F&P Health posts record profit, with more to come

F&P Healthcare has increased R&D spending by 13 per cent to $73.3m. Photo / Greg Bowker

Fisher & Paykel Healthcare, the medical device maker, beat its forecast for annual profit, boosting revenue and margins, and said it expected to post new records in the coming year.

Net profit jumped 27 per cent to a record $143.4 million in the year ended March 31, ahead of its forecast range of $135 million to $140 million, the Auckland-based company said.

Revenue increased 21 per cent to $815.5 million, also an all-time high and ahead of a forecast $800 million.

The company has forecast profit in the coming year of $165 million to $170 million on revenue of $900 million.

F&P Healthcare, which competes with Resmed and Respironics, boosted sales of respiratory and acute care humidification products by 22 per cent to $436.3 million, and sales of obstructive sleep apnea devices by 21 per cent to $365.8 million. Gross margin expanded to 64 per cent from 61.1 per cent the year earlier, as the company sold more higher-margin products and increased the volume from its Mexico factory.

"This result is due to strong uptake of our products across both the hospital and homecare settings and a continuation of gross margin expansion," said chief executive Lewis Gradon.

"Continuous product improvement, serving more patient groups, broadening the range of assistance we can provide for each patient and expanding our international presence is a strategy that is well proven and has guided us to record operating revenue every year over more than a decade," Gradon said. "We believe this consistent strategy will continue to deliver robust revenue growth in the current year."

Gradon said revenue growth from the company's respiratory and acute care product group accelerated over the second half of the financial year as the company benefited from the successful transition of US hospital distribution to its own team. The company assumed direct responsibility for those products from July last year after previous distributor CareFusion was taken over by Becton Dickinson.

In the past year, Fisher & Paykel Healthcare increased research and development spending by 13 per cent to $73.3 million, or 9 per cent of revenue.

Its shares closed yesterday at $10.30 and have advanced 15 per cent this year.