Healius shares extend losses as it receives remuneration strike
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More news: Healius shares extended losses on the ASX as the healthcare services provider's shareholders voted against the adoption of its remuneration report at today's annual general meeting.
Shares were down 16.2% to $1.33 by 1:45pm AEDT.
About 55% of shareholders voted against the resolution after Healius' new chair Kate McKenzie flagged that the board had received a "lower than expected vote" during her AGM remarks.
Elsewhere, shareholders supported resolutions to re-elect McKenzie and fellow director Sally Evans to the board.
Healius shares tank as govt funding cuts could lead to laboratory closures
The news: Healius shares dived in early trading on the ASX as the healthcare services provider conducted its annual general meeting and warned that it could close laboratories if the government cut funding for some tests.
The numbers: Healius shares were down 9% to $1.45 by midday AEDT, making it the worst performing stock across the ASX 200.
The context: During the AGM, its chief executive Paul Anderson said the company anticipated a "material increase in pathology earnings in 2H25".
However, he noted that the Government was exploring funding cuts to both Vitamin B12 and urine tests which could lead to closing collection centres and laboratories.
The company gave a trading update during the meeting and said that pathology volumes increased 4.5% for the year to date, with revenues growing by 5.9%.
However, the it noted that this "does not translate immediately to earnings" due to its investment in growing revenue, labour cost pressures and other inflationary increases.
Healius chair Kate McKenzie told shareholders that the board has received a "lower than expected vote" for the adoption of its remuneration report.
What they said: On potential government funding cuts Anderson said: "Without full and fair funding, pathology providers will have little choice but to introduce co-payments or close collection centres and laboratories".
"Neither is a palatable choice when we know that pathology is the last remaining bastion of bulk billed health care," he said.
On the remuneration report vote, McKenzie said: "We believe this is primarily due to the bespoke nature of the CEO remuneration package that falls outside the expected, or more usual split, between cash and equity components and the incentive targets".
"Your board believes that this was, and remains for now, the right arrangement to implement the change needed through the completion of the sale of Lumus, the simplified operating model and the return to sustainable pathology margins which will ultimately deliver value to shareholders," she said.
The sources: ASX announcement, ASX announcement
