Sonic Healthcare Ltd (ASX:SHL) has released their results for the half-year ending 31st December 2015. Backed by growth in revenue, profits, and international earnings, the results remained relatively upbeat for the period.
Revenue up 21.8%
The healthcare service provider reported revenue of A$2.4billion for the period, a 21.8% rise to the PCP. Alongside 8% growth in NPAT, to A$188million.
This expansion in revenue for the company was particularly supported by the growth in international earnings. With 59% of total earnings comprised of international revenue (A$1.4billion), a 7% rise to the PCP. Europe was the biggest contributor to international revenue, making up 36% (A$887million) of total earnings for the period. Growth in Europe particularly came from the UK, with Sonic’s JV, Health Laboratory Services, according to CEO Dr Colin Goldschmidt, “exceeding expectations”
The USA followed suit, contributing 22% to total revenue (A$540million). Dr Colin Goldschmidt attributes the USA’s “double-digit earnings growth” to the “Successful restructure of the CBL Path business completed last financial year”. Australia contributed 25% (A$609million) to overall statutory revenue for the period, a 5.2% rise in statutory revenue to the PCP.
However, fees and volumes charges were impacted by the Medicare changes from the 1st of November 2014.
Gearing Ratio Increased
Sonic’s gearing ratio has grown to 40.7% over the period, from 37.3% to the prior corresponding period. This is primarily due to an increase in FX changes (-A$90million), along with acquisitions.
As at the 31st December 2015, Sonic’s cash balance is A$256.4million, a 34% increase to the PCP.
The board of Sonic have declared an interim, 30% franked dividend of $0.30cents, with the Ex-Dividend and Payment date on the 3rd of March and 6th of April 2016 respectively. This is a 3.4% increase to the PCP (H1FY15:$0.29cents).
Sonic expects a full year FY16 reported EBITDA between the range of A$870-900million. With growth continuing to be driven internationally, the company expects particularly strong earnings growth from the USA, Germany, UK, Switzerland and Belgium.
As at 11.50am (AEDT), SHL has gained 2.8%, to $18.64.
Author: Ben Khouri
Feb 17, 2016
Ben Khouri is a financial editor for Wise-Owl with a particular focus on the top ASX 300 companies. Having a vast background in economics and finance, Ben provides financial commentary & analysis as well as global market updates, which guide investors in devising investment strategies. Ben specialises in analysing economic data and global events from around the world and examines the impacts they have on the major equity markets.