Shock warning on F&P Appliances' books

[Lovelee]

Fisher & Paykel Appliances has been talking to "a number of potential strategic partners" as it looks for ways of raising cash after a sharp rise in its debt levels.

Shares in the whiteware manufacturer have been smashed to record low levels - losing as much as 40 percent in value - after the company put out an update today that was both a profit and debt warning.

The company, which said that chief executive John Bongard had taken an immediate 7.5 percent pay cut, forecast earnings of $25 million to $30 million for the year to March. However, one-off restructuring provisions would see the final figure be about break-even. Last year the company made $65.5 million before one-offs and $54.2 million after.

In the year to March 2008 Bongard was paid $1,142,593. Other executive staff are taking 5 percent pay cuts, while the company is finalising a scheme that would see all salaried staff rostered off for one day a month. They can use annual leave for this.

Of immediate concern to a twitchy sharemarket was F&P's debt levels. The company said it may consider getting a cornerstone shareholder in - something that would have been unthinkable for the company even a year ago.

"We have been talking to a number of potential strategic partners - I can't tell you who, obviously for good sound commercial reasons," Bongard said.

"As yet the size of any strategic or cornerstone stake - although we've got some ideas on it - we wouldn't be sharing that at the moment."

Bongard said the debt to debt-plus-equity ratio for the appliances business had increased to 43 percent, which is outside its targeted range of 25 percent to 35 percent.

The company said that due to the rapid depreciation of the New Zealand dollar, foreign currency denominated debt had increased in Kiwi dollar terms by $122 million since March 2008. At the end of last month total bank debt was $512 million and it was expected to reach $570 million by the end of March 2009.

F&P said that levels were expected to be then progressively reduced by $230 million over the next nine months through working capital adjustments and from an estimated $95 million to be raised from sale of its sites in Brisbane and East Tamaki, Auckland.

http://www.stuff.co.nz/4849405a13.html

[Lovelee]

Prime Minister John Key should follow through on his pledge to bail out struggling New Zealand businesses by backing iconic brand Fisher & Paykel Appliances, says New Zealand Shareholders Association chairman Bruce Sheppard.

Mr Sheppard said Fisher & Paykel was an iconic New Zealand company that had to be kept afloat.

Mr Key revealed last month treasury had done "scoping work" on companies that might need to be bailed out but did not say who had been identified.

"If we got into a situation where a New Zealand corporate could not raise money in its own name, could not receive the level of funding that was required from the banks and we deemed it to be in the best interests of the country for the Government to step in and provide those funds on a temporary basis.
"There is a limited group of corporates which would sit within that quarter," Mr Key said.

http://www.stuff.co.nz/4849514a13.html

[guest49]

I may be wrong, but isnt F&P the company that only a few months ago, was outsourcing all its manufacturing to Mexico?

I see on the news this morning, that some idiot wants the government to pour money into the company.

[guest49]

Shon Key is "going to take a look at support for F&P" according to the Stuff News.
I would hope that the executives of the company would take big pay cuts before this happens - in the case of the executive director, who apparantly gets over a million dollars a year, a $900,000 cut would seem appropriate.

[donquixotenz]

Why should jk support a company that abandoned New Zealand workers for foriegn slave labour.
That is just good money after bad.
Let them sack their management and return manufacture to new zealand and let the shareholders who in their greed voted to allow the board to shift operations to foreign ports, probably mostly foreign investors, pay for their stupidity.
For Nz to support this  who has in effect mostly abandoned the kiwi and attempting to hold it to ransom is gross stupidity...........Let them stew in the cookpot of their own greed.
It will all come out in the wash

[Lovelee]

aww my hearts still bleeding for the shareholders.

No company should be helped out by way of taxpayers money!!

If that is gonna happen - I imagine there should be a line up of people who also need support for small businesses - and that sure as hell wont be happening.

[dragontamer]

I agree with Yak - a major pay revision (and not in a positive way) for the management.  Shareholders - well, part and parcel of being a shareholder is to take the good with the bad.  Let them take some of the cream they have siphoned over the years and put it back. 

It's on the nose that they can have 10 years + of high, and can't weather 6 months of low. 

[Lovelee]

The explanation gien this morning is too much stock and no ones buying.

Because they shifted off shore - they doubled their stock output so they would have enough stock while closing NZ down and opening the Thai one.

So they are loaded with stock and no ones buying.

[Lovelee]

Govt to consider taking stake in some companies

Updated at 8:03am on 17 February 2009

Prime Minister John Key has raised the possibility of a public bailout of the private sector, by saying the Government will not rule out taking a stake in some troubled New Zealand companies.

