Table of Contents
What changed
Fisher & Paykel Healthcare delivered HY26 revenue of NZ$1,088.5m, up 14.4% on HY25's NZ$951.2m (12% in constant currency, indicating a modest FX tailwind). The earnings line expanded considerably faster than revenue: PBT rose 37.5% to NZ$283.8m and NPAT rose 39% to NZ$213.0m, with the effective tax rate essentially stable at ~25%, so NPAT is the cleanest read here.
The Hospital product group drove the outperformance, growing to NZ$692.2m (up 17% on HY25's NZ$591.4m) and lifting its share of group revenue by 1.4 percentage points to 63.6%. Homecare grew more slowly to NZ$395.9m (+10.2%) and gave back proportional share.
The balance sheet strengthened materially. Cash surged to NZ$300.0m from NZ$116.6m, while gross borrowings fell to NZ$62.2m from NZ$102.3m, producing net cash of NZ$237.8m versus NZ$14.3m a year earlier. Operating cash flow grew only modestly, to NZ$245.8m from NZ$233.0m (+5.5%), while capital expenditure increased to NZ$61.8m, leaving reported Free cash flows+ of NZ$173.2m.
The interim dividend was lifted 2.7% to NZ19.0 cents per share.
What matters
Cash conversion deteriorated materially. NPAT grew 39% but operating cash flow grew only 5.5%. The FCF-to-NPAT ratio fell to 81.3% from 110.6% in HY25. Trade debtors rose 20.8% to NZ$256.6m — well ahead of revenue growth — extending receivable days by approximately 2.2 days to 42.9 days. Inventory days improved (from ~63.7 to ~56.3 days), partially offsetting the receivables build, but operating working capital still expanded by NZ$48.3m. This gap between reported profit growth and cash realisation is the single most important quality question in this result.
Margin expansion looks structurally significant, but the source is not fully disclosed. Operating profit rose 31.2% to NZ$286.1m on 14.4% revenue growth, implying meaningful operating leverage. No gross margin is disclosed in the extraction, so it is not possible to determine how much of the expansion came from pricing, product mix, currency, or cost discipline. The Hospital segment's faster growth, higher share, and historically better margins suggest mix was a contributor, but this cannot be confirmed from the available data.
The balance sheet is now a clear positive. Net cash of NZ$237.8m versus NZ$14.3m a year ago reflects strong accumulated earnings and a deliberate reduction in borrowings. ROE strengthened to 21.4% from 15.9%. The dividend is conservatively covered by Free cash flows+ (payout ratio ~60.6% of pre-lease FCF), providing financial flexibility.
Expectations
No quantitative guidance or formal medium-term targets were disclosed in the release. The comparison base is demanding: HY25 was itself described as a record half with 18% revenue growth and 43% NPAT growth, so HY26's 14% revenue growth and 39% NPAT growth represents a continued acceleration in absolute dollar terms against a high prior base.
Seasonality context from FY25 is relevant: HY25 accounted for only 40.6% of full-year NPAT, with the implied second half (NZ$224.0m) materially heavier. If a similar first-half-light skew applies to FY26, HY26's NZ$213.0m NPAT contribution would imply a full-year outcome well above NZ$500m — though this projection depends on maintaining the margin profile through the second half and resolving the receivables build. Annualising HY26 revenue produces NZ$2,177m, approximately 7.7% above FY25's NZ$2,021m, which sets a reasonable directional floor rather than a ceiling if second-half weighting persists.
The constant currency revenue growth of 12% (versus 14% reported) suggests FX contributed approximately 2 percentage points to the headline number. If NZD strengthens in the second half, that tailwind could reverse.
Quality of result
The profit outcome looks largely durable in its operating drivers: Hospital consumables growth, which is inherently recurring, appears to be the engine, and operating leverage on a largely fixed cost base is credible. The operating profit margin expansion (operating profit up 31% on revenue up 14%) is consistent with prior FPH periods of strong volume growth.
The key quality concern is the receivables build. Trade debtors growing 20.8% against 14.4% revenue growth is not explained in the disclosed excerpts — it could reflect end-of-period revenue weighting, new market penetration with extended payment terms, or collection timing. Until the receivables trajectory reverses in the second half, the gap between reported NPAT and cash generation is real.
