Australia’s fastest growing allied health company has gained further momentum as Healthia (ASX: HLA) expands their presence in Victoria and Queensland with the addition of 16 allied health clinics, taking their nationwide network beyond 320 across Australia and New Zealand.
The newest additions to the Healthia network include Melbourne Hand Rehab which operates 8 hand therapy clinics in Victoria, Kosmac & Clemens Optometrists which operate 6 optometry clinics in Victoria and Vision Eye Health which operate 2 optometry clinics in Queensland.
Combined, the businesses were acquired by Healthia for $13.97m. Of that though, only $10.98m will be paid in cash upfront from Healthia’s free cash flow and finance facility. The remainder comprises $1.9m deferred and $1.09m in Clinic Class Shares which enable the vendors to retain profits generated by their respective clinics.
Settlement is expected before 30 April 2023 with those earnings-accretive clinics to be partially captured in Healthia’s FY23 results.
On a pro-forma basis though, the 16 clinics are expected to contribute $10.5 million in underlying revenue to Healthia, and $2.94m in underlying EBITDA on an annualised basis.
The deployed capital is part of Healthia’s strategy of consolidating the hugely fragmented allied health industry, commiting to deploy a minimum of $20 million per annum towards acquisition growth. The acquired clinics typically witness organic growth in the years post-acquisition thanks to Healthia’s support services that include marketing, accounting, human resources and supply chain.
The acquisitions come two weeks after Healthia confirmed their FY23 guidance where the Company is on track to deliver at least $122.5m underlying revenue for the Half Year ended 31 December 2022. This would represent a 31.7% increase on the previous year.
The boost in revenue comes as Healthia CEO Wesley Coote was delighted to report that trading across the network has returned towards pre-pandemic levels, without the abnormally high staff absenteeism and patient cancellations endured over the past two years.
Subsequently, the improved trading conditions have contributed to Healthia’s earnings where the Company expects to report underlying EBITDA of at least $17.7m for the Half Year, a 45% increase by conservative estimates.
“With the improved trading that we witnessed in the second half of H1, Healthia is pleased to reaffirm our Full Year FY23 guidance of delivering at least $40 million in underlying EBITDA,” said Coote.
“These new acquisitions provide an excellent opportunity to drive organic growth in the clinics with integration into the Healthia network and we are proud to have again delivered on our annual target to deploy at least $20 million towards these earnings accretive opportunities.”
Since listing on the ASX in 2018 with 104 allied health clinics in the network, these 16 newly acquired clinics take that number beyond 320 in less than five years since listing.
Marking the rising popularity of Healthia within the allied health industry, the Company has just welcomed 120 new team members to its Graduate Program which offers clear pathways toward clinic ownership within the Healthia network.
Healthia will report its audited Half Year results in the coming weeks and invites investors to join their mailing list here.
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