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F&P Healthcare posts 15% gain in profit

Wednesday 26th May 2010

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Fisher & Paykel Healthcare posted a 15% gain in full-year profit on increased earnings from sleep apnea and respiratory products, and favourable foreign exchange hedging gains.

Net income climbed to $71.6 million, or 13.5 cents a share in the 12 months ended March 31, from $62.2 million, or 11.8 cents a year earlier, the Auckland-based company said in a statement today. Operating revenue rose 9.7% to $503 million.

The manufacturer said 2011 profit may rise as much as 4.7% as it introduces its new range of ICON flow generators, ramps up research and development, bolsters sales and distribution teams and expands manufacturing capacity in New Zealand and Mexico. Sales will rise about 11% to $560 million, assuming the kiwi dollar averages around 67 US cents. The local currency was recently at 66.91 cents.

The company’s ICON flow generator range “has been enthusiastically received by customers in New Zealand and Australia” since it launched the products last year, said chief executive Mike Daniell.

Shares of F&P Healthcare fell 1.2% to $3.36 and have climbed 18% in the past 12 months, outpacing a 10% gain in the NZX 50 Index. Full-year profit was at the top end of the $65 million-to-$70 million guidance it gave in November. Guidance for the current year is a range of $70 million to $75 million.

The company kept its final dividend unchanged at 7 cents a share, fully imputed, and announced plans to build up shareholder funds, allowing it to continue to fund its foreign exchange hedging programme as it grows.

F&P Healthcare gets almost 80% of its revenue in US dollars so it typically benefits from a weaker kiwi dollar when bringing home the proceeds of overseas sales. It has a mix of foreign exchange contracts and collar options extending out five years with a face value of about $550 million. For the 2011 financial year, it has 67% of its US dollar and 70% of its euro needs covered at 60 US cents and 45 euros respectively.

Operating revenue growth from obstructive sleep apnea, or OSA, products accelerated to 34% in the second half as the company gained market share.

Respiratory and acute care devices also showed a second-half pickup, with revenue growing 35%.

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