• Oct 12, 2018 AEDT
  • Team Kalkine

After the announcement by Capitol Health Limited (ASX: CAJ) in regards to the additional MRI Medicare License process, the company is happy to announce that it is acquiring two more clinics situated in South West WA running under the name “West Coast Radiology” which is providing service in an area of high growth surrounding Busselton and Eaton region.

West Coast Radiology targets two significant centers which cater to the major population of the country providing interventional services and general diagnostic there. Both clinics are comprehensive, and they provide all possible and a full range of services. The consideration of acquisition is $5 million upfront which will be in the form of cash and is free from debt. Based on the performance, an additional $0.3 million will be made at the completion of ownership of the first year. It is also expected that the new clinics will be contributing $4.2 million in the revenue and EBITDA up to $0.9 million on an annual basis (as per FY19 forecast). It is expected that the acquisition will get completed in the second quarter of FY19 which depends once the company meets the satisfaction level of the standard conditions. The company has entered into an employment agreement for a period of at least 1 year of completion. After the completion of employment, the acquisition of the West Coast Radiology business, 8 clinics will be all positioned in key growth areas. As per Andrew Harrison who is the Managing Director, the group is positive about Capitol growing its path in the WA market. This region has huge potential in getting new MRI licenses and other license allocation process under the Governments within the network of 8 clinics because of the composition and location of the patients and patients referred at these clinics. It is expected that there will be further opportunities in regards to the organic and transactional growth in the WA market.  

As of now, the acquisition will be funded by the company from its existing cash reserves and facilities. Within a period of 10 years the performance of the company is 392.86%. For the others periods i.e. 6 months, 1 year, 5 years the performance was negative with values -9.26%, -15.52%, -37.97% respectively. For the period ended 30 June 2018, the company has made a loss of A$ 10.913 million. The company has a balance sheet in which the company has total assets worth A$ 128.909 million and total liabilities which of A$ 27.046 million. The company has generated A$ 11.076 million as net cash flow from its operating activities. The net cash flow from the investing activities is worth A$ 46.428 million. However, the company has used amount A$ 63.584 million in the investing activities which includes payments in respect to share buyback and related costs, payment of the treasury shares, payment of dividend , payment of leasing agreement, repayment of secured and unsecured loans. As a result of which there was a net decrease of A$ 6.080 million in the cash and cash equivalent. At the end of year dated 30 June 2018, the available cash and cash equivalent with the company is A$ 12. 137 million.

The share price of the company was A$ 0.26 with market capitalization of A$ 196.42 million.

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