{"id":4212,"date":"2020-02-26T13:08:01","date_gmt":"2020-02-26T02:38:01","guid":{"rendered":"https:\/\/strawman.com\/blog\/?p=4212"},"modified":"2020-02-26T13:08:02","modified_gmt":"2020-02-26T02:38:02","slug":"nanosonics-asxnan-first-half-results","status":"publish","type":"post","link":"https:\/\/strawman.com\/blog\/nanosonics-asxnan-first-half-results\/","title":{"rendered":"Nanosonics (ASXNAN) First Half Results"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Infection control company <strong>Nanosonics<\/strong> (ASX: NAN) today released its first half results for the 2020 Financial Year. Nanosonics sells the Trophon EPR device for disinfecting ultrasound probes, as well as the consumable capsules required for each disinfection cycle. This can be thought of as a razor + blade business model.<\/p>\n\n\n\n<p>The bad news was that profit before tax was down to $6.7 million for the half, as the company ramped expenditure on R&amp;D and expansion into new markets, such as Japan and China. On top of that, there was an increase in selling expenses related to the new deal with their US distributor. That deal saw revenue from consumables skyrocket about 41%, half on half, but did involve some additional selling costs.<\/p>\n\n\n\n<p>Overall, the 19% revenue growth to just over $48 million might seem decent, but it would have been better if the company hadn\u2019t suffered from a 24% reduction in capital equipment sales to its North American distributor. As you can see in the chart in this <a href=\"https:\/\/arichlife.com.au\/nanosonics-asx-nan-1h-fy-2020-results-show-steady-progress-but-no-reason-to-buy\/\"><em>A Rich Life<\/em> article on Nanosonics<\/a>, the company has not always grown revenue every single half, due to the lumpiness of distributor destocking and restocking. On the bright side, destocking events have historically been followed by re-stocking events, which boosts sales in a future period.<\/p>\n\n\n\n<p>Importantly, the company continued to grow its installed base, reaching nearly 50% of the addressable market in the US. As the installed base grows, the company builds its quasi-recurring revenue from consumable sales. On that front, the company reported growth in all regions. Particularly exciting for long term shareholders was the news that it had installed its first units in Japan, which is promising given it has spent several years building the \u2018fundamentals for adoption\u2019 (such as regulatory guidelines) in that market. Next stop, China.<\/p>\n\n\n\n<p>Finally, the company is suggesting its next product &#8212; with a similar business model and addressable market to the Trophon &#8212; will begin commercialisation in FY 2021. That could be an important step change for the company in the long term. For now, though, shares are trading on a high multiple of earnings, indicating the market is pricing in plenty of growth.<\/p>\n\n\n\n<p>Check out what other members\u2019 are saying on the<a href=\"https:\/\/strawman.com\/member\/company\/forecasts\/NAN\"> Nanosonics Company Page.<\/a><\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><em>Claude Walker is the founder of <a href=\"https:\/\/arichlife.com.au\/\">A Rich Life<\/a>, an online periodical that covers investing, art, culture &amp; philosophy<\/em>.<em> Claude is a highly experienced private investor with a very successful long-term track record. He owns shares in Nanosonics, but reduced his holding on the day of publication.<\/em><\/p>\n\n\n\n<p class=\"has-text-color has-background has-very-dark-gray-color has-very-light-gray-background-color\"><em>Strawman is Australia&#8217;s premier online investment club. Join for free to access independent &amp; actionable recommendations from proven private investors.<\/em><br><\/p>\n\n\n\n<div class=\"wp-block-button aligncenter\"><a class=\"wp-block-button__link has-text-color has-very-light-gray-color has-background has-tertiary-background-color\" href=\"https:\/\/strawman.com\/member\/landing\/signup\">Register for free ASX recommendations<\/a><\/div>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p class=\"has-text-color has-cyan-bluish-gray-color\"><em><strong>Disclaimer\u2013<\/strong> The author may hold positions in the stocks mentioned in this publication, at the time of writing. The information contained in the publication and the links shared are general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. For errors that warrant correction please contact the editor at admin@strawman.com.<\/em><\/p>\n\n\n\n<p class=\"has-text-color has-text-align-center has-cyan-bluish-gray-color\">\u00a9 2020 Strawman Pty Ltd. All rights reserved.<\/p>\n\n\n\n<p class=\"has-text-align-center\">| <a href=\"https:\/\/strawman.com\/member\/landing\/privacy\">Privacy Policy<\/a>&nbsp;|&nbsp;<a href=\"https:\/\/strawman.com\/member\/landing\/terms\">Terms of Service<\/a> | <a href=\"https:\/\/strawman.com\/member\/landing\/fsg\">Financial Services Guide<\/a> | <\/p>\n\n\n\n<p class=\"has-text-color has-text-align-center has-cyan-bluish-gray-color\">ACN: 610 908 211 <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Infection control company Nanosonics (ASX: NAN) today released its first half results for the 2020 Financial Year. Nanosonics sells the Trophon EPR device for disinfecting ultrasound probes, as well as the consumable capsules required for each disinfection cycle. This can be thought of as a razor + blade business model. The bad news was that profit before tax was down [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":4217,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[97],"tags":[],"class_list":["post-4212","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-guest-contributors"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Nanosonics (ASXNAN) First Half Results - Strawman Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/strawman.com\/blog\/nanosonics-asxnan-first-half-results\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Nanosonics (ASXNAN) First Half Results - Strawman Blog\" \/>\n<meta property=\"og:description\" content=\"Infection control company Nanosonics (ASX: NAN) today released its first half results for the 2020 Financial Year. Nanosonics sells the Trophon EPR device for disinfecting ultrasound probes, as well as the consumable capsules required for each disinfection cycle. This can be thought of as a razor + blade business model. The bad news was that profit before tax was down [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/strawman.com\/blog\/nanosonics-asxnan-first-half-results\/\" \/>\n<meta property=\"og:site_name\" content=\"Strawman Blog\" \/>\n<meta property=\"article:published_time\" content=\"2020-02-26T02:38:01+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-02-26T02:38:02+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/strawman.com\/blog\/wp-content\/uploads\/2020\/02\/trophon-technician02.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"554\" \/>\n\t<meta property=\"og:image:height\" content=\"286\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Claude Walker\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Claude Walker\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/strawman.com\\\/blog\\\/nanosonics-asxnan-first-half-results\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/strawman.com\\\/blog\\\/nanosonics-asxnan-first-half-results\\\/\"},\"author\":{\"name\":\"Claude Walker\",\"@id\":\"https:\\\/\\\/strawman.com\\\/blog\\\/#\\\/schema\\\/person\\\/a2a063c851cf82d929dac1d4567c8ce8\"},\"headline\":\"Nanosonics (ASXNAN) First Half Results\",\"datePublished\":\"2020-02-26T02:38:01+00:00\",\"dateModified\":\"2020-02-26T02:38:02+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/strawman.com\\\/blog\\\/nanosonics-asxnan-first-half-results\\\/\"},\"wordCount\":536,\"image\":{\"@id\":\"https:\\\/\\\/strawman.com\\\/blog\\\/nanosonics-asxnan-first-half-results\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/strawman.com\\\/blog\\\/wp-content\\\/uploads\\\/2020\\\/02\\\/trophon-technician02.jpg\",\"articleSection\":[\"Guest Contributors\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/strawman.com\\\/blog\\\/nanosonics-asxnan-first-half-results\\\/\",\"url\":\"https:\\\/\\\/strawman.com\\\/blog\\\/nanosonics-asxnan-first-half-results\\\/\",\"name\":\"Nanosonics (ASXNAN) First Half Results - 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