Allied health company Healthia (ASX: HLA) has bounced back from the pandemic in style with organic growth across their network being driven by new services introduced to existing clinics and a workforce buoyed with enthusiasm which contributed to a 48.2% increase in earnings.
For the Half Year ended 31 December 2022, Healthia reported $124.9 million in underlying revenue which represented a 34.3% increase on the previous year. The boost should come as no surprise with Managing Director Wesley Coote reporting in November 2022 that business across the network had mostly returned to pre-pandemic trading. Patient cancellations and high staff absenteeism impacted the Company’s results over the previous two years.
The strong trading flowed down to Healthia’s earnings with underlying EBITDA of $18.1m representing a 48.2% increase on last year. Underlying NPATA came in at $9.2m, a 48.3% increase. Shareholders were rewarded with a 2.0 cents per share interim dividend with a fully underwritten Dividend Reinvestment Plan.
“While we continued to experience disruptions from COVID-19 during the start of this financial year, I’m extremely pleased with the results we have achieved for H123, and the efforts of the Healthia team,” said Coote.
Healthia is better known in healthcare circles for their ability to acquire underperforming allied health clinics, and then improve the businesses with additional services and vertical integration for accounting, marketing, human resources and supply chain services.
But for the FY23 Half Year, Healthia’s 5.4% organic growth was on the higher end of their 3-6% expectation, while even further organic growth was witnessed beyond the reporting period.
“Organic Revenue for the period 1 November 2022 to 31 January 2023 is up 7.6% on the prior corresponding period. We expect to continue to see this level of trading for the remainder of FY23.”
The growth is being driven by Healthia’s rollout of new services into existing clinics, something that was limited during the pandemic due to travel restrictions. Across the Half Year, $1.9m was deployed to expand service offerings in existing locations.
This might include introducing podiatry services and/or hand therapy services within a physiotherapy clinic.
Workforce enthusiasm is on full show across the Healthia network of more than 320 clinics, with the lift in trading coinciding with their Inspired 2022 conference. The event was the first national conference held by Healthia in three years and was attended by more than 1,000 team members.
Across the weekend, Healthia provided industry education and professional development with experts flown in from around the world to share insights on the latest allied health research and trends. Not only did this drive an increase in trading in the aftermath, it is also a key pillar of Healthia’s staff retention strategies to ensure leading talent progresses through to clinic ownership.
Looking ahead, the 7.6% organic growth anticipated by Coote will be driven by more services introduced to existing locations, upskilling of the workforce and its Technology Roadmap. Which will provide products and services to patients and customers in an efficient, timely and cost effective way.
Coote confirmed that Healthia is on track to deliver more than $40 million in underlying EBITDA for FY23.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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