Ann: FLLYR: FPH: FPH delivers record full year re

• Release Date: 23/05/14 11:07
• Summary: FLLYR: FPH: FPH delivers record full year result, net profit up 26%
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					FPH
23/05/2014 09:07
FLLYR

REL: 0907 HRS Fisher & Paykel Healthcare Corporation Limited

FLLYR: FPH: FPH delivers record full year result, net profit up 26%

FISHER & PAYKEL HEALTHCARE DELIVERS RECORD FULL YEAR RESULT, NET PROFIT UP
26%
Auckland, New Zealand, 23 May 2014 - Fisher & Paykel Healthcare Corporation
Limited today announced record financial results for the financial year ended
31 March 2014.

The medical device manufacturer, which provides respiratory care systems and
products for the treatment of obstructive sleep apnea, today reported record
net profit after tax of NZ$97.1 million for the full year, an increase of 26%
over the prior year.  Operating revenue was also a record, at NZ$623.4
million, 12% above the prior year or 13% growth in constant currency.

Chief Executive Officer Michael Daniell said, "Our record results are very
pleasing and they reflect that hospital clinicians and homecare providers are
increasingly using our innovative products to help to improve care and
outcomes.  Our medical devices are designed to increase the effectiveness and
efficiency of care and we estimate that our products were used in the
treatment of more than 9 million patients during the year".

Both of the company's major product groups, respiratory and acute care (RAC)
and obstructive sleep apnea (OSA), delivered record operating revenue
results.  RAC product group revenue grew 12% to NZ$336.9 million, or 14%
growth in constant currency, and OSA product group revenue grew 15% to
NZ$270.0 million, or 15% growth in constant currency.  The company estimates
that revenue growth was about double the market growth for both major product
groups.

"Growth in our RAC product group was strong and we are particularly
encouraged by the continuing robust revenue growth, 29% in constant currency,
in new applications for our products outside our traditional invasive
ventilation market.

"More and more customers around the world are choosing to use our Optiflow
oxygen therapy system and respiratory humidification systems for patients who
are receiving noninvasive ventilation, as they see the real benefits for
their patients and healthcare systems.

"The roll-out over the year of new masks for the treatment of OSA has been a
key contributor to the excellent growth in our OSA product group, with mask
operating revenue growth increasing to 26% in the second half in constant
currency.

"Our Eson, Pilairo Q and Simplus masks are designed for comfort, seal and
ease of use and we have enjoyed a very positive response from our customers",
said Mr Daniell.

The company's directors have approved a final dividend of 7.0 NZ cents per
share for the financial year ended 31 March 2014, carrying full imputation
credit.  The dividend reinvestment plan, under which eligible shareholders
can elect to reinvest all or part of their cash dividends in additional
shares, will again be made available in respect of the 2014 final dividend.
A 3% discount will be applied when determining the price per share in respect
of the 2014 final dividend.

A feature of the result was the ongoing substantial improvement in gross
margin, 393 basis points in constant currency over the prior year, due to
favourable product mix, new products, Lean manufacturing improvements,
increased volume from the Mexico facility and supply chain efficiencies.

The company continued to grow its investment in research and development
(R&D) with R&D expenses increasing by 18% to NZ$54.1 million, representing
8.7% of operating revenue.  "We have a number of exciting new products under
development including masks, flow generators, humidifier systems and
respiratory and acute care consumables", said Mr Daniell.

Outlook for FY2015
"The number of patients who can benefit from our products is growing
significantly, as a result of an aging demographic and increasing investment
in healthcare in developing countries. We have a clear strategy to meet
those needs by continually improving our products, serving more patient
groups, extending our range of products and growing our international
presence.

"The company continues to have favourable foreign exchange hedging in place
although substantially less than in the 2014 financial year.

"At current exchange rates we anticipate an operating profit headwind of
approximately NZ$32 million in the 2015 financial year from both reduced
hedging and less favourable spot rates.  Despite the challenge of this large
roll-off in hedging, we have momentum in both of our product groups and we
believe that we can offset that headwind in the 2015 financial year.

"For the 2015 financial year, based on a NZD:USD exchange rate of 0.86 for
the remainder of the year, we expect our operating revenue to be
approximately NZ$640 million and net profit after tax to be similar to
FY2014.

