F&P Healthcare sees revenue dropping to $1.67-$1.7b

Fisher and Paykel Healthcare expects its revenue to drop in the current financial year. Photo / File

Fisher & Paykel Healthcare's share price fell sharply after the respiratory products maker said it expects its operating revenue to be between $1.675 billion and $1.70b in the current financial year to March 31.

The previous year's revenue for New Zealand's biggest company by market cap came to $1.97b.

The latest revenue forecast is slightly short of a Bloomberg consensus of market expectations of $1.76b.

The company's shares last traded at $25.69, down $2.21 or 7.9 per cent from Monday's closing level. The stock has dropped by more than 10 per cent over the last 12 months.

The 2021 year was a big one for F&P Healthcare, with earnings arising from the Covid-19 pandemic helping to drive an 82 per cent lift in net profit to a record $524m.

That result was driven by sales in F&P Healthcare's hospital product group, which tracked Covid-19 hospitalisation surges around the world.

Managing director and chief executive Lewis Gradon said in today's guidance that the company's second half hospital consumables revenue was currently tracking to be similar to that reported in the first half.

"This is consistent with reports of the increasing prevalence of the Omicron variant over the last two months and its associated lower respiratory intervention requirements, as well as a relatively mild flu season in the Northern Hemisphere."

In the company's homecare product group, growth in sales of its obstructive sleep apnoea (OSA) masks was currently tracking above the first half growth rate, despite supply constraints of treatment hardware in the market.

Freight rates remained elevated and for the 2022 financial year were expected to impact F&P Healthcare's long-term gross margin target of 65 per cent by about 250 basis points.

F&P Healthcare's annual result is due on May 25.