Fisher & Paykel Healthcare (ASX:FPH) share price on watch after reporting huge profit growth

The Fisher & Paykel Healthcare Corp Ltd (ASX:FPH) share price will be on watch on Thursday following the release of a strong full year result…

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The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price will be one to watch on Thursday.

This follows the release of the medical device company’s full year results this morning.

How did Fisher & Paykel Healthcare perform in FY 2021?

Fisher & Paykel Healthcare was a very positive performer in FY 2021, delivering a record full year result.

According to the release, for the 12 months ended 31 March, the company reported a 56% increase in operating revenue to NZ$1.97 billion. And thanks to margin expansion, the company’s net profit after tax jumped 82% to NZ$524 million.

This compares very favourably to the guidance given with its half year results of revenue of ~NZ$1.72 billion and net profit after tax of NZ$400 million to NZ$415 million.

What were the drivers of its growth?

The key driver of its growth was its Hospital Product segment, which recorded an 87% increase in revenue to NZ$1.5 billion. This represents 76% of the company’s operating revenue.

Fisher & Paykel Healthcare’s Managing Director and CEO, Lewis Gradon, commented: “The unprecedented result was driven by our Hospital product group, which includes Optiflow and Airvo systems used to deliver nasal high flow therapy. Sales of our Hospital hardware and consumables have continued to track COVID-19 hospitalisation surges in countries around the world,”

“Although COVID-19 restrictions impacted sleep clinics and reduced OSA diagnosis rates, revenue for the Homecare product group was $466 million, an increase of 2% over the previous year, or 4% in constant currency,” added Gradon.

Outlook

Due to ongoing COVID-19 uncertainties, Fisher & Paykel Healthcare is unable to provide guidance for FY 2022.

Mr Gradon explained: “We expect our Hospital and Homecare revenue for FY22 to be impacted by the number of COVID-19 related hospitalisations around the world. There is a wide range of scenarios for both the timing of a ‘return to normal’ and to what extent a return to normal includes COVID-19 endemic hospitalisations. It is unclear at this stage when and if other respiratory hospitalisations and surgical procedures will return to pre-COVID levels, or whether countries will increase their investment in healthcare infrastructure.”

Though, the company has provided an update on current trading.

It advised: “In the financial year so far, Hospital revenue continues to remain variable with higher volumes of Hospital hardware and consumables to locations with hospitalisation surges and an ongoing shift towards Optiflow nasal high flow therapy. OSA shows signs of recovery after a slower fourth quarter.”

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