Insights

Here’s why the Paragon (ASX:PGC) share price has surged 19% today

The Paragon Care Ltd (ASX: PGC) share price is soaring today following updates of the company’s debt financing and third quarter performance.
The post Here’s why the Paragon (ASX:PGC) share price has surged 19% today appeared first on The Motley Fool Australia. –

Medical staff wear hero capes, indicting strong shar [price performace for healthcare shares

The Paragon Care Ltd (ASX: PGC) share price is flying today following two exciting updates from the company. At the time of writing, the Paragon share price is 19% higher than its previous close, with shares in the company trading for 25 cents.

This comes after Paragon announced that it had renegotiated its financing facilities with the National Australia Bank Ltd (ASX: NAB). It also provided the market with a positive update to its quarterly performance.

Let’s take a closer look at today’s news from the medical device company.

Renegotiated financing facilities

Paragon announced today it has renegotiated its financing facilities with NAB.

The company expects the new banking facility to create $575,000 of savings annually, increasing in time.

The new banking contract will cover the next 3 years and is designed to support the company’s future growth.

Paragon states the new facility will allow it to resume dividends and explore acquisition opportunities.

As of the end of March, Paragon had $101 million in debt. Its amortisation will resume from 1 July 2021.

Paragon’s third quarter update

Paragon also announced today its earnings before interest, tax, depreciation, and amortisation (EBITDA) for the financial year to date at the end of last quarter was 79% higher than the prior corresponding period.

It said its improved performance reflects its new cost rationalisation program, which has significantly reduced its employment, marketing, and administration costs.

Paragon also stated its trading conditions have improved over the past six months. Particularly, elective surgery has now returned to pre-COVID levels. As a backlog of elective surgery cases still remain, sustained demand of the company’s devices is expected to continue until next year.  

Paragon’s revenue for the financial year to date is down 3% compared to the prior corresponding period. It’s raked in $173 million so far. Its gross profits are in line with the prior corresponding period.

The company also made $15.3 million in payments to vendors for business acquisitions this financial year. It now has no more payments remaining. Paragon states this will lead to significantly more free cash flow in the future.

As of 31 March 2021, the company had $19 million in cash.

Commentary from management

Paragon’s CEO Phil Nicholl commented today’s updates, saying:

The successful renegotiation of our banking facilities is a significant milestone for the Company. The strength of our underlying business now means that we can repay debt, whilst also preserving our ability to pay dividends and explore acquisition opportunities…

Over the past year, we have been working hard to implement improved processes across the business and these initiatives are now delivering over $7 million in annualised savings and a structurally lower cost base… We are well positioned to capitalise on the growth opportunities to expand our market share as COVID pressure abates.

Paragon Care share price snapshot

The boost to the Paragon Care share price from today’s news has put the company’s shares back into the green on the ASX.

Currently, the Paragon share price is up 8.7% year to date. It’s also gained 25% over the last 12 months.

The company has a market capitalisation of around $70 million, with approximately 337 million shares outstanding.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Brooke Cooper 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.

The post Here’s why the Paragon (ASX:PGC) share price has surged 19% today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!