"However, we again expect to deliver robust constant currency net profit
growth of approximately 40% for the 2015 financial year", concluded Mr
Daniell.

Result highlights:
o 26% growth in net profit after tax to a record NZ$97.1 million, 46% growth
in constant currency.
o 12% growth in operating revenue to a record NZ$623.4 million, 13% growth in
constant currency.
o Double digit operating revenue growth in both of the company's major
product groups - Respiratory and acute care (RAC) 14%, Obstructive Sleep
Apnea (OSA) 15% in constant currency.
o New RAC applications consumables revenue outside of invasive ventilation
grew particularly strongly at 29% in constant currency.
o Strong performance from new OSA masks, Eson, Pilairo Q and Simplus, drove
mask operating revenue growth of 23% in constant currency.
o Gross margin improvement of 327 basis points for the full year, 393 bps in
constant currency.
o Fully imputed final dividend of 7.0 cps.
o Investment in R&D increased by 18% to NZ$54.1 million, representing 8.7% of
operating revenue.
About Fisher & Paykel Healthcare
Fisher & Paykel Healthcare is a leading designer, manufacturer and marketer
of products and systems for use in respiratory care, acute care and the
treatment of obstructive sleep apnea.  The company's products are sold in
over 120 countries worldwide.  For more information about the company, visit
our website www.fphcare.com.

Full Financial Statements and Commentary
Attached to this news release are condensed NZ dollar financial statements
and commentary.  For convenience the income statement has been translated
into US dollars.  The US dollar financial statement is non-conforming
financial information, as defined by the NZ Financial Markets Authority.

The company's financial statements for the year ended 31 March 2014 and the
comparative financial information for the year ended 31 March 2013 have been
prepared under the New Zealand equivalents to International Financial
Reporting Standards (NZ IFRS).

A constant currency analysis is also included. A constant currency income
statement is prepared each month to enable the board and management to
monitor and assess the company's underlying comparative financial performance
without any distortion from changes in foreign exchange rates. The constant
currency data provided is an estimate of the changes in the main income
statement items after excluding the impact of movements in foreign exchange
rates, hedging results and balance sheet translations. The data is based on
the NZ dollar income statements for the relevant periods which have all been
restated at the budget foreign exchange rates for the 2014 financial year.

The constant currency analysis is non-conforming financial information, as
defined by the NZ Financial Markets Authority, and has been provided to
assist users of financial information to better understand and track the
company's comparative financial performance without the impacts of spot
foreign currency fluctuations and hedging results and has been prepared on a
consistent basis each year.

Full Year Results Conference Call
Fisher & Paykel Healthcare will host a conference call today to review the
results and to discuss the outlook for the 2015 financial year.  The
conference call is scheduled to begin at 10:00am NZST, 8:00am AEST (6:00pm
USEDT) and will be broadcast simultaneously over the Internet.

To listen to the webcast, access the company's website at
www.fphcare.com/investor.  Please allow extra time prior to the webcast to
visit the site and download the streaming media software if required.  An
online archive of the event will be available approximately two hours after
the webcast and will remain on the site for two weeks.

To attend the conference call, participants will need to dial in to one of
the numbers below at least 5 minutes prior to the scheduled call time and
identify yourself to the operator.  When prompted, please quote the
conference code of:  40710638.

New Zealand Toll Free 0800 446 046 USA Toll Free 1800 742 9301
Australia Toll Free 1800 725 000 Hong Kong Toll Free 800 906 648
United Kingdom Toll Free 0808 234 1369 International +61 2 8373 3610

An audio replay of the conference call will be available approximately 2
hours after the call and will be accessible for two weeks by dialing one of
the numbers below.  When prompted please enter the conference code of:
40710638.

New Zealand Toll Free 0800 453 213 USA Toll Free 1855 452 5696
Australia Toll Free 1800 153 898 Hong Kong Toll Free 800 963 117
United Kingdom Toll Free 0808 234 0072 International +61 2 9003 4211

Contact: Michael Daniell MD/CEO on +64 9 574 0161 or Tony Barclay CFO on +64
9 574 0119.
End CA:00250794 For:FPH    Type:FLLYR      Time:2014-05-23 09:07:43