Healius share price rallies amid corporate reset

An outgoing chair and a revitalised balance sheet. Healius is undergoing a makeover.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Healius Ltd (ASX: HLS) share price is rising this morning as the pathology and imaging company attempts to wipe its slate clean.

As the morning dew begins to dry, shares in the $90 million healthcare operator are up 3.8% to $1.38 — outpacing the more modest 0.75% increase mustered up by the All Ordinaries (ASX: XAO). The uptick places the company on track for a four-day green streak.

Cropped shot of a young female scientist working on her computer in the laboratory.

Image source: Getty Images

Spring cleaning sparks optimism

Spring is almost over, but not before embattled Healius breaks out the feather duster, so to speak. Yesterday, the company announced to the market that its chair, Jenny Macdonald, would be retiring at the completion of today's annual general meeting (AGM).

In her place, non-executive director Kate McKenzie will preside over Macdonald's former role until an official replacement is found. The decision to depart from the company follows nearly two years of disappointing performance for the diagnostic company, contending with the post-COVID slowdown.

The outgoing chair provided prepared comments for Healius' AGM today. Describing the reason for retiring, Macdonald stated:

Leadership stability will be crucial for Healius as it further progresses the work required to ensure that it is positioned to take advantage of the strong long term fundamentals for the Australian healthcare sector.

While we have made some important progress in the past 12 months, our plan requires stability to enable management to further progress our work and allow time for the benefits to emerge.

In stepping down as chair and opting to not seek re-election as a non-executive director of Healius, my objective is to provide stability for the business.

Investors might look at Healius more fondly today as the overhaul of its old self continues.

Refresh for the Healius share price

Healius shares have paid the price during the last two years. Since December 2021, the share price has crumbled to the tune of 72%.

The company's profit statement tells the story. In FY2022, Healius generated $292.4 million in net profits after tax. One year later, shareholders are suddenly staring at $380 million in losses.

As detailed by my colleague, James Mickleboro, Healius' deteriorating financial situation recently prompted it to raise capital at a steep discount of $1.20 per share. On 22 November, the company revealed it had secured $154 million from the institutional placement.

The funds will predominantly be used to lighten the load on Healius' balance sheet.

Today, the retail component of the capital raise opens, giving eligible shareholders the opportunity to get involved. As per this morning's announcement, new shares from the raise will be issued under a separate ticker ('HLSNB') due to the off-market takeover bid from Australian Clinical Labs (ACL).

The Healius share price is down 50.1% in 2023.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Healthcare Shares

A senior pharmacist talks to a customer at the counter in a shop.
Healthcare Shares

Broker sees 26% upside in ASX healthcare share behind Chemist Warehouse

Morgans has just upgraded its rating on this ASX healthcare stock due to ongoing share price weakness.

Read more »

Woman using a pen on a digital stock market chart in an office.
Healthcare Shares

Why this ASX healthcare stock is surging while the market sinks on Middle East fears

Avita shares surge as a US government contract boosts sentiment again

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
Healthcare Shares

Should you buy Telix shares after its big US news?

Is this milestone a reason to invest? Let's find out.

Read more »

Three health professionals at a hospital smile for the camera.
Healthcare Shares

Up 31% in a month, why are Telix shares lifting off again on Friday?

ASX investors are piling into Telix shares today. But why?

Read more »

Doctor checking patient's spine x-ray image.
Healthcare Shares

Where is the value amongst ASX healthcare shares?

These three stocks are worth monitoring.

Read more »

Two lab workers fist pump each other.
Healthcare Shares

Telix Pharmaceuticals: FDA accepts Pixclara NDA

The FDA has accepted Telix's Pixclara NDA for imaging brain cancer.

Read more »

Six smiling health workers pose for a selfie.
Healthcare Shares

Bell Potter says this ASX healthcare stock could rise nearly 200%

The positive announcement has reinforced the broker's recommendation.

Read more »

A man rests his chin in his hands, pondering what is the answer?
Healthcare Shares

CSL shares: 3 reasons to buy and 3 reasons to sell

CSL shares have tumbled again.

Read more »