Is the notion of the typical Australian stacking on the ‘isobars’ and indulging in a few too many ‘lockdown lagers’ during their in-house detention just another case of fake news?
In reality, says Healthia (ASX: HLA) CEO Wesley Coote, incarcerated citizens were more likely to be exercising more often and assiduously holding to their appointments with health professionals such as podiatrists and physiotherapists.
“In Brisbane, where I live, people were walking as a family and exercising more than ever,” Mr Coote says.
“They couldn’t spend money on overseas holidays, so they spent more time looking after themselves and making sure they got to their appointments.”
As deemed essential services, Healthia’s clinics largely kept their doors open during the pandemic, with minimum tweaking of rostering and hours. Mr Coote says the company was also in the right place at the right time because the working-from-home requirement created a new breed of client: those with stiff necks and sore backs from ergonomically poor, makeshift desks and chairs.
In addition, podiatry clinics benefited from folk injuring their feet after exercising more vigorously than usual. With their rhythm of life returning to some semblance of normality, Mr Coote reflects that Australians “were acting less affected” as the lockdowns wore on.
So while Healthia’s business declined up to 30% during the initial national lockdowns in April, it was only 16% off the pace during Victoria’s second wave (where 24 of Healthia’s then 150 clinics were located).
“When one of our Victorian clinics started cancelling and rescheduling appointments, patients rang us to express their frustrations and disappointment that they could not be seen,” he says. “We worked out pretty quickly that they wanted a business as usual approach.”
This ‘keep calm and carry on’ message is also resonating at Healthia’s top corporate echelons. At the company’s (virtual) AGM held on November 30, shareholders were told that organic revenue growth gained 14% in the 2020-21 financial year to date (July 1 to October 31).
The company recorded 1.8% revenue growth for the year to June 30 2020 – or 5.3% excluding the impact of the COVID-hit months of April and May. “With restrictions now easing in Victoria, we are pleased to report that from November these clinics are also trading at pre COVID-19 levels,” Mr Coote told investors.
Elsewhere in the health sector telehealth played a key role in maintaining consumer engagement during the pandemic with many patients using the tool for the first time. Healthia also offered the service, but, interestingly, the take-up was small.
“People preferred to come into the clinic for our services as most of our services are delivered with better clinical outcomes face to face,” Mr Coote says.
“We used it mainly to let the patient know we had safety measures in place for them. It then gave them comfort to come back into the clinic.”
Post-pandemic, Healthia has now broadened its reach into optometry with the $43 million purchase of The Optical Company (TOC). Mr Coote notes that optometrists were hard hit in the national lockdown, as they closed for all but urgent or critical work (less arduous rules were implemented during the later Victorian lockdown).
“They [TOC’s 41outlets] are now seeing really good like-for-like sales growth of +5%.”
Despite the TOC purchase, the company’s biggest to date, management has revised its expected spend on practice acquisitions from $15 million annually, to $20m.
“We still have a lot of acquisition opportunities on the go and we’re likely to acquire one or two a month into the New Year,” Mr Coote says.
“Inquiries [from potential vendors] have increased since COVID-19 and we believe that’s because they are placing a lot more value on being part of a larger group in these uncertain times.
“After all, it’s been a hell of a time for a small business owner.”
*Owners of this website are shareholders in a company mentioned in this article and have been engaged by them to assist in investor communications
Tim Boreham edits The New Criterion
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