What: Leading IVF specialist Virtus Health Ltd (ASX: VRT) shares have fallen 3% after releasing a solid set of full year results.
Virtus is the Australian market leader in IVF services with the company claiming to have a 45.5% market share in the eastern states. Pleasingly Virtus reported that it had increased its market share including achieving strong growth in NSW.
So what: The share selling after the release of the results would appear to be in response to the firm missing prospectus forecasts for EBITDA. This is despite the stock beating its prospectus pro-forma net profit after tax number by registering a gain of 17.2% to $32 million. In my view, the overall results are solid and share price weakness could be viewed as a possible buying opportunity.
Now what: The board has declared a final dividend of 14 cents per share (cps) which brings the total dividend for the year to 26 cps and equates to a yield of 3.3%.
During the past financial year, Virtus expanded its operations into Ireland via the 70% acquisition of Ireland’s largest IVF provider. The firm is also preparing to open its first clinic in Singapore later this year. In short – the growth outlook for Virtus remains favourable.
The full year profit result equated to earnings per share on a pro-forma basis of 40.2 cps. Which places the stock on a price-to-earnings ratio of 19.3x. As a high quality company with both defensive and growth attributes this is a stock worth following.