Fisher & Paykel Healthcare (FSPKF, Financial) received an upgrade to 'Buy' from 'Hold' by Jefferies, with the price target being raised to NZ$40.90 from the previous NZ$39.40. The firm highlights the company's successful translation of clinical advancements into product sales projected through fiscal year 2025, even in the face of a mild flu season.
Jefferies notes that Fisher & Paykel Healthcare's efforts in continuous process improvement and minimal impact from tariffs are expected to boost the company's operating leverage, positioning it for future growth.
FSPKF Key Business Developments
Release Date: May 27, 2025
- Operating Revenue: $2.02 billion, up 16% on FY24, 14% in constant currency.
- Net Profit After Tax: $377.2 million, up 43% on FY24, 30% in constant currency.
- Hospital Operating Revenue: $1.28 billion, up 18% on FY24, 16% in constant currency.
- Homecare Operating Revenue: $739.9 million, up 13% on FY24, 11% in constant currency.
- Gross Margin: 62.9%, increase of 181 basis points, 129 basis points in constant currency.
- Operating Margin: 25.2%, increase of 379 basis points, 260 basis points in constant currency.
- R&D Expenses: $227 million, 14% growth, 11% of revenue.
- SG&A Expenses: $534 million, increase of 8% in both reported and constant currency.
- Operating Cash Flow: $549 million, up 28% from last year.
- Capital Expenditure: $103 million, down from $339 million last year.
- Net Cash: $200.5 million as of March 31.
- Final Dividend: $0.24 per share, 2% increase from last year.
- Full-Year Dividend: $0.425 per share, up 2% from last year, 66% payout of full-year profit.
- Foreign Currency Impact: Positive impact of $39 million on NPAT compared to last year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fisher & Paykel Healthcare Corp Ltd (FSPKF, Financial) reported a 16% increase in operating revenue, reaching $2.02 billion for the full year.
- Net profit after tax rose by 43% to $377.2 million, showcasing strong financial performance.
- The company successfully launched new products, including the Nova Nasal mask and Airvo 3, contributing to growth in both hospital and homecare segments.
- Gross margin improved by 181 basis points, driven by manufacturing and overhead efficiencies.
- Operating cash flow increased by 28% to $549 million, reflecting robust profit growth and efficient cash management.
Negative Points
- Global tariffs are expected to impact gross margin by approximately 75 basis points annually, posing a challenge to margin improvement.
- The company faces variability in hospital revenue due to seasonal respiratory hospitalizations, which could affect financial outcomes.
- Operating expenses grew by 10%, which, although expected, indicates rising costs that need to be managed.
- The OSA mask revenue growth slowed in the second half due to competitive pressures, highlighting market challenges.
- The company anticipates a longer timeline to achieve its target gross margin of 65% due to ongoing tariff impacts.
