Fisher & Paykel Healthcare to buy Karaka land for expansion

An artists' impression of F&P Healthcare's planned facility at Karaka. Photo / Supplied

Fisher & Paykel Healthcare says it plans to spend $275 million buying a 105-hectare Karaka property for a new second campus to complement its existing East Tāmaki facility.

The respiratory products manufacturer said its current site was nearing capacity and it needed more land to enable its continued growth.

Chair Scott St John said the company had consistently signalled the importance of long-term infrastructure planning to help it deliver on its growth strategy.

F&P Healthcare has aspirations of doubling its constant currency revenue every five to six years.

"In order to take advantage of the opportunities ahead of us, we need more space," St John said.

Development of the new campus will occur over a 20 to 30-year period, with a focus on earthworks and core infrastructure over the next five years.

The new campus would house a large number of employees in R&D, pilot manufacturing and related roles, managing director and chief executive Lewis Gradon said.

He noted separate plans were underway to develop adjacent areas with improved transportation links and new housing developments.

The site is 25km south of the company's existing campus and about 40 km south of Auckland's CBD.

It sits adjacent to a major rail line and is a short distance from State Highway 1 and the site of the proposed passenger railway station at Drury West.

Gradon said the company's standard approach in New Zealand was to buy land rather than lease it, given the purpose-built nature of its facilities and the long-term certainty that offered.

The purchase of the Karaka land is subject to approval by New Zealand's Overseas Investment Office and will be funded through a combination of operating cash flow and debt.

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

The company's share price came under downward pressure last month when it said its profit for the first half to September would fall sharply from the same period a year earlier, when demand was high due to the Covid-19 pandemic.

F&P Healthcare expected operating revenue for the first half to be about $670 million, down from $900m in the previous comparable period. It expected its net profit to be $85m-$95m, down from $222m.