The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price will be on watch on Wednesday following the release of its half year results.
How did Fisher & Paykel Healthcare perform in the first half?
Like rival ResMed Inc. (ASX: RMD), Fisher & Paykel Healthcare has been a strong performer in the first half of FY 2020.
During the six months to September 30, it delivered operating revenue of NZ$570.9 million and a net profit after tax of NZ$121.2 million. This was an increase of 12% and 24% increase, respectively, on the prior corresponding period.
The company's managing director and CEO, Lewis Gradon, explained that the Hospital product group was the main driver of growth during the half.
He said: "We've had a strong start to the 2020 financial year, mainly driven by our Hospital product group, which delivered operating revenue growth of 19 per cent. We saw strong demand across our Hospital product portfolio, but in particular, for our Optiflow and Airvo systems, which continued to benefit from the growing body of clinical research in the use of nasal high flow therapy."
Over the period the Hospital product group reported a 19% increase in operating revenue to a record NZ$353.6 million. This accounts for 62% of its total operating revenue.
This was supported by modest growth from its Homecare product group. This product group includes products used in the treatment of obstructive sleep apnea (OSA) and respiratory support in the home. Homecare operating revenue rose 2% to NZ$214.7 million during the half.
Mr Gradon advised: "Revenue from our new F&P Vitera full face mask in Australasia, Canada and Europe has partially offset declines in sales of some of our legacy OSA masks, resulting in Homecare revenue in line with expectations for the first half. Vitera was launched in the United States in October, and we are encouraged by the early response from customers."
This strong half allowed company's board to declare an interim dividend of 12 NZ cents per share, which is an increase of 23% on the last year's interim dividend.
Outlook.
The company's chief executive appears confident on the second half.
He said: "In the second half of the 2020 financial year we anticipate consistent underlying trends in our Hospital product group. Assuming a moderate flu season for FY20, for the second half we expect constant currency Hospital revenue growth similar to the second half of FY19."
"In our Homecare product group we also expect a continuation of recent trends with strong growth in home respiratory support and ongoing pressure in legacy OSA masks, resulting in Homecare revenue for the 2020 financial year similar to the previous financial year, in constant currency terms," he added.
As a result, the company expects full year operating revenue to be approximately $1.19 billion and net profit after tax to be in the range of approximately NZ$255 million to NZ$265 million. This is in line with its recently upgraded guidance.