The large cash balance increase (NZ$300m versus NZ$116.6m a year ago) is partly balance-sheet-assisted: it reflects cumulative earnings retention and debt repayment rather than a single period cash conversion event. The FCF-to-NPAT ratio of 81.3% is below comfortable territory for a capital-light consumables business and warrants monitoring.
No non-recurring items, discontinued operations, or one-off adjustments were disclosed, which means the reported NPAT and PBT figures reflect the ongoing business without distortion.
Unresolved
- Receivables explanation: What drove the 20.8% increase in trade debtors — geographic mix, payment term changes, revenue concentration in the final weeks of the period, or collections lag? This is the most important unresolved question given the cash conversion deterioration.
- Gross margin trajectory: Without a disclosed gross margin, it is impossible to determine whether the operating leverage is sustainable or partly driven by one-off cost timing or favourable FX pass-through on cost of goods.
- Second-half guidance: Management has not provided quantitative guidance. Whether the Hospital growth rate holds above 15% into a period where the prior comparable (HY25 second half) was stronger than HY25 first half is unknown.
- FX sensitivity: The NZD/USD and NZD/EUR movements that produced the ~2 percentage point reported-versus-constant-currency gap are not quantified, leaving second-half FX risk uncharacterised.
- Capital deployment intent: With NZ$237.8m net cash and borrowings falling, the release does not indicate whether FPH intends to deploy surplus capital via investment, an off-cycle return, or continued balance sheet accumulation.
This briefing cannot assess the gross margin or segment profitability breakdown, as neither was disclosed in the supplied extraction data.
Key metrics
| Metric | HY26 | HY25 | Change |
|---|---|---|---|
| Revenue | $1.1m | $1.0m | +14.4% ↑ |
| Net profit after tax | $213m | $153.2m | +39.0% ↑ |
| Net cash inflow from operating activities | $245.8m | $233m | +5.5% ↑ |
| Interim dividend per share | 19.0c | 18.5c | +2.7% ↑ |
| Operating profit | $286.1m | $218.1m | +31.2% ↑ |
| Profit before tax | $283.8m | $206.4m | +37.5% ↑ |
| Cash and cash equivalents | $300m | $116.6m | +157.3% ↑ |
| Total assets | $2.6m | $2.4m | +8.0% ↑ |
Source: annolyse.ai/briefings/fph-hy26
Segment breakdown
| Segment | Current revenue | Prior revenue | Current result | Mix shift |
|---|---|---|---|---|
| Hospital product group | $692.2m | $591.4m | — | +1.4pp |
| Homecare product group | $395.9m | $359.4m | — | -1.4pp |
Source: annolyse.ai/briefings/fph-hy26
Analytical metrics
| Metric | HY26 | HY25 | Context |
|---|---|---|---|
| PBT growth | +37.5% | — | — |
| Effective tax rate | 25.0% | 25.8% | — |
| FCF pre-lease | $184.0m | $177.9m | +$6.1m |
| FCF post-lease | $173.2m | $169.4m | +$3.8m |
| FCF / NPAT | 81.3% | 110.6% | complementary conversion metric |
| Capex % revenue | 5.7% | 5.8% | — |
| Capex | $61.8m | $55.1m | +$6.7m |
| Free cash flow | $173.2m | $169.4m | +$3.8m |
| Debtor days | 42.9 | 40.7 | +2.2 days |
| Inventory days | 56.3 | 63.7 | -7.3 days |
| Operating working capital | $593.5m | $545.2m | +$48.3m absorbed |
| Trade debtors | $256.6m | $212.5m | +$44.1m |
| Net debt | −$237.8m | −$14.3m | −$223.5m |
| Gross borrowings | $62.2m | $102.3m | −$40.1m |
| Payout ratio vs NPAT | 52.3% | — | — |
| Payout ratio vs FCF pre-lease | 60.6% | — | covered |
| ROE (annualised) | 21.4% | 15.9% | Strengthening |
| HY25 share of FY25 revenue | 47.1% | — | Other half was 52.9% |
| HY25 share of FY25 NPAT | 40.6% | — | Other half was 59.4% |
| Profit from continuing operations | $213.0m | — | — |
Source: annolyse.ai/briefings/fph-hy26
This analysis was generated using Annolyse, an AI-powered tool that extracts and analyses NZX/ASX company announcements. The underlying data is extracted from official company filings and verified against source documents. This is general information only and does not constitute financial advice. The analysis may contain errors. Always read the original company filings and consult a licensed financial adviser before making investment decisions.