Fisher & Paykel Healthcare keeps cautious outlook as first-half earnings rise 24%

F&P Health's net profit rose to $121.2m in the six months ended September 30 from $97.4m a year earlier. Photo / File

Fisher & Paykel Healthcare has kept a relatively conservative outlook for the year as it reported a 24 per cent lift in first-half profit.

Net profit rose to $121.2 million in the six months ended September 30 from $97.4m a year earlier. Revenue rose 12 per cent to $570.9m, as its hospital division lifted sales 19 per cent on strong demand for its Optiflow and Airvo systems.

"We saw strong demand across our hospital product portfolio, but in particular, for our Optiflow and Airvo systems, which continued to benefit from the growing body of clinical research in the use of nasal high flow therapy," chief executive Lewis Gradon said.t.

The breathing mask manufacturer affirmed annual guidance for profit to rise to between $255m and $265m on revenue of $1.19 billion. That was revised up in October after the company's Vitera mask received US regulatory approval earlier than anticipated, although some investors have noted that F&P Healthcare has typically adopted a cautious approach to providing guidance.

In the March 2019 year, the company posted record operating revenue of $1.07b, up 9 per cent. Net profit was up 10 per cent to a record $209m.

That's based on similar revenue growth for F&P Healthcare's hospital division, and assumes a moderate flu season, whereas the homecare division's revenue is likely to be in line with the prior financial year.

The company also announced chair Tony Carter would retire in at the August 2020 annual meeting, after seven years running the board. Scott St John was elected to replace him.

The board declared an interim dividend of 12 cents per share, payable on December 19 with a December 9 record date.

The shares hit a record $21.07 on November 13, and closed yesterday at $20.75, up almost 60 per cent so far this year, making them the best performer on the S&P/NZX 50 Index and New Zealand's biggest listed company, with a market value of $11.93b.

F&P Healthcare boosted spending on research and development by 18 per cent to $54m in the half, and the company's annual forecast assumed about 80 per cent of that would be eligible for the government's new tax credit. Some $6.6m of the first half spend was recognised as deductible.

The company flagged capital spending of $170m for the year, including a new facility in New Zealand, increased manufacturing capacity, and new product tooling.

Its manufacturing facilities consist of three buildings in New Zealand, with a fourth to be completed early next year, and two buildings in Tijuana, Mexico.