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Cochlear shares soar after dividend boost

Simone Ziaziaris  |  17 Aug 2017Text size  Decrease  Increase  |  

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SYDNEY - [AAP] Shares in Cochlear (ASX: COH) have soared after the hearing implant maker lifted its final dividend and forecast profit growth in the year ahead.

The company's net profit in the year to June 30 rose 18 per cent from the prior year to $223.6 million, as it achieved strong growth in sales revenue and earnings after launching new products.

Healthier operating cash flows supported a 17 per cent increase in Cochlear's final dividend.

Cochlear said it expects previous investments in product development and market growth to deliver a net profit of between $240 million and $250 million in the 2017/18 financial year, though a stronger Australian dollar is expected to moderate its underlying growth.

"In particular, we expect the launch of the Nucleus 7 Sound Processor, which commences its full market release from September, to contribute to both implant growth and upgrade demand over the coming years," the company said.

Cochlear shares were up $11.63, or 8.2 per cent, at $154.41 at 1330 AEST.

The company's core cochlear implant business, which contributes 62 per cent of sales revenue, achieved 5 per cent revenue growth in 2016/17, as the number of implants sold rose 8 per cent to 32.6 million.

Chief executive Chris Smith said Cochlear invested $152 million in 2016/17, or 12 per cent of sales revenue, in research and development, with a pipeline of new products expected to be launched over the coming years.

STRONG REVENUE BOOSTS PROFIT

* Full year net profit up 18pct to $223.6m

* Sales revenue up 7pct to $1.2bn

* Final dividend up 20 cents to $1.40, fully franked

 

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