Fisher & Paykel shares hit after profit warning
Fisher & Paykel Healthcare’s share price dropped after the company said its profit for the first half to September would fall sharply from the same period a year earlier, when demand was extraordinarily high due to the Covid-19 pandemic.
The company’s shares ended the day at $19.85, down more than 6 per cent on Thursday’s close, and compared with its record $37.68 high set in August 2020.
The respiratory products maker said its operating revenue for the first half would be about $670 million, down from $900m in the previous comparable period and net profit would fall to $85m-$95m from $222m.
The revenue forecast would represent an increase on the pre-pandemic level of $570.9m achieved in the first half of 2020.
In its last annual result announcement, F&P Healthcare detailed how it had dramatically increased production in response to the Covid-19 pandemic. “As a result, we sold approximately 10 years’ worth of hardware in two years — to hospitals all around the world,” said chief executive and managing director Lewis Gradon.
Gradon said with the most recent waves of the Omicron variant, fewer patients have required hospitalisation and respiratory support.
“We believe customer stock levels have been elevated during our first half, which impacts our short-term sales.
“This does not change the fundamentals of our business or our strategy.”
Gross margin for the first half is expected to be about 60 per cent — below the company’s long-term target of 65 per cent.
Gradon said the company was not providing quantitative revenue or earnings guidance for the full 2023 financial year.
However, he believed that second-half revenue for the 2023 financial year would be higher than in the first half.