Good night's sleep boosts F&P health

Fisher & Paykel Healthcare makes a range of breathing aids with flow generators, masks and tubing.

Avid American demand for nasal masks to treat obstructive sleep apnoea is continuing to buoy profits of Fisher & Paykel Healthcare.

The medical equipment-maker yesterday disclosed a $3.5 million, or 12 per cent, increase in its half-year net profit to a record $31.6 million, on revenue of $135.4 million.

Chief executive Michael Daniell said the company was tapping rising demand in the $1.2 billion market for devices to treat obstructive sleep apnea (OSA) after studies linked the breathing condition to other illnesses, including heart disease.

Sales of its OSA devices - which rose 42 per cent in its main market, the United States, over the half - were expected to keep growing and would help boost full-year revenue by a fifth, Daniell said.

With more products in the pipeline and business increasing in other international markets, he was confident of finishing the year strongly, raising the company's full-year revenue forecast to between $278 million and $285 million from the $271 million to $279 million range predicted in May.

Healthcare shares closed down 8c at $3.75 yesterday, having traded at a record $3.86 the day before.

The company has an 8 per cent share of the world market for OSA treatment devices, which Daniell said was growing rapidly.

An estimated 12 million Americans may suffer from the condition, which sees people briefly stop breathing during sleep, and Daniell said as few as 10 per cent of sufferers had been diagnosed.

Fund manager James Lindsay, at Tyndall Investment Management, said the half-year result was a solid performance in a strongly growing market.

Although it had not seen any obvious gains from the threat of bird flu, Daniell said it was increasing its stocks at hospitals around the world and would expect to see a one-off-gain if a pandemic did break out.

A $60 million project to double the size of its East Tamaki, Auckland, factory to provide more space for manufacturing and research and development, primarily for the OSA product group, is due to be finished next year.

- Additional reporting: NZPA, Bloomberg 


F&P Healthcare

Six months to September 30 

                           2005             2004
Revenue         $135.4m        $117.4m
Pretax profit     $47.4m             $43m
Tax                     $16m          $14.9m
Net profit         $31.6m          $28.1m
EPS                  6.2cps            5.5cps
Dividend          5.4cps*              5cps
                        *Payable December 9