F&P Healthcare first-half profit rises 4%, lifts forecast for annual earnings
By Tina Morrison
Nov. 21 (BusinessDesk) - Fisher & Paykel Healthcare, the medical device maker, increased first-half profit 4 percent, widened its margins, and lifted its forecast for full-year earnings to the top end of its range.
Net profit rose to $81.3 million, or 14.1 cents per share, in the six months ended Sept. 30, from $78.2 million, or 13.6 cents, in the same period a year earlier, the Auckland-based company said in a statement. The latest earnings included $9.8 million of patent litigation costs, and excluding those, profit would have risen 13 percent, it said. First-half revenue lifted 8 percent to $458.4 million. The company had forecast first-half revenue of about $460 million and profit of about $80 million.
Annual profit is likely to be between $185 million and $190 million, at the top end of its previous forecast of $180 million to $190 million, the company said today.
F&P Healthcare, which competes with Resmed and Respironics, lifted first-half sales of hospital products by 11 percent to $262.5 million and sales of homecare-based products by 4 percent to $191.3 million. Gross margin expanded by 116 basis points to 66 percent as it sold more profitable products and increased production in Mexico, where it now makes 35 percent of its products.
Managing director Lewis Gradon said the first half results were in line with the company's expectations and reflect "consistent momentum" across both its product groups. F&P Healthcare is about to start construction of a new manufacturing facility in Tijuana, Mexico, which is expected to be operational in mid-2018, he said.
In the latest period, F&P Healthcare increased research and development spending by 13 percent to $47 million.
"We have a number of new products that will be released over the next few years and intend that these products, along with our consistent growth strategy, will support sustainable and profitable growth over the long term," Gradon said.
The company will pay a first-half dividend of 8.75 cents per share on Dec. 20, an increase of 6 percent from the same period last year.
Its shares last traded at $13.88 and have gained 59 percent over the past year.