Fisher Healthcare on track for $200m full year revenue

By NZPA

Thursday 7th November 2002

Fisher & Paykel Healthcare says it is on track to deliver full year revenue of $US100 million ($NZ203.62 million).

The company has reported a 31.6 percent jump in first half year net profit to $33.807 million on fairly flat revenue of $101 million from continuing operations.

The result included a $9.1 million foreign exchange gain.

Chief executive Michael Daniell said he expected to see strong revenue growth continue in the second half of the year, and was anticipating similar operating margins of 33 to 34 percent.

The company declared an interim dividend of 23 cents per share, and said it was on target to pay 50cps for the full year.

Shares in F&P Healthcare jumped 10c at 10am to $10.90c, enhancing a steady rise of over $1 in the last month as the market anticipated a solid result.

The company is about to mark its first anniversary as a standalone company after being split off from the larger Fisher & Paykel appliance company last year.

Shares initially soared to $18.75 but virtually halved as the company battled competitors and failed to produce results as quickly as expected in the United States market.

Mr Daniell said that although revenue looked flat in New Zealand dollars, it had to be understood that it was the kiwi currency had appreciated around 15 percent in the last 12 months.

A weakening kiwi dollar had reversed part of a first quarter foreign exchange gain of $13.6 million foreign exchange gain, and that eroded September quarter net earnings to $3.4 million, compared with $30.4 million in the June quarter.

But since the end of September the New Zealand dollar had strengthened again "so in fact, we've already presumably got all of that back".

Over the half year, revenue grew 12 percent, compared to the same period last year, and by 20 percent between quarters in US dollar terms.

The fastest growing revenue earner had been the company's obstructive sleep apnoea (OSA) products which rose by 40 percent in US dollar terms in the September quarter.

Respiratory humidification revenue increased by 9 percent and neonatal and patient warming revenue increased by 7 percent.

Mr Daniell said the company was hedged at around US46c. For the full year the company was expected to gain $NZ28 million in foreign exchange before tax.

An issue of concern for the company is the time it is taking for US regulators to approve its latest neonatal products. Mr Daniell said it usually took about six to 12 months for a product to be approved, but Fisher and Paykel could be waiting longer because the Food and Drug Adminsitration had made an administrative error.

The company has already been waiting six months.

On the lawsuit between itself and Australian competitor Resmed, Mr Daniell said the ball was in F&P's court as far as responding to the claim. "It could be a lengthy process," he warned.

Resmed is suing Fisher and Paykel over intellectual property rights over its respiratory masks.

Going forward, Mr Daniell said each product group had a "substantial pipeline" of new products in development and some would be announced during 2003.

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