F&P Healthcare annual profit jumps 27%

Fisher & Paykel Healthcare, the medical device maker, beat its forecast for annual profit, boosting revenue and margins, and said it expected to post new records in the coming year.

Net profit jumped 27% to a record $143.4 million in the year ended March 31, ahead of its forecast range of $135-140 million, the Auckland-based company said in a statement. Revenue increased 21% to $815.5 million, also an all-time high and ahead of a forecast $800 million

The company today forecast profit in the coming year of $165 million to $170 million on revenue of $900 million.

F&P Healthcare, which competes with Resmed and Respironics, boosted sales of respiratory and acute care humidification products by 22% to $436.3 million, and sales of obstructive sleep apnea devices by 21% to $365.8 million. Gross margin expanded to 64% from 61.1% the year earlier, as the company sold more higher-margin products and increased the volume from its Mexico factory.

"This result is due to strong uptake of our products across both the hospital and homecare settings and a continuation of gross margin expansion," said chief executive Lewis Gradon.

"Continuous product improvement, serving more patient groups, broadening the range of assistance we can provide for each patient and expanding our international presence is a strategy that is well proven and has guided us to record operating revenue every year over more than a decade," Mr Gradon said. "We believe this consistent strategy will continue to deliver robust revenue growth in the current year."

Mr Gradon said revenue growth from the company's respiratory and acute care product group accelerated over the second half of the financial year as the company benefited from the successful transition of US hospital distribution to its own team. The company assumed direct responsibility for those products from July last year after previous distributor CareFusion was taken over by Becton Dickinson.

In the past year, Fisher & Paykel Healthcare increased research and development spending by 13% to $73.3 million, or 9% of revenue.

"Our consistent investment in R&D is fuelling one of our most exciting periods of new product development, with humidifier controllers, masks, respiratory consumables, flow generators and compliance monitoring solutions all expected to be released during this current year," Mr Gradon said.

The company will pay a final dividend of 10c a share on July 8, up from 8c a year earlier. That takes the annual payout to 16.7c.

Its shares last traded at $10.20 and have advanced 15% this year. The stock is rated a 'buy' according to the average recommendation of seven analysts compiled by Reuters.

(BusinessDesk)