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Capitol Health Limited (ASX:CAJ) announced its half-year results for the period 1 July 2018 through 31 December 2018.
Financial performance:
During the period the Company delivered revenue of $72.9m (up $16.8m or ~30% compared to prior corresponding period) and operating EBITDA of $11.9m (up $1.6m or ~15% compared to previous comparable period). The Company delivered improved net cash from operations to $7.7m, up 99% on prior corresponding period (pcp). There was an increase in NPAT to $11.9m vs. pcp (+$9m). [optin-monster-shortcode id="swikrbu1d9j9aq0o4cko"]
The Borrowing costs were down by 55% vs. pcp to $0.8m. There was continued growth in dividend payments by 25% â 0.05 cps franked interim. There was an increase in Net Cash from Operations to $7.7m vs. pcp 99%. Also, the period saw an increase in EPS (basic) to 1.50 cps (up from 0.34 cps). The Net Debt at balance date stood at $25.7m. The period generated free cash flow of $ 4.6m up on pcp by $3.3m. The Free cash flow conversion on Operating EBITDA was up to 39% up from 12% in pcp.
CAJ made a net profit after tax for the half year ended 31 December 2018 of $11.93m (2017 December: $2.89m).
Operating revenue from continuing operations for services rendered was up $17.5m over the corresponding period in the prior fiscal year. It represented an increase of 32% primarily driven by revenue from newly acquired businesses.
Total operating expenses increased by $7.5m (14.5%) in the current half-year compared to the same period in the prior fiscal year.
Dividend:
Subsequent to balance date the Company declared an interim dividend for the half year ending 31 December 2018 of $0.005 per share (2017: $0.004) with the maximum dividend payable subject to elections under the Companyâs Dividend Reinvestment Plan of $3,931,803 (2017: $3,209,826). The ex-date for the dividend is 5 March 2019 with a record date of 6 March 2019 and the payment due date on 3 April 2019.
Business Performance:
Capitol has a fleet of 18 MRIs, of those, two have full Medicare licences, eight have partial Medicare licences, and eight do not have Medicare licences and therefore operate without attracting a Medicare rebate. The regulatory environment continued to improve for diagnostic imaging as evidenced by the Governments announcement in October 2018 of an increase in Medicare-funded MRI services through the issue of 30 new licenses. The number was further increased to 50 new MRI licenses in early 2019.
Capitol continues to negotiate with Citic Pharmaceutical over its China Imaging Joint Venture. Also, Capitol to contribute RMB 3m (~A$0.6m) for 30% stake in JV, CITIC will hold 70%.
Outlook:
The company highlighted that, if the subdued first half demand persisted for the balance of the year, it is expected to result in a reduction to the previously guided full year FY19 EBITDA forecast in the order of 10% to 13%.
The bearish outlook published by the company did not sit well with the market participants. The shares of CAJ closed at A$0.180 on AXS (Closing Price: 27 February 2019), down by 23.404% from its previous close.
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