The Healius Ltd (ASX: HLS) share price is racing higher today following the release of its first quarter update.
At the time of writing, the healthcare company's shares are up 7% to a record high of $3.69.
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How did Healius perform in the first quarter?
Healius has started FY 2021 in a very positive fashion and delivered strong revenue and profit growth during the first quarter.
According to the release, the company recorded revenue of $492.5 million and underlying earnings before interest and tax (EBIT) of $81.2 million. This represents an increase of 17.5% and 150%, respectively, on the prior corresponding period.
What are the drivers of its growth?
Management notes that its Pathology revenues have been strong in the first quarter and so far in October. Non-COVID revenues are now ahead of the prior corresponding period, community COVID testing is currently plateauing around 7,000-10,000 per working day, and commercial COVID testing is growing rapidly.
Things haven't been quite as positive for its Imaging business. The release advises that Imaging revenues fluctuated in the first quarter due to the Victorian lockdown and outbreak clusters in other states. Nevertheless, revenues are currently up in all states other than Victoria, where activity is starting to grow in line with the easing of restrictions.
Finally, the company's Day Hospitals business is performing well. Management notes that revenues were materially ahead of the prior comparable period in the first quarter and the division is continuing to perform strongly in October.
"Critical role" in COVID-19 fight.
The company's CEO, Dr Malcolm Parmenter, was very pleased with the quarter and the way Healius is helping with the COVID-19 fight.
He commented: "We continue our critical role in the fight against the COVID-19 pandemic and in the delivery of essential healthcare services in this country."
"In terms of the financials, we are pleased with the strength of our trading across our businesses during the early part of the 2021 financial year, our ability to leverage the learnings and savings from the national lockdown in March and April, and our delivery of operational and support cost efficiencies through the Sustainable Improvement Program, all of which have underpinned a very strong result."
Outlook.
Dr Parmenter warned that the remainder of FY 2021 is uncertain and that the pandemic could impact its revenue both negatively and positively.
He explained: "Looking to the remainder of FY 2021, our revenue streams may be affected, both positively and negatively, by government responses to further community outbreaks including lock-downs, restrictions on clinical activity, and community testing regimes, as well as by clinical advances in testing capabilities and vaccines."
In light of this, he cautioned "against extrapolating from this quarter to the remainder of the financial year" as the company does "not expect this level of performance to continue."
Healius also provided an update on the sale of Healius Primary Care business.
It remains on schedule to complete this calendar year and is expected to deliver significant balance sheet flexibility. Pleasingly, during the first quarter the Dental business recorded three months of results above the level required to receive the earn-out on completion.
