Nanosonic Share Price Down on Earnings

Nanosonics [ASX:NAN] is an Australian-based infection control solutions provider. It has a current market capital close to $800 million, and a P/E ratio of around 30.

At time of writing the company has fallen 11.91% and is trading at $2.625 a share.

What happened to Nanosonic share price?

In the half-year financial results posted this morning, the company told investors that its net profit had fallen to $2.2 million from $22 million a year ago, making it a 90% fall from grace.

Sales were down 17% and R&D expenses were up 7%.

The company said first half reduction reflected a reduction in sales of consumables and accessories to GE Healthcare of around $1.8 million due primarily to sustaining inventory levels.

Where to from here for Nanosonic?

Nanosonics reiterated its growth agenda to focus on establishing its technology as the market standard, expanding into new markets, and developing new products which focus on unmet needs in infection prevention.

CEO Michael Kavanagh noted that the company’s agreement with GE Healthcare in the US is changing, which is forecasted in 2019 to result in a significant increase in consumable revenue and margins.

The company expects continued growth in North America, growing momentum in the UK, and an R&D increase in the second half.

The company expects the second generation of their key product ‘trophon’ to be introduced, alongside one or more new infection prevention solutions, in FY20.

The past year has been volatile for Nanosonics shares, reaching a peak of $3.35 in May, and a low of $2.15 in August. Its current share price represents around a 4% gain from where it was a year ago.

Regards,

Ryan Dinse                                        

Editor, Money Morning  

and

Jack Cameron,              

Junior Analyst, Money Morning

PS: Have you been searching for small-cap opportunities across the ASX? At Money Morning this is an area we’re always researching. We’ve recently written a report titled ‘Top Three Small-Cap Stocks 2018’. To check it out, click here.


Ryan Dinse is a contributer at Money Morning. He has worked in finance and investing for the past two decades as a financial planner, senior credit analyst, equity trader and fintech entrepreneur. With an academic background in economics, he believes that the key to making good investments is investing appropriately at each stage of the economic cycle. Different market conditions provide different opportunities. Ryan combines fundamental, technical and economic analysis with the goal of making sure you are in the right investments at the right time.  


Leave a Reply

Your email address will not be published. Required fields are marked *

Money Morning Australia