Fisher & Paykel Healthcare, New Zealand's biggest listed company, increased first-half profit 4 per cent, 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 $12.2 million of patent litigation costs over disputes with rival Resmed compared with $2.4 million of costs a year earlier, and excluding those, profit would have risen 13 per cent, it said. First-half revenue lifted 8 per cent to $458.4 million.

The company had forecast first-half revenue of about $460 million and profit of about $80 million.

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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. It said it expects its gross margin to expand by 50-to-100 basis points for the full year.

F&P Healthcare, which makes respiratory products, lifted first-half sales of hospital products 11 per cent to $262.5 million and sales of homecare-based products 4 per cent to $191.3 million.

Gross margin expanded 116 basis points to 66 per cent as it sold more profitable products and increased production in Mexico, where it now makes 35 per cent 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.

The shares slipped 2.4 per cent to $13.55, after climbing to a record high $13.88 yesterday.

James Smalley, senior advisor at Hamilton Hindin Greene, said investors appeared to be taking profits and rebalancing their portfolios following the stock's 60 per cent gain over the past year.

In the latest period, F&P Healthcare increased research and development spending 13 per cent to $47 million. It expects growth in R&D spending to slow in the future, reverting back to match revenue growth after a period of higher spending.

"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, up from 8.25 cents in the year earlier period.

F&P Healthcare sells products in more than 120 countries, with 46 per cent of its revenue coming from North America, and 29 per cent from Europe. In the first half, the company booked a foreign exchange hedging gain of $10.4 million to pre-tax profit, compared with a $9.7 million gain recorded in the same period a year earlier.

It expects to book a gain of $10 million for the full year.

Gradon said it was too early to tell what effect proposed tax changes in the US may have on the company.