Nanosonics Ltd (ASX: NAN) shares are having a strong session on Thursday.
In early trade, the ASX 300 stock is up 6% to $3.97.
Why is this ASX 300 stock is jumping?
Investors have been buying the infection prevention company's shares this morning following the release of a half-year update.
According to the release, Nanosonics is expecting to report a sizeable increase in revenue and profits for the half after returning to form in FY 2025.
For the six months ended 31 December, the ASX 300 stock expects total revenue to be approximately $93.6 million. This is up 18% from $79.6 million in the prior corresponding period. It is also up 4% from the $90.4 million recorded in the second half of FY 2024.
Commenting on its top line performance during the half, the company's CEO and president, Michael Kavanagh, said:
The expected first half revenue result of $93.6m represents a good start to the year up 18% compared to pcp and 4% compared to H2 FY24. Revenue growth was primarily driven by 20% growth (compared to pcp) in our consumables and service annuity revenue streams. The total number of trophon units sold in the first half was broadly in line with internal forecasts and was similar to the total number sold in the pcp, with overall capital revenue up 11% compared to pcp.
Strong profit growth
The company's gross margin for the half is expected to be approximately 78.5%. This is down from 79.7% in the prior corresponding period but up from 76.3% in the second half of FY 2024.
Nanosonics' operating expenses are expected to be approximately $66.7 million for the half. This is up 10% from the prior corresponding period and 3% on the previous half.
Nevertheless, this couldn't stop the ASX 300 stock from delivering strong profit growth. Management expects a profit before tax of approximately $10.9 million for the six months. This is more than double the $4.9 million recorded in the prior corresponding period and is up from $8.1 million in second half of FY 2024.
CEO Michael Kavanagh revealed that some of this profit growth comes from one-offs. He explains:
As a result of the increased first half revenue, the business expects to deliver profit before tax (PBT) of $10.9 million for the half. The expected PBT result includes a gain of approximately $1.3 million (compared to a $0.4 million loss in H1 FY24) due to the AUD exchange rate moving from 0.66 on 30 June 2024 to 0.62 on 31 December 2024. This movement created an unrealised FX gain on US dollar-denominated assets, partially offset by the group's hedging activities.
Outlook
Kavanagh believes that Nanosonics' first half performance means that it is on track to "achieve revenue, gross margin and operating expenses in FY25 around the top of each of the ranges for those measures specified in Nanosonics' FY25 outlook statement."
This includes total revenue growth of 8% to 12%, a gross margin of 77% to 79%, and operating expense growth of 6% to 10%.
