F&P Healthcare scores record sales and interim profit

Fisher & Paykel Healthcare reported a record $97.4 million interim profit on record sales across its two divisions.

Net profit rose 20 per cent in the six months through September, and was 14 per cent higher on a constant currency basis, the Auckland-based maker of hospital equipment and personal sleep apnoea products said.

That beat its $95m forecast and saw it lift its interim dividend by 11 per cent. Its shares rose 1.1 per cent to $13.20.

F&P employs almost 4200 people in 37 countries. While just over half its staff are in New Zealand, only about 1 per cent of its sales are in local currency, about half in US dollars and almost 20 per cent priced in euros.

It reiterated its full-year earnings forecast at $205m-$210m. The forecast assumes exchange rates of 67 US cents and 60 euro cents for the period, from 72 US cents and 59 euro cents for the prior March year.

It also allows for an expected $20m-$30m spend on litigation for the full year and a moderate flu season in the northern hemisphere. Last year the flu season there was very strong, with more people ill.

F&P has been in patent disputes with ResMed since 2016 and in September trimmed its earnings forecast after its San Diego-based rival lodged complaints with the US International Trade Commission. F&P spent $15.6m on litigation in the year ended March 31, down from $20.7m a year earlier. Litigation cost it about $7.7m in the six months through September.

Managing director Lewis Gradon said the ITC action and a Federal Court action in Australia would cause “big spending” later in the second half. He urged analysts not to try to forecast a litigation spend for the coming year based on the second-half rate.

Operating revenue for the six months through September climbed 12 per cent to a record $511.3m, up 8 per cent on a constant currency basis. Operating revenue for the hospitalproduct group increased 13 per cent to a record $297.3m and was up 11 per cent in constant currency.

F&P will pay an interim 9.75 cents per share dividend on December 21.