Fisher & Paykel Healthcare Corp Ltd
(ASX: FPH) shares are up almost 5% after providing an FY21 trading update.
FY21 trading update
The healthcare business which is part of the effort to provide products to fight COVID-19 said that in the first four months of FY21 to July 2020 showed continuing strong demand for the company’s hospital respiratory care products. It reflects a changing trend in clinical practice to lead with nasal high flow therapy to treat COVID-19 patients.
Hospital hardware sales were up 390% and manufactured output of the related consumables have steadily increased. Hospital consumable revenue has grown 48% and overall hospital product group revenue grew by 91%.
Global sales of both invasive ventilation and Optiflow consumables in July have returned to similar levels as the April peak.
However, the homecare product group has been impacted with lower diagnosis rates of obstructive sleep apnea globally, coupled with mildly elevated rates of mask supply. However, growth in home respiratory is more than offseting this decline.
Outlook
It has been hard for the company to provide guidance because it can’t predict the extent and duration of the impact of COVID-19. This will directly impact the demand for products.
The company is expecting global hospitalisations requiring respiratory support will steadily return to normal by the end of the calendar year. It has also maintained its expectation of lower OSA diagnosis rates.
Full year revenue for FY21 is expected to be $1.61 billion and net profit after tax (NPAT) of between $365 million to $385 million.
Summary
It’s sad circumstances for the company’s strong growth, but it’s good that the business is able to help the world fight the pandemic with its products. At some point demand is likely to be lower again, so I’m not sure what the right price to buy Fisher & Paykel Healthcare shares is. There are other ASX growth shares where the longer term outlook is more stable like Pushpay Holdings Ltd (ASX: PPH).
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