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Fisher & Paykel Fiscal 2009 Operating Revenue Up 28%

Fisher & Paykel Healthcare Corporation Limited (Fisher & Paykel), a designer, maker and marketer of products and systems for use in respiratory care, acute care and the treatment of sleep apnea, has reported operating revenue of NZD458.7 million for the fiscal 2009, up 28%, compared with the previous year. It also reported operating profit of NZD102.4 million for the fiscal 2009, up 76%, compared with the previous year.

Operating revenue

Respiratory and acute care product group operating revenue increased by 34% to NZD244.5 million and OSA product group operating revenue increased by 23% to NZD202.6 million.

“Demand for our respiratory humidifier systems was exceptionally strong, assisted by substantial orders for hospital Group Purchasing Organisation (GPO) contracts in the United States and delivery of respiratory consumable backorders in the first half.

In the expanding OSA treatment market, constant currency revenue growth for total mask and flow generator operating revenue increased to 12% in the second half as we began to gain share with our new premium CPAP flow generators and masks”, commented Fisher & Paykel’s chief executive officer, Michael Daniell.

“We continue to make very encouraging progress in developing new clinical applications for our technologies beyond our traditional invasive ventilation and OSA markets. These include patients requiring non-invasive ventilation, oxygen therapy, humidity therapy and laparoscopic surgery. These applications generated constant currency revenue growth of 55% over the prior year and contributed a quarter of our respiratory and acute care consumables revenue.”

Dividend

The company’s directors have approved a final dividend for the financial year ended March 31, 2009 of 7cents per ordinary share (2008: 7cents), carrying full imputation credit. Non-resident shareholders will receive a supplementary dividend of 1.2353 cents per share. The final dividend will be paid on July 6, 2009, with a record date of June 19, 2009, and an ex-dividend date of June 15, 2009 for the ASX and June 22, 2009 for the NZSX.

The company will implement a dividend reinvestment plan under which shareholders may choose to reinvest all or part of their cash dividends in additional ordinary shares.

Research & Development, SG&A

Research and development expenses increased by 18% over the prior year to NZD28.3 million, representing 6.2% of operating revenue. The company continued to expand its product and process research and development activities and current new product projects include flow generators, masks and additional respiratory care consumables. For the 2009 financial year the company has accrued in other income a one-time R&D tax credit of NZD3 million.

Selling, general and administrative (SG&A) expenses grew 22% to NZD118.9 million, or 13% in constant currency terms, as the company continued to expand its operations and its sales teams in North America, Europe, Asia/Pacific and South America.

Foreign Exchange Hedging

The company has in place a mix of foreign exchange contracts and collar options, up to five years forward, with a face value of about NZD610 million. These instruments are at average rates of about $0.55 and EUR0.44 to the New Zealand dollar for the 2010 financial year and are to protect the company from exchange rate volatility.

Outlook

“This year we intend to invest significantly in expanding our sales and distribution operations, with plans to establish distribution and clinical sales support centres in four additional countries, including Japan. We will be expanding both our R&D activities and our manufacturing capacity in New Zealand, and will also establish an offshore manufacturing facility,” concluded Daniell.

For the 2010 financial year the company expects to continue to achieve robust revenue growth and estimates that, at an average NZD:USD exchange rate of 0.60, it will achieve operating revenue of about NZD540 million and profit after tax growth of about 25% to about NZD75 million to NZD80 million.