F&P Healthcare stock rallies on record first-half sales

By Paul McBeth

Nov. 22 (BusinessDesk) - Fisher & Paykel Healthcare shares rallied after the breathing respirator maker lifted first-half profit 18 percent on record sales.

The stock climbed 5.7 percent to $2.58, the highest level in more than 13 months, after lifting profit to $33.3 million, or 6 cents a share, in the six months ended Sept. 30, from $28.3 million, or 5.2 cents a year earlier. Sales rose 6 percent to $266.9 million.

The company’s gross margin widened to 54.3 percent from 52.5 percent as growth in cost of sales lagged behind revenue growth at 2 percent. F&P Healthcare will pay a first-half dividend of 5.4 cents a share, unchanged from a year earlier.

F&P Healthcare reaps most of its sales in foreign currencies, and the strength of the kiwi dollar has hindered its bottom line.

Dunedin City credit rating under threat from tight targets

Dunedin City Council is at threat of a downgrade by rating agency Standard & Poor's over the strength of its finances which may not bounce back as quickly as forecast.

Standard & Poor’s affirmed Dunedin’s AA credit rating and put it on a negative outlook, giving it a one-in-three chance of a downgrade over the next two years. The council forecasts small surpluses over the next three years as it slows down the pace of annual rate hikes, while at the same time facing more capital expenditure and rising interest costs.

Subsidiary Delta Utility Services is also under investigation by the Auditor-General over decisions to invest in residential property in Queenstown and Wanaka, which have fed into weaker earnings from the investment unit, Dunedin City Holdings.

S&P said the outcome of that investigation could stress the council’s rating further if it raises questions about the management of council-controlled trading organisations.

Chinese visitors keep rising

The number of Chinese visitors coming to New Zealand for a brief stay jumped 44 percent last month from October 2011, offsetting a 15 percent fall in the number of short-term arrivals after the peak of the Rugby World Cup.

The number of short-term arrivals fell 15 percent to 184,200 in October from the same month in 2011, and was down 0.6 percent on an annual basis, according to Statistics New Zealand. The monthly slump was due to the country being flush with visitors for the showcase rugby event in October 2011, with the biggest declines coming from Australian, British and South African visitors.

Asian short-term arrivals were the only region to gain in the month, led by a 44 percent jump in Chinese visitors to 15,344. Chinese short-term arrivals were up 39 percent to 53,884 on an annual basis.

Kiwi dollar hits 7-month high vs. yen on weak Japanese trade

The New Zealand dollar rose to a seven-month high against the yen after Japan’s trade deficit widened, stoking concern the world’s third-biggest economy is heading back into recession.

The kiwi rose to 67.22 yen at midday in Wellington, the high since early April, from 66.50 yen yesterday. It increased to 81.46 US cents from 81.30 cents yesterday.

Japan posted its fourth straight monthly trade deficit in October, with a gap of 549 billion yen, compared to a forecast deficit of 360 billion yen in a Dow Jones survey. The trade deficit so far in 2012 has reached a record 5.3 trillion yen.

(BusinessDesk)

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