Why the Nanosonics (ASX:NAN) share price is charging higher

The Nanosonics Ltd (ASX:NAN) share price is charging higher on Tuesday following the release of its annual general meeting update…

| More on:
high share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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."

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.

More on Share Gainers

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX All Ords stock just rocketed 34% on strong earnings growth

Investors just sent this ASX All Ords stock surging 34%. Here’s what’s happening.

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Share Gainers

Why Dimerix, Newmont, Regal Partners, and Titomic shares are storming higher

These shares are having a good finish to the week. Let's see why.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Share Gainers

Why Fortescue, Lynas, PEXA, and Regis Healthcare shares are charging higher

These shares are having a strong session on Thursday. But why?

Read more »

A young man talks tech on his phone while looking at a laptop. A financial graph is superimposed across the image.
Share Gainers

Why Capricorn Metals, Insignia, Perseus Mining, and Qoria shares are storming higher

These shares are having a strong session on Tuesday. But why?

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.
Share Gainers

Why Amaero, AMP, Block, and South32 shares are racing higher today

These shares are starting the week on a positive note. But why?

Read more »

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another momentous session for ASX shares this Friday.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Share Gainers

Why BHP, Catalyst Metals, Mesoblast, and Pilbara Minerals shares are shooting higher

These shares are ending the week with a bang. But why?

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

The Mesoblast share price just rocketed 38%! Here's why

ASX investors just sent the Mesoblast share price up 38%. But why?

Read more »