ASX 200 healthcare stock Australian Clinical Labs Ltd (ASX: ACL) has soared on stronger-than-expected earnings results and a healthy dividend, with the stock pushing towards its 12-month high.
The shares traded as high as $2.86, up 21.7%, before settling back to be 17% higher at $2.75. The 12 -month high for the stock is $2.97.
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Australian Clinical Labs' profit better than expected
The company reported revenue of $735.8 million, at the lower end of guidance of $735-$745 million, but underlying net profit of $35.5 million solidly beat consensus expectations of $31 million.
The company also declared a fully franked dividend of 9.25 cents per share, compared to consensus expectations of 8 cents.
Chief Executive Officer Melinda McGrath said of the result:
I am proud of the result ACL has delivered this year, particularly given the challenging market conditions facing the pathology sector. Amid subdued GP attendance volumes, Medicare fee changes and persistent inflationary pressure, we maintained a clear focus on our strategy, improving margins year on year to 9.4%. I am confident ACL is well positioned for the future, having improved profitability in a low-growth environment while continuing to invest in initiatives that will support sustainable earnings growth. As volumes recover and our innovation programs mature, the combination of operating discipline, technology-enabled improvement and the capability of our people give me confidence in ACL's ability to continue creating value for patients, referrers, employees and shareholders.
Australian Clinical Labs said it expected revenue in the current financial year to be in the range of $745-$765 million, and for underlying EBIT to be $67-$73 million.
The company added:
Capital management will continue to be a feature of our strategy in FY27, including a continuation of the on-market buyback program subject to ongoing review of funding requirements, including strategic investments and stay-in business capital expenditure.
Incoming Chief Executive Officer Greg Horan said his focus would be on, "disciplined execution, improving revenue quality, growing profitable market participation, converting productivity initiatives into earnings and cash, and maintaining strong capital discipline''.
He added:
The market environment remains challenging, but ACL has clear levers within its control and a platform built to deliver long-term sustainable value.
Results comfortably beat expectations
RBC Capital Markets said the company's earnings were "much better than expected".
The broker added:
Management's FY27 guidance is broadly in line with consensus expectations but is better than our forecasts because we had included an estimate for the full impact of the Fair Work Gender undervaluation case. We expect the stock to outperform the market today due to the profitability beat in FY26.
Australian Clinical Labs is valued at $438.3 million.
