Shares in respiratory products maker Fisher and Paykel Healthcare spiked sharply to a new high after the company reported a 37 per cent incease in net profit to $287.3 million in the year to March.

F&P Healthcare expects net profit to swell to $325 to $340m for the 2021 year.

By late morning, the stock had rallied by 70c or 2.2 per cent to $32.20 after earlier hitting $33.45. Shares in the company have more than doubled in price over the last 12 months.

The March 2020 net profit compares with the company's own earnings guidance of $275m to $280m.

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The company, whose sales have been boosted by the Covid-19 outbreak, said its revenue for the 2021 financial year would be about $1.48b.

Capital expenditure would lift to $160m. The company's fourth manufacturing facility in New Zealand has been completed.

With a market capitalisation of over $18 billion, F&P Healthcare is the sharemarket's biggest company.

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F&P Healthcare said that for the first three months of 2021 its hospital product group growth had continued to accelerate, with hardware growth of over 300 per cent and hospital consumables tracking at over a one-third increase, compared to the first three months of 2020.

The company also signalled plans to increase its dividend as its earnings grow.

Excluding the impact from tax changes, being the R&D tax credit and building tax depreciation, net profit after tax grew 23 per cent.

The increase in revenue for the year just passed was largely driven by growth in the use of the company's Optiflow nasal high flow therapy, demand for products to treat Covid-19 patients, and strong hospital hardware sales throughout the course of the year, the company said.

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"The 2020 financial year was already on track to deliver strong growth before the coronavirus impacted sales," managing director and chief executive Lewis Gradon said in a statement.

"Beginning in January, the demand for our respiratory humidifiers accelerated in a way that has been unprecedented," he said.

"With new processes, new procedures and new ways of working safely, we managed to double and in some instances triple, output for some of our hospital hardware products over just a few months at the end of the year," he said.

For the Hospital product group, which includes products used in respiratory, acute and surgical care, operating revenue increased 25 per cent or 21 per cent to $801.3m for the year.

Sales from new applications consumables, which includes products used for nasal high flow therapy, increased by 23 per cent constant currency over the previous financial year.

For the homecare product group, which includes products used in the treatment of obstructive sleep apnea (OSA) and respiratory support in the home, revenue rose 9 per cent, or 4 per cent in constant currency, to finish at $457m.

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The company's gross margin fell by 73 basis points to 66.1 per cent primarily driven by additional air freight costs.

The company said it expected to increase dividends as earnings grow, while taking into consideration its target gearing ratio.

Directors have approved a final dividend of 15.5 cents per share, an increase of 15 per cent on the final dividend last year, bringing the total to 27.5 cents per share.

Gradon said management could not predict the scope, duration or impact of Covid-19 and its effects on the company's operations and financial results.

F&P Healthcare expects capital expenditure for the 2021 financial year to be about $160m.