Healius (ASX:HLS) Completes Sale of Medical Centres biz Healius Primary Care

  • November 23, 2020 02:18 PM AEDT
  • Kunal Sawhney
    Kunal Sawhney
    CEO Kunal Sawhney
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    Kunal Sawhney is founder & CEO at Kalkine and is a richly experienced and accomplished financial professional with a wealth of knowledge in the Australian Equities Market. Kunal obtained a Master of Business Administration degree from University of T...

Healius (ASX:HLS) Completes Sale of Medical Centres biz Healius Primary Care

Summary

  • Healius has received cash proceeds of $483 million related to the sale of Healius Primary Care. It also received the Dental deferred consideration of $75 million in full. 
  • The sale of the business provides Healius with a strong balance sheet and headroom for investments in continuing operations for growth. 
  • 1Q FY21 trading revenue from continuing operations stood at $492.5 million against $419 million in the same period last year. 

Healius Limited (ASX:HLS) has announced that Healius Primary Care – its medical centres business has been sold to BGH Capital.  

The company secured cash proceeds of $483 million. The cash proceeds represent $500 million enterprise value adjusted for working capital, separation and completion costs to date, and future earn outs to be funded by BGH Capital. 

Healius also received the Dental deferred consideration of $75 million in full because of strong trading conditions this financial year. 

It would continue operating pathology collection centres and imaging clinics, which are housed in the medical centres. The collection centres and imaging clinics would be under a long-term lease agreement with rents similar to historic levels. 

For the next 12 months, the company would continue to provide some services on commercial terms to the sold business, which would use the Healius name for the same period. 

CEO Dr Malcolm Parmenter stated that the sale of medical centres simplifies the portfolio of the company and enables to emphasise on its market-leading diagnosis and day hospital businesses. The transaction strengthens the company, reduces net debt, and provides headroom for investments. 

Now, Healius has a growing day hospital business and specialist diagnosis business. It would enable to leverage current market position and business to deliver shareholder and enhanced customer value. 

The company is progressing to optimise its cost base to reflect a streamlined portfolio. Healius now has a strong balance sheet and low gearing levels, which would support growth in the pathology, imaging and day hospital businesses. 

Trading Update

At its Annual General Meeting in October 2020, the company provided a trading update based on unaudited financials from continuing operations for 1Q FY2021.  

Revenue for the period stood at $492.5 million compared to $419 million in the previous corresponding period, and underlying EBIT was $81.2 million compared to $32.4 million in the same period last year. 

The pathology business delivered a strong performance in 1Q, which continued in October. It was highlighted that non-COVID revenues were now ahead of the same period last year. Imaging revenues were volatile in the first quarter, owing to the Victorian lockdown and outbreaks in other states.

At the time of update, the company stated that imaging revenues were up in all states except for Victoria, where activity was recovering gradually. 

The Day Hospitals business had performed strongly, and revenues were materially higher than the same period last year. The division also continued to perform strongly in October. 

At the time of writing, Healius shares traded at A$3.550, up 0.566% from its previous close.

 

 


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