If you are bothered by all that sharemarket bleeding, investing in health-related companies might lift your stocks

The   carnage,  as the  mainstream   media  delight in  calling  it,  has deepened  on   global  sharemarkets this week.  And while the bleeding on the NZ  market has  not been  quite  as sustained  as  on   Wall Street, it has left   investors  reaching for the  tourniquets.

Point of  Order  has  no pretensions  to  being able to  divine  if and when the  bleeding can be staunched and while there will be hopes the  government’s fiscal package will  do the trick, the  bigger   question mark  is over  the trend  in  those global  bourses.

But while the  doomsters portray the  carnage as  evidence of the  economic shock  the  Covid-19  pandemic  is  delivering,  there  are some slivers  of  light in the enveloping  gloom.

Some of them  are  coming from   companies   which are  manufacturing  products to be used  in  the  battle  against  Covid-19.

Auckland-based  Fisher and  Paykel  Healthcare’s shares  climbed  9%  on Monday  and  8%  on Tuesday   to new  record  levels above  $27.

Its respiratory humidifiers and consumables are directly involved in treating patients with coronavirus. An increase in demand globally has ramped  up the company’s output. At the same time, it has benefited from stronger sales in the Homecare product group and a weakening of the NZ dollar.

F &P Healthcare has lifted its financial forecast for the year to March, saying it now expects to make $275m-$280m in profit on revenue of $1.24bn, based on an exchange rate of 61USc.

Previously the company had been forecasting revenue of $1.2bn and profit of $260m-$270m, but since February the NZ dollar has eased by US3c. Shares in the company  have risen more than $12 to $27.20 in the last year.

CEO Lewis Gradon  says  the company’s highest priorities are the safety and welfare of  its people and the patients who use  products it manufactures.

We are very appreciative of the support that we have received from our suppliers and from government agencies globally during this challenging time”.

 At the  other  end of the country, Dunedin-based   Blis  Technologies,  which  recorded  its  first profit  last year  after   18  years,  this week  reported  sharp increases in sales of its BLISTM finished goods, complementing a strong year of sales of  its branded ingredients into international markets.

Brian Watson, CEO said:

“Sales of our BLIS probiotic brands through pharmacies and online channels in February and March were better than expected. This increase is across the Blis range but is particularly evident for our products with an immune boosting proposition. BLIS TravelProtectTM, UltraBLISTM, DailyDefenceTM and ThroatGuard PROTM have all seen a lift in sales over this period.We have noted media reports of immunity products seeing a lift in demand globally and it appears some of our current increased sales are related to COVID-19 concerns.

“We believe consumers are looking for products that may help support natural immunity. To date our supply chain, from ingredient supply through to manufacture of finished product has been able to meet the lift in demand and we have significantly increased our production to meet anticipated forward orders. We continue to monitor our supply chain for any future constraints.”

Blis Technologies has upgraded its revenue and earnings guidance for the financial year ended March  31. Guidance provided in February was for revenue of more than $9.4m and Ebitda in excess of $1m. The company  now expects full year revenue of around $10m and Ebitda of between $1.5m to $1.7m, subject to completion of existing orders and audit.

The high  demand  for health  products  has  also been encouraging  for  honey producer  Comvita. It  reports a  strong performance through its online channels across all  its markets as consumers seek ingredients known to support immune function. In China online sales grew in excess of 70% in the first 10 days of March.  This has materially offset the impact of fewer shoppers in traditional retail.

CEO  David Banfield  says  in North America,  the performance  has been good  (+50%) from  its biggest retail partners and  orders on the Comvita.com platform globally have more than doubled versus the prior comparable period last year.

From a supply point of view Comvita’s  product is clearing customs efficiently at the China border and its warehouse in Shenzhen is now operating at full capacity.

In other markets internationally, Comvita is seeing an uplift in online demand for our immunity supporting products Propolis and Fresh-Picked™ Olive Leaf Extract, and UMF™ Manuka honey.”

In another food field,   King  Salmon – in an  update in the context of a rapidly evolving situation brought about by the COVID-19 virus – reports  it is  confident that the product portfolio remains very relevant in this time, with healthy food top of mind for consumers around the world.

We are planning on the basis our foodservice markets will be affected at some point. We will mitigate  these impacts with a greater focus on retail and online channels, and other product formats such as smoked and frozen.

“Maintaining supply chain continuity is also important. As travel restrictions become more prevalent, NZ King Salmon is working with key logistics partners to ensure we can access our markets.

“While passenger flights are reduced, we will extend our usage of cargo aircraft, as well as our frozen sea freight programme. We continue to work with suppliers to anticipate and manage any potential disruptions to inbound materials, and to date have no concerns.As China shows signs of recovery from COVID-19, our fresh salmon sales to this market are up and running again after a brief hiatus due to supply chain delays.

“Although China is a developing market representing only around 2% of our total sales portfolio, this is a good example of our diversification strategy”.

King Salmon  CEO  Grant Roswearne   says at this time  the company  sees no need to change the previously advised guidance for the FY20 year ended 30 June— a pro forma operating Ebitda of $25m-$28.5m, based on currently known factors.

A2 Milk,   which   markets  milk products  it  claims have particular health benefits,  lifted  revenue  in the December half to $806m,  up  31.6% to beat earlier guidance   The   company has worked   hard to ensure  that  product has been available  in  online sales channels   and  it reported China & other Asia segment revenue of $317.2m, up 76.7%,

After a detailed strategic review in 2019, A2  Milk stepped up investment in its China label infant nutrition business considerably.

We have also expanded our team in China, reviewed and optimised relationships with distributors and are focusing on the biggest opportunities for growth.

“We are pleased our investments to deepen our understanding of consumer and channel trends and the increased levels of investment in marketing and capability development are translating into accelerated growth in our China label business.

“For the period, we achieved sales in a2 Platinum® China label infant nutrition of $146.7m, double the sales we achieved in the previous corresponding period. In addition to driving in-store productivity, we also expanded our footprint to 18,300 stores, up from 16,400 stores at the end of 2H19.

“Furthermore, we achieved our highest market value share in the MBS channel during the period. These indicators give us confidence that our strategy is on track. We are committed to maximising our growth opportunities, including through product innovation. We launched a China label version of our Stage 4 product in December and recently re-launched our Stages 1, 2 and 3 China label products with a tamper-evident lid for additional product security.

“Our infant nutrition portfolio is complemented by our other nutritional products as we broaden our appeal to existing consumers and seek to connect with new consumers”

 Not surprisingly, A2  Milk’s  shareprice   has  remained   strong   through  the  latest    market   devastation,  with shareholders  comforted   it is  sitting  on a  cashpile of  $600m.

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