Ann: FLLYR: FPH: FPH Delivers Record Full Year Result, Increases Dividend

• Release Date: 29/05/15 08:59
• Summary: FLLYR: FPH: FPH Delivers Record Full Year Result, Increases Dividend
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					FPH
29/05/2015 08:59
FLLYR
PRICE SENSITIVE
REL: 0859 HRS Fisher & Paykel Healthcare Corporation Limited

FLLYR: FPH: FPH Delivers Record Full Year Result, Increases Dividend

FISHER & PAYKEL HEALTHCARE DELIVERS RECORD FULL YEAR RESULT, INCREASES
DIVIDEND
Auckland, New Zealand, 29 May 2015 - Fisher & Paykel Healthcare Corporation
Limited today reported record net profit after tax of NZ$113.2 million for
the full year, an increase of 17% over the prior year.

Operating revenue was also a record, at NZ$672.3 million, 8% above the prior
year or 13% growth in constant currency. Operating profit increased by 19% to
NZ$170.1 million. Constant currency operating profit grew a substantial 57%.

The company, which provides respiratory and acute care (RAC) systems and
products for the treatment of obstructive sleep apnea (OSA), indicated in
November that it expected net profit after tax for the full year to be
approximately NZ$105 million to NZ$110 million.

Chief Executive Officer Michael Daniell said "We have exceeded our earnings
guidance provided in November as a result of robust revenue growth in both
major product groups, a continuation of gross margin expansion and through
operating leverage, and despite a $26.7 million reduction in foreign exchange
hedging gains compared to the prior year."

The company's directors have approved an increased fully imputed final
dividend of 8.0 cents per ordinary share, an increase of 14% on the previous
year.

"We are pleased with our record results, which demonstrate the success of our
consistent growth strategy. 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 10 million patients during the year" said
Mr Daniell.

Each of the company's major product groups, RAC and OSA, reported record
operating revenue and 14% growth in constant currency. RAC product group
revenue grew 9% to NZ$368.2 million and OSA product group revenue grew 8% to
NZ$291.1 million.

The proportion of the company's revenue generated from recurring items, such
as consumables and accessories, continued to increase and accounted for 81%
of core operating revenue.

"We are particularly encouraged by the continuing robust revenue growth, 26%
in constant currency, from products used in applications outside our
traditional invasive ventilation market.  Those products, which include our
Optiflow and AIRVO systems, now account for almost half of our RAC
consumables revenue.

"Last week a very positive clinical trial result was published in the New
England Journal of Medicine. The randomised controlled trial, which included
310 patients and was conducted in 23 intensive care units in France and
Belgium, found a significant reduction in mortality for acute hypoxemic
respiratory failure patients treated with Optiflow nasal high flow therapy
compared to standard oxygen therapy or noninvasive ventilation.

"Our range of masks used in the treatment of OSA continue to perform
strongly. They have been a key contributor to the excellent growth in our OSA
product group, with mask constant currency revenue up 22% compared to the
prior year," commented Mr Daniell.

The increased final dividend of 8.0 cents per share, carrying full New
Zealand imputation credit, will be paid on 10 July 2015. The dividend
reinvestment plan (DRP), 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 2015 final dividend. The DRP will be
offered without a discount in respect of the 2015 final dividend payment.

The company's directors have reviewed the company's gearing and dividend
policies and have established a revised target debt to debt plus equity ratio
in the range of +5% to -5% to support business growth and the operation of
its foreign currency hedging policy. The company now expects that a dividend
pay-out ratio of approximately 70% of net profit after tax will be
appropriate to achieve and maintain that target gearing.

The company's ongoing improvement in gross margin resulted in a a 443 basis
point increase, in constant currency, over the prior year, due to favourable
product mix, logistics and manufacturing improvements and increased volume
from its Mexico manufacturing facility.

Investment in research and development (R&D) increased and R&D expenses grew
by 20% to NZ$65.0 million, representing 9.7% of operating revenue.  "The
recent release of our updated AIRVO flow generator system with new breathing
tube technology, a new nasal cannula range and portable power supply is the
first of a number of new products to be launched over the next 18 months,"
said Mr Daniell.

The company also outlined changes to its distribution arrangements for its
hospital respiratory care products in the United States. From 19 July 2015,
Fisher & Paykel Healthcare will assume direct responsibility for sales and
support of its extensive portfolio of respiratory care products in the US.

"Following the recent acquisition of CareFusion by Becton Dickinson, we
believe the time is right to move to direct responsibility for our US
respiratory product sales, as we have previously successfully implemented in
our other major markets. We have enjoyed a longstanding relationship with
CareFusion and are now working with them to ensure a smooth transition for
our customers," said Mr Daniell.

Fisher & Paykel Healthcare has established an expanded distribution centre in
the US and is doubling the size of its US hospital sales and support team.

"The investment we will be making over the next six months will ensure that
we have the resources in place to serve our hospital customers and to better
promote the benefits of our innovative respiratory care products. We expect
that the specialised sales representative focus on Fisher & Paykel Healthcare
products will support an increase in revenue growth over time, particularly
in non-invasive therapies such as Optiflow. An inventory sell down by our
current distributors will have a temporary effect on RAC revenue growth in
the first half", said Mr Daniell.

Outlook for FY2016
"We continue to focus on our strategy of continually improving our products,
serving more patient groups, extending our range of products and growing our
international presence.  We believe that this strategy will continue to
deliver robust revenue growth in the current year.

"At current exchange rates we expect full year operating revenue to be
approximately NZ$750 million and net profit after tax to be approximately
NZ$125 million to NZ$130 million," concluded Mr Daniell.

Result highlights:
o 17% growth in net profit after tax to a record NZ$113.2 million
o Operating profit increased by 19% to NZ$170.1 million, 57% growth in
constant currency
o Increase in the final dividend to 8.0 cps, an increase of 14%
o 8% growth in operating revenue to a record NZ$672.3 million, 13% growth in
constant currency.
o 9% growth in RAC operating revenue, 14% in constant currency.
o New applications consumables operating revenue grew 26% in constant
currency, accounting for 46% of RAC consumables revenue.
o 8% growth in OSA operating revenue, 14% in constant currency.
o Strong performance from OSA masks, 22% growth in constant currency.
o Gross margin improvement of 252 basis points for the full year, 443 bps in
constant currency.
o Investment in R&D increased by 20% to NZ$65.0 million, representing 9.7% 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, surgery 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 2015 and the
comparative financial information for the year ended 31 March 2014 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 2015 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. The company's constant currency income statement
framework can be found on the company's website at www.fphcare.com/ccis.

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 2016 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.co.nz/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:  34898546.

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:
34898546.

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: Marcus Driller, Investor Relations & Corporate Affairs Manager on
+64 9 574 0110.
End CA:00264996 For:FPH    Type:FLLYR      Time:2015-05-29 08:59:49