The Nanosonics Ltd (ASX:NAN) share price is charging higher on Tuesday following the release of its annual general meeting update…
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The Nanosonics Ltd (ASX: NAN) share price has been a strong performer on Tuesday.
In afternoon trade the infection prevention company’s shares are up 3.5% to $6.71.
Why is the Nanosonics share price charging higher?
Investors have been buying the company’s shares today following the release of its annual general meeting update.
At the event, the company’s chairman and chief executive officer both spoke positively about the future.
Nanosonics Chairman, Maurie Stang, commented: “As we progress into FY21, notwithstanding our customers facing challenges in various markets, we are now seeing some very encouraging indicators that underscore our belief in the fundamentals of this business.”
This sentiment was echoed by CEO, Michael Kavanagh. While he notes that the company’s performance was impacted greatly by the pandemic in the fourth quarter of FY 2020, it has rebounded strongly from the crisis.
He explained: “We certainly do not believe that COVID-19 has negatively impacted the underlying fundamentals for the business and indeed the COVID-19 impacts experienced in the fourth quarter of FY20 have significantly reversed in the first 4 months of FY21.”
FY 2021 trading update.
During the first wave of COVID-19 in North America, Nanosonics struggled to gain access to hospitals.
Pleasingly, things have been very different during the second wave. Management notes that hospitals in the region appear better equipped to manage the impact of the pandemic now. As such, ultrasound procedure volumes requiring High Level Disinfection have not been impacted to the same degree as experienced in the first wave.
Though, management has warned that this does not guarantee that future waves will follow the same pattern in North America or other regions.
Nevertheless, as things stand, purchases of Consumables (Sonex/NanoNebulant) by end customers continued to recover in the first four months of FY 2021 as hospital departments reopened and ultrasound procedure volumes increased towards pre-fourth quarter levels.
Unit purchases of Consumables by end customers in the first four months of FY 2021 were up 4% compared with prior corresponding period and 25% compared with the last four months of FY 2020.
In addition to this, the company has continued to grow the footprint of its trophon product. It advised that the number of new trophon units installed globally was up 16% in the first four months of FY 2021 compared with the last four months of FY 2020.
It notes that this recovery was experienced in both North America, which was up 14%, and EMEA, which was up 64%.
Another positive is that the recovery in its new installed base growth means that GE Healthcare in North America will resume its purchasing of capital equipment by end of the first half.
Overall, management remains positive on the future, concluding: “Despite ongoing periods of uncertainty we remain optimistic about the future and investments in our growth agenda continue across the business.”
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited. The Motley Fool Australia has recommended Nanosonics Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.