Healius (HLS) H2 2024 earnings summary

Executive summary

• Group BAU revenue increased 6.1% to AUD 1.74 billion for FY24, with underlying EBITDA at AUD 346.6 million and underlying EBIT of AUD 65.4 million, both at the top end of guidance.

• Covid-related revenue declined by AUD 61 million, reducing EBIT by AUD 30.4 million year-over-year.

• Transformation initiatives delivered AUD 20.4 million in net benefits, exceeding guidance.

• The Lumus Imaging sale process is well advanced, with strong buyer interest and outcome expected soon.

• Net debt reduced to AUD 361 million, with gearing at 4.1x and interest cover at 3.1x, both within covenant limits.

Financial highlights

• Underlying EBITDA was AUD 346.6 million, and underlying EBIT was AUD 65.4 million for FY24; reported EBIT was a loss of AUD 579.3 million due to a AUD 603.2 million impairment in Pathology.

• Pathology BAU revenue grew 4.7% (including Agilex), with COVID revenue down AUD 61 million.

• Lumus Imaging gross revenue up 5.7% to AUD 519 million, with community and hospital segments up over 12%; EBIT margin improved to 8.1% for FY24.

• Agilex revenue up 20.8% to AUD 39.5 million, EBITDA more than doubled, and EBIT margin increased to 12.9%.

• Cash conversion at 85% (operating cash flows as % of EBITDA, less non-underlying items and discontinued ops).

Outlook and guidance

• Pathology volumes trending slightly above 4% growth in early FY25.

• Imaging volumes up ~15% and revenue up 12% year-to-date.

• Agilex has a strong pipeline, with a significant portion of 1H FY25 revenue under contract and robust growth expected.

• Management aims to resume dividends as soon as practicable and expects to remain within bank covenants in FY25.

• Focus remains on embedding transformation in pathology and driving technology-enabled efficiency.