ResMed boss notes ‘older, fatter’ population as full-year profit swells

ResMed’s boss says the sleep device maker is benefiting from the fattening of the global population.

ResMed chief executive Mick Farrell. Picture: Hollie Adams

ResMed boss Mick Farrell says the sleep device maker is benefiting from a fattening of the global population after the company booked an 11 per cent lift in full-year revenue to $US2.6 billion ($3.74bn).

Shares in ResMed surged to a record high during the session on Friday before closing up 5.6 per cent at $18.99, while the broader ASX 200 had lost 0.36 per cent.

Mr Farrell, whose father founded dual ASX and NYSE-listed ResMed (RMD) in Sydney 30 years ago, told The Australian this morning that he expects the business to continue growing at a rapid rate over the year ahead.

“Sadly, as a global population, we are getting older and we are getting fatter and we are getting more chronic disease,” he said.

“There’s a rise in obesity; there’s a rise in diabetes; there’s a rise in cardiovascular disease and there’s a rise in sleep apnea and there’s a rise in chronic obstructive pulmonary disease (COPD) or lung disease.”

The company said this morning that net income shot up 28 per cent for the 12 months through June to $US404.6 million.

“We delivered another quarter of operating leverage, which gives us flexibility as we execute on our long-term strategy to provide innovative products, software, and solutions to improve health outcomes, create efficiencies, and reduce overall healthcare system costs,” Mr Farrell said.

ResMed said that all three of its operating segments grew over the last financial year, as the company continued to implement its strategy to use data technology to engage sleep apnea patients and to remind COPD patients to take their medication.

“One of our big jobs is to reach out the 936 million people worldwide who suffocate every night due to sleep apnea and help them identify that they have a problem and engage on a pathway and enrol in some type of healthcare to treat it,” Mr Farrell said.

COPD is the third leading cause of death worldwide according to the World Health Organisation and more than 380 million people worldwide are estimated to suffer from the condition, which is caused by pollution and smoking as well as second hand smoke. Many sufferers are undiagnosed.

During the 2019 financial year, ResMed acquired Propeller Health, which collects data on how often people take mediation, driving up adherence as well as revenue.

ResMed, which aims to keep patients out of hospital with its treatments, said that there are many underpenetrated markets in both sleep apnea and COPD around the world, particularly as healthcare costs rise.

“Our pipeline is solid; we are well-positioned as we enter fiscal year 2020 on a trajectory to improve 250 million lives in out-of-hospital healthcare in 2025,” Mr Farrell said.

ResMed declared a final dividend of US 39 cents per share, up from US37c last year. ResMed, which pays dividends quarterly, lifted its total revenue payout to $US1.50 a share this financial year, up from $US1.44 last year.