Strong sales revenue growth underpinned a record half-year profit for Fisher & Paykel Healthcare for the six months to September.
Revenue rose 20% from $317.4million last year to a record $381million, earnings before interest and tax (ebit) grew 31% from $72.6million to $95.2million, and after-tax profit was up 26.8% from $48.9million to $62million.
Fisher & Paykel Healthcare (FPH) chief executive Michael Daniell attributed the record result to the continuation of the company's consistent growth strategy, which drove strong revenue growth in both major product groups and more improvements in the gross profit margin.
''With the move to a direct sales model in the US, as we have already done in our other major markets, we expect the increased sales focus will enable us to maximise opportunities and increase US revenue growth,'' Mr Daniell said in a statement yesterday.
Forsyth Barr broker Suzanne Kinnaird said the key highlight for FPH was the revenue growth of 25% in masks, which indicated strong market share gains, helped by the continued success of recent new products, Simplus and Eson in particular.
''FPH has reiterated full-year 2016 guidance for revenue of around $800million and after tax profit of between $135million to $140million,'' she said.
Craigs Investment Partners broker Peter McIntyre said it was a ''strong'' first-half result, and in line with guidance provided at the August annual shareholders meeting.
He said the quality of earnings continued to improve, with the company on track to make a $14million hedging loss at current foreign exchange rates at ebit level for the year, but those hedging losses would disappear when hedging rolled off, by 2018, ''providing a strong tailwind to earnings growth''.
Mrs Kinnaird said while the currency outlook was slightly less favourable, the underlying business performance was tracking ahead, which would offset currency losses.
''FPH has a positive growth outlook in both its core markets underpinned by favourable structural trends, new products and further expansion into new areas,'' Mrs Kinnaird said.
The company again increased its investment in research and development, up 14.3% to $35.8million, representing 9.4% of operating revenue for the half, senior vice-president of products and technology and chief executive designate Lewis Gradon said.
''We have a significant pipeline of new products that we expect to release in the coming year, including new humidifier controllers, flow generators, masks and consumables,'' he said.
At a glance
Fisher & Paykel Healthcare:
Designs, manufactures and markets products for respiratory care, acute care, surgery and treating obstructive sleep apnea sold in more than 120 countries.
Revenue from respiratory and acute care/hospital products up 18% to $200million Revenue in obstructive sleep apnea/homecare products up 23% to $175.3million.
Consumables and accessories accounted for 83% of operating revenue.
- Source: FPH
