Healthy profit for F&P Healthcare

By PAUL PANCKHURST

The 130 shareholders gathered yesterday afternoon for Fisher & Paykel Healthcare's annual meeting in Auckland were a quiet bunch.

So quiet that it was easy to imagine a new use for the company's high-tech respiratory equipment, on show at the rear of the room in the Ellerslie Convention Centre.

When it was time for questions, a lone figure took the microphone, asking when F&P Healthcare's markets were likely to be saturated.

Managing director and chief executive officer Michael Daniell replied that F&P Healthcare had a US$100 million ($220 million) share of a growing US$1 billion ($2.2 billion) market, so that moment was not coming soon.

And that was about it.

A flash of colour came in the shape of tributes to Maurice Paykel, who co-founded the firm in 1934.

He died in June, aged 88.

A director, Sir Colin Maiden, talked of Paykel's "incredible contribution" to industry and the country, and a videotape of the industrialist was screened.

Today, the biggest share of F&P Healthcare's revenue comes from "respiratory humidification" products, used in intensive care units around the world to help patients breathe.

Shareholders saw Paykel fondly retelling the story of the company's earliest experiments in this field - using a jam jar with holes in the lid, and "a few pipes and things".

If the shareholders were quiet, it could have been mental exhaustion from the wild ride of the stock, which took off from May last year to hit $18.75 before plummeting this year to as low as $7.80.

Or maybe they were giving silent thanks that the stock seemed to have found its level - which was well below the unrealistic valuations before the company's listing on the Nasdaq last November - and was bouncing back.

Certainly, they can only be encouraged by the congratulations analysts from the United States and New Zealand gave Daniell during a briefing yesterday morning via conference call on the result for the three months to June 30.

"Fabulous," was one description.

F&P Healthcare reported an after-tax profit of $30.4 million - more than double the figure for the same period last year.

A big chunk - $17.5 million - came from a foreign currency gain.

Total operating revenue was $50.92 million, down 3.6 per cent.

F&P Healthcare sells the bulk of its products in North America and Europe. The two biggest earners are the respiratory products and the sleep products, the latter used to treat obstructive sleep apnoea, otherwise known as the snorer's curse.

Analysts were encouraged in particular by an 18 per cent increase for the quarter - in US dollar terms - in the operating revenues for the sleep products.

That was in the context of an overall 10 per cent increase in revenue across the key product groups.

The company's fortunes are tied to a diverse range of factors - from the number of flu cases in the Northern Hemisphere (a boon for respiratory products) to levels of subsidies on products by Medicare in the United States.