F&P Healthcare lifts earnings guidance; CEO Mike Daniell to retire

UPDATED: F&P Healthcare on target to reach $1b operating earnings in next 3 years

EARLIER: Fisher & Paykel Healthcare [NZX: FPH], the medical devices manufacturer, lifted its 2016 earnings guidance on the back of a favourable exchange rate and said long-serving managing director Mike Daniell will retire.

Assuming the New Zealand dollar stays at about 65USc for the rest of the year, the company now expects full-year net profit of $135-140 million in 2016, $10 million higher than the guidance given in May, the Auckland-based company said in a statement. As 99% of its revenue is generated outside New Zealand, the weaker NZ dollar benefits the company's bottom line.

Mr Daniell reported robust revenue growth so far this year and expected first-half constant currency operating revenue growth of around 12%, with a slight impact from an inventory selldown by its previous US distributor. Strong demand was continuing this financial year which ends March 31, driven by increasing adoption by clinicians and healthcare providers of its products.

Mr Daniell intends retiring by the end of the current financial year, though will remain a director. His successor is Lewis Gradon, currently the company's senior vice-president of products and technology, who has been with the company for 32 years.

Chairman Tony Carter said Mr Gradon currently leads a significant part of the business, including R&D, clinical research, manufacturing and supply chain and had contributed significantly to the execution of the company's international growth strategy.

"Under Lewis's leadership the company will be well-positioned for growth as we near our next target of more than $1 billion in revenue," Mr Carter said.

The board paid tribute to Mr Daniell's contribution to the company over more than 25 years, leading an innovative, rapidly expanding team, which has grown the business more than twenty-fold.

"During his tenure as CEO, Fisher & Paykel Healthcare has achieved strong revenue and earnings growth despite the challenges of an appreciating New Zealand dollar and the impacts of the global financial crisis," Carter said. "He has driven the company's successful diversification from our traditional invasive ventilation market, initially into the obstructive sleep apnea market and more recently with the extension of the company's products into non-invasive ventilation, oxygen therapy and surgery."

Mr Daniell has won a number of management accolades including Entrepreneur of the Year at the NZ Engineering Excellence Awards, Deloitte Top200 Executive of the Year in 2013 and the INFINZ leadership award this year.

He said the time was right to begin the process of moving from an executive role into governance roles.

"Underpinning our success over many decades has been an unwavering belief in providing innovative medical devices that help to improve patient care and outcomes," Mr Daniell said.

The shares rose 0.4% to $7.25 and have gained 16% since the start of the year.

(BusinessDesk)