MEDICAL centres operator and pathology group Primary Health Care is on track to lift its 2013 earnings after cost cuts helped deliver a first half profit surge.
Primary made a net profit of $69.5 million in the six months to December 31, up 50 per cent from $46.3 million in the previous corresponding period. Managing director Dr Edmund Bateman said the group was benefiting from operating efficiencies and cost cuts. Earnings and profit margins also grew across Primary’s medical centres, pathology, and imaging divisions, despite lower GP patient numbers. Dr Bateman said the drop in patient numbers was linked to Australians still being cautious with their spending. The recent floods in Queensland and northern NSW were also expected to continue to impact the spending behaviour of affected locals, but not cause a major dent in the earnings of Primary’s GP division. “For the first quarter of this (financial) year the numbers were strong in terms of patient attendances – they flattened a bit in November and December, and come January we’ve had floods and extreme weather,” he said. “(But) in the last few weeks GP numbers are kicking up again.”
Primary’s earnings before interest, tax, depreciation and amortisation (EBITDA) rose 11.6 per cent to $186.1 million in the first half. Dr Bateman said the group was on track to meet its full year target of lifting EBITDA to $370-$380 million from $351.1 million in 2011/12. Earnings per share are also expected to rise by 20-25 per cent. Dr Bateman said acquisitions of GPs, radiologists, dental and allied health were running ahead of this time last year. But he said Primary would call a halt to buying new medical centres for the time being, focusing instead on organic growth. “Clearly we’re backfilling and making the most of the footprint we’ve got and the investment we’ve made in the past, and that’s what we’ll continue to do for the foreseeable future,” he said. Primary’s shares closed flat at $4.49 after having risen by about five per cent in early trade. CommSec analyst Steven Daghlian said while investors had responded positively to Primary’s results, the stock had enjoyed some strong gains recently. “Since the beginning of the year (Primary’s shares have) done very well – it’s up about 14.2 per cent, which is about three times better than the rest of the market overall,” he said. “It’s been one of the outperformers”
Laverty pathology 