Health Check: More ASX healthcare winners emerge from the reporting fiesta

Spelling bee whizzes: EBOS and Alcidion are today’s reporting champs, for spelling out ‘enhanced shareholder satiation amid exogenous adversities’. Pic: Getty Images

EBOS shares soar up to 13% on the right growth prescription
Alcidion’s vital signs read well
Avita Medical’s Permeaderm leaves cadaver material for dead

 

In the main, today’s crop of full-year reports from the healthcare sector perpetuates yesterday’s rosier signals from the recovering CSL (ASX:CSL) and Cochlear (ASX:COH).

While chemist owner and pet food maker EBOS Group (ASX:EBO) faces the usual challenges, the Trans-Tasman entity has hit the right note with its largely ‘no surprises’ disclosures.

Management’s messaging bodes well for rival Chemist Warehouse owner Sigma Healthcare (ASX:SIG), which reports next Wednesday.

EBOS boosted net earnings by 4.7% to $225 million, on a 9.9% revenue boost to $13.48 billion. That’s Aussie dollars, by the way.

Underlying EBITDA grew 5% to $614 million.

Locally, EBOS owns the Terry White Chemmart chain and the Symbion wholesale drug distribution business.

Management cites broad-based growth across healthcare and the animal stuff, supported by recent acquisitions.

The company also eked out the profit growth “despite elevated fuel costs and foreign exchange headwinds”.

The healthcare arm grew revenue by 8.5% to $12.58 billion, with underlying earnings up 3.2%.

This was driven partly by – you guessed it – demand for GLP-1 fat-busting prescriptions. But  “growth is moderating, as expected”.

Recent reforms to Australia’s Community Service Obligation – the prescription drug delivery arrangement between the federal government and the industry – also should help.

 

‘Big Build’ delivers

EBOS CEO Adam Hall notes the company delivered the biggest infrastructure upgrade in its history: a $360 million revamp of its distribution centres.

The less mature animal care arm boosted revenue by 35%, to $907 million. The division’s underlying earnings grew 12% to $138m, across both the branded and wholesale portfolio.

EBOS owns the Black Hawk and VitaPet brands and last year acquired SVS Veterinary Supplies for a base $115 million.

Reflecting the “lower capital intensity” in the current year, management guides to underlying EBITDA of $635-655 million, 3.4-6.6%  higher.

Management cites a mélange of factors including increased productivity, “expanded” retail pharmacy earnings and customer and product growth within animal care.

In a note, broker Citi opines the earnings guidance could be conservative, “given the new distribution centre network is now complete and can drive benefits over the coming two to three years.”

Given the stock soared up to 13% today, investors must concur.

 

Alcidion’s vital signs improve as profit jumps 38%

The bedside charts bode well for UK-centric hospital supplier Alcidion (ASX:ALC), which posted record earnings in a “milestone year”.

Revenue surged 27% to $51.6 million, with underlying earnings up 34% to $6.8m.

Net profit jumped 38% to $2.28 million, sending Alcidion shares up as much as 8%.

The company also cites annual recurring revenue of $38.3 million, up 34%.

“Throughout the year we continued to build and expand relationships with our enterprise customers, validated by over $150 million of new and renewal contracts … won over the past two  years,” CEO Kate Quirke said.

Management cites contract wins including an extension with Australian Defence Force supplier Leidos and the UK National Health Service trusts University Hospitals Sussex and North Cumbria.

Without putting a number on it, the company expects revenue and earnings to grow in the current year.

On June 29 Alcidion completed the acquisition of  Telstra’s hospital IT business, Kyra Flow.

The company said the acquisition was immediately earnings accretive “and provides opportunities to introduce Miya Precision to Kyra customers and realise operating efficiencies as integration progresses.”

 

‘We’re improving’, says Healius

Pathology chain Healius (ASX:HLS) hasn’t walked away with the spelling bee award, but vies for a ‘much improved’ ribbon.

Attesting to the tough times in the sector, Healius reported a $415 million bottom-line loss, for the full year to June 30, 2026.

But management also hints at better conditions in the second half, as measured by improved pathology margins.

Operating under brands including Dorevitch and QML, Healius operates 72 labs and 1881 collection centres nationally.

Full year revenue edged up 2.2%, to $1.372 billion.

The ‘underlying loss’ narrowed to $13.2 million, from $24.8m previously.

