Fisher & Paykel Finance on the block

Fisher & Paykel Appliances has engaged First NZ Capital to look at selling its finance arm.

Appliance company Fisher & Paykel is thinking about selling its finance arm because of apparent market interest.

Fisher & Paykel Appliances, owned by China’s Haier Group, announced yesterday evening it is assessing its ownership of subsidiary company Fisher & Paykel Finance Holdings.

The finance company has been growing strongly after “significant investment” in its products and staff, and had fielded several enquiries regarding its long-term plans for the business, chairman Keith Turner says.

“Buyer interest in financial institutions is presently very strong … it is very possible a change in ownership may be a better option,” he says.

Fisher & Paykel has appointed First NZ Capital to help assess potential options.

The finance company has been restructured over the past 12 months, after a strategic review concluded it would benefit from a more diversified funding base. This included establishing a securitisation programme last August, under which it made an initial sale of $275 million of receivables from its Q Card to Q Card Trust, owned by immediate parent F&P Finance Holdings.

It also 'sold' its Consumer Insurance Services unit, which offers insurance and product protection policies to retailers and consumers, to parent F&P Finance Holdings for $20.1 million in December. The charging group's software and intangible assets were also sold to the parent for $7.3 million.

Fisher & Paykel has grown from being a niche whiteware business to a consumer finance company – its main product is Q Card, a consumer card service with a network spanning more than 10,000 retail outlets and more than 148,000 active customers – which is now capable of operating as a stand-alone operation.  The country’s fourth largest finance company, behind ANZ-owned UDC Finance, GE Money and Toyota Finance, had mulled listing Q Card in the past.

Haier acquired F&P Finance as part of its takeover of F&P Appliances in 2012. The Chinese manufacturer opted to retain the finance company after initially considering it for sale.

In calendar 2014 F&P Finance reported net interest income of $35.5 million, up from $33.4 million in the year-earlier nine months. Profit almost tripled to $31.8 million, after a revaluation gain on a subsidiary transfer.

“Guarding [Fisher & Paykel’s] reputation, preserving the relationships the company has built with consumers, investors, and our retail partners, and respecting the strong commitment staff have made to the business will be big considerations in any decision we make,” Dr Turner says. “In the meantime, it is very much business as usual.”