FPH’s Shares Uplifted On ASX After Reporting 20% Increase In Net Profit For H1 2019

On 26 November 2018, Fisher and Paykel Healthcare Corporation Ltd (ASX: FPH) announced its H1 2019 results, following which the share price of the company increased by 1.221 percent. The company reported that its Net profit after tax increased by 20 percent to NZ$97.4 million in H1 2019 as compared to the H1 2018. Further, the operating revenue of the company increased by 12 percent to NZ$511.3 in H1 2019 as compared to the previous corresponding period. In the first half of FY 2019, the Gross margin of the company increased by 77 basis points to 66.8 percent mainly due to favorable product mix and Mexico manufacturing. In the first half, the investment in R&D was NZ$45.7 million which was 9 percent of the revenue.

As per the company’s Managing Director and CEO Mr. Lewis Gradon, the company is on track, with its core product groups delivering a 12 percent increase in revenue and the company’s new F&P 950 heated humidification system for neonates is performing well in New Zealand and Australia. Further, the company is looking forward to the release of the 950 in Europe next year.

In H1 2019, the operating revenue from the Homecare product group of the company increased by 10% to NZ$211.1 million. As per Mr. Gradon, the management of the company is pleased with the progress that the company has made with its myAirvo device and sales from this product are an increasing proportion of the company’s Homecare revenue. The company is anticipating that resolving a manufacturing delay will allow it to introduce its next new OSA mask early in 2019. In the first half of FY19, the Hospital product group delivered revenue growth of 11% in constant currency over H1 FY18 which was mainly due to the continued adoption of the Company’s Optiflow nasal high flow therapy system around the world.

The Company’s board has declared an interim dividend of 9.75 NZ cents per share with a record date of 10 December 2018 and pay date of 21 December 2018. The interim dividend of 9.75 NZ is 11 percent higher than the interim dividend of the last year.

While discussing the Outlook for FY19, Mr. Gradon told that the company is anticipating that the second half of the FY 2019 will be a strong period of growth in the Hospital product group. At current exchange rates the company is expecting that the full year operating revenue for FY19 will be around NZ$1.07 bn and net profit after tax will be in the range of approximately NZ$205 to NZ$210 million. Recently, the company also announced the appointment of Neville Mitchell as a non-executive director of the Board.

In the last six months, the share price of the company increased by 1.74 percent as on 23 November 2018. FPH shares traded at $12.430 with a market capitalization of circa $7.04 billion as on 26 November 2018 (AEST 1:47 PM).


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