But ‘group underlying EBIT’ improved to $30.2m from $13.1m previously – so take your pick.

Healius called out similar headwinds to Australian Clinical Labs (ASX:ACL), which reported on Monday.

Management notes that GP attendances were down 0.9% relative to the previous 12 months, with face-to-face attendances down 2.7%.

Visits to the doc drive pathology referrals.

“The majority of [pathology] items on the Medicare Benefits Schedule continue to receive no indexation, while changes to criteria for vitamin B12 and urine testing have negatively impacted volumes and further reduced funding.”

That’s enough to piss anyone off!

As with ACL on Monday, Healius also called out the material increase in labour rates. This was driven by the Fair Work Commission’s decree to fix up gender-based underpayments.

“Industry fundamentals remain positive, supported by growing healthcare demand from an ageing population, rising chronic disease and increasing health complexity,” management chirped.

“Pathology remains central to disease prevention, diagnosis, and treatment, underpinning expected medium-to-long-term growth.”

Meanwhile, CSL shares this morning gained close to 5% more, augmenting yesterday’s 17% gain.

Spell: ‘naysayers, begone’.

 

Avita shares soar 26% on trial news

Burns and wound care house Avita Medical (ASX:AVH) says its biosynthetic wound matrix Permeaderm results in far less preparation time, but with “comparable clinical outcomes” to standard ‘cadaveric’ allograft material.

Crucially this results in a 70% “economic advantage”, according to Avita’s multi-centre, post-marketing controlled study.

This is based on product cost per percent of total body surface area (TBSA) treated.

Permeaderm is a biosynthetic dressing to be applied temporarily while the wound is evaluated.

Avita sells this product in the US via a licensing compact, with Stedical Scientific.

Currently cadaver skin is used for this dressing function. But this material is expensive, requires careful tracking and needs to be frozen.

The study reported a 96% reduction in preparation time “and comparable clinical outcomes to allograft including graft take, wound healing, and safety.”

Getting down and dirty here, Permeaderm costs US$148.7 for every 1% of TBSA treated, compared with US$497.10 for an allograft.

Yep! That’s a Down Down saving of 70%.

“Temporary wound coverage is a critical step between excision and definitive closure when a wound bed is not yet ready for autograft placement,” said burns surgeon and study investigator Anju Saraswat, of the Atrium Health Wake Forest Baptist Burn Center.

“… by eliminating tissue bank logistics and preparation time, Permeaderm offers a more efficient approach to wound temporisation without any compromise to healing outcomes and reducing cost.”

The study enrolled 40 patients across 11 US burns centres, with wounds up to 30% TBSA.

Permeaderm is an add-on to Avita’s current portfolio that centres on its flagship Recell spray-on skin treatment.

 

Aroa takes the direct approach

Still on wound care, Aroa Biosurgery (ASX:ARX) CEO Brian Ward notes that the NZ-based company now gleans around 60% of its revenue from direct sales.

As he told today’s AGM in Auckland, “this is significantly more than just a few years ago and is a trend that we plan to see continue into our future”.

Ward was referring to the diminishing relative contribution from the Nasdaq-listed TELA Bio, which distributes its Ovitex range of reinforced tissue matrices for abdominal hernia and breast surgery.

Aroa’s business is split between direct sales of three products for soft tissue and complex wounds, led by the “star” Myriad range.

The other offerings are Endoform (acute and chronic wounds) and Symphony (complex wounds).

In the year to March 2026, Myriad sales grew by 54%, with a 90% plus gross margin.

“[Myriad]  is, and will continue to be, the engine room of our business for some time,” Ward told investors.

He dubbed the year just gone as a “very good one”. Revenue grew 23% to NZ$104 million, while normalised EBITDA reached NZ$13m.

“These results exceeded the financial guidance provided at the beginning of [the current financial year] and marked Aroa’s second consecutive year of positive normalised EBITDA.”

Current year Ovitex sales should be flat because of  “hospital contracting headwinds”.

But Ward stressed that TELA Bio continued to be an important partner for Aroa.

“In the early years, much of our revenue was derived from Ovitex products sold and distributed by TELA Bio,” he said.

“That provided the significant cash flows we needed to develop our own sales and marketing workforce and means that we did not need additional capital.

“This model continues.”

 

At Stockhead, we tell it as it is. While Aroa is a Stockhead advertiser, the company did not sponsor this article.