Nanosonics Ltd (ASX: NAN), the healthcare equipment producer, announced a 47% rise in first-half sales thanks to the increased use of its Trophon medical equipment disinfection system in hospitals in the US and Europe and domestically.
Infections and the passing of diseases between patients is a big issue for the healthcare industry. Nanosonics' Trophon medical sterilisation unit meets that challenge by giving healthcare providers an easier way to disinfect equipment in an enclosed system that also reduces direct exposure to disinfectants and chemicals.
The company has a market capitalisation of $473 million, but its share price growth has been very impressive as it climbed from about $0.40 in May 2013 to yesterday's close of $1.79 – to quadruple in less than two years. Just last November you still could have snapped up shares at around $1.00.
Here are the half-year results highlights:
– Revenue $14.3 million, up 47.4% from $9.7 million
– Earnings before interest and tax (EBIT) $1.2 million, up from -$3.6 million
– Net profit after tax (NPAT) $1.2 million, up from -$3.5 million
– Earnings per share 0.47 cents, up from – 1.33 cps
– Dividend per share no interim dividend was declared
The quick expansion in the North America healthcare market has driven sales. Trophon equipment is now in 44 of the top 50 US hospitals and is being used by more than 1,500 hospitals across North America.
Nanosonics has great potential growth in the world's largest healthcare market. The company sees the opportunity to go broader into the 5,000+ US hospitals, as well as go deeper into specialised healthcare providers like gynaecology/obstetrics, urology and even digital imaging. Nanosonics projects a potential market of 40,000 units, or 10 times the current 4,000 units installed in US hospitals.
Nanosonics could follow in the footsteps of other Australian success stories like ResMed Inc. (CHESS) (ASX: RMD), Sirtex Medical Limited (ASX: SRX) and Cochlear Limited (ASX: COH). In fact, the company is moving to its new corporate headquarters, which previously were the global headquarters for Cochlear. Nanosonics has established direct sales and service infrastructure in the US alongside its non-exclusive distributor GE Healthcare there.
Nanosonics recorded a $1.2 million net profit in the first half and if the medical equipment producer can achieve a net profit in the second half of financial year 2015, it will generate its first full-year net profit.
Investors who are looking for new, smaller companies with good prospects to build up a growth portfolio may be interested in Nanosonics as it expands in the US and Europe.
