Healius shares drop over 6% after mixed first-half result
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The news: Healius shares shed more than 6% after the pathology services provider reported a first-half result that roughly met market estimates but was party driven by its imaging business, which is being sold.
The numbers: Healius shares were down 6.2% to $1.36 at 1:20pm AEDT.
The company narrowed its half-year net loss to $12.8 million from $635.8 million in the prior corresponding period, meeting consensus forecasts.
Group revenue of $934 million marked a 10% increase year on year and beat market estimates of $908 million.
Pathology revenue — excluding Healius' bioanalytics lab Agilex — grew by 7% to $641.7 million, while the group's imaging business Lumus Imaging saw revenue growth of 13.3% to $286.5 million.
However, Agilex saw revenue decline to $18.8 million from $19 million a year earlier. The company attributed the retreat to a "slowing market and inherent uncertainty which has in turn reduced new drug development programs globally", following the impact of the US election in November.
The context: Healius said it expects pathology volume and revenue growth to remain consistent during the second half of the year, with imaging exams up 12% and revenue up 12.4% for January and February.
The company noted that it is "significantly progressed" with plans and actions for the simplification of its pathology operations following the sale of Lumus Imaging, announced in September.
RBC Capital Markets analyst Craig Wong-Pan said the market could view this it as a "slight weaker result" given the group performance was driven by its outgoing imaging business.
Jarden analysts said the result saw "no obvious upside" with the most unexpected outcome being a further deterioration in its Healius' pathology earnings margins.
The sources: ASX, Jarden research, RBC Capital Markets research
