Friday, May 28, 2010

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.

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c Shareinvestor 2010


  1. Hi Darren,

    It is a pity but F & P do not have a good rep in North America.

    I wonder how they do in NZ? and I wonder how seriously management are taking this customer backlash?

  2. Hi Ramjett, F & P have had reliability problems with some products for as long as they have been in business and their anti competitive behavior has been legendary in this part of the world.

    Poor company culture extends to their service to customers and their current demise was obvious 20 years ago in this poor culture.

  3. Ah Hem, No F& P in your house then Darren.

  4. RJ, We have an old Gentle Annie that my wife had before we got together and she purchased a Fridge from them.

    The GA was excellent in its day and still works well but their recent offerings have just been, well, crap.

    I would have bought a asian made fridge if I was in charge of that department - better features and cheaper - but she must have had a blind rush of blood to the head (or the salesman was getting more commission to sell the F & P )when she walked in the shop door.

    We should really shop around before settling on the same old...

    An icemaker as standard in an entry level asian fridge. that is what I call a fridge RJ....


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