Primary Health Care shares soar on 27.8% profit growth

Primary Health Care's after-tax profit clocked in at $152 million.

Justin Loiseau

Justin Loiseau hails from the great united state of North Carolina, where he started his first business at the ripe age of five: melting crayons into candles. With the infamous Crayola Crash of 1994, Justin moved on to study economics and environmental studies as a Morehead-Cain Scholar at the University of North Carolina. He has worked in a variety of sectors across the globe, from management consulting to the United Nations, and once spent three months examining invasive snails in Vietnam. Justin discovered The Motley Fool in 2012 and it’s been love ever since. Creativity, contrarianism, kerfuffling… what more could one want? When he’s not playing the Fool, you can find Justin at the University of Auckland, where he is pursuing a Masters in Economics as a Rotary Ambassadorial Scholar. Justin finds biogas digesters fascinating and can unicycle a mile in seven minutes.

Published August 14, 2013 10:13 am AEST

Primary Health Care (ASX: PRY) reported full-year earnings today, and Mr. Market has signalled his approval. The medical centre operator reported top-line growth of 4.6%, putting 2013 revenue at a total $1.46 billion.

While the company improved on its top line, bottom line movement is what really made investors' day. Primary Health Care's after-tax profit clocked in at $152 million, a substantial 27.8% higher than 2012's number. For shareholders, that amount translates to $0.299 EPS in addition to the $0.175 in dividends for this year. The company's latest $0.11 final dividend is 83% higher than last year's.

Margins are stronger than ever across Primary Health Care's operations. Medical Centres EBITDA margins are up 80 basis points to 56%, pathology margins improved 80 basis points to 17.7%, and imaging margins jumped 400 basis points to 23.3%. With fatter profits, the company managed to pocket an additional $40 million in free cash flow to put 2013's net cash provided by operating activities at $269 million.

Primary Health Care shares are up 5.2% today as of this writing, and there are plenty more dynamite dividends just like this one. The Australian Financial Review says "good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit." Get "3 Stocks for the Great Dividend Boom" in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

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Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.

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