On 15 February 2019, Healius Limited (ASX: HLS) published its half-yearly results for 2019. On the financial performance front, the underlying EBIT of the company was $73.1 million during the first half driven by stronger contribution from imaging business, and a good performance from medical centres partially offsetting the decline in Pathology impacted by well-documented headwinds. The reported EBIT included $21.7 million investment in Leapfrog, LIS, iCAR, and corporate support modernisation, together with set-up costs and redundancies. The Board of the company has declared an interim fully-franked dividend of 3.8 cents per share. This represents a pay-out ratio of 60% of underlying NPAT during the half-year period of 2019. The dividend will be paid on Tuesday, 26 March 2019 with ex-date of Friday, 15 March 2019, and the record date is Monday, 18 March 2019.
On the balance sheet front, the group had $3.3 billion in assets, including $2.5 billion in goodwill, and $2.1 billion of shareholders equity as at 31 December 2018. The Group has a net current asset deficiency of $57.1 million (1H 2018 $88.1 million). However, the group generates significant operating cash flows and has access to unused financing facilities which can be drawn on. In 1H 2019, the company successfully undertook a $250 million capital raising with net proceeds of $244.6 million reducing debt and funding capital requirements.
As per the outlook of the company, 1H 2019 result was below the normal rate, on the back of soft market conditions experienced in all divisions, driven in part by a good winter flu season. Modest recovery was evidenced in October and November, but subsequent months have seen inconsistent growth rates across the divisions.
As per the company guidance, the underlying net profit after tax in FY 2019 will be between $93 million and $98 million with improving underlying market conditions throughout the rest second half of FY 2019 and to normalise to long-term averages. The population growth and ageing, advancements in technology and cancer survival rates, and trends in rising patient expectations are key factors to support the strong long-term market growth.
On the price-performance front, the stock of Healius Limited last traded at $2.840 with a market capitalization of $1.78 billion. The stock has generated a YTD return of 17.21% and posted returns of -5.59%, 14.86% and 4.76% over the last six months, three months and one-month period respectively. It has a 52-week high price of $3.956 and a 52-week low price of $2.190 with an average trading volume of ~2.054 million. The stock is trading at a PE multiple of 168.240x with an EPS of AUD 0.017 and with an annual dividend yield of 3.71%.
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