This morning CSL Limited (ASX: CSL) reported its half-year results for the period ending December 31 2018. Below is a summary of the results with comparisons to the prior corresponding half (all figures in US$).
- Revenue of $4.5 billion, up 8.6%
- Sales revenue of $4.4 billion, up 10.5% on constant currency basis
- EBIT of $1,553 million
- Net profit of $1.2 billion, up 6.8%
- Earnings per share of $2.56, up 10%
- Interim dividend US85 cents per share (A$1.20, up 20%)
- Fiscal 2019 net profit now expected at "upper end" of $1,880 million to $1,950 million range
Driving another strong result is the continued success of the group's core immunoglobulin blood products business, with Privigen sales up 17% and Hizentra sales up 14%.
Other new products have performed even better as Haagarda sales tripled and Idelvion sales lifted 55%.
Its flu vaccine business Sequiris also grew sales 23% to produce earnings before interest and tax (EBIT) of more than $300 million, which compares to a full year loss of $200 million only three years ago.
Should you buy?
Importantly, CSL is a business that continually invests in new products to drive tomorrow's growth and it has five new products in the "human clinical trial" stage, with patient recruitment "progressing well' for its CSL 112 trial that is investigating a treatment for cardiovascular or heart attack victims.
Professional analysts and the company itself have flagged the CSL 112 product as potentially a huge winner, but only if clinical trials prove its efficacy.
On an FX-adjusted basis the stock at $193.10 trades on around 26.9x annualised earnings of A$7.20 per share, which is roughly in line with its historical average.
Given the company's strong track record, competitive advantages, and outlook for more growth I'd rate the stock a buy today.
Others high quality companies to consider in the healthcare space include Cochlear Ltd (ASX: COH) and ResMed Inc. (ASX: RMD), although they don't offer the same growth and quality at current valuations in my opinion.
