By Jenny Ruth
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Thursday 25th March 2010 |
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Trading conditions for Fisher & Paykel Appliances continue to be tough and, at this stage, there appears to be little sign of those conditions abating, says Forsyth Barr analyst Andrew Harvey-Green.
"As a result, we have downgraded our 2010 forecast from the top of Fisher & Paykel's range to the bottom," he says.
He has cut his earnings before interest and tax (EBIT) forecast for the year ending March 31 by 7.6% to $61.1 million and his 2011 forecast by 11.3% to $79.9 million. He cut his valuation by 7 cents to 89 cents a share. Although the share price is considerably lower, "it is difficult to see a near-term catalyst," he says.
"Fourth quarter results for the US and Europe weren't particularly encouraging and appliance retail statistics in New Zealand and Australia for the last four months have been patchy at best," Harvey-Green says.
While the company will start distributing product from 20% China-based shareholder Haier from April 1 in New Zealand and Australia, and he expects this to provide some sales uplift, incremental profit will be modest, he says.
"The lack of announcement from Fisher & Paykel indicates that there have been delays in setting up showrooms in China which has probably hampered the launch of Fisher & Paykel-branded products there."
BROKER CALL: Forsyth Barr rate Fisher & Paykel Appliances as accumulate.
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