F&P Healthcare shares surge after leap in first-half profit

Shares in Fisher & Paykel Healthcare soared 14c after it revealed a record after-tax profit for the first half of its financial year.

The company said yesterday it made $37 million for the six months to September 30 - 31 per cent above the same period last year.

That saw its share price rise 4.6 per cent to close on $3.19.

Chief executive Michael Daniell said the result had been driven by strong growth in its sleep apnoea product group, continuing demand for its respiratory products and favourable foreign exchange hedging results.

The company made an exchange gain of $9.35 million versus an exchange loss of $3.36 million in the same period last year.

"We are very encouraged by the better than expected growth we have achieved in the first half, which has offset the effect of the appreciating New Zealand dollar."

Daniell said new products in its sleep apnoea and respiratory divisions had allowed the company to tap into additional customers.

Operating revenue for the six months increased 18 per cent to a record $251.4 million, boosted by strong recurring revenue from sales of consumables and accessories which made up 75 per cent of revenue.

But costs associated with research and development increased 23 per cent to $16.3 million and selling and administration costs were up 18 per cent to $70.4 million after new distribution and sales support offices were set up in Japan and Canada.

Daniell said the expansion of its manufacturing facilities through the leasing of a site in Mexico were on track.

He expected growth to continue in the second half of the year and predicted revenue of $500 million and an after-tax profit of $65 million to $70 million for the full year to March 31 at a NZ/USD exchange rate of 74c.

That was down on a prediction of $75 million to $80 million made in August.

But Daniell said the prior forecast had been based on an exchange rate of 60c and taking that into account it was a profit upgrade.