Fisher & Paykel Healthcare has reported a better than expected annual net profit of $71.6 million, with strong product demand and favourable forex hedging lifting the result by 15% over last year.
While it previously forecast that it would reach a net profit of between $65 and $70 million, that was assuming a US74c exchange rate, when the average was actually just under the 72c mark.
The company’s operating revenues for the year ending March were not far off the $500 million forecast, coming in at $503.3 million, up 10% on the previous year, although that rise increases to 14% in US dollar terms.
It is expecting to achieve operating revenue of about $560 million and profit after tax of about $70 million to $75 million over the coming year, based on an average spot exchange rate of US67c.
The company attributed the past year’s rise to strong growth in its obstructive sleep apnea (OSA) and respiratory and acute care product groups, as well as the favourable foreign exchange hedging result.
OSA product revenue increased by 22% to $US160.8 million - or 17% to $NZ237 million - while respiratory and acute care product revenue increased by 11% to $US164.7 million, or 7% to $NZ242.4 million.
The company has gained market share with its new premium products and its new Icon flow generator range had been “enthusiastically received” by customers in New Zealand and Australia, according to chief executive Michael Daniell.
The new Icon range will be introduced over the next year into Europe, North America and the remainder of F&P Healthcare’s international markets.
Mr Daniell said the company also continued to generate strong operating revenue growth from clinical applications beyond its traditional and OSA markets.
“These include patients requiring non-invasive ventilation, oxygen therapy, humidity therapy and laparoscopic surgery. Those applications contributed 27% of the company’s respiratory and acute care consumables revenue for the year. “
During the past year, F&P Healthcare’s research and development expenses increased by 25% to $35.3 million, while also investing $48 million in capital expenditure, with $27 million spent in New Zealand.
This included equipment for increased manufacturing capacity, new product tooling, replacement equipment and the initial site works for a new building on its Auckland site.
F&P Healthcare has declared a final unchanged dividend for the financial year of 7.0 NZ cents per ordinary share.
It is also offering a dividend reinvestment plan (DRP), under which shareholders may elect to reinvest all or part of their cash dividends in additional Fisher & Paykel Healthcare shares, with a 3% discount.
The company’s directors have also revealed that after reviewing F&P Healthcare’s capital structure, they intend to progressively increase shareholders funds, to ensure that the company has capacity to continue to implement its foreign currency hedging policy as it grows.
They have also established a target debt to debt plus equity ratio of 5% to 15% (excluding unrealised financial instrument gains or losses). The company intends to maintain the current dividend until the target capital structure is achieved, although a dividend payout ratio of greater than 60% may be established in the longer term to maintain target gearing.
Wed, 26 May 2010