Very different results from two major healthcare groups yesterday – Primary (PRY) reported an expected slide in earnings as previously announcement impairments and write downs hit home, while Sonic (SHL) had a record year thanks to solid performances here and offshore, helped nicely by currencies.
Sonic Healthcare’s full-year net profit leapt 30% to a record $451 million on the back strong growth in its European and US businesses which helped revenues crack the $5 billion mark for the first time.
Sonic Healthcare raised its final, partially franked, dividend by 7.3% to 44 cents a share from 41 cents. That took the total for the year to 74 cents a share from 70 cents in 2014-15.
The company also said yesterday that it had suspended its dividend reinvestment program – which is always a sign of a company rolling in cash and prospects.
But the company told the market not to expect a repeat this financial year and suggested investors should look for slowing earnings growth.
Analysts pointed out that the profit was aided by a lower tax rate than the market had expected. Net profit after tax was up from $347.7 million in the prior year.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 13.8% to $876.3 million. However that growth rate will more than halve to around 5% in 2016-17, the company said yesterday.
Revenue rose 20.3% to $5.05 billion, but removing the effects of currency fluctuations, revenue rose 14% to $4.79 billion. Analysts expected revenue of $4.95 billion.
Chief executive Colin Goldschmidt said it was a "banner year" for the $9 billion healthcare giant because it also pierced through the $1.00 mark for earnings per share for the first time. Earnings per share rose 27 per cent to $1.09.
Dr Goldschmidt noted that Sonic’s broad international reach – it has pathology operations throughout Europe and the United States – helped to offset a difficult year for the Australian operations. Sonic shares ended ip 6.2% at $23.51.
