The Paragon Care Ltd (ASX: PGC) share price is currently down 11.3% in response to issuing some market guidance for its upcoming profit result. It went into a trading halt yesterday before announcing the news.
A few months ago, Paragon announced it had started a strategic review of its capital equipment business. According to Paragon's announcement today, that business is going to show an earnings before interest, tax, depreciation and amortisation (EBITDA) loss of $5 million in the first-half result, on revenue of $11 million. Paragon is looking to sell this business.
In the first half the continuing business is expected to generate revenue of $119 million, a gross profit margin of 38% and EBITDA of $14 million, which includes a $1.8 million benefit of a lease adjustment. For the whole of FY19 it is expecting $240 million of revenue and $28 million of EBITDA (including the benefit of a $4 million lease adjustment).
Organic growth at the continuing business has been 9%. Paragon also outlined cost reductions of more than $3 million by FY20 due to integration benefits.
The full result is expected to be released on 26 February 2019.
