Big gain but long wait for F&P

By Nick Stride

Friday 23rd July 2004

Fisher & Paykel Healthcare's new medical apparatus could add $US118 million ($180 million) to the company's value, according to sharebroker Goldman Sachs JB Were.

The new system, MR860, provides humidification during laparoscopic surgery (surgery within the abdominal cavity).

During such surgery cold, dry carbon dioxide is blown into the cavity. But this results in tissue damage, inflammation and pain caused by dehydration and drying out.

The MR860 system humidifies the gas to body temperature and saturates it with water vapour.

Pilot marketing has begun in Australia and New Zealand.

The company estimates four million laparoscopic procedures are performed annually worldwide. Goldman Sachs JB Were estimates five million a year may be performed in the US alone.

Its value gain figure was based on the equipment being used in 33% of operations. "We believe it will take at least three to five years for this product to affect [the company's] financials in a meaningful fashion," the broker said.

Meanwhile Fisher & Paykel Appliances has fast-tracked a multimillion- dollar expansion of its Taieri plant near Dunedin because of strong domestic and export sales of its DishDrawer dishwashers.

The company told the Stock Exchange on Tuesday it planned to spend $3-4 million extending its existing site, which was expanded more than a year ago.

Under an agreement with Dunedin City Council, Fisher & Paykel was to have embarked on a stage-built, lease and buy-back programme that would have seen the second phase completed within three years and the third within six years.

However, the company has decided to combine the second and third stages in one fast-tracked effort.

The company has not talked numbers but it is understood hundreds of new jobs could be created.

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