A slightly higher dividend was announced for its 2023-24 financial year, along with expectations for a slightly better result in 2024-25, by New Zealand-based Fisher & Paykel Healthcare Corporation (ASX:FPH) on Wednesday.
The company stated it will pay a final dividend of 23.5 NZ cents per share, up half a cent from 2022-23. This brings the total for the 2024 financial year to 41.5 NZ cents, a 2% increase from 2022-23’s 40.5 NZ cents.
Revenue rose by 10% (8% in constant currency) to $NZ1.74 billion, attributed to growth in demand for hospital consumables and strong performance in the obstructive sleep apnea (OSA) mask business.
Reported net profit after tax for the financial year was $NZ132.6 million, impacted by three one-off items totaling $NZ137 million after tax, including the cost of a product recall during the year. Excluding those, underlying net profit after tax was $264.4 million, a 6% increase over the previous financial year or 5% in constant currency.
FPH noted 6% growth in Hospital operating revenue to $NZ1.1 billion, with 15% revenue growth for new applications consumables, 18% growth in Homecare operating revenue to $NZ652.3 million, and 21% growth in OSA masks revenue. Investment in R&D was 11% of revenue, or $NZ198.2 million, expected to decrease to around $NZ150 million in 2024-25, which should support margins and overall earnings for the coming 12 months.
Looking ahead, FPH stated its outlook assumes no significant respiratory disease events, with revenue expected in the range of approximately $1.9 billion to $2.0 billion and net profit after tax in the range of approximately $310 million to $360 million.
"The net profit after tax guidance assumes a further improvement in gross margin during the 2025 financial year,” FPH said.
CEO Lewis Gradon mentioned in the release on Wednesday, “After several years of changing demand patterns, we are pleased to have returned to a trajectory of growth. All the right foundations are in place for future success – we have an impressive portfolio of products, strong relationships with our customers, and the right infrastructure to meet our future needs.”
"During the 2024 financial year, the company made progress in returning to its long-term gross margin target of 65%. Excluding the provision for a product recall, underlying gross margin was 61.1%, an increase of 216 basis points in constant currency over the previous financial year. “This was achieved through lower freight costs, manufacturing efficiencies, and pricing, which more than offset the impact of inflationary cost increases. Including the provision for a product recall, gross margin was 59.9% for the 2024 financial year, an increase of 95 basis points in constant currency,” he added.
