Paragon Care (ASX: PGC) share price soars 5% on $8.3 million profit

Financial year 2021 saw Paragon back in the green…

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The Paragon Care Ltd (ASC: PGC) share price is in the green today after the company released its earnings for financial year 2021 (FY21). 

Right now, the Paragon share price is 30 cents, 5.26% higher than its previous close.

Paragon Care share price gaining on return to profit

Here's a snapshot of how the producer of medical equipment, devices, and consumables performed during FY21:

All Paragon's remaining vendor earn-outs from previous acquisitions were completed in FY21. They totalled $15.3 million. 

The company ended the period with $33.1 million of cash and $69.1 million of debt. 

What happened in FY21 for Paragon?

Here's what drove Paragon and its share price in FY21:

Paragon's major news from the financial year just been was a joint venture between Paragon's diagnostic business, Immulab, and Jiangsu Zojiwat Bio-Pharmaceuticals Co. Ltd.

The companies will be working together to distribute Immulab's proprietary in vitro diagnostics blood bank reagents in China. 

To do so, they must complete patient trials in at least three domestic clinical institutions, in line with the recommended National Medical Products Administration (NMPA) approval process. The process will likely take around 2 years. 

The joint venture is Paragon's first foray into China. 

Additionally, Paragon announced it had renegotiated its financial facilities in May. The facilities are with National Australia Bank Ltd (ASX: NAB)

Finally, the company's aged care-related business was impacted by COVID-19. However, these impacts were offset by growth in its devices pillar and expansion revenue in New Zealand. 

What did management say?

Paragon Care's CEO Phil Nicholl commented on the news driving the company's share price today, saying:

These results validate our hard work over the past year to implement continuous improvement processes throughout the company and to diversify our revenue streams across product lines and geographies. The successful renegotiation of our banking facilities was a significant milestone and reflects the underlying strength of our business. We have taken the first steps in our China growth strategy, and we are now investing for growth to leverage our extensive portfolio of best-in-breed med-tech solutions.

What's next for Paragon?

Here's what investors interested in the Paragon share price may want to keep an eye on in FY22:

Paragon has stated it is looking to expand its product range and attract new agency agreements. 

It will also focus on cross-divisional selling to fully leverage the maturing pillar structure. Paragon believes this approach will likely see it report 15% EBITDA margins in the future. 

Paragon share price snapshot

The Paragon share price has gained 30% year to date. It is also 50% higher than it was this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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