Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

F&P Healthcare shares at highest in over 2 yrs on outlook

F&P Healthcare shares jump to highest in more than 2 years on profit outlook

By Tina Morrison

May 23 (BusinessDesk) - Shares in Fisher & Paykel Healthcare jumped to their highest in more than two years as the maker of breathing masks and respirators said it expects to beat analyst estimates for 2014 profit after surpassing its own guidance for 2013.

F&P Healthcare shares surged 5.9 percent to $3.21, the highest since Feb. 1, 2011, when it touched $3.22. The stock has surged 23 percent so far this year.

Profit is likely to be $85 million to $90 million in the year ending March 13, 2014, managing director Michael Daniell said today. That's more than the $79 million-to-$83 million range expected in a survey of seven analysts by Merlin Consulting.

F&P Healthcare, which competes with Resmed and Respironics, is boosting profit margins on record sales, higher-margin new products and lower costs from its plant in Mexico.

"The share price rise reflects the guidance for 2014 being better than expectations," said Rickey Ward, who manages equities at Tyndall Investment Management. "Next year looks like it's better than forecast."

F&P Healthcare said 2013 profit rose 20 per cent to $77.1 million, ahead of its February guidance of about $75 million. The company boosted operating revenue to a record $556.3 million on strong demand for its respiratory systems and new masks to treat the condition obstructive sleep apnea.

"All of the new products we have invested in over the last 18 months do a better job and in return for that we are getting better margins," Daniell said on a conference call. "We are pretty positive about the coming year."

The company expects operating revenue to rise to between $610 million to $630 million in 2014, Daniell said. The 2014 forecasts are based on the New Zealand dollar trading between 80 US cents and 85 US cents for the remainder of the year as about half its operating revenue is derived in US dollars.

In constant currency terms, which the company uses to show its underlying performance excluding currency affects, operating revenue rose 11 percent. Sales of respiratory products rose 15 percent, while sales of devices to treat obstructive sleep apnea increased 6 per cent.

The annual revenue growth rate in constant currency terms should continue in the mid-teens, driven by new products and applications, Daniell said.

Making an increased quantity and range of products at its plant in Mexico contributed to an improvement in gross margin to 55.3 percent in 2013 from 53.2 percent the year earlier, Daniell said.

Removing the effects of currency volatility, gross margins are expected to expand 100 to 200 basis points a year as a result of new products, efficiencies and the Mexico plant, he said.

F&P Healthcare expects to outlay $40 million in capital expenditure in 2014. That's down from $62 million in 2013 when it spent on new equipment to increase manufacturing capacity, new product tooling, replacement equipment and $33.6 million to complete a third building on its Auckland site.

Research and development spending increased 9 percent in 2013 and current new projects include masks, flow generators, humidifier systems and respiratory and acute care consumables.

It spent 6 percent more on selling as it expanded in North America, Europe and the Asia Pacific regions.

The company's diluted earnings per share increased to 13.8 cents in 2013 from 11.7 cents the year earlier. It will pay a final dividend of 7 cents a share on July 5, unchanged from the year earlier.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Water: Farming Leaders Pledge To Help Make Rivers Swimmable

In a first for the country, farming leaders have pledged to work together to help make New Zealand’s rivers swimmable for future generations. More>>

ALSO:

Unintended Consequences: Liquor Change For Grocery Stores On Tobacco Tax

Changes in the law made to enable grocery stores to continue holding liquor licences to sell alcohol despite increases in tobacco taxes will take effect on 15 September 2017. More>>

Back Again: Government Approves TPP11 Mandate

Trade Minister Todd McClay says New Zealand will be pushing for the minimal number of changes possible to the original TPP agreement, something that the remaining TPP11 countries have agreed on. More>>

ALSO:

By May 2018: Wider, Earlier Microbead Ban

The sale and manufacture of wash-off products containing plastic microbeads will be banned in New Zealand earlier than previously expected, Associate Environment Minister Scott Simpson announced today. More>>

ALSO:

Snail-ier Mail: NZ Post To Ditch FastPost

New Zealand Post customers will see a change to how they can send priority mail from 1 January 2018. The FastPost service will no longer be available from this date. More>>

ALSO:

Property Institute: English Backs Of Debt To Income Plan

Property Institute of New Zealand Chief Executive Ashley Church is applauding today’s decision, by Prime Minister Bill English, to take Debt-to-income ratios off the table as a tool available to the Reserve Bank. More>>

ALSO: