Respiratory products maker F&P Healthcare has reported its latest annual result.
Respiratory products maker F&P Healthcare has reported its latest annual result.
Investors and market analysts gave Fisher & Paykel Healthcare the thumbs up after the respiratory products maker lifted 2024 profit before abnormal items by 6 per cent to $264.4 million, returning to growth after a post-Covid earnings slump last year.
The previous year’s earnings fell by 34 per cent, reflectinga return to more normal levels after a period of very strong growth during the pandemic.
Now, it appeared Fisher & Paykel Healthcare (FPH) was back to “firing on all cylinders” Forsyth Barr analyst Matt Montgomerie said.
Total operating revenue for the 2024 financial year was $1.74 billion, up 10 per cent.
FPH said growth was driven by solid demand in hospital consumables and strong growth in the obstructive sleep apnea (OSA) mask business.
The company said its net profit came to $132.6 million, down 47 per cent from the previous year’s profit of $250.3m, because of abnormal items.
Today’s result was in line with the company’s guidance, issued in March, of revenue of $1.7 billion and a net profit of $250m to $260m.
In its outlook for the current year to March 2025, FPH said it expects operating revenue of $1.9b to $2.0b and net profit after tax in the range of $310m to $360m.
Montgomerie, noting a rally in FPH’s share price, said it was a good result. The stock rose $1.65, or 6 per cent, to $29.31 following the result announcement.
“I think the best way to characterise is that revenue is firing on all cylinders,” he said.
“The guidance that FPH proved across all the businesses showed the momentum looks very good,” he said.
Jarden Securities, in a research note, said the underlying numbers were in line with FPH’s guidance, although one-off adjustments were larger than the broker had expected.
Excluding a provision for a product recall, the underlying gross margin was 61.1 per cent – an increase of 216 basis points over the previous year.
FPH said it had made progress in returning to its long-term gross margin target of 65 per cent.
In its result, FPH said its investment in research and development was 11 per cent of revenue, or $198.2m.
The company outlined details of its abnormal items.
FPH said the land’s current zoning status, higher interest rates and “general development land market conditions” led to a non-cash accounting adjustment of $98m.
“In the company’s view, owning this site mitigates risk to future growth in light of the current uncertainty around potential development sites in Auckland.
“A re-zoning application for the Karaka land will be submitted this calendar year.”
The second abnormal item was a change in New Zealand legislation removing tax deductions for depreciation of buildings.
“This resulted in a tax expense of $19.3 million to adjust the deferred tax liability balance related to the four buildings on the company’s East Tāmaki campus,” FPH said. “Ongoing impacts of this tax change are minimal.”
A voluntary limited recall of Airvo 2 and myAirvo 2 devices manufactured before August 14, 2017 was the third item.
“After early responses from customers indicating the number of remaining Airvo 2 and myAirvo 2 devices affected by the recall, the cost of the recall was revised to $20m.”
The Mexican city of Tijuana, where FPH said progress was made with a new plant and exports from a distribution centre.
In an investor presentation, FPH said highlights of the financial year included opening a third manufacturing plant in Tijuana, Mexico.
FPH declared a dividend of 23.5 cents per share for the second half of the year, fully imputed, to be paid on July 10.
The total dividend for the year was 41.5c, up 2 per cent.
FPH said hospital product group operating revenue was $1.1b up 5 per cent.
Homecare product group revenue was $652.3m, up 8 per cent.
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
