Primary Health Care Limited (ASX: PRY) had its AGM on November 22, 2018, i.e. today. Managing Director and CEO of PRY, Mr. Malcolm Parmenter, while addressing the shareholders in its 2nd AGM, presented the performance of the company in the year 2018, with key initiatives taken for the year 2019.
He mentioned that entire health domain is facing a period of significant change. Growing demand along with cost efficient accessibility to technology driven healthcare services is the need and only those who can provide effective solutions covering an entire gamut of services right from clinical excellence to consumer friendly and cost-effective services to the community, will stay and succeed in the long run.
Pathology being one of the largest business of PRY, is exploring opportunities to optimise the portfolio of collection centres and laboratories by undertaking varied initiatives in FY19. Pathology business is being streamlined with the upgradation of core testing instruments known as the Serum Work area, to deliver better testing capabilities at reduced cost. PRY is in the process of negotiating a new Laboratory Information System or LIS. PRY expects net benefits of approximately $20 million after the system is fully embedded into the business.
Medical Centres division has a unique portfolio which holds large-scale clinics that provide range of services and have excellent size and good location and accessibility. PRY has a comprehensive program called Project Leapfrog that aids in the restructuring of Medical centres model. PRY will make an investment of approximately $140 million in property, processes and people over a span of next three years. PRY also expects an average of $1 million EBIT across all 73 centres.
Under the leadership of Dean Lewsam, PRY’s Diagnostic imaging division has performed significantly well over the last 2 years. The success of the division was backed by the continuous focus on imaging in hospitals and on Medical Centre division, MRI and growth of CT. PRY is now working on increasing the positioning of the community sites, imaging centers that are situated in main shopping areas and on the main roads with a focus on consumer value proposition, rebranding and marketing. The group is tracking well on its process of rolling out new radiology information system and picture archiving and communication platform, the iCAR system.
PRY has recently acquired Montserrat, a leading operator in day hospitals and haematology/oncology clinics. Improved technology is driving the attention from the high-cost-overnight hospitals to day hospitals. The acquisition will provide a platform for the growth in an aligned market. PRY with 5-day hospitals will be benefitted by Montserrat that will provide a platform for growth and improved performance. The acquisition will provide an opportunity of Integration with PRY IVF business and an opportunity for significant growth in fragmented market place.
While the group witnessed a bleak first quarter volumes, PRY still expects underlying net profit after tax for the year to be at or above $100 million, taking an assumption of industry growth to be normal in the second half of 2019. Second half of the year is expected to witness stronger trading performance as compared to the first half across all the divisions.
PRY post its AGM showed an upside move of 6.33% and was seen to be trading at the levels of $2.52 (1:50 PM AEST).
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