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Post Market Wrap | Fisher & Paykel FY22 Revenue Guidance Down By 14 Percent to $1.7B

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This Post Market Wrap is presented by KOSEC – Kodari Securities

  • Lower COVID hospitalisation cases impacting revenue and operating margin
  • Higher freight costs also creating margin pressure 
  • Future revenue growth dependent on success of new products 
  • No earnings guidance given prevailing uncertainty around COVID-19 variants. 

Fisher & Paykel Healthcare (FPH or the Company) is a New Zealand based medical device manufacturer of products and systems for use in chronic respiratory care, surgery and the treatment of obstructive sleep apnea. The Company comprises 2 key business units, Homecare and Hospital. FPH designs, manufactures and sells its products in 120 countries worldwide.

FY22 revenue guidance

FPH expects full year operating revenue for the March 2022 financial year to be in the range of $1.675 billion to $1.7 billion. This compares to operating revenue of $1.97 billion generated for the full year ended 31 March 2021, a decline of 14 percent. 

The Company attributes the decline to lower respiratory intervention requirements of the current Omicron variant, as compared with the more severe Delta variant. The comparatively mild flu season in the Northern Hemisphere has also contributed to lower demand for hospital consumables. This follows a period of unprecedented demand for humidification products used in respiratory, acute and surgical care during FY21, when hospitalisations in response to COVID-19 case numbers were extraordinary. Hospitalisation numbers are critical to revenue growth because the Hospital product group accounts for approximately 75 percent of total operating revenue. 

The 63.1 percent operating margin earned in FY21 represented a decline of close to 3 percent compared to the previous financial year. Higher air freight utilisation and elevated freight rates were cited as reasons for this margin decline. This adverse trend has continued into the FY22 financial year with the operating margin expected to come in at about 62.5 percent. This compares to Fisher & Paykel’s long term gross margin target of 65 percent.

Looking Ahead

The flattening of the curve following the global surge in COVID-19 has tempered revenue growth while higher freight costs have compressed operating margins, in the current reporting period. The Hospital product group, which was the primary beneficiary of the COVID-19 hospitalisation surge, saw revenue in the FY21 financial year, ramp up by 87 percent to $1.5 billion. This revenue spike was sustained up to the period when the Delta variance was rampant around the world, especially in North America. 

Given subsequent lower hospitalisation rates, the Hospital product group is now focused on testing and trialing new products. The success of such products, including the Visairo mask for non-invasive ventilation in the US and the Evora full mask on NZ and Australia, will have a bearing on medium term revenue growth. R&D research is also a key factor in future revenue growth, with $75 million expended in the first half of the current financial year.     

Significantly, the FPH board has not committed to firm earnings guidance for the FY22 year. The prevailing uncertainty around COVID-19 variants, including the effectiveness of vaccinations, is impacting the number of COVID-19 related hospitalisations around the world. The lack of clear and definitive qualitative evidence is grounds for FPH in leaving earnings details to the release of full financial year results on Wednesday May 25. 

This Post Market Wrap is presented by Kodari Securities, written by Michael Kodari, CEO at KOSEC.

"Michael Kodari is one of the world's most consistent, top performing investor. A philanthropist and one of the prominent experts of the financial markets, he has been referred to as ‘the brightest 21st century entrepreneur in wealth management' by CNBC Asia and featured on Forbes. Featured on TV as the "Money Expert", on the weekly Sunday program "Elevator Pitch", he is recognised internationally by governments as he was the guest of honour for the event "Inside China's Future", chosen by the Chinese government from the funds management industry, attended by industry leaders, when they arrived in Sydney Australia, on April 2014. Michael and George Soros were the only two financiers in the world invited and chosen by the Chinese government to provide advice, and their expertise on Chinese government asset allocation offshore. With a strong background in funds management and stockbroking, Michael has worked with some of the most successful investors and consulted to leading financial institutions. He was the youngest person ever to appear on the expert panel for Fox, Sky News Business Channel at the age of 25 where he demonstrated his skillset across a 3 year period forming the most consistent track record and getting all his predictions right over that period. Michael writes for key financial publications, is regularly interviewed by various media and conducts conferences around the world."

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ANZ job cuts spark banking clash

ANZ plans to cut 3,500 jobs, sparking debate on the future of Australia’s banking sector and employment dynamics.

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ANZ plans to cut 3,500 jobs, sparking debate on the future of Australia’s banking sector and employment dynamics.


ANZ has announced plans to cut 3,500 staff and 1,000 contractors over the next year, triggering a fierce debate between business leaders, unions, and government about the future of Australia’s banking sector.

The decision raises wider questions about the resilience of the business community and the role of politics, productivity, and technology in shaping employment.

