Buy Bird on a Wire: The Inside Story from a Straight Talking CEO & more @ Fishpond.co.nz




c Share Investor 2010