Shares in Cochlear (COH) cracked the $100 level yesterday, jumping more than 14% on the day, after it reported a 32% jump in interim profit and a tasty rise in half year dividend.
Thanks to a combination of renewed growth in its core hearing products and the positive impact of the weaker Aussie dollar, Cochlear is now firmly back on the growth trail.
The 32% rise in earnings is the slowest of the past three half years – it was a 240% surge a year ago and then a 56% jump in the six months to June 2015. But the latest, slower rate of growth has been far more productive from the point of view of the future of the company.
So much so that the company upgraded full year guidance in yesterday’s announcement.
Cochlear said it now expects its 2015-16 profit to fall between $180 million and $190 million, up from its earlier forecast of $165 million to $175 million, although the increase is “primarily” driven by foreign exchange movements, which is what the dollar’s recent slide is supposed to do for exporters like Cochlear.
Cochlear said its net profit in the six months ended December 31 reached $94.03 million, off the back of a 32% leap in revenues for the half year to $581.7 million.
And directors lifted interim payout to shareholders more than 20%, or 20 cents, to $1.10 a share.
As a result Cochlear’s shares jumped close to 10% at the opening (the results were released before trading started) to $99.90 and then went on to top the $100 level to be up more than 14% at the close on $104.05.
COH 1Y – Investors tune into Cochlear as interim profits jumps 32%
Earnings before interest and taxes in the first half rose 30% to $130.97 million.
“We are particularly pleased with the Implant business, which delivered sales growth across both developed and emerging markets, with some countries like the United States (US) experiencing accelerated market growth,” CEO Chris Smith said yesterday.
“The business is benefiting from the rollout of new products launched in FY15 [financial year 2015] and the continued investment in strategic growth initiatives that commenced two years ago," Mr Smith added.