New Zealand group, Fisher & Paykel Healthcare says 2018-19 was a record year for revenue and profits and expects to do even better in the 2019-20 financial year with a forecast of a 15% or so lift in net earnings.
The company yesterday told stock exchanges on both sides of the Tasman that it lifted full-year profit 10% to a record $NZ209.02 million ($A197.7 million) in the year to March 31.
The health equipment provider said the rise in earnings was struck on a 9% lift in revenue to $NZ1.07 billion for the 12 months to March 31 as sales across its hospital group – which includes products used in respiratory, acute and surgical care – jumped 11% to a record $NZ642.3 million.
Fisher and Paykel lifted its final dividend one cent to 13.5 NZ cents per share, up 8%.
With the interim of 10NZ cents, the full year payout is up 9% at 23.5 NZ cents.
The shares lost more than 3% in Australia to end at $15.30.
And the company said that given its “strong performance over the last five years and reduction of debt to below the target gearing range, the Board has determined to suspend the dividend reinvestment plan (DRP).”
“As a result, shareholders who have previously elected to participate in the DRP will receive dividends in cash for the dividend scheduled to be paid on 5 July 2019.”
Looking the current financial year, directors said the company was looking for operating revenue for the 2020 financial year “to be approximately NZ$1.15 billion and net profit after tax to be approximately NZ$240 million to NZ$250 million.”
“Recent changes introduced by the New Zealand Taxation (Research and Development Tax Credits) Act 2019, a significant reduction in patent litigation costs and forecast currency benefits have been factored into our earnings guidance for 2020,” the company added.
CEO, Lewis Gradon said in yesterday’s statement. “It is now 50 years since the inception of our business and our results this year are a reflection of our long term and consistent growth strategy.”
“Our record results were driven by our innovative products, the dedication of our teams around the world, a culture of continuous improvement and the value we offer for clinicians and patients,” Operating revenue for the Hospital product group, which includes products used in respiratory, acute and surgical care, increased 12% to a record NZ$642.3 million, or 11% growth in constant currency. Products in the Hospital group made up 60% of the company’s operating revenue,’ he said.
“Operating revenue for the Homecare product group, which includes products used in the treatment of obstructive sleep apnea (OSA) and respiratory support in the home, rose 6% to NZ$421.5 million, or 4% growth in constant currency. A hiatus in OSA mask launches was offset by a strong contribution from the successfully completed rollout of the company’s new SleepStyle OSA device to all major markets, and from home respiratory support.
Gross margin increased by 56 basis points to 66.9%, or a 58 basis points increase in constant currency, compared to the previous year, primarily due to favourable product mix.
“Research and development remains a fundamental part of our success story, with a cumulative $750+ million invested in R&D since 2001. Last year, we invested $100 million (equal to 9% of our revenue) into R&D and we have a full pipeline of new products in development,” Mr. Gradon said.
“We expect capital expenditure for the 2020 financial year to be approximately NZ$150 million as we increase capacity for both existing and new products and complete construction of the fourth building on our Auckland campus,” he added.
