Spelling bee whizzes: EBOS and Alcidion are today’s reporting champs, for spelling out ‘enhanced shareholder satiation amid exogenous adversities’. Pic: Getty Images<\/p>\n
EBOS shares soar up to 13% on the right growth prescription
\nAlcidion\u2019s vital signs read well
\nAvita Medical\u2019s Permeaderm leaves cadaver material for dead<\/p>\n
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In the main, today\u2019s crop of full-year reports from the healthcare sector perpetuates yesterday\u2019s rosier signals from the recovering CSL (ASX:CSL)<\/a> and Cochlear (ASX:COH)<\/a>.<\/p>\n While chemist owner and pet food maker EBOS Group (ASX:EBO)<\/a> faces the usual challenges, the Trans-Tasman entity has hit the right note with its largely \u2018no surprises\u2019 disclosures.<\/p>\n Management\u2019s messaging bodes well for rival Chemist Warehouse owner Sigma Healthcare (ASX:SIG)<\/a>, which reports next Wednesday.<\/p>\n EBOS boosted net earnings by 4.7% to $225 million, on a 9.9% revenue boost to $13.48 billion. That\u2019s Aussie dollars, by the way.<\/p>\n Underlying EBITDA grew 5% to $614 million.<\/p>\n Locally, EBOS owns the Terry White Chemmart chain and the Symbion wholesale drug distribution business.<\/p>\n Management cites broad-based growth across healthcare and the animal stuff, supported by recent acquisitions.<\/p>\n The company also eked out the profit growth \u201cdespite elevated fuel costs and foreign exchange headwinds\u201d.<\/p>\n The healthcare arm grew revenue by 8.5% to $12.58 billion, with underlying earnings up 3.2%.<\/p>\n This was driven partly by \u2013 you guessed it \u2013 demand for GLP-1 fat-busting prescriptions. But\u00a0 \u201cgrowth is moderating, as expected\u201d.<\/p>\n Recent reforms to Australia\u2019s Community Service Obligation \u2013 the prescription drug delivery arrangement between the federal government and the industry \u2013 also should help.<\/p>\n \u00a0<\/p>\n \u2018Big Build\u2019 delivers<\/p>\n EBOS CEO Adam Hall notes the company delivered the biggest infrastructure upgrade in its history: a $360 million revamp of its distribution centres.<\/p>\n The less mature animal care arm boosted revenue by 35%, to $907 million. The division\u2019s underlying earnings grew 12% to $138m, across both the branded and wholesale portfolio.<\/p>\n EBOS owns the Black Hawk and VitaPet brands and last year acquired SVS Veterinary Supplies for a base $115 million.<\/p>\n Reflecting the \u201clower capital intensity\u201d in the current year, management guides to underlying EBITDA of $635-655 million, 3.4-6.6% \u00a0higher.<\/p>\n Management cites a m\u00e9lange of factors including increased productivity, \u201cexpanded\u201d retail pharmacy earnings and customer and product growth within animal care.<\/p>\n In a note, broker Citi opines the earnings guidance could be conservative, \u201cgiven the new distribution centre network is now complete and can drive benefits over the coming two to three years.\u201d<\/p>\n Given the stock soared up to 13% today, investors must concur.<\/p>\n \u00a0<\/p>\n Alcidion\u2019s vital signs improve as profit jumps 38%<\/p>\n The bedside charts bode well for UK-centric hospital supplier Alcidion (ASX:ALC)<\/a>, which posted record earnings in a \u201cmilestone year\u201d.<\/p>\n Revenue surged 27% to $51.6 million, with underlying earnings up 34% to $6.8m.<\/p>\n Net profit jumped 38% to $2.28 million, sending Alcidion shares up as much as 8%.<\/p>\n The company also cites annual recurring revenue of $38.3 million, up 34%.<\/p>\n \u201cThroughout the year we continued to build and expand relationships with our enterprise customers, validated by over $150 million of new and renewal contracts \u2026 won over the past two \u00a0years,\u201d CEO Kate Quirke said.<\/p>\n 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.<\/p>\n Without putting a number on it, the company expects revenue and earnings to grow in the current year.<\/p>\n On June 29 Alcidion completed the acquisition of\u00a0 Telstra\u2019s hospital IT business, Kyra Flow.<\/p>\n The company said the acquisition was immediately earnings accretive \u201cand provides opportunities to introduce Miya Precision to Kyra customers and realise operating efficiencies as integration progresses.\u201d<\/p>\n \u00a0<\/p>\n \u2018We\u2019re improving\u2019, says Healius<\/p>\n Pathology chain Healius (ASX:HLS)<\/a> hasn\u2019t walked away with the spelling bee award, but vies for a \u2018much improved\u2019 ribbon.<\/p>\n Attesting\u00a0to the tough times in the sector, Healius reported a $415 million bottom-line loss, for the full year to June 30, 2026.<\/p>\n But management also hints at better conditions in the second half, as measured by improved pathology margins.<\/p>\n Operating under brands including Dorevitch and QML, Healius operates 72 labs and 1881 collection centres nationally.<\/p>\n Full year revenue edged up 2.2%, to $1.372 billion.<\/p>\n The \u2018underlying loss\u2019 narrowed to $13.2 million, from $24.8m previously.<\/p>\n But \u2018group underlying EBIT\u2019 improved to $30.2m from $13.1m previously \u2013 so take your pick.<\/p>\n Healius called out similar headwinds to Australian Clinical Labs (ASX:ACL)<\/a>, which reported on Monday.<\/p>\n Management notes that GP attendances were down 0.9% relative to the previous 12 months, with face-to-face attendances down 2.7%.<\/p>\n Visits to the doc drive pathology referrals.<\/p>\n \u201cThe 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.\u201d<\/p>\n That\u2019s enough to piss anyone off!<\/p>\n As with ACL on Monday, Healius also called out the material increase in labour rates. This was driven by the Fair Work Commission\u2019s decree to fix up gender-based underpayments.<\/p>\n \u201cIndustry fundamentals remain positive, supported by growing healthcare demand from an ageing population, rising chronic disease and increasing health complexity,\u201d management chirped.<\/p>\n \u201cPathology remains central to disease prevention, diagnosis, and treatment, underpinning expected medium-to-long-term growth.\u201d<\/p>\n Meanwhile, CSL shares this morning gained close to 5% more, augmenting yesterday\u2019s 17% gain.<\/p>\n Spell: \u2018naysayers, begone\u2019.<\/p>\n \u00a0<\/p>\n Avita shares soar 26% on trial news<\/p>\n