Shares in diagnostic imaging and healthcare services business Capitol Health Ltd (ASX: CAJ) hit a 52-week high of 29 cents this afternoon after the group recently announced it will sell its NSW radiology operations for $81.5 million. The transaction is due to complete on or around August 31.
The business also reportedly has a stake in “deep learning’ diagnostics business Enlitic that is growing in value as the Enlitic business has success in the Chinese market.
Capitol Health shares are still down around 70% from highs above $1 hit in the spring of 2015 as the business adjusted to regulatory changes around Medicare and bulk billing. Its debt-funded acquisition spree in previous years also failed to deliver the anticipated earnings growth and an overleveraged balance sheet tipped the share price to just 10 cents in November 2016.
For the six-month period ending December 31 2016 it posted a net profit of $0.2 million, but is forecasting full year adjusted (before one off costs) EBITDA of between $19.5 million to $21.5 million on revenues in the range of $162 million to $165 million for FY 2017.
The group has also raised capital recently to bolster its balance sheet and the worst may now be behind it.