Record revenue and after-tax profits have been reported
by Fisher and Paykel Healthcare, which is surging ahead after
an almost 20% boost to its research and development spending.
Operating revenue for the year to March was up 12% to a
record $623.4 million, after-tax profit grew 26% to hit a
record $97.1 million and R&D spending increased 18% to
With all sectors facing uncertain economic times, the
majority of listed companies have cried off giving detailed
forward financial guidance, but Fisher and Paykel yesterday
spelled out much of its year ahead.
Chief executive Michael Daniell issued a caution in his
outlook, saying after-tax profit at the end of the current
financial year might be ''similar'' to the past year's,
because of unfavourable foreign exchange rates stripping more
than $30 million from revenue.
''At current exchange rates we anticipate an operating profit
headwind of approximately $32 million in the 2015 financial
year from both reduced hedging and less favourable spot
rates,'' he said.
He said despite the challenge of the ''large roll-off in
hedging'', the company had momentum in both its product
groups - respirators and breathing masks - that should offset
the strong New Zealand dollar during the 2015 financial year.
Forsyth Barr broker Haley Van Leeuwen said the record profit
was ''broadly in line with expectations'', noting that its
foreign exchange hedging gains had contributed $54.6 million
to operating profit, compared with $48.5 million the year
Craigs Investment Partners broker Chris Timms said the
consensus of analysts for full year 2015 was for some growth
in after-tax profit.
''There will be some downgrades coming through as other
analysts bring their full-year 2015 forecasts into line with
guidance,'' Mr Timms said.
Ms Van Leeuwen said with the forecast foreign exchange
''headwind'' of $32 million, the expectation of a similar
after-tax profit for the current financial year would come
from several areas.
The profit would be driven by ongoing expansion in gross
profit margins due to favourable product mix, new products,
operating efficiencies and increased volumes from the Mexican
facility, plus supply chain efficiencies.
Mr Daniell said the company had increased R&D spending by
18% to $54.1 million, which represented 8.7% of operating
revenue for the full year.
''We have a number of exciting new products under
development, including masks, flow generators, humidifier
systems and respiratory and acute care consumables,'' Mr
Fisher and Paykel had a clear strategy to meet the needs of
an ageing demographic and was increasing investment in
developing country healthcare, by continually improving and
extending product ranges, serving more patient groups and
expanding its international presence, Mr Daniell said.