Daily ShareChat: Fisher & Paykel Healthcare

By Jenny Ruth

Friday 3rd June 2011

Fisher & Paykel Healthcare's annual result was slightly ahead of guidance but the company's guidance for the current year disappointed the market, says Guy Hallwright, an analyst at Forsyth Barr.

The company's $63.9 million result before a one-off $11.5 million tax charge compared with the company's $60 million to $63 million guidance.

It is forecasting net profit for the year ending March 2012 will be between $62 million and $76 million, assuming the New Zealand dollar is between 70 US cents and 80 cents.

"The upper end of the range was the market consensus pre-result and most forecasts will be revised down," Hallwright says.

Nevertheless, the company "has a positive growth outlook in both its businesses: solid underlying market growth in sleep apnoea along with expansion into new higher-priced segments, and expansion outside intensive care in respiratory and acute care," he says.

In the year ended March, obstructive sleep apnoea revenue in constant currency terms increased from 1% in the first half to 7% in the second half as the company rolled out its new Icon range.

"Fisher & Paykel Healthcare expects growth to be at least mid-teen percentages in full-year 2012, although we note this was also management's expectation for the second half but was not achieved," Hallwright says.

Valuation metrics, including multiple comparisons with competitor Resmed, "suggest limited share price upside."

Recommendation: Hold.

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