Shareholders of allied health company Healthia (ASX: HLA) will be pleased to see its Board of Directors committing to their expansion plans by opening up their wallets, backing the Company’s upwards trajectory by purchasing a large parcel of shares themselves.
This is exactly what Board members Glen Richards, Paul Wilson, Lisa Dalton, and Wesley Coote did when purchasing $2.85 million of Healthia shares last week following the Company’s $88.4m acquisition of Back in Motion Health Group.
With that acquisition, Healthia acquired 64 physiotherapy clinics with 51 located in Australia and 13 in New Zealand, taking the total number of clinics under their Bodies & Minds division to 122. It also elevated Healthia to become Australia’s largest provider of physiotherapy services.
In total, the acquisition took their total portfolio of allied health businesses to 281 which represents 170% growth since listing on the ASX in 2018 with 104. Driving the continued acquisitions spree has been the consolidation of a hugely fragmented industry of podiatry, physiotherapy and optometry clinics.
Instead, by joining forces with Healthia, small business clinician-operators are able to gain access to Healthia’s back office support services and network cross referrals which contributed to 9.1% organic revenue growth in FY21 which delivered a 91% increase in underlying NPATA of $8.8 million.
Interestingly, and despite their large presence via owned brands MyFoot Dr, Allsports Physiotherapy and The Optical Company, the addition of Back in Motion marks Healthia’s first entry into New Zealand.
“We definitely want to grow in physiotherapy over there and we’d love to get into podiatry,” said Healthia CEO, Wesley Coote at a recent investor briefing.
“And at some point optical as well because they are the three disciplines that we have here in Australia and we see that we can replicate what we’re doing here quite nicely in New Zealand.”
Replication may be the key to Healthia’s growth in New Zealand where the market is very similar to Australia in terms of sporting activity and healthcare.
With a population of 5.1 million people, 94% of young people play a form of sport in any given week while 72% of adults participate in play, active recreation and sports. The most popular sport is rugby union, which Healthia is deeply entrenched in within Australia where they are the naming partners of the Allsports Physiotherapy Hospital Challenge Cup, the second tier rugby competition in Queensland.
As naming partners with Queensland Rugby, AllSports Physiotherapy are actively marketed across all Queensland Rugby leagues, ensuring that the clinics are regularly the first port of call for amateur atheletes seeking physiotherapy services.
This was just one reason why Healthia’s Bodies & Minds division led the Company’s organic revenue growth with 9.9% compared to Feet & Ankles with 8.3%.
Further making the New Zealand market attractive for growth is the approximately 1.4 million residents that are covered by private health insurance as of 2019 according to the NZ Ministry of Health.
As more small clinic owners seek centralised support to alleviate themselves of administrative tasks that enable them to focus on their patients, Healthia’s acquisition pipeline has been growing rapidly since the onset of COVID-19. This has become even more popular courtesy of their Clinic Class Shares model where vendors are able to retain a share of rising profits that are generated through their organic growth initiatives such as co-location and cross referrals.
Committed to spending $20m per annum on acquisitions growth, that pipeline will only further expand as more NZ-based allied health professionals start seeing the growth generated from Healthia’s newest clinics across the Tasman.
*Owners of this website are shareholders in a company mentioned in this article and have been engaged by them to assist in investor communications
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