Fisher & Paykel Appliances chairman Ralph Waters today sounded a note of caution about the company's full year results amid concerns about deteriorating economic conditions across all key markets.
While stopping short of giving a profit warning,
Fisher & Paykel Appliances chairman Ralph Waters today sounded a note of caution about the company's full year results amid concerns about deteriorating economic conditions across all key markets.
While stopping short of giving a profit warning, Mr Waters said the company was forecasting full year earnings before interest and tax at the lower end of analysts’ guidance range of between $45-52 million.
“The board is increasingly concerned about the risk of further deterioration in economic conditions across our key appliances markets,” Mr Waters said in speech notes prepared for today’s annual shareholders meeting in Auckland.
“If these concerns are realised, achieving the full year forecast will be challenging.”
Although the company had managed to lift gross margins by 4.4 percentage points, sales for the first quarter were down 11% on the same quarter last year.
Mr Waters said market conditions in key appliance markets continued to be uncertain. He agreed with commentators that an economic recovery in the US and New Zealand was likely to be further delayed.
While Australia had been less affected, demand had softened and would remain subdued through the current year.
Offsetting this outlook for appliances was a strong performance from the company’s finance arm, which was benefiting from higher margins and cost containments.
Chief executive Stuart Broadhurst said the finance company could comfortably operate within all of its financial covenants without sourcing any funding from the debenture market.
The company expected the finance company’s earnings to be at the top end of range of $25m to 34m.
