Wellington, Sept 25 NZPA - Investors are disappointed that Fisher & Paykel Appliances Ltd downgraded its profit outlook so soon after a capital raising announced in May and also that nothing was said at the annual meeting just last month.

The stock was sold down on heavy volume today to 58c but found support and closed at 65c, down 9c, or 12.16 percent.

The company raised $142.9 million in a rights issue announced in May by selling shares at 41c each. The rights issue closed on June 25.

It said yesterday that North American sales revenue in US dollars was now forecast to finish the year 12 percent below the level assumed in the prospective financial information (PFI) for the rights issue.

The group's trading performance for the six months to September was also expected to be outside the 20 percent permitted adverse variance under a budget performance covenant agreed with the company's bank syndicate.

The company is in discussions with its banking syndicate and banks have requested internal credit approvals in waiving compliance with the budget performance covenant.

It will update the market on banking arrangements on or before September 30.

There was speculation that the company was cleansing as leadership changes. Chief executive John Bongard, who is being treated for prostate cancer, leaves on Wednesday.

Shane Solly, portfolio manager at Mint Asset Management, said the announcement was disappointing because it was such a short period since the annual meeting.

"There they were cautious but they didn't give any indication at that point," he said.

Still, he said from a broader corporate perspective economic times were still difficult and a number of companies could come out with weak statements.

The Fisher and Paykel Appliances restructuring was complex and there were issues with timing.

Stephen Wright at ASB Securities said the timing of the statement so soon after a capital raising raised credibility issues.

The company said it expected to make only 40 percent of the net profit of $32.8m it forecast for the 2010 financial year, between $20m and $23m -- even though it told investors last month it was on track for its forecast profit.

"Directors are reviewing the carrying value of assets for any possible impairment," it said.

The company said it expected to post a net loss of between $2m and $5m this fiscal year, compared with a May forecast of a net profit of $11.7m.

The final costs of relocations of manufacturing to Thailand and Mexico were expected to be higher than in the PFI, staff retrenchments costs were also higher as were costs associated with debt restructuring. Marketing expenditure was also higher than in the PFI.

Debt was still forecast to fall below $200m by March 31 next year as inventory reductions continued and cash flow from operations improved.

The finance business continued to perform well.

The whitegoods maker brought in Haier as a strategic investor. Haier invested $46.5m in an initial placement, paying 80c a share, and $11.2m in a top up placement so the company raised a total $200m in new capital, including the rights issue.

Stuart Broadhurst, former chief operating officer appliances, will be acting chief executive, as well as retaining his current role, while the company recruited a new chief executive. NZPA