F&P Healthcare expects more growth

F&P Healthcare chief executive Michael Daniell.

Fisher & Paykel Healthcare reported a 31 per cent rise in half year net profit to $37 million.

The record profit was a result of strong revenue growth in the obstructive sleep apnea (OSA) product group, continuing strong demand for respiratory products and favourable foreign exchange hedging results, the company said today.

Operating revenue for the six months to the end of September increased 18 per cent, compared to a year earlier, to $251.4m.

An interim dividend of 5.4c per share is to be paid.

For the rest of the 2010 financial year the company expected continuing growth in demand for its products, Healthcare said.

It estimated that at an average exchange rate of US74c to the NZ dollar, it would achieve operating revenue of about $500m and profit after tax of about $65m to $70m.

Chief executive Michael Daniell said underlying growth was expected to increase substantially in the second half, with accelerating growth in respiratory product demand.

In the next few months, the company planned to begin introduction of its new flow generator into the OSA market.

Recurring revenue, from sales of consumables and accessories, was about 75 per cent of total operating revenue, Healthcare said.

OSA product group operating revenue rose 31 per cent to $118.8m, reflecting strong demand for the company's new premium flow generators and masks.

Respiratory and acute care product group operating revenue rose 8 per cent to $117.4m.

Constant currency operating revenue growth for OSA masks and flow generators was 20 per cent, as Healthcare gained market share with new premium products, Mr Daniell said.

Allowing for the exceptional first half last year, it was estimated that underlying constant currency revenue growth for the respiratory and acute care product group was about 14 per cent.

"We continued to make very encouraging progress in developing new clinical applications for our technologies beyond our traditional invasive ventilation and OSA markets," Mr Daniell said.

"An increasing proportion of our respiratory and acute care revenue is derived from devices used to assist in the treatment of patients requiring non-invasive ventilation, oxygen therapy, humidity therapy and laparoscopic surgery."

Research and development expenses were up 23 per cent to $16.3m, representing 6.5 per cent of operating revenue. New product projects included flow generators, masks and additional respiratory care consumables.

During September and October the company monetised US$62m ($84.5m) of forward exchange contracts with maturity dates in the 2012 and 2013 financial years with a cash benefit of $30m being realised and applied to reduce bank debt.

- NZPA