- Healthcare is a priority sector in New Zealand
- A new healthcare system is in the offing
- Pharma and medical equipment companies to get a boost
Budget 2022 focuses on healthcare reforms as the finance minister outlined in his Budget speech last week.
There is a new system being looked at local levels. After that, health will be placed on a three-year budget, so that DHBs can plan for the services Kiwis need and how to get those services delivered.
Against this backdrop, let’s examine three NZX-listed medical stocks.
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AFT reported its full-year results for FY22 showing robust growth across regions, new products and royalties. Its annual operating revenue grew 15% to NZ$130 million from NZ$113.1 million over pcp. All regions, including Australia and New Zealand, delivered a growth of 12% and 15%, respectively, despite the COVID-19 pandemic having an impact on its sales, particularly in Q#.
Despite headwinds created by the pandemic, its Asian and international businesses saw a growth of 24.4% and 32.2%, respectively. Gross profit increased by 26.7% to NZ$61.8 million from NZ$48.7 million while margins improved by 4.3 percentage points to 47.4%.
Recently, AFT also welcomed the dismissal of an application by Reckitt & Benckiser on the advertisement by the Company. The High Court of Australia turned down the application by the UK-based consumer products giant which found AFT justified in making a series of claims in relation to its pain-relieving tablets, Maxigesic.
Also Read: CBD, AFT & BLT: A glance at 3 attractive NZX pharma stocks
Related Read: AFT Pharmaceuticals (NZX:AFT): What are its expectations for CY2022?
On 27 May, the stock was trading up 2.20% at NZ$ 4.180, at the time of writing.
TruScreen Limited (NZX:TRU)
TRU provides cancer screening devices. Its cancer screening methods recently received the validation of China’s Obstetricians and Gynaecologists Association (COGA). COGA, after completing a trial with TruScreen’s method, gave approval as being effective, simple to use, and a rapid real-time method.
On 27 May, the stock was trading down by 1.54% NZ$0.064, at the time of writing.
PEB is a cancer diagnostics company that declared its FY22 results. It announced an annual growth of 49% in its operating revenues and a 33% growth in its total revenue. Net losses after tax (NPAT) increased to NZ$19.8 million from NZ$14.2 million, reflecting a 37% increase in operating expenses to NZ$33.7 million as the company invested in initiatives.
According to a release, the total laboratory throughput (TLT) of Cxbaldder tests increased 46% to 23,086 tests. Commercial tests grew 48% to 19,196.
Initiatives of the Investment Program in FY23 will be phased in proportion to business milestones. The company is well funded with cash and short-term deposits at NZ$105 million.
On 27 May, the stock was trading down by 3.7% at NZ$ 0.740
Bottom Line: The Finance Minister has declared healthcare as a priority area. Accordingly, new plans are likely to place the medical equipment and other healthcare companies in a better spot..