Healthcare trends promise revenue boost

Mike Daniell foresees a rapid rise in potential customers for F&P's technology. Photo / Greg Bowker

Fisher & Paykel Healthcare's sales could be nudging the $2 billion mark within a decade if the company's bullish growth projections become a reality.

The Auckland-based firm, whose products include respiratory humidifiers used in hospital intensive care units and devices for sufferers of obstructive sleep apnoea (OSA), has forecast operating revenue in the current financial year of around $800 million. It is expecting a profit of $135 million to $140 million.

Chief executive Mike Daniell told the Infinz conference that the company's acute care technology was now being used to treat about 7 million hospital patients annually, from a pool of 40 to 50 million potential patients, which could grow to 100 million in 10 to 15 years.

"We see this ageing demographic coming through, which is going to pretty much double the number of people over the age of 65," said Daniell. "Plus, we've got developing markets -- China being a good example -- where they're rapidly improving their healthcare infrastructure."

Similarly, the OSA and home care side of F&P Healthcare's business, which treats roughly 3 million patients a year, was expected to expand to 100 million potential patients annually in the same period.

With the company earning roughly US$60 ($89) per patient annually, that suggests its revenue could hit US$12 billion by 2030 if it wins 100 per cent of both the acute care and OSA/home care markets.

That was unlikely, said Daniell, but there was potential for F&P Healthcare to be treating 30 million patients a year within 10 years, which would provide annual revenue of around US$1.8 billion.

"We are typically getting a bit more value per patient as well as we introduce better technology," he said. "That US$60 per patient we would think would increase a bit as well."

Daniell, who has announced his retirement, said F&P Healthcare would spend about $75 million on research and development in the current financial year -- almost 10 per cent of its revenue.

The company employs more than 400 Auckland-based R&D staff.

F&P Healthcare shares, which have gained 42 per cent in the past 12 months, closed yesterday at $7.64.