Fisher and Paykel Healthcare sees earnings boost from Covid-driven demand

Fisher and Payel Healthcare sees a big lift in earnings arising from the Covid-19 pandemic. Photo / NZ Herald

Shares in Fisher and Paykel Healthcare rallied sharply after the company said intense demand for its products arising from the Covid-19 pandemic would boost its net profit by close to $100 million this financial year.

In an earnings update, F&P Healthcare, which specialises in making respiratory products, said it expects full year revenue to come in at about $1.61 billion and for its net profit to lift to about $364m to $385m in the current year.

The company's most recent profit for the year to March came to $287m, on revenue of $1.26b.

In early trading, the company's stock was up $2.05 or 5.8 per cent at $37.05 on the news.

In the first four months of the financial year to the end of July, strong demand for the company's hospital respiratory-care products continued to track the spread of Covid-19 around the world, reflecting a changing trend in clinical practice to lead with nasal high-flow therapy for treatment of Covid-19 patients in hospital, it said.

"Hospital hardware sales have continued to steadily increase over the first four months of 2021, with 390 per cent constant currency revenue growth to the end of July compared to the prior comparable period," it said in a statement.

"Our manufactured output of the related consumables has steadily increased over the four months, allowing us to begin some rebuilding of inventory levels after a peak in shipments in April," managing director and chief executive Lewis Gradon said.

"Including a very strong finish to the first quarter, for the first four months of 2021 hospital consumables revenue has grown 48 per cent and overall hospital product group revenue has grown 91 per cent, compared to the prior comparable period and in constant currency terms," he said.

Gradon said the upgraded guidance assumed that global hospitalisations requiring respiratory support would steadily return to normal by the end of this calendar year.

F&P Healthcare designs, makes and markets products and systems for use in chronic and acute respiratory care, surgery and the treatment of obstructive sleep apnea.