The Healius Ltd (ASX: HLS) share price is under pressure on Monday following the release of its full year results.
At the time of writing, the healthcare company's shares are down 8% to $4.53.
Healius share price sinks despite more than doubling its profits in FY 2021
- Revenue increased 21.7% to $1,913.1 million
- Underlying earnings before interest and tax (EBIT) jumped 106% to $266.5 million
- Net profit after tax up 179% to $148.4 million
- Operating cash flow tripled to $912.8 million
- Full year dividend of 13.25 cents, up from 2.6 cents in FY 2020
What happened in FY 2021 for Healius?
For the 12 months ended 30 June, Healius reported a 22% increase in revenue to $1,913.1 million and the doubling of its underlying EBIT to $266.5 million. As strong as this was, it was 3% short of the analyst consensus estimate of $276 million. This goes some way to explaining the weakness in the Healius share price today.
Healius' result was driven by growth across all divisions and the success of its Sustainable Improvement Program. However, the standout performer during the year was its key Pathology business, which reported revenue growth of 25% to $1,452.1 million and EBIT growth of 103% to $252.8 million. This reflects strong demand for community and commercial COVID-19 testing, undertaking 5.75 million tests to-date.
Non-COVID revenues also grew, which management believes demonstrates the resilience of its core healthcare services. For example, Imaging revenue grew in all channels and Day hospitals revenue grew thanks to on-going growth in its multi-specialist Westside Private Hospital in Brisbane. At its peak, the latter undertook ~1,000 procedures per month and successfully trialled short-stay surgery for hip and knee replacements.
What did management say?
Healius' Managing Director and Chief Executive Officer, Dr Malcolm Parmenter, said: "Our overriding aim throughout the COVID-19 pandemic has been ensuring we play an instrumental role in Australia's public health response. This has extended the team well beyond our normal capacities and capabilities, including reconfiguring our laboratories to accommodate new equipment, protecting the health and safety of our own people, rolling-out drive-through testing clinics in numerous locations for safe and easy public access, and operating our pathology facilities for significantly extended hours, often 24 hours a day / 7 days a week."
"What's more, we have delivered our non-COVID healthcare services efficiently and effectively within the restrictions of various state lockdown requirements, helping maintain the health of the nation through frontline diagnosis and day surgery."
"While it would have been acceptable to defer our portfolio, capital and other strategic initiatives due to the immediate demands of COVID-19 testing, our people have also delivered on these initiatives resulting in a significant year of growth in shareholder returns," he added.
What's next for Healius?
While no guidance was given for the year ahead, management notes that demand has been strong for its services so far in FY 2022. This is particularly the case for COVID-19 testing following the emergence of the Delta strain.
Dr Parmenter commented: "There has been a further surge in COVID-19 testing in July and August with the emergence of the delta strain in this country and our testing has grown to over 40,000 test per working day in July and August on average. At times these levels have stretched our systems to their limit and we are currently investing in more machines to increase our capacity and technology to speed the process."
"What's more with the revenue we are receiving from COVID testing, we have a real opportunity to invest in the future health of the nation, implementing systems, digital interfaces and a raft of leading-edge applications which should permanently change for the better how consumers access diagnostic healthcare in Australia," he concluded.
The Healius share price was up 33% year to date prior to today.
