What: The relatively unknown Lifehealthcare Group Ltd (ASX: LHC) has reported an outstanding half-year result.
The distributor of medical devices listed on the ASX just over one year ago and so far the company certainly hasn't disappointed initial public offer (IPO) investors with the share price up over 40%, which is outstanding compared with the 14.6% return from the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) over the same time period.
For its interim results the group exceeded its prospectus forecast for net profit after tax but before amortisation (NPATA) by 19.5% with a figure of $4.3 million achieved. Revenue growth was also impressive, coming in 15% higher than the prior period at $48.4 million.
So what: The explanation for the significantly higher profit result was strong growth in the higher margin implantable devices business and a higher margin capital equipment product mix.
The growth in implantable device revenue was achieved via a greater number of surgeons using the company's implants and increasing penetration of products amongst both new and existing surgeons.
Meanwhile, the introduction of new capital equipment products helped boost growth across the Cardiology, Operating Room and Neurophysiology channels.
What now: Shareholders have a 7.5 cent per share dividend, which will be 76% franked to look forward to in March.
It should be noted that Lifehealthcare has now used up all of its franking credits and management provided guidance that it does not expect any further dividends paid prior to 30 June 2016 to have any franking attached to them.
Management also provided guidance for the full year for revenue growth in the low double digit range and for earnings before interest, tax, depreciation and amortisation (EBITDA) margins consistent with historical performance.
With the company operating in the attractive healthcare industry which is experiencing favourable tailwinds for many in the sector (including CSL Limited (ASX: CSL) and Ramsay Health Care Limited (ASX: RHC)) it could be worth long-term investors considering as it trades on an undemanding multiple.