#ANZ #Banking #Jobs #Unions #Australia #Economy #TickerNews


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1 in 8 households don’t have the money to buy enough food

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Katherine Kent, University of Wollongong

Around one in eight (1.3 million) Australian households experienced food insecurity in 2023. This means they didn’t always have enough money to buy the amount or quality of food they needed for an active and healthy life.

The data, released on Friday by the Australian Bureau of Statistics (ABS), show food insecurity is now a mainstream public health and equity challenge.

When funds are tight, food budgets suffer

The main driver of food insecurity in Australia is financial pressure.

Housing costs and energy bills expenses consume much of household income, leaving food as the most flexible part of the budget.

When money runs short, families cut back on groceries, buy cheaper but less nutritious food, skip meals, or rely on food charities.

These strategies come at the expense of nutrition, health and wellbeing.

Inflation has added further pressure. The cost of food has risen substantially over the past two years, with groceries for a family of four costing around $1,000 per fortnight.

Who is most affected?

Not all households are affected equally. Single parents face the highest rates of food insecurity, with one in three (34%) struggling to afford enough food.

Families with children are more vulnerable (16%) than those without (8%).

Group households, often made up of students or young workers, are also heavily affected at 28%.

Rates are even higher for Aboriginal and Torres Strait Islander households, where 41% report food insecurity.

Income remains a defining factor. Nearly one in four (23.2% of) households in the lowest income bracket experience food insecurity, compared with just 3.6% in the highest.

These headline numbers are only part of the story. Past research shows higher risks of food insecurity for some other groups:

While the ABS survey can not provide local breakdowns, it will also be important to know which states and territories have higher rates of food insecurity, to better inform state-level responses.

What are the impacts?

Food insecurity is both a symptom and a cause of poor health.

It leads to poorer quality diets, as households cut back on fruit, vegetables and protein-rich foods that spoil quickly. Instead, they may rely on processed items that are cheaper, more filling and keep for longer.

The ongoing stress of worrying about not having enough food takes a toll on mental health and increases social isolation.

Together these pressures increase the risk of chronic diseases including diabetes, heart disease and some cancers.

For children, not having enough food affects concentration, learning and long-term development.

Breaking this cycle means recognising that improving health depends on improving food security. Left unaddressed, food insecurity deepens existing inequalities across generations.

What can we do about it?

We already know the solutions to food insecurity and they are evidence-based.

Strengthening income support by increasing the amount of JobSeeker and other government payments is crucial. This would ensure households have enough money to cover food alongside other essentials.

Investment in universal school meals, such as free lunch programs, can guarantee children at least one nutritious meal a day.

Policies that make healthy food more affordable and available in disadvantaged areas are also important, whether through subsidies, price regulation, or support for local retailers.

Community-based approaches, such as food co-operatives where members share bulk-buying power and social supermarkets that sell donated or surplus food at low cost can help people buy cheaper food. However, they cannot be a substitute for systemic reform.

Finally, ongoing monitoring of food insecurity must be embedded in national health and social policy frameworks so we can track progress over time. The last ABS data on food insecurity was collected ten years ago, and we cannot wait another decade to understand how Australians are faring.

The National Food Security Strategy is being developed by the Department of Agriculture, Fisheries and Forestry with guidance from a new National Food Council. It provides an opportunity to align these actions, set measurable targets and ensure food security is addressed at a national scale.

Food insecurity is widespread and shaped by disadvantage, with serious health consequences. The question is no longer whether food insecurity exists, but whether Australia will act on the solutions.The Conversation

Katherine Kent, Senior Lecturer in Nutrition and Dietetics, University of Wollongong

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Inflation data impacts markets as stocks reach highs

Inflation data and tariff uncertainty loom as U.S. stocks near record highs ahead of potential Federal Reserve rate cuts

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Inflation data and tariff uncertainty loom as U.S. stocks near record highs ahead of potential Federal Reserve rate cuts

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In Short:
– U.S. stock investors face crucial inflation data amidst concerns over tariffs and bond yields.
– The Federal Reserve is expected to lower interest rates following weaker job growth and trade uncertainties.
U.S. stock investors are facing a week filled with critical inflation data.
Uncertainty over tariffs and government bond yields complicates the market landscape. Despite a record high for the S&P 500 index, the recent monthly employment report revealed weaker job growth in August, prompting concerns.Banner

Investor focus turns to the upcoming U.S. consumer price index data, with implications for potential interest rate cuts.

The Federal Reserve is widely expected to reduce rates at its upcoming meeting.

Market Risks

Concerns linger around tariffs, especially after a court ruling deemed many of President Trump’s tariffs illegal.

This has muddied the decision-making for corporations and investors. Higher long-dated U.S. government debt yields, which reached 5% for the first time in over a month, have also contributed to stock market challenges.

Despite a substantial 10% rise in the S&P 500 this year, traders remain cautious as economic releases could disrupt elevated stock valuations amidst ongoing trade uncertainties.


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