HP NEW ZEALAND TOPS $600M PROFITS UP 36%

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HP NZ sales top $600m, profits up 36%
Hewlett-Packard New Zealand has cemented its position as the country’s largest computer hardware supplier, posting a 10 per cent rise in revenues to $602.2 million in the year to October. Profits were up 36 per cent to $16.7 million.Chief executive Keith Watson says fallout from the subprime crisis is causing businesses to put off some purchasing decisions, but consumer demand remains strong and HP is bidding for some “huge deals” in the public sector.”Usually what happens in these situations when you get a bit of uncertainty — which has been created predominantly by subprime debt — is that deals tend to slip and some of the big ticket items tend to ‘move out’ and we are starting to see that a little bit in our business.”That is probably true in other areas of the economy as well, such as housing and, to some extent, travel.”

Consumers are taking advantage of the strong exchange rate and a ramp up in the production of lcd flat screen TVs and monitors that “have to be sold”, he says.”The consumer market is being fuelled by the fact products are so price-attractive right now. People are buying bigger and better things.”Mr Watson says last year’s result was underpinned by “strong demand across the board”.Consumers were spending up on notebook computers to take advantage of social networking sites such as Facebook, Bebo and MySpace, but New Zealand still has “quite a bit of work to do as a country in the broadband space”, he says.”We have seen some changes in the regulatory environment but I don’t think they go anywhere near far enough. They are not going to make us competitive with other countries by 2010.”We have got to get fibre to the home. That will really open up not just business growth but our capabilities in terms of remote working as well — we have just got to go a lot further, a lot quicker in terms of getting fibre to the house.”Another factor behind last year’s strong result was the growing market share HP enjoyed in the market for blade servers, used by businesses, following the release of its ‘C’ class servers.Hewlett-Packard New Zealand employs more than 700 staff. “A very big priority” this year would be taking advantage of the acquisitions its US parent had made in the software market, such as its US$4.5 billion acquisition of system management software supplier Mercury Interactive.

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March 18, 2008 at 11:02 AM