23 Nov 2012

Shares in medical equipment maker up

7:05 am on 23 November 2012

Shares in Fisher & Paykel Healthcare have risen by 2% after the medical equipment maker lifted its half year profit by 18% and flagged stronger full year earnings.

The company made $33.3 million in the six months to September.

Sales rose 6% to hit a record $276 million, due to higher prices for new breathing masks and sleep disorder products, and reduced costs at its Mexico plant, and cheaper distribution costs.

About 98% of its sales are outside of New Zealand, and about 44% of that is generated in North America.

Chief executive Mike Daniell said Fisher & Paykel Healthcare expects revenue to continue growing as it expands its product range used for hospital care, and creates more comfortable masks to treat sleep apnea in the home.

The business was first established providing humidification devices into intensive care ventilation, or providing breathing support to people in the intensive care unit.

Mr Daniell said the company developed a strong position in that around the world.

He said Fisher & Paykel Healthcare is now taking technology in that field and moving it into broader respiratory applications such as non-invasive ventilation and oxygen therapy.

Mr Daniell said there are many more patients in those areas than in intensive care and there has been very good growth there, about 20% growth in those applications in first half.

He says the company has also developed new sleep apnoea products, particularly in mask area.

Mr Daniell said that's been well received by customers and it's expected to drive good growth in second half.

He said the company is looking to introduce new products over the next year and the company expanded its process research and development activities.

Mr Daniell said most of that work is carried out in New Zealand and the company has about 320 people involved in research and development at its Auckland site.

He said the company will spend around $45 million on research and development for the full year.

Mr Daniell forecasts that profit after tax will be between $69 - $72 million for the financial year.

The company's stock rose 16 cents at one stage, before retracing some of those gains to add 5 cents, or 2%, to close at $2.49 each.