Paragon Care Ltd (ASX: PGC) has reported a 190% increase in revenues for the 2016 financial year (FY16) – and a 257% jump in profit after tax compared to the prior year.
Paragon Care supplies hospitals, medical centres and aged care facilities with a wide range of medical equipment and consumable medical products, including bedding, emergency trolleys, medical carts, stainless steel medical equipment, clinical refrigerators, ultrasound systems and even nurse uniforms.
Paragon’s closest ASX-listed comparable company is LifeHealthcare Group Ltd (ASX: LHC) – which also distributes and supplies a range of medical products.
Here’s a quick summary of the results:
- Revenues of $93.4 million – up 190% compared to FY15
- Earnings before interest, tax, depreciation and amortisation (EBITDA) of $12.1 million (up 224%)
- Net profit after tax of $7.5 million (up 257%)
- Earnings per share (EPS) of 5.6 cents (up 75%)
- Cash in the bank $19.1 million – although net debt stands at $19.0 million
- Fully franked dividend of 2.2 cents
What does it mean for investors?
It was a decent result driven primarily by a number of acquisitions – that’s why EPS is only up 75% compared to net profit up 257%.
At the current share price of 70 cents, Paragon Care is trading on a P/E of 12.5x and paying a fully franked dividend of 3.1%.
What next for Paragon Care?
Essentially, more of the same. Paragon made a number of acquisitions in FY16 and has already completed a number of new acquisitions including MIDAS Software Solutions on July 8.
As long as debt stays in check and earnings per share grows, Paragon looks reasonable value, given the tailwinds in the healthcare sector. The one ever-present risk is a cut to medical benefits by the government – which investors should bear in mind.
If there's one thing for sure, 2020 has been the year we embraced sanitisation. Scott Phillips has discovered a little-known Australian healthcare company could be set to reap the rewards of the post-covid world.
Better yet, this fast-growing company is currently trading at a 30% discount from its highs. Scott believes in this stock so much, he's staked $209k of our own company money on it. Forget 'buy now pay later', this stock could be the next hot stock on the ASX.
Scott and his team have published a detailed report on this tiny ASX stock. Find out how you can access our TOP healthcare stock today!
As of 2.11.2020
The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
- Why PWR Holdings Ltd could see its share price rise from here – July 21, 2017 12:11pm
- Fortescue Metals Group Limited share price sinks on native title decision – July 20, 2017 4:23pm
- 5 overlooked finance shares to add to your watchlist – July 20, 2017 2:33pm