F&P Healthcare profit up 15pc to $71m

Mike Daniell. Photo / Paul Estcourt

Fisher & Paykel Healthcare reported a 15.1 per cent rise in full year net profit to $71.6 million, boosted by strong sales growth in some products and favourable foreign exchange hedging results.

Operating revenue for the year to March was up 10 per cent over the year before to $503.3m, or in US dollar terms up 14 per cent to US$341.5m.

Strong growth in its obstructive sleep apnea (OSA) and respiratory and acute care product groups, as well as the favourable foreign exchange hedging results, contributed to the result, the company said today.

An unchanged final dividend of 7c per share is to be paid.

For the 2011 financial year strong revenue growth was expected to continue, F&P Healthcare said.

It estimated that, at an average spot exchange rate for the year of US67c to the NZ dollar, operating revenue for 2011 would be about $560m and profit after tax about $70m to $75m.

OSA product group operating revenue increased in the 2010 financial year by 22 per cent to US$160.8m, or 17 per cent to $237m, reflecting strong demand for the company's premium flow generators and masks, it said.

Respiratory and acute care product group operating revenue increased by 11 per cent to US$164.7m, or 7 per cent to $242.4 million.

Chief executive Michael Daniell said operating revenue growth for the company's OSA product group was a robust 34 per cent in US dollar terms in the second half and 17 per cent in constant currency terms for the year.

That happened as F&P Healthcare gained market share with new premium products.

Late in the year, it started introducing its new ICON flow generator range, which had been enthusiastically received by customers in New Zealand and Australia, Daniell said.

Accelerating growth in demand for the company's respiratory and acute care devices was encouraging, with second half revenue growth of 35 per cent in US dollar terms, or 17 per cent in constant currency, compared to the same period last year.

Strong operating revenue growth continued from clinical applications beyond the company's traditional invasive ventilation and OSA markets.

Those included patients requiring non-invasive ventilation, oxygen therapy, humidity therapy and laparoscopic surgery, with such applications contributing 27 per cent of the company's respiratory and acute care consumables revenue for the year.

F&P Healthcare said directors had reviewed the company's capital structure and intended to progressively increase shareholders funds, to ensure the company had capacity to continue to implement its foreign currency hedging policy as it grew.

A target debt to debt plus equity ratio of 5 per cent to 15 per cent, excluding unrealised financial instrument gains or losses, had been established.

The company said it was expected that, subject to earnings performance, the dividend would be maintained in real terms until the target capital structure was achieved.

Longer term, the directors expected a dividend payout ratio of greater than 60 per cent would be appropriate to maintain target gearing.

During the year the company had monetised US$66m of forward exchange contracts with maturity dates in the 2012, 2013 and 2014 financial years with a cash benefit of $32m being used to reduce bank debt.

- NZPA