Fisher & Paykel Healthcare Corporation Limited (NZSX:FPH, ASX:FPH) announced today that 53% trading revenue growth, in US dollar terms for CPAP flow generators and masks, contributed to a record operating profit of NZ$104.1 million.
Trading revenue growth of 20% to NZ$289.5 million for the year was achieved through ongoing growth of the company’s expanding product range and its increased activities in international markets. Profit after tax increased 14% to NZ$70.0 million compared with NZ$61.4 million in the prior year.
Over the period the company derived approximately 65% of its trading revenue in US dollars. In US dollar terms, trading revenue for the year ended 31 March 2006 increased by 23% and operating profit increased by 18% compared with the prior year. Operating margin on trading revenue continued to be very strong at 35.9%.
Continuing strong sales growth in each of the company’s obstructive sleep apnea (OSA), respiratory humidification and neonatal product groups helped generate the earnings growth.
The company’s directors have approved an increased final dividend for the financial year ended 31
March 2006 of NZD 7.0 cents per ordinary share (2005: 5.8 cents), carrying full imputation credit. Non-resident shareholders will receive a supplementary dividend of NZD 1.2353 cents per share. The final dividend will be paid on 28 June 2006, with a record date of 16 June, and an ex-dividend date of 12 June for the ASX and 19 June for the NZSX.
OSA product group revenue increased by 34%, respiratory humidification revenue increased by
14% and neonatal and warming revenue increased by 24% in US dollar terms compared with the prior year.
“Our innovative masks and flow generators are continuing to gain share within the rapidly growing OSA treatment market. We are particularly pleased with customer acceptance of both our broad range of masks and our ThermoSmart flow generator technology.
Constant currency revenue growth of 17% over the prior year in our respiratory humidification product group was driven by robust demand for our humidifier controllers and continuing strong market share gains by adult and neonatal breathing circuits,” commented Mr Daniell. Strong growth in the neonatal 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 to NZ$17.3 million or 6% of trading revenue for the twelve months ended 31 March 2006. The company continues to expand its research and development activities and current new product projects include additional breathing system consumables, flow generators and masks.
Selling, general and administrative expenses grew 21% to NZ$81.7 million as the company continued to expand its operations and its sales teams in North America, Europe and Asia.
“We see clear opportunities to continue to grow market share in the OSA and intensive care ventilation markets. In addition, we have recently introduced a number of innovative devices which can enhance the treatment of patients in a broad range of new applications including non-invasive ventilation, oxygen therapy, humidity therapy and resuscitation.
For the 2007 financial year we expect a continuation of strong underlying revenue growth across our international markets. At current exchange rates we estimate that trading revenue will grow almost 30% to approximately NZ$375M. This growth will help us accommodate the transition from last year’s favourable hedge rates. As previously indicated, we expect that at an average NZD:USD exchange rate of 0.60, operating profit will remain at a similar level to the 2006 financial year,” said Mr Daniell.
Financial Statements and Commentary
Attached to this news release are condensed financial statements and commentary 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 2007 financial year. The conference call is scheduled to begin today at 10:00am NZST, 8:00am AEST (6:00pm USEDT, Wed 24 May 2006) 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 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 009 696
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 066512.
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 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.