F&P shares up despite profit fall

Fisher and Paykel Healthcare shares have rallied sharply despite the company reporting a 57 per cent fall in first-half net profit to $95.9 million.

The fall in earnings reflected sales returning to more normal levels after a Covid-driven rush.

The bottom line figure was slightly above the top end of company guidance, issued in August, of $95m.

The respiratory products maker said its revenue for the six months to September fell by 23 per cent to $690.6m but was above the $670m figure guided by the company.

F&P Healthcare — New Zealand’s biggest company by market capitalisation — raised its interim dividend by half a cent to 17.5 cents a share.

The sharemarket’s response to the result was positive, with the company’s share price gaining $2.51 or 12 per cent to $23.22 by midafternoon yesterday.

The company did not give a full-year forecast for revenue or earnings because of the high number of uncertainties.

Managing director and chief executive Lewis Gradon said the result was consistent with what was signalled in August.

“Compared to prepandemic levels, this represents solid growth.”

Jarden equity research director Adrian Allbon said first half’s earnings and revenue were ahead of expectations. The strong result and encouraging commentary for the second half should help remove fears F&P Healthcare is still in a “material downgrade cycle” for 2023.

One of the key downside risks included hospital inventory levels, Allbon said.

Forsyth Barr analyst Matt Montgomerie said the result had given the market confidence there was now a base for F&P Healthcare’s earnings and a growth path ahead.

Over the past two financial years F&P Healthcare has supplied $880 million worth of hospital hardware, the equivalent of about 10 years of hardware sales pre-pandemic.

The March 2021 year was the peak, with revenue hitting a record $1.97 billion, and net profit coming in at $524m.