The company’s shares are on the move following a strong performance in FY21.
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Australian Clinical Labs shares are now changing hands at $4.55 apiece, up 8.3% after hitting an intraday high of $4.63 this morning.
Let’s investigate further.
Australian Clinical Labs share price jumps on earnings boost
Highlights from the company’s FY21 results include:
Australian Clinical Labs successfully listed on the ASX in May 2021
Outperformed prospectus revenue forecasts by 4.2% at $674 million
Earnings before interest, tax, depreciation and amortisation (EBITDA) came in 11% ahead of forecasts at $270 million and grew 98.4% year on year.
Net profit after tax (NPAT) of $88.7 million which was 19.2% in front of the prospectus forecast, and 6% ahead of (previously) upgraded guidance. This is also a 659% year on year increase.
Decreased net debt from $93.3 million to $64.1 million
Cash EBITDA to operating cash flow conversion of 101.4%, with “pro forma cash flow” of $97.2 million.
What happened in FY21 for Australian Clinical Labs?
Australian Clinical Labs completed its initial public offering (IPO) on the ASX on 14 May 2021, and has “outperformed pro forma prospectus” earnings forecasts.
The company recorded revenue of $674 million alongside EBITDA of $270 million. These results came in around 4% and 11% ahead of forecasts outlined in its prospectus.
Moreover, it smashed NPAT prospectus forecasts by almost 20%, recognising around $89 million for FY21. This figure also fell within the upper ranges of previously upgraded guidance released back on 3 June. The NPAT figure signifies an approximate 660% year on year increase.
Australian Clinical Labs’ advised that its FY21 non-COVID revenue growth was 6.3% higher than the year prior. Non-COVID sales growth normalised by the second half of FY21, increasing 14% compared to FY20.
The company also strengthened its balance sheet by reducing net debt from $93 million to just over $64 million through the year.
In addition, the company commissioned a new laboratory in Queensland, marking its expansion into the sunshine state. This coincided with the acquisition of SunDoctors, a “leading skin cancer clinic business in Australia”.
Finally, Australian Clinical Labs “delivered excellent turnaround times on all testing”, even when demand increased suddenly.
What did management say?
Australian Clinical Labs CEO Melinda McGrath said:
The commitment and dedication of our 2,800 staff has been on display this year as ACL continues to play a central role in Australia’s COVID-19 response which was at times challenging for everyone in the organisation, but particularly for our frontline staff managing testing sites, and I take this opportunity to thank each and every one
of them for their commitment and compassion to serving their communities.
Touching on the company’s growth vision, McGrath added:
With a well-defined growth strategy and predictable and consistent long-term growth drivers supporting the $5.8 billion Australian pathology market, excluding COVID-19, we are confident in our ability to continue to deliver solid results in FY22 and beyond.
What’s next for Australian Clinical Labs?
Acknowledging “significant volatility” in the market, the company upgraded its FY22 guidance based on trading to date in FY22.
As such, guidance for the first half of FY22 includes total revenue between $392 million to $375 million, calling for an 18% – 22% upgrade to the prospectus forecast.
It also sees NPAT between the range of $48 million to $53 million, a 109% to 130% upgrade on the prospectus forecast.
The Australian Clinical Labs share price has gained 13% since listing, slightly behind the S&P/ASX 200 Index (ASX: XJO)’s return of about 14% over the same period.
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The author Zach Bristow has no positions 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 Bruce Jackson.