Virus drives FPH boost

Respiratory product demand lifts earnings

A JUMP in demand for respiratory and home care products on the back of the coronavirus pandemic has helped lift Fisher & Paykel’s full-year profit 37 per cent to a record $NZ287.30 million ($A268.81 million).

The NZSX and ASX-listed health equipment provider said revenue for the 12 months to March 31 rose 18 per cent to $NZ1.26 billion as sales across its hospital group – which includes products used in respiratory, acute and surgical care – rose by a quarter to $NZ801.3 million.

The increase in revenue was largely driven by growth in the use of the company’s nasal high flow therapy, demand for products to treat COVID-19 patients and strong hospital hardware sales.

“The 2020 financial year was already on track to deliver strong growth before the coronavirus impacted sales,” managing director Lewis Gradon said.

“Beginning in January, the demand for our respiratory humidifiers accelerated in a way that has been unprecedented.”

Output for some of its hospital hardware products doubled or tripled over just a few months at the end of the year due to new processes and new procedures of working safely, he added.

However, the company’s gross margin decreased 73 basis points to 66.1 per cent.

This was primarily driven by additional air freight costs required to acquire increased supply of raw materials and expedite finished goods to customers towards the end of the financial year, as well as the additional start-up costs of the company’s second Mexico manufacturing facility.

The company lifted its final dividend two cents to 15.5 NZ cents per share.

Fisher & Paykel said its Hospital product group growth had continued to accelerate for the first three months of FY21, with hardware growth of over 300 per cent, and hospital consumables tracking at over a one-third increase compared to FY20.

In the Homecare product group, however, mask resupply levels are returning closer to expected levels.

The company is forecasting full-year revenue for FY21 of $1.48 billion and net profit after tax of between $325 million and $340 million.