Healthia (ASX: HLA) shareholders have voted with their wallets firmly in favour of the allied healthcare provider’s expansion into optometry with the Company successfully raising $13.2m from an Entitlement Offer to fund their acquisition of The Optical Company (TOC).
The $13.2m from shareholders forms part of the $43m acquisition to proceed, adding 41 optometry clinics and a frame distribution business to the Healthia network of what will soon be 194 businesses predominantly covering podiatry, physiotherapy and optometry.
“Speaking with shareholders over the past fortnight, we are delighted to see others as excited as we are for the launch of our new Eyes & Ears division,” said Healthia CEO Wesley Coote.
“This expansion into optometry with the acquisition of TOC’s 41 clinics and frames distribution business will complement our Feet & Ankles and Body & Minds divisions, enabling Healthia to further deliver exceptional patient outcomes across all of Healthia’s allied healthcare services.”
The addition of optometry is tipped to be popular given there are more than 13.2 million Australians that suffer from some type of long-term eye disease. The prevalence of wearing glasses is further driven by Australia’s aging population and becoming more common in younger generations due to increased screen time in front of computers and smartphones.
Highlighting Healthia’s interest in the optometry market is the margins forecast, with the TOC having delivered 20% EBITDA margins which is comparable to Healthia’s 24% from podiatry and 16% from physiotherapy.
Once integrated into their network, Healthia has plans to roll out audiology services into their optometry clinics which will follow a similar strategy employed by the Company to maximise floorspace. This has been done in various Healthia locations where physios and podiatrists are able to co-locate within the same venue while other podiatry clinics are co-located within retail footwear stores.
Following this business model, Healthia has seen substantial growth and profitability since listing on the ASX, including strong FY20 results The Company reported a 46.2% increase in revenue to $96.3m and 36.9% increase in underlying NPATA $2.69m.
With most services offered by Healthia falling within extras cover for private health insurance, the Company traditionally has a strong end to each calendar year as patients utilise services, like getting new glasses, before their coverage lapses for the year.
By entering the optometry market, Healthia has increased its annual addressable market from $6.5 billion to $9.8 billion where they have opportunities to secure greater market share through cross-referral between allied health services.
*Owners of this website are shareholders in a company mentioned in this article and have been engaged by them to assist in investor communications
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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