Fisher & Paykel (ASX:FPH) share price on watch following half-year results

The Fisher & Paykel Healthcare (ASX: FPH) share price could be on the move today following the release of its FY21 half-year results.

| More on:
woman looking up as if watching asx share price

Image source: Getty Images

The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price could be on the move today. This comes after the company released its half-year results for FY21.

Fisher & Paykel is a New Zealand-based company that designs, manufacturers and markets products for a range of treatments. These include use in respiratory care, acute care, surgery and the management of obstructive sleep apnoea.

What will be moving the Fisher & Paykel share price?

It will be interesting to see how the Fisher & Paykel share price performs today after the company reported strong results for the first half of FY21.

For the period ending 30 September, Fisher & Paykel reported net profit after tax of $225.5 million. This reflected an 86% improvement over the prior corresponding period (pcp).

Operating revenue grew to $910.2 million, a 59% uplift on the first half of FY20. The strong set of numbers came from a surge in demand for the company’s hospital hardware, particularly Optiflow and Airvo systems. Traditionally, nasal high flow therapy is used in clinical practices, however, this was shifted as a front-line treatment for COVID-19 patients in hospitals.

In the hospital portfolio alone, operating revenue jumped more than 93% over the first-half year results for FY20. The $681 million achievement made up three-quarters of the company’s entire operating revenue, highlighting the importance of its lifesaving products.

The homecare product group, which includes treatment for sleep apnoea, gained 5% in revenue to $226.2 million over the pcp.

Gross margin fell to 61.7% for the half-year as use of air freight was used more frequently. The cost to transport the goods also rose, weighing down on the result. However, the company noted that excluding air freight, gross margin is broadly in line with last year’s performance.

The board declared an interim dividend of 16 cents per share to be paid to shareholders on 16 December. This represents a 33% increase on the prior comparable period’s dividend.

Management commentary

Fisher & Paykel Managing Director and CEO, Mr Lewis Gradon, commented on the group’s scorecard for H1 FY21. He said:

We had a strong first half of the year and have continued to expand our installed base of hardware in hospitals.

Since our last trading update in August, we maintained the same level of both hardware and consumables revenue in our Hospital product group for the half year. In our Homecare product group, OSA masks revenue also continued at similar levels to the first four months of the financial year.

Sales in hardware and consumables continued to track surges in COVID-19 globally, as the virus moved across Europe, North America, South America and South Asia.

Since the pandemic started, many sleep clinics have been closed, resulting in a reduction in new patient diagnoses. Our F&P Evora and F&P Vitera masks for OSA are great products that have yet to reach their full potential.

Remaining outlook for FY21

With focus now on the second-half, Fisher & Paykel did not provide guidance for the end of the FY21 year. This is due to the uncertain nature of COVID-19, and the fact that vaccine developments are still progressing in the background.

However, the company did advise that if things return to normal, it could project some estimations for FY21. This is dependent upon hospital hardware sales, OSA diagnosis rates, and freight costs returning to normal levels.

Based on these assumptions, Fisher & Paykel forecasts operating revenue to be around $1.72 billion. Net profit after tax would fall somewhere between $400 million to $415 million, provided exchange rates remain relatively stable.

About the Fisher & Paykel share price

The Fisher & Paykel share price has been surging forward over the past 12 months. Reaching an all-time high of $34.92 in the middle of July, its shares are sitting just 8% below this level at the time of writing. It will be interesting to see whether the Fisher & Paykel share price can break its record on the back of its robust results.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News