F&P Healthcare lifts 2015 guidance after 1H earnings rise; shares hit record

Thursday 20th November 2014

Fisher & Paykel Healthcare, which makes breathing masks and respirators, raised its outlook for annual profit after posting a 10 percent gain in first-half earnings as it benefits from the sale of new products, gains market share for existing products and boosts margins. The shares rose to a record.

The company expects profit of $105 million to $110 million in the year ending March 31, based on the local currency trading at 79 US cents and 63 euro cents, it said in a statement. That's ahead of its August estimate for annual profit of $100 million, based on an exchange rate of 84 US cents, and its May guidance that earnings would be little changed from 2014's profit of $97.1 million which was based on 86 US cents.

The company increased profit to $48.9 million, or 6.4 cents per share, in the six months ended Sept. 30, from $44.5 million, or 7.3 cents, a year earlier. It said it faced a $15 million headwind to operating profit in the half as it lost the benefit of foreign exchange hedges. First-half revenue increased 4 percent to a record $317.4 million on increased sales for its traditional products and expansion into oxygen therapy, non-invasive ventilation, humidity therapy and surgery.

F&P Healthcare, which competes with Resmed and Respironics, increased its first-half gross profit margin to 60.6 percent from 58.4 percent in the same period a year earlier due to a favourable product mix, logistics and manufacturing improvements and increased volume from the company’s Mexico manufacturing facility. The company estimates it is tapping a potential market for respiratory products of more than US$5 billion a year and more than 100 million patients.

"We continued to gain market share across the broad range of applications for our products," said chief executive Michael Daniell. "Our strategic direction remains consistent as we focus on developing innovative products, increasing the number of patients who can benefit from our products, extending our range of products and growing our international presence."

The company raised its forecast for annual revenue to $660 million, from its August estimate of $650 million, its May forecast of $640 million and $623.4 million reported in 2014.

F&P Healthcare will pay a first-half dividend of 5.8 cents a share on Dec. 19, up from 5.4 cents a year earlier.

Shares in F&P Healthcare rose 1.6 percent to a record $5.71, and have gained 46 percent this year.

BusinessDesk.co.nz

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