Fisher & Paykel Healthcare Corporation Limited (NZSX:FPH, ASX:FPH) today announced record revenue for the year ended 31 March 2005 and a 14% increase in operating profit to NZ$89.7 million.
Revenue growth of 12% to NZ$240.6 million for the year was achieved through ongoing growth in the company’s expanding product range and its increasing activities in international markets. Profit after tax increased 12% to NZ$61.4 million compared with NZ$54.7 million in the prior year.
Over the year the company derived approximately 61% of its revenue in US dollars. In US dollar terms, total revenue increased by 23% and operating profit increased by 25% compared with the prior year. Operating margin increased to 37.3% compared with 36.8% for the prior year.
Chief Executive Officer, Michael Daniell said that new products introduced during the year in each of the company’s obstructive sleep apnea (OSA), respiratory humidification and neonatal categories helped generate the revenue and earnings growth.
“These new products, along with our established ranges in each of our core product groups, have helped us increase market share and we continue to invest in the research and development that will lead to further new products in the coming year.”
The company’s directors have approved an increased final dividend for the financial year ended 31
March 2005 of NZD 5.8 cents per ordinary share, carrying full imputation credit. This dividend is equivalent to NZD 29 cents per share prior to the five for one subdivision in October 2004. Non-resident shareholders will receive a supplementary dividend of NZD 1.024 cents per share. The final dividend will be paid on 17 June 2005, with a record date of 7 June, and an ex-dividend date of 1 June for the ASX and 8 June for the NZSX.
Operating revenue for the company’s core product range grew 24%, in US dollar terms, over the prior year. This increase was driven by strong growth in sales of devices for the treatment of obstructive sleep apnea, respiratory humidification systems and neonatal and warming products. OSA revenue increased by 34%, respiratory humidification revenue increased by 16%, and neonatal and warming revenue increased by 31% in US dollar terms.
“We are continuing to gain share in the rapidly growing OSA market. Robust OSA product group growth was driven by combined revenue growth of approximately 70%, in US dollar terms, in nasal masks and CPAP flow generators. Our broad range of mask categories has been very well accepted by both dealers and end users.
Revenue growth in our respiratory humidification product group was driven by increased penetration of our MR850 respiratory humidifier technology and strong market share gains in both adult and neonatal breathing circuits,” commented Mr Daniell.
Strong growth in the neonatal and warming product group was from both neonatal warmers and neonatal breathing systems, which include the company’s infant CPAP system and infant resuscitator.
Research & Development, SG&A
Research and development expenses increased by 15% to NZ$16.2 million or 6.7% of revenue for the twelve months ended 31 March 2005. This was largely due to increased product development activity and the number of new products released during the year.
Selling, general and administrative expenses grew 14% to NZ$67.4 million, or approximately 18% in constant currency terms, as the company continued to expand its operations and its sales teams in North America, Europe and Asia.
Foreign Exchange Hedging
The company has in place a mix of foreign exchange contracts and call options with a face value of approximately NZ$189 million, the majority of which are for the year ending 31 March 2006. These instruments are at average exchange rates of approximately 0.43 US dollars and 0.46 Euros to the New Zealand dollar and are to protect the company from exchange rate volatility.
“We expect our growth to continue to be driven by an increasing range of innovative products, opportunities to serve additional patient populations and international expansion.
To ensure we can meet growing demand for our products we have begun construction of a 23,300m2 building in addition to the existing 28,000m2 facility on our Auckland site. This approximately NZ$60m investment will accommodate additional manufacturing and R&D capacity on completion in mid 2006, ” said Mr. Daniell.
“For the current financial year we expect a continuation of strong underlying revenue growth similar to the 2005 financial year. We expect revenue for the current year to be in the range of US$190 to US$195 million and operating margin percentage to be in the mid thirties.”
Attached to this news release are condensed financial statements in both NZ dollars and US dollars.
Full Year Results Conference Call
Fisher & Paykel Healthcare will host a conference call to review the results and to discuss the outlook for the 2006 financial year. The conference call is scheduled to begin at 10:00am NZST, 8:00am AEST (6:00pm USEDT, Tues 17 May) and will be broadcast simultaneously over the Internet.
To listen to the webcast access the company’s website at www.fphcare.com. Please allow extra time prior to the webcast to visit the site and download the streaming media software required. An online archive of the event will be available approximately two hours after the webcast and will remain onsite for approximately two weeks.
To participate in the conference call please dial in to one of the numbers below a few minutes prior to the scheduled call time and identify yourself to the operator:
New Zealand Toll Free : 0800 449 118
Australia Toll Free : 1800 555 619
USA Toll Free : 1866 369 4113
International : +61 3 9221 4420
An audio replay of the conference call will be available approximately 60 minutes after the call and will be accessible for two weeks at +61 3 9221 4752, access code 034357.
About Fisher & Paykel Healthcare
Fisher & Paykel Healthcare is a leading designer, manufacturer and marketer of heated humidification products and systems for use in respiratory care and the treatment of obstructive sleep apnea. It also offers an innovative range of patient warming devices and neonatal care products. The company’s products are sold in over 90 countries worldwide. For more information about the company visit www.fphcare.com
Contact: Michael Daniell MD/CEO on +64 9 574 0161 or Tony Barclay CFO on +64 9 574 0119.