Healius share price rallies amid corporate reset

An outgoing chair and a revitalised balance sheet. Healius is undergoing a makeover.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Healius Ltd (ASX: HLS) share price is rising this morning as the pathology and imaging company attempts to wipe its slate clean.

As the morning dew begins to dry, shares in the $90 million healthcare operator are up 3.8% to $1.38 — outpacing the more modest 0.75% increase mustered up by the All Ordinaries (ASX: XAO). The uptick places the company on track for a four-day green streak.

Cropped shot of a young female scientist working on her computer in the laboratory.

Image source: Getty Images

Spring cleaning sparks optimism

Spring is almost over, but not before embattled Healius breaks out the feather duster, so to speak. Yesterday, the company announced to the market that its chair, Jenny Macdonald, would be retiring at the completion of today's annual general meeting (AGM).

In her place, non-executive director Kate McKenzie will preside over Macdonald's former role until an official replacement is found. The decision to depart from the company follows nearly two years of disappointing performance for the diagnostic company, contending with the post-COVID slowdown.

The outgoing chair provided prepared comments for Healius' AGM today. Describing the reason for retiring, Macdonald stated:

Leadership stability will be crucial for Healius as it further progresses the work required to ensure that it is positioned to take advantage of the strong long term fundamentals for the Australian healthcare sector.

While we have made some important progress in the past 12 months, our plan requires stability to enable management to further progress our work and allow time for the benefits to emerge.

In stepping down as chair and opting to not seek re-election as a non-executive director of Healius, my objective is to provide stability for the business.

Investors might look at Healius more fondly today as the overhaul of its old self continues.

Refresh for the Healius share price

Healius shares have paid the price during the last two years. Since December 2021, the share price has crumbled to the tune of 72%.

The company's profit statement tells the story. In FY2022, Healius generated $292.4 million in net profits after tax. One year later, shareholders are suddenly staring at $380 million in losses.

As detailed by my colleague, James Mickleboro, Healius' deteriorating financial situation recently prompted it to raise capital at a steep discount of $1.20 per share. On 22 November, the company revealed it had secured $154 million from the institutional placement.

The funds will predominantly be used to lighten the load on Healius' balance sheet.

Today, the retail component of the capital raise opens, giving eligible shareholders the opportunity to get involved. As per this morning's announcement, new shares from the raise will be issued under a separate ticker ('HLSNB') due to the off-market takeover bid from Australian Clinical Labs (ACL).

The Healius share price is down 50.1% in 2023.

Motley Fool contributor Mitchell Lawler 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 Scott Phillips.

More on Healthcare Shares

Five healthcare workers standing together and smiling.
Healthcare Shares

3 ASX 200 healthcare shares to buy amid sector rout

The experts are backing these stocks for price growth.

Read more »

Researchers and doctors with futuristic 3D hologram overlay for body anatomy or DNA in hospital clinic.
Healthcare Shares

Are investors taking a big gamble chasing 4DX shares higher and higher?

Investor interest in this ASX healthcare tech stock is booming.

Read more »

A group of people in a corporate setting do a collective high five.
Broker Notes

3 reasons to buy Ramsay Health Care shares today

A leading analyst expects Ramsay Health Care shares to keep outperforming in the months ahead.

Read more »

Half a man's face from the nose up peers over a table.
Healthcare Shares

If I could buy only 1 ASX 200 share right now, it would be…

This stock looks underpriced and oversold to me.

Read more »

woman testing substance in laboratory dish, csl share price
Healthcare Shares

CSL shares slide again in March — but is a comeback brewing?

Brokers remain upbeat and see upside up to 95% for the biotech stock.

Read more »

A female athlete in green spandex leaps from one cliff edge to another representing 3 ASX shares that are destined to rise and be great
Broker Notes

Up 57% since February, why Telix shares could keep leaping higher in 2026

A leading analyst believes investors are undervaluing Telix shares. But why?

Read more »

A woman has a thoughtful look on her face as she studies a fan of Australian 20 dollar bills she is holding on one hand while he rest her other hand on her chin in thought.
Healthcare Shares

Is it time to get greedy with CSL shares?

This ASX healthcare giant is out of favour, but that may be where opportunity starts.

Read more »

Stressed, unhappy, and tired scientist with a headache working on a computer in a lab.
Healthcare Shares

3 ASX 200 healthcare shares at multi-year lows

Does this present a buying opportunity?

Read more »