- Pro Medicus (PME) is returning over 50 per cent of its earnings to shareholders after a healthy boost to revenue and profit over the last half-year
- The healthcare IT specialist bolstered half-yearly revenue by 7.8 per cent to almost $19 million compared to the previous corresponding period
- At the same time, net profit increased by over 12 per cent to $13.54 million over the six-month period
- As a result, the company is paying out a fully-franked interim dividend of 7 cents per share, which is slightly above 50 per cent of its earnings
- Company CEO Dr Sam Hupert says the company is expecting an even stronger second half of the 2021 financial year as it continues recovering from the coronavirus pandemic
- Shares in Pro Medicus closed 2.1 per cent lower this afternoon at $44.69 per share.
Pro Medicus (PME) is returning over 50 per cent of its earnings to shareholders after a healthy boost to revenue and profit over the last half-year.
The healthcare IT specialist revealed a 7.8 per cent increase in half-yearly revenue for the six months to the end of 2020 compared to the same time period in 2019.
On top of this, Pro Medicus bolstered underlying profit before tax by almost 26 per cent to $18.76 million. This translated to a 12.4 per cent increase in net profit to $13.54 million compared to the previous corresponding period.
In light of this, the company has declared a 7-cent-per-share interim dividend, which CEO Dr Sam Hupert said is slightly higher than the company’s typical target of 50 per cent of earnings.
“Our main focus when it comes to retained earnings is to ensure that we make the necessary investments in our business, followed by return to shareholders and keeping sufficient funds for any future M&A activities,” Dr Hupert explained.
“Whilst we don’t have a fixed policy, our guideline is to pay out approximately 50 per cent of earnings. As it turns out, at seven cents per share, we are slightly more than 50 per cent which reflects our confidence in things going forward.”
Steady COVID recovery
The Pro Medicus chief said while medical examination numbers in key markets dipped over March and April 2020 due to the coronavirus pandemic.
Numbers were still low over the first few months of the first half of the 2021 financial year, meaning the improved revenue and profit numbers come mostly from the later months.
In fact, Dr Hupert said exam volumes returned to normal over the last three months of the half-year and even surpassed pre-COVID levels in some cases.
At the same time, the Australian dollar appreciated significantly over 2020, creating even more of a headwind for Pro Medicus, which generates 80 per cent of its income in the United States.
As such, the company said on a constant currency basis, revenue would be up 12.4 per cent at $32.93 million and underlying profit before tax would be up 32 per cent at $19.66 million.
Nevertheless, Pro Medicus said it’s expecting a stronger second half of the 2021 financial year compared to the first half.
With examinations back to pre-coronavirus levels and some important contracts drawn up in recent months, like this week’s deal with a string of U.S. universities, Pro Medicus is expecting a strong final few months of the financial year.
Of course, Dr Hupert admitted that this is all dependent on whether or not the coronavirus causes more major economic shutdowns.
Shares in Pro Medicus closed 2.1 per cent lower this afternoon at $44.69 per share.