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Nanosonics Ltd (ASX:NAN) saw a significant boost in its share price on Tuesday, rising 11.85% to AU$3.02 following the release of its full-year FY24 results. The stock, which opened at AU$2.86, climbed to an intraday high of AU$3.08 as investors reacted positively to the company's financial turnaround in the second half of the fiscal year.
Strong Second Half Drives Revenue Growth
The FY24 results reveal a notable turnaround for Nanosonics, particularly in the latter half of the year. Despite a challenging start, the company achieved a 14% increase in revenue during the second half, contributing to an overall revenue growth of 2% for the year, reaching AU$170 million.
Key Financial Metrics:
- Installed Base Growth: Nanosonics expanded its installed base by 7% to a total of 34,790 units globally.
- Sales Revenue: Increased by 2% to AU$170 million.
- Recurring Revenue: Rose by 9% to AU$121.8 million.
- Gross Profit: Reported at AU$132.4 million, up 1% from FY23, with a gross profit margin of 77.9%, slightly down from 78.7% in FY23.
- Net Profit After Tax (NPAT): Dropped by 35% to AU$13 million, primarily due to increased investments in long-term growth initiatives.
- Free Cash Flow: Positive at AU$20.4 million.
- Cash Position: Cash and cash equivalents stood at AU$129.6 million as of June 30, with no debt.
Significant Turnaround and Future Prospects
Nanosonics highlighted a "significant turnaround" in the second half of FY24, reversing the negative revenue growth experienced in the first half. This strong performance in the latter part of the year was instrumental in driving overall revenue growth.
The decline in NPAT reflects the company's strategic investments aimed at fostering long-term growth. Nanosonics invested AU$32.8 million in research and development during FY24, marking an 11% increase from the previous year. This investment is focused on advancing the company’s product line, including its Endoscope Reprocessing program with CORIS and new initiatives in ultrasound reprocessing and connectivity.
The company's future growth is expected to hinge on the development and market introduction of its next transformational product, Coris. Nanosonics reached a critical milestone in April with the filing of a de novo regulatory submission for Coris with the U.S. Food and Drug Administration (FDA). Despite a 3.08% drop in share price on the day of the filing announcement, investors are keenly awaiting the potential impact of Coris on the company’s future prospects.
