In the current reporting season, businesses in almost every sector have been affected, first by the bushfires, and then due to the coronavirus outbreak. The companies have been updating the market with their respective financial results, and while there have been quite a few challenges, some of the companies have delivered positive performances.
Due to the recent coronavirus outbreak, the healthcare sector seems to get highlighted in terms of developing new technology and performing clinical trials across the world.
In this article, we are highlighting how healthcare stocks are positioned in this reporting season.
Let us zoom lens on the earnings updates of NAN, HLS, PNV, and REG:
PolyNovo Limited (ASX:PNV)
A medical technology company, PolyNovo Limited is involved in the development of a dermal regeneration solution known as NovoSorb BTM. The company produces this solution by utilising its patented technology- NovoSorb biodegradable polymer technology. The developmental program of PolyNovo offers solutions for Breast Sling, Hernia, and Orthopaedic applications.
BTM sales up 129% in H1 FY20
PolyNovo reported its half-year results for the financial year 2020 (ended 31 December 2019) and highlighted the milestones achieved in the first half as well as clinical trial update.
Quick financial summary from half-year results-:
- PolyNovo revealed that the revenue from sales of NovoSorb BTM stood at $8.57 million, up by 129% in the first half of the financial year 2020.
- The cash on hand of the company was approximately $8.14 million for H1 2020.
- Research & Development and New Capital Expenditure were nearly $3.22 million.
Clinical trial update
- CE Burn trial is complete and will be published in March 2020.
- Publication of BARDA-funded feasibility trial would be published in March 2020.
- PNV was granted US FDA “Breakthrough technology” assessment pathway for NovoSorb BTM, which will accelerate US FDA feedback, guidance, and support of the trial program.
- BARDA-funded Pivotal burn trial will begin after approval of US FDA protocol.
Other highlights
- For hernia development, the commercial validation processes will run till the end of 2020, once the machinery is installed in Port Melbourne. Market entry in the United States is expected in June 2021.
- PolyNovo revealed that the company has four new patents that are in ‘contestable phase’ and PNV will announce these after completion of this phase.
Stock Information
On 26 February 2020, PNV stock settled the day’s trade at $2.400, down by 20.53%. The market capitalisation of the stock stood at around $2 billion, with nearly 661.09 million shares outstanding. The 52 weeks high and low price of the stock was noted at $3.285 and $0.700, respectively.
A healthcare sector player, Nanosonics Limited is engaged in the development of unique automated high-level disinfection device and is an innovator in providing high-level disinfection for ultrasound probes.
Nanosonics unique, an automated trophon® EPR high-level disinfection device, is a comprehensive solution for decreasing the spread of healthcare-acquired diseases by reducing the contamination among the patients.
The company is working to improve the safety of patients, clinics as well as their staff by transforming the way of infection prevention and introducing innovative technologies for providing improved standards of care.
Total revenue for H1 FY2020 was up by 19% compared to pcp
- For the first half of 2020, the company recorded sales of $48.5 million, up 19% on the prior corresponding period (pcp).
- Continued robust global installed base growth, increased by 17% in the previous 12 months and 8% in the last six months to 22,500 units.
- Capital sales for the first half FY2020 were nearly $14.4 million.
- Operating profit before tax stood at $6.7 million, compared to $11.0 million in pcp.
- Free cash flow for the half-year was $10.0 million compared to $1.6 million in pcp.
- Cash and cash equivalents of the company increased $9.8 million to $82.0 million, providing a solid foundation for constant investment in growth.
- R&D activities continued to grow with the investment of $6.8 million, up 24% compared to pcp and 15% on the previous half.
Significant investments of $6.8 million were made in R&D, an increase of 15% on previous half and 24% compared to pcp.
Stock Information
On 26 February 2020, NAN stock settled the day’s trade at $6.570, down by 1.203%. The market capitalisation of the stock stood at around $2 billion, with nearly 300.48 million shares outstanding. The 52 weeks high and low price of the stock was noted at $7.730 and $3.660, respectively.
Healius Limited (ASX:HLS)
A market-leading, ASX-listed healthcare network, Healius Limited works with a network of multi-disciplinary medical centres, diagnostic imaging centres and pathology laboratories. The company provides a world-class facility to the radiologists, general practitioners and other healthcare professionals to deliver quality care to the patients.
Healius’ H1 2020: Revenue up ~7%
- Healius reported revenue for the first half of 2020 of approximately $945.1 million, up by nearly 7%.
- EBIT of approximately $75.7 million was reported for H1 2020, up 4% as compared to pcp.
- NPAT for the first half was recorded to be $42.1 million, an increase of 8% with lower finance costs.
- The company declared an interim fully franked dividend of 2.6 cents per share, in line with the second half of FY2019.
Outlook
- The company forecast underlying NPAT of between $96 million and $102 million for the financial year 2020.
- Healius aims to investigate a sale process of part or all the Medical Centres business to emphasis on a range of growth initiatives in the diagnostic divisions.
Stock Information
On 26 February 2020, HLS stock settled the day’s trade at $3.180, up by 15.217%. The market capitalisation of the stock stood at around $1.72 billion, with nearly 622.74 million shares outstanding. The 52 weeks high and low price of the stock was noted at $3.315 and $2.610, respectively.
An ASX-listed company and one of the largest aged care providers in Australia, Regis Healthcare Limited is into providing services such as aged care facilities, home care services as well as day therapy and day respite services and retirement villages throughout Australia from the last 30 years with the highest standard of care.
The company has near about 63 homes, six retirement villages, five day therapy centres and six home care bases. Regis has delivered care to over 8,000 older Australians by more than 9,000 employees.
NPAT falls by 50.5%
The company reported its financial results for the first half of 2020, mentioning its financials as well as outlook, including developmental programs.
Financial highlights
- Regis Healthcare recorded revenue of approximately $361.5 million, up by 4.4% as compared to pcp.
- EBITDA of the company for the first half of 2020 was recorded at $73.0 million, $13.1 million decline in EBITDA compared to pcp.
- Net profit after tax was reported to be $12.1 million, down by 50.5% as compared to pcp.
Outlook
- The company anticipates improvement in EBITDA and NPAT in the second half of the financial year 2020.
- Net RAD cash flow of $50 million-$70 million is expected from completion of the ramp-up of new homes in the period to 30 June 2021.
- The company will focus on maintaining conservative balance sheet management.
Regis has a well-planned development program for the upcoming years.
Stock Information
On 26 February 2020, REG stock settled the day’s trade at $2.000, down by 10.314%. The market capitalisation of the stock stood at around $670.67 million, with nearly 300.75 million shares outstanding. The 52 weeks high and low price of the stock was noted at $3.515 and $2.000, respectively.