Monday, May 4, 2009

Fisher & Paykel Appliances future looking bleak

For those of you who have followed my rantings on this that and the other over the last 2 years or so, you will know I haven't got much time for Fisher and Paykel Appliances [FPA.NZ] the so-called "kiwi business icon" and today is no exception.

Get ready for another rant.

It has been poorly run for many years and was only a success largely because of protectionism in New Zealand and has fought that protectionism and lost the battle.

To me Fisher and Paykel Appliances is looking terminal. It has more than half a billion of debt on its books, with a massive slashing of its sales and profit, and bleak hope for the future.

The company is technically bankrupt.

For management to blame the current credit meltdown is moronic and dishonest at best. There has been clear evidence of a spiraling down of company fortunes over the last 10 years, not the least the massive debt that has been allowed to build up.

It shows the lack of forward planning that management did nothing about that debt until the very last minute and it is only the current dire credit climate and global economic circumstances that have accelerated an inevitable credit crunch.

FPA management have been blessed with less foresight than an Al Gore devotee with a blindfold on that they couldn't see the end coming.

The simple fact that it has taken more than six weeks to find some poor sucker to poor millions of dollars more into this loser shows the less savvy investor that nobody really wants to touch it with a 10 foot dish draw.

Having said that what the company does have to its advantage is one or two products that could be useful to another company looking for an edge in the whiteware market and a brand name with just enough cache left that could be used by a more competitive and well managed whiteware manufacturer.

For that reason alone the best thing for the company is for it to be broken up and sold.

That is sad, but some "business icons" have their best days behind them and Fisher and Paykel Appliances is definitely one of those.

Will the company survive?

Unlikely in its current form.

Fisher & Paykel Appliances @ Share Investor

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