The share price of Healthia Ltd (ASX:HLA) will be on watch tomorrow after reporting profit growth of 78% in its FY21 half-year result.
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What did Healthia announce?
Healthia revealed that its customer revenue increased by 38.9% to $61.5 million. This revenue growth was supported by organic revenue growth of 14.5%.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew 90.7% to $11 million. The underlying EBITDA margin increased by 486 basis points to 17.87%.
Underlying net profit after tax plus amortisation of customer list intangibles (NPATA) jumped 85.5% to $4.7 million. The underlying NPATA margin increased 194 basis points to 7.72%.
The underlying earnings per share (EPS) grew 78.2% to 6.86 cents. The Healthia board of directors decided to declare an interim fully franked dividend of 2 cents per share.
Management said that this result is testament to the ongoing dedication and resilience of its clinicians and support staff. Healthia said the result was also reflective of the essential nature of the allied health services that its businesses and people provide to their local communities.
The company said that as it integrates its new ‘eyes and ears’ division, settled in November 2020, into its allied health network it will attempt to generate growth from cross-referrals between Healthia’s three disciplines to promote better patient outcomes.
Recent Healthia share price movements
The Healthia share price has gone up by 33% over the last 12 months, despite the COVID-19 pandemic. Since the end of October 2020, Healthia shares have actually risen by 60%.
Healthia said it will continue to focus on four areas: patient focused outcomes, organic growth, future accretive acquisitions and vertically integrated business units.
It has a few different strategies to generate ongoing organic growth. It said it will continue to invest in industry-leading education, tools and support for clinicians, as well as developing industry-leading career opportunities for all team members. This is expected to continue to drive strong organic growth into the future.
Other organic growth strategies could be to further enhance its centralised support functions to clinical teams, finding additional opportunities to co-locate services, introducing services into existing locations and working on new ways to engage its teams.
Healthia said that the acquisition of The Optical Company and the addition of optometry increases its total addressable revenue market from $6.5 billion to $9.8 billion. That breaks down to $2.7 billion in feet and ankles, $3.8 billion in bodies and minds and $3.3 billion in eyes and ears, with the parent company haing a market share of less than 1.5%.
The company said that with its low market share, and the fragmented nature of the target allied health industries it operates, acquisitions will continue to be a central pillar of the growth strategy.
Healthia expects to deploy a minimum of $20 million per annum into new allied health acquisitions. These are expected to be funded from a combination of bank debt, free cash flow and clinic class shares.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended HEALTHIA FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.