F&P Healthcare projects flat earnings

Friday 27th August 2010

Fisher & Paykel Healthcare is projecting flat profits this year, thanks mainly to the strong New Zealand dollar.

FPH chief executive, Mike Daniell, told shareholders at its annual meeting today that earnings will gain 10% “in constant currency terms.”

The company expects to turn over $530 million this year compared to $474.8 million, and produce a net profit after tax of between $65 million and $70 million dollars. That is, before deducting the $27 million one-off, somewhat off-setting and unrealised impacts of Budget tax changes to the corporate tax rate and building depreciation rules.

The company reported record net earnings of $71.6 million last year, and half-year earnings were $10 million higher than this year’s half year projection, at $37million. The shares fell 1.1% to $2.80 in trading on the NZX this afternoon.

FPH will take the hit from the 2010 Budget tax changes in the first half of the current financial year, ending September 30, said Daniell.

“In the second half, we expect a continuation of strong respiratory and acute care revenue growth,” he said in speech notes posted with the NZX. The company’s new ICON product, due for imminent release, “has been very encouraging”, although anticipation of its availability had depressed first half sales of FPH’s SleepCare range of products.

“Growth for the first half, so far, has been strong as expected,” Daniell said.

First half revenues of $245 million, a 7% increase, are forecast in the first half, while full year revenues should be more than twice that, at $530 million.

Margin erosion caused by unfavourable exchange rate movements had been offset by efficiency gains and “a favourable product and pricing mix.”

FPH topped sales of half a billion New Zealand dollars last year, derives 75% of its revenue for consumables used in its popular range of devices to assist people with chronic respiratory problems – a huge and growing proportion of the ageing population.

The company exports 99% of its products and is strong in North America, Europe, and affluent parts of Asia.

Businesswire.co.nz

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