Shares in New Zealand medical technology group Fisher & Paykel Healthcare (FPH) took a pounding yesterday despite the company turning in a stellar result for its 2021 financial year.
FPH shares – which closed at $29.72 on Wednesday – slumped more than 10% in early Thursday trading to a day’s low of $26.49 before edging higher to end the day down 6% at $27.94.
That was despite the company confirming earlier guidance with 94% jump in net earnings a constant currency basis to $NZ524 million ($238 million).
The profit surge came largely off the back of an 87% increase in hospital product revenues over the past year
Overall revenues were up 61% on a constant currency basis to $NZ1.97 billion.
Like fellow ASX-listed meditech ResMed, FPH stepped up to fill the significant global demand for hospital hardware and ventilators as coronavirus swept across the globe in 2020, triggering a health crisis never seen before and pressuring the entire sector.
Reflecting the current improvement in the pandemic situation, FPH warned the market that assuming the global vaccine rollout gains traction in the next financial year, demand for respiratory products will decline compared with this year.
And that was taken to mean lower revenues and profits and a lower share price, so down went the shares in a kneejerk reaction.
The omitting of guidance for 2021-22 didn’t help investor sentiment and added to the initial slide.
With the ongoing uncertainties of vaccinations, lockdowns, COVID-19 variants, localised waves and return to stable hospitalisation rates around the world, the company is not providing guidance for the 2022 financial year.
“We expect our Hospital and Homecare revenue for FY22 to be impacted by the number of COVID- 19 related hospitalisations around the world,” CEO Lewis Gradon said in the statement to the ASX.
However, the company said that if there are new, localised surges of the virus that could have a favourable impact on device sales.
And only an hour or so after the filing of the results, Victoria went into a seven-day lockdown with what could be the most serious infection situation since the big lockdown in the middle of last year.
Shareholders didn’t miss out though. The board approved a final dividend of 22 NZ cents a share, up 42% on the final dividend for last year.
This took the total dividend for the year to 38.0 cents a share, a tasty increase of 38%.