His comments followed a plunge in the share price of Fisher & Paykel Appliances on Monday, after the company halved warned its full year profit forecast.

It's the first time since Air New Zealand was rescued by Labour in 2001 that such bailouts have been considered.

Stock Exchange chief executive Mark Weldon says it's prudent for the Government to consider taking a stake in troubled companies.

Mr Weldon, who will chair a Government employment summit on 27 February in Auckland, says it's sensible for the Prime Minister to discuss options.

However, the Northern Employers and Manufactuers Association says the circumstances need to be exceptional to justify any bailout.

Chief executive Alasdair Thompson says the Government should first lower company taxes and reduce compliance costs.
Fisher & Paykel situation

Mr Key said he had spoken to Fisher & Paykel Appliances chief executive John Bongard, who reassured him that the company had a plan to deal with its difficulties.

Mr Key said the Government is prepared to offer assistance if needed.

He said the Government would not allow 1600 jobs to be lost.

The company employs 3700 staff, 1600 of whom are in New Zealand.

Mr Key said he would not rule out the option of taking a stake in any company if required.
http://www.radionz.co.nz/news/stories/2009/02/17/12459e404469

[Lovelee]

I wonder if JK has even thought about the fact that any bailout money might be used to further their production status overseas.

He would probably get some support for this if they had stuck with NZ.

[Calliope]

Is John Key aiming to "nationalise" business?
Is he going to be to National what Roger Douglas was to Labour - a renegade?
Is National going to become the NEW Labour?

[Magpie]

This whole business is extraordinary - a National Party PM talking about nationalising the whiteware industry!

Key is rapidly looking more and more like a new Muldoon. This is against everything the National Party is supposed to believe in: capitalism, private enterprise, the free market....

Where are Brownie and Ballasted Moth? They should be screaming blue murder at Key threatening to throw into the waste bin everything they hold dear.

Or are they so besotted with the Prime Minister they haven't even noticed?

[Lovelee]

PM doesn't want appliance company to fall into wrong hands

Updated at 12:16pm on 17 February 2009

Fisher & Paykel Appliance chief executive John Bongard says Prime Minister John Key has told him the Government does not want the company to fall into what he calls, the wrong hands.

Mr Key signalled again on Tuesday he would not let Fisher & Paykel collapse.

Shares in Fisher & Paykel fell on Monday after the company issued a forecast that its profit would be halved.

Mr Bongard says he has promised Mr Key to keep the Government up to date with Fisher and Paykel's situation.

Mr Key on Tuesday repeated his Government's willingness to help as a last resort.

Finance Minister Bill English says the Government has to remain "open minded" about how it responds to the effects of the global recession.

Mr Key says Fisher & Paykel is an important company and could be treated as a special case.

He says that does not mean the Government would inevitably bail out the company if its situation gets worse, but all options are open.

http://www.radionz.co.nz/news/stories/2009/02/17/12459e414697

This "icon" should be left to drown - seems heavy public opinion is also saying that and I dont care if the appliance company falls into the 'wrong hands'.  Seems to me NZ has had its best of F&P.

[enemyoftheleft]

just a quick thought for all the conspiracy dudes..............Fand P are an old jewish company,and Key is jewish as well,so maybe this little deal has already been worked out in the synagogue !!!!!!!!!!!

[Lovelee]

 


 Woolf Fisher was born in Wellington on 20 May 1912, the eldest of six children of Jewish parents Michael Fisher and his wife, Fanny Dabscheck. His father, who owned the bakery and general store in Paraparaumu, was from Riga, Latvia, then part of Russia; his mother was born in Victoria, Australia. They led a rural life and at an early age Woolf showed a particular ability to handle horses. The family moved to Wellington, then later to Auckland, where he attended Mount Albert Grammar School in 1926–27.

By the 1930s Woolf Fisher was working as a salesman selling confectionery on commission. He was also an agent for the importing firm Paykel Brothers. When the parents of his close friend Maurice Paykel found themselves with a surplus of refrigerators, Fisher offered to sell those they did not want. After selling the first in Whangarei he realised there was a future in importing refrigerators. In January 1934 Woolf and his father, together with Maurice Paykel and his father, George, formed the company of Fisher and Paykel. Woolf’s contribution was £40 and a £210 loan on his 1928 De Soto car. The close personal and business relationship between the families was sealed when Woolf Fisher married Maurice’s sister, Joyce Paykel, at the Auckland synagogue on 12 September 1935.


http://www.dnzb.govt.nz/DNZB/alt_essayBody.asp?essayID=5F8