At midday, shares of fertility specialist, Virtus Health Ltd (ASX: VRT) were trading around 3.5% lower following the release of its half-yearly results this morning.
In the six months to 31 December 2014, Australia's largest provider of Assisted Reproductive Services (ARS) recorded a net profit of $16.7 million, down 1.2% on the prior period, following the incursion of a number of non-recurring items such as acquisition costs, unamortised bank facility fees and set-up costs in Singapore.
Five key facts you need to know
- Revenue increased 12.9% to $114.5 million
- In New South Wales, Queensland and Victoria, the market for ARS contracted 0.9% and remains subdued
- Virtus' market share of ARS increased from 45% to 45.6%
- In Ireland, the 70%-owned Sims Clinic – acquired by Virtus in May 2014 – saw volumes increase 25% and contribute $10.4 million to group revenue
- Despite earnings per share falling 2.4% to 20.71 cents, an interim dividend of 13 cents per share was declared, up one cent on the prior period
Virtus CEO Sue Channon said: "These results demonstrate how the collective strength of our core fertility services combined with the benefit of specialist diagnostic testing and day hospital services can deliver growth despite the contraction in the Australian ARS market."
During the half, diagnostic and day hospital revenues increased 17.3% and 3.7%, respectively, over the prior corresponding period.
Should you buy Virtus Health shares today?
Despite today's somewhat lacklustre results, management maintained guidance for low to mid-teens earnings growth before non-recurring items of $2.1 million. If it can reach its target and continue to deliver sustainable dividend increases, shares may represent good value for long-term focused investors.
