Paragon Care (PGC) H2 2024 earnings summary

Executive summary

• Completed merger between CH2 and Paragon in June 2024, creating a fully integrated healthcare business with expanded product range and geographic reach across Australia, New Zealand, and Asia Pacific, including Japan, Thailand, Vietnam, Korea, and the Philippines.

• New organizational structure with six sales streams and a shared service model implemented from July 1, with a refreshed board and management team blending leadership from both legacy companies.

• Integration progressing rapidly, with all business units targeted for full ERP integration by June 2025 and annual synergies of $5 million in FY25 and $12 million in FY26.

Financial highlights

• FY24 proforma revenue reached $3.33 billion (+33.7% YoY), proforma EBITDA was $90.8 million (+14.5% YoY), and proforma NPAT was $28.8 million; statutory revenue was $2.97 billion, statutory EBITDA $44.8 million, and statutory NPAT $8.4 million, impacted by one-off merger costs.

• Strong revenue growth driven by CH2 (+31.4%), Oborne (+21.7%), and ParagonCare (+5.5%), with gross margin performance: CH2 at 5.34%, Oborne at 23.0%, ParagonCare at 42.2%.

• Free cash flow improved year-over-year, with statutory operating free cash flow at $53.9 million, driven by better working capital management.

• Net debt at year-end was $176.7 million, with $172.8 million in unused debt facilities and $20 million cash.

Outlook and guidance

• On track to deliver expected cost and revenue synergies in FY25 and FY26, with a focus on organic growth, operational efficiencies, cross-selling, and selective inorganic growth.

• FY25 trading update and outlook to be provided at the November 2024 AGM.