Capitol Health Ltd (ASX: CAJ) is a leading player in the Australian healthcare market segment, offering diagnostic image services via clinics established in Tasmania, Melbourne and Victoria.
As per an ASX announcement dated 18 August 2017, Capitol Health Ltd (ASX: CAJ) announced its on-market share buyback plan of up to 52.3 million shares, representing approximately 6.5% of issued shares. Considering the closing price of $0.275 as on 17 August 2017, the company estimated cash outlay of $14.38 million if all shares are acquired as per the plan. Taylor Collison Limited was appointed as the broker for the business plan.
The management believed that a share repurchase is an effective tool for capital management of the company, although it would be dependent on various market factors, volumes and prevailing share price. This would also be beneficial for shareholders who would be better able to take advantage of the expected additional liquidity in the company’s shares.
As per today’s ASX announcement, Capitol Health released its daily share buy-back notice for the previous day. The company reported 115,350 shares being brought back yesterday, totalling to 3,08,44,918 share purchase till 3rd January 2019. The total consideration of $31,144,50 was paid yesterday, amounting to a full consideration of $84,89,514.31 paid till 3rd January 2019. As against the highest price of $0.2836 allowed under rule 7.33, the company paid the highest price of $0.2700 yesterday. Overall, the company paid the highest price of $0.2950 on 8 September 2017 and lowest price of $0.2525 on 12 October 2018.
The company can further buy back a maximum of 21,455,082 shares from the market.
Business Acquisitions: During 2018, Capitol Health completed profitable acquisitions of I-Rad (radiology clinic) and Radiology Tasmania (diagnostic image provider). The company also acquired nine independent clinics across Melbourne and Perth. Capitol is anticipating further strategic acquisitions in the healthcare and radiology market segment, in the financial year 2019.
Financial performance: In the recently shared annual financial results for the financial year ending 30 June 2018, Capitol Health stated annual revenue of $129.1 million. The company recorded EBITDA of $24.2 million, representing an increase of 9% from the previous year. It declared a fully franked dividend of 0.8 cps. The balance sheet stands strong with net cash of AUD 8 million. Net operating cash inflow of $11.1 million, Net investing cash inflow of $46.4 million and Net financing cash outflow of $63.6 million was recorded. However, the group incurred a Net loss after tax of $10.9 million for the year.
Stock performance: The price of the scrip is trading on the downside from the past six months, falling by almost 21% (from AUD 0.340 on July 3, 2018 to AUD 0.270 on January 3, 2019). Over past one month, the company’s share plunged by approximately 4%. The shares are currently trading at AUD 0.265, down by 1.9% (as at 3:19 PM, January 4, 2019). The company has a market capitalization of AUD 212.32 million with earning per share of AUD -0.014x.
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