Gradon, when asked on a conference call with analysts about the possible impact of tariffs on the business, said: “We really don’t want to be drawn into any speculation on that, whatsoever.
“We have to think about the long term, and we have got to think about where the opportunities lie,” he said.
“The other key point for us is that we provide products and therapies that improve care outcomes, so whatever your scenario, we feel that that does give us flexibility to work with our customers on mitigating things that might come our way.”
Most of the company’s manufacturing is done in New Zealand - it has four buildings totalling 110,000sq m in area.
In Tijuana, Mexico, it has three buildings covering 63,000sq m.
F&P Healthcare started shipping products from its new site in Guangzhou, southern China, in July.
The products made in China were a “subset” of its nasal high-flow range.
“Over time, I think we will continue to expand the range manufactured at the plant,” Gradon said.
“At the moment, that output is destined for China and, over time, that will grow.”
The company did not plan to supply the US from its China facility.
In response to another question on the possible threat of tariffs, Gradon said: “The current situation is based on the entry of illegal drugs and migrants going into the United States, so your guess is as good as mine.”
Shares in F&P Healthcare, which have enjoyed a strong this year on the back of two broker upgrades, fell after today’s result.
By mid-afternoon, the stock was down $1.09 (2.8%) at $37.33, but off its low of $36.38.
Forsyth Barr analyst Matt Montgomerie said there was a difference between the company’s operational and non-operational performance over the half.
“From an operational point of view, I think it was good to be slightly ahead of expectations,” he said.
“There was very strong growth in consumables, which is a key driver of the investment case,” he said.
On the non-operational side, tax and interest costs were higher than expected, which was most likely acting to drive the share price lower.
“The earnings growth drivers were very strong in the result, and the outlook remains solid for the business,” he said.
On the question of tariffs, there was still a lot of water to go under the bridge.
“It’s too early to form conclusions around what may or may not happen.
“There is a definite downside scenario, but we won’t know what that will look like for a while yet.”
The company said its sharp first-half profit lift was driven primarily by new product introductions and changing clinical practice.
“Early indications are that a relatively high hospital census during the period may have contributed as well, as hospitals returned to more normalised staffing and capacity, and seasonal hospitalisations in the Northern Hemisphere from full-year 2024 persisted into the beginning of our current financial year,” Gradon said.
For the hospital product group, which includes humidification products used in respiratory, acute and surgical care, first-half revenue was $591.4m, an increase of 21% over the same period last year in both reported and constant currency.
Hospital new applications consumables revenue increased 24%.
For the homecare product group, first-half revenue was a record $359.4m, an increase of 14% on the first half of last year.
Sales of masks and accessories for treating obstructive sleep apnoea were up 14%.
The company kept its net profit guidance for the full year unchanged at $320m to $370m.
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
