Paragon Care (PGC) H1 2025 earnings summary

Executive summary

• Revenue for HY25 reached $1.85 billion, up 28% year-over-year, reflecting the full integration of CH2 Holdings and Oborne Health Supplies, and creating a leading healthcare wholesaler and distributor across Australia, New Zealand, and Asia.

• EBITDA increased 103% to $47.5 million, and Net Profit After Tax rose 85.9% to $13.2 million compared to HY24; net profit after tax before PPA amortisation was $16.1 million.

• The merger with CH2 Holdings was completed in June 2024, with results now reflecting the combined entity; integration of CH2, Oborne, and ParagonCare businesses is progressing as planned, with $5 million in synergies targeted for FY25 and $12 million for FY26.

• No interim dividend declared for HY25 to retain cash for future investments; focus remains on integration and leveraging synergies from recent acquisitions.

Financial highlights

• Revenue increased 28% to $1,850.4m compared to $1,440.8m in the prior year period, driven by acquisitions and market share gains.

• EBITDA more than doubled to $47.5m (HY24: $23.4m); EBIT was $32.2 million.

• Gross margin improved 111% to $163.5m, but gross margin percentage declined due to revenue mix; $650k in one-off integration costs were incurred.

• Depreciation and amortisation rose by $4.2m due to recent acquisitions; finance costs increased with higher debt levels.

• Net debt increased to $226.6m, up 28.2% from June 2024, with a net debt/EBITDA ratio of 2.39; $84m unused bank facility remains.

Outlook and guidance

• Continued focus on integration, operational efficiency, and cost rationalisation; cross-selling and bundled offerings to drive organic growth.

• Acquisition pipeline in place for further expansion and growth opportunities.

• Borrowings and finance costs expected to revert to historical levels in the second half; additional income tax expense of $2.2m may be recognized in H2 FY25 due to a change in thin capitalisation treatment.