FPA would miss annual guidance if market conditions worsen

Monday 23rd August 2010

Fisher & Paykel Appliances Holdings would struggle to achieve its guidance for full-year earnings if key markets deteriorate, chairman Ralph Waters told shareholders at their annual meeting today.

"The board is increasingly concerned about the risk of further deterioration in economic conditions across our key appliances markets," Waters said.

"If these concerns are realized, achieving the full-year forecast will be challenging."

Earnings before interest and tax for the appliance business will be at the lower end of the broker consensus range of $45 million to $52 million, while finance EBIT will be at the top end of the $25 million-to-$34 million range, Waters said today.

"We agree with market commentators that any recovery in the US and New Zealand is likely to be further delayed," he said.

"While the Australian market performed better than all others in the last financial year, demand has since weakened and is expected to remain subdued through the current financial year."

Shares of F&P Appliances were unchanged at 51 cents on the NZX today. They have fallen almost 18% this year.

Earnings last year were eroded by one-time charges to write-down the value of brands and inventory and to cover relocation costs for plants moved to Thailand and Mexico.

The whiteware manufacturer last year strengthened its balance sheet by selling shares at a deep discount, renegotiating its bank debt and welcoming China's Haier Group as a new cornerstone investor.

Businesswire.co.nz

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