Nanosonics Limited (ASX: NAN) has released its half year results to the market, for the period ending 31 December 2019. The business posted a strong first half with net profit after tax of $5.7 million, while the market expected $5.4 million. North America, the largest segment, grew total revenue by 18% to $43.8 million, while Europe/Middle East and Asia Pacific grew by 38% and 27%, respectively. The company has guided operating expenses (including R&D) of $67 – 68m for the full year. This half, NAN spent $30.7m, leaving approximately $37m for the second half. Furthermore, the company has stuck to its initial plan of launching a new product (similar, but not the same as Trophon) throughout FY21.
Nanosonics Limited (ASX: NAN) released its full year results to the market, for the first half of FY20. The business posted NPAT of $5.7m, above analyst expectations of $5.4m. (Credit: Nanosonics).
Nanosonics has historically showed seasonality in its business, where the second half is generally stronger than the first half. This announcement mentions FY20 profit phasing will now be more balanced between 1H and 2H as a result of timing of consumables sales in 1H. Based on the current run-rate of $5.7m, we now expect a full-year net profit of approximately $11.4m. This is below current consensus expectations of $12m. That being said, the largest component of a valuation is the long-term growth rate. Therefore, a small miss this year may not have as great an impact as the growth from the coming years due to this new product/further expansion.
NAN is trading on a PE multiple of 59x on 41% EPS growth (FY22) – this can be perceived as relatively expensive. Given the current market volatility, expensive multiples and a potential miss on full-year expectations, there may be share price weakness for NAN today.
This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)
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