Healius (ASX:HLS) in Red Despite EBIT Turnaround

Sonal Goyal

18 February 2026 01:24 PM AEDT

Healius (ASX:HLS) in Red Despite EBIT Turnaround

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Highlights

Healius recorded a 3.8% rise in group revenue to AUD 688.1 million and a 13.1% increase in underlying EBITDA to AUD 122.2 million.
Underlying EBIT improved to AUD 7.9 million compared with a AUD 2.7 million loss in the prior corresponding period.
Agilex Biolabs revenue climbed 16.0% to AUD 21.8 million, with EBITDA up 65.5% to AUD 4.8 million.

Shares in Healius Limited (ASX:HLS) fell following its latest result for the half year ended 31 December 2025, with investors appearing concerned about margin pressure across its pathology division and softer-than-expected earnings growth. While revenue remained stable, rising operating costs and ongoing restructuring expenses weighed on profitability, prompting a cautious market reaction.

Healius shares were trading at AUD 0.75 on 18 February 2026, down 7.98% on the day. The stock has declined 48.84% over the past 12 months and 19.68% over the past month.

Investment bank Jefferies has issued an Underperform rating on the company with a target price of AUD 0.81.

Financial Performance

Group revenue increased to AUD 688.1 million from AUD 662.6 million in 1H FY25. Underlying EBITDA rose to AUD 122.2 million, while underlying EBIT reached AUD 7.9 million, compared with a loss of AUD 2.7 million a year earlier.

On a reported basis, EBIT showed a loss of AUD 12.9 million after non-underlying items of AUD 20.8 million. Reported NPAT, including discontinued operations, was a loss of AUD 30.4 million.

Healius ended the period with net cash of AUD 11.6 million, holding AUD 51.6 million in cash and AUD 40.0 million in drawn debt.

Pathology Division Lifts Earnings

Pathology revenue rose 3.5% to AUD 666.3 million, supported by a 1.2% increase in volumes. Volumes grew 2.4% in the first quarter but were flat in the second quarter.

Revenue gains exceeded volume growth due to a shift in mix toward areas including Genomics, clinical trials, and Veterinary Pathology. The average fee improved by 3.5% over the half.

EBIT for the Pathology segment improved to AUD 5.2 million, compared with a AUD 3.8 million loss in 1H FY25.

General practitioner attendances declined 1.5% over the period, while specialist attendances rose 2.5%. Changes to Medicare criteria for certain B12 and urine tests from 1 July 2025 also affected GP-related volumes.

Cost Management and Digital Investment

Operating costs increased by 1.9% during the half. Labour optimisation initiatives, introduced in FY25, reduced headcount by approximately 400 full-time equivalents. Labour costs as a percentage of revenue declined to 49.3% in the second quarter, down 2.7 percentage points from the first quarter.

Healius reported that consumable costs fell in absolute terms despite higher volumes and now account for 15.8% of revenue.

The company also continued its digital transition. From 1 January 2026, digital investment will no longer be treated as a non-underlying item. More than 75% of analysers across core laboratories have migrated to a unified platform, and automation has expanded across microbiology and specimen handling workflows.

Agilex Biolabs Expands Capability

Agilex Biolabs delivered revenue of AUD 21.8 million, up 16.0% year-on-year. EBITDA increased 65.5% to AUD 4.8 million, while EBIT rose 145.5% to AUD 2.7 million.

The division opened a new Brisbane bioanalytical laboratory in August 2025 and exited its Toxicology business to focus on large molecule development, immunoassay and immunobiology services.

Australian Defence Force Contract

Healius signed a five-year agreement with the Australian Department of Defence to provide pathology services to the Australian Defence Force. The contract is expected to generate approximately AUD 60 million in revenue over the initial term.

Outlook

Healius expects FY26 earnings to align with current market consensus. Revenue and profitability are anticipated to be weighted toward the second half due to cost-saving initiatives and seasonal volume patterns.

The company continues to target high single-digit EBIT margins by June 2027, supported by pricing initiatives, expansion of higher-margin services, ongoing technology deployment, and additional cost measures.

Healius’ first-half FY26 results show revenue growth, improved earnings and progress in operational programs, alongside continued investment in digital platforms and laboratory capability. With a new defence contract secured and Agilex Biolabs expanding its footprint, the company enters the second half of the financial year with a focus on margin improvement and cost discipline.

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