The Healius Ltd (ASX: HLS) share price has been among the best performers on the ASX 200 on Wednesday.
In afternoon trade, the healthcare company's shares are up 6% to $4.45 after the market responded positively to its half year results.
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Healius share price higher amid stellar profit growth
- Revenue up 43% to $1,339 million
- Underlying earnings before interest and tax (EBIT) up 177% to $376.1 million
- Underlying net profit after tax up 226% to $245.6 million
- Fully franked interim dividend up 54% to 10 cents per share
What happened during the first half?
Healius had an incredibly positive half thanks largely to demand for COVID testing services. The company notes that it played a pivotal role in Australia's public health response to the Delta and Omicron outbreaks, with PCR testing the main driver of its 43% jump in revenue to $1,339 million.
This was supported by growth in non-COVID Pathology revenues, above market growth from its Victoria and Queensland imaging businesses, and revenue growth from its flagship day hospital, Westside Private.
Another positive was that its operating cash flow was strong and, normalised for exceptionally high volumes in the last two weeks of the year, EBITDA conversion was well over 90%.
Management highlights that its balance sheet remains conservatively geared and is positioned to reward shareholders, fund growth, and meet the sustaining capital needs of the business.
Management commentary
Healius' Managing Director and Chief Executive Officer, Dr Malcolm Parmenter, commented: "Following the huge surge in late December and early January, we have now returned to same-day turnaround times for PCR testing. We are expecting an on-going baseload of PCR testing for some time to come, as the clinical issues around this disease remain of concern, in particular for the more vulnerable within the population."
"Following the science, we are also investing in more efficiency initiatives in preparation for any new variants which may unfortunately coincide with increased influenza next winter. This includes investing to lower our cost per test and to handle a higher number of tests with the same level of staff," he added.
Looking ahead, Dr Parmenter expects the rest of its business to experience an acceleration in demand.
He explained: "With the country now opening up, all of our businesses are expecting an acceleration in demand for routine healthcare services, including a period of catch-up for the backlog in diagnosis and surgery. This is likely to be a strong driver for growth over the near-term, in particular our imaging and day hospitals businesses are well-placed to deliver on the return of elective surgery."
The chief executive also revealed that Healius intends to put its strong balance sheet to use.
He commented: "With the deleveraging of our balance sheet from the sale of Healius Primary Care and with the revenue we are receiving from COVID testing, as I have said before we have a real opportunity to invest in digital leading-edge applications to permanently change for the better how consumers access diagnostic healthcare in Australia. We're already on this path with our COVID digital initiatives and I am excited about what we can and will develop over the next few years."
No guidance has been given for the remainder of FY 2022.
