Primary Health Care profit boost


Medical centre operator Primary Health Care is forecasting continued growth after posting an almost 50 per cent jump in full year profit.

Managing director Dr Edmund Bateman said earnings per share were expected to increase 20 to 25 per cent in the current financial year, underpinned by steadily increasing GP attendances, revenues and low inflation.

This was based on predictions that earnings before interest, tax, depreciation and amortisation would climb to between $370 million and $380 million in 2012/13, from $351.1 million in 2011/12.

'This outlook we think is supported by careful analysis of likely variables we see, going forward,' Dr Bateman said as the company unveiled a $116.6 million net profit for the financial year to June 30, up 49 per cent from $78.3 million in 2010/11.

'There is a continued reduction in interest expense, through hedging and margin improvements,' Dr Bateman added.

Macquarie Equities analyst Craig Collie said the result was consistent with analysts' expectations, although the guidance exceeded them.

'Guidance was two to three per cent above our expectations, which was positive,' Mr Collie told AAP.

But he said the reaction in the share price, which was up 29 cents, or 9.39 per cent ,at $3.38 at 1342 AEST, was more of a mystery.

'I can only assume that the market's expectations were well below analysts,' he said.

Primary's revenue climbed 5.3 per cent to $1.4 billion, with the company's medical centres, pathology and imaging services all recording increases.

However, revenues and earnings for the health technology division were flat.

Revenue grew 5.6 per cent across the company's 76 medical centres but the 57 larger centres were the best performers, recording a 12 per cent boost in revenue.

One new medical centre opened in 2011/12, with another expected to be up and running in the 2013 financial year.

Primary acquired 105 doctors at a cost of about $50 million and reported a GP retention rate of 93 per cent for large-scale centres, which was expected to remain stable.

Patient attendances to medical clinics increased seven per cent across all centres and 12 per cent in the large-scale centres.

Primary's pathology division was a strong performer with a 6.1 per cent increase in revenue to $785.4 million, up from from $740.1 million in the previous period.

'This is purely organic, we've had no acquisitions whatsoever,' chief financial officer Andrew Duff said.

He said cash flow would continue to improve, with interest costs reducing.

The company's $1.02 billion of debt was refinanced in October 2011.

source: skynews.com.au