Highlights

  • Group Underlying EBITDA guidance of $259-264 million and Group Underlying EBIT of $30-35 million for FY26, with pathology volumes declining 0.4% for the 10 months to April 2026 though Revenue grew 2.4% on improved fee realisation.
  • Healius has engaged UBS Securities Australia Limited to explore a potential sale of Agilex Biolabs following multiple unsolicited approaches from credible parties, with an update expected at the full-year results in August 2026.
  • Pathology labour costs impacted by Fair Work Commission gender undervaluation findings, with a $1.8 million Q4 FY26 impact from Collector wage increases from 1 April 2026, and further phased increases for Health Professionals commencing July 2026.

 

Healius Limited (ASX:HLS) traded at $0.40 on the ASX on 13 May 2026, recording an intraday decline of over 18%. With this, HLS share price has declined by approximately 63% over the preceding 12 months.

Today, the company released a FY26 trading update and announced a strategic review of its Agilex Biolabs asset, providing the market with both Earnings guidance and signals of Balance Sheet optimisation activity.

Healius is one of Australia's largest pathology providers, operating through a network of collection centres and laboratories across the country under the Healius name, serving consumers and referring practitioners. The company also owns Agilex Biolabs, a Clinical Trials and bioanalytical testing Business that has been growing strongly and operates as a standalone unit within the group.

FY26 Financial Guidance

For FY26, Healius guided Group Underlying EBITDA of between $259.0 million and $264.0 million. Group Underlying EBIT was guided at between $30.0 million and $35.0 million. These ranges reflect the operating performance of the pathology business plus the strong contribution from Agilex Biolabs, offset by corporate costs and the structural headwinds in pathology from the funding freeze and rising labour costs. The EBIT guidance range is notably narrow relative to the EBITDA range, implying that Depreciation and Amortisation charges are both substantial and relatively predictable — consistent with the Capital-intensive nature of pathology laboratory networks.

Pathology Operations: Volume Softness and Cost Containment

Pathology volumes grew 1.2% and revenue grew 3.5% for the first half of FY26. However, for the 10 months to April 2026, volumes have declined by 0.4% while revenue grew 2.4% — indicating that the volume trajectory has softened in the second half of the year. The company attributed part of this softening to GP attendance trends: GP attendances declined 1.5% in 1H FY26 and 1.0% in the January to March 2026 period. Since pathology testing volumes are closely correlated with GP consultation rates, declining GP attendances represent a structural constraint on pathology volume growth that is outside the company's direct control.

On the cost side, management has delivered meaningful improvements in labour cost containment. Pathology costs increased 1.1% for the 10 months to April 2026, reduced from the 1.9% reported at December 2025. Labour cost savings are flowing through as expected in the second half of FY26, driven by a combination of headcount rationalisation, collection centre closures, and the closure of certain regional laboratories. These are difficult operational decisions that carry social and service access implications but are described by management as necessary given the inadequate funding environment.

Fair Work Commission: Labour Cost Pressures

An important cost headwind for Healius in the near term arises from the Fair Work Commission's initial findings on gender-based undervaluation across the healthcare sector. Pathology Collectors received a wage increase effective 1 April 2026, adding $1.8 million to pathology labour costs in Q4 FY26. Health Professionals will receive phased increases over five years in equal instalments commencing 1 July 2026, with a final determination on rates and classifications yet to be delivered. Inclusive of these Fair Work Commission impacts, pathology labour costs have increased 0.8% for the 10 months to April 2026, against previous guidance of broadly flat for the full year.

The Fair Work Commission wage increases, while important from an Equity and workforce sustainability perspective, create a challenging simultaneous equation for Healius: the company must absorb higher wages in an environment where the majority of pathology test funding remains frozen. Management has flagged that out-of-pocket fees for pathology tests may be the only viable option left to bridge the funding gap — a development that would represent a significant change to the current bulk-billing model that underpins accessible pathology services for Australian patients.

Federal Budget Response

The Australian Federal Budget released in May 2026 contained no new funding for the pathology sector. This was received with evident frustration by Healius, which noted that while the 2024-25 Federal Budget had partially restored indexation, funding for the majority of pathology tests remains frozen. Changes to Medicare criteria for B12 and urine testing effective 1 July 2025 have more than offset the previous indexation restorations, meaning the net funding position has deteriorated. Healius characterised the pathology sector as receiving no support to fund the Fair Work Commission wage increases, describing this as putting additional pressure on a sector that is a critical part of Australia's primary healthcare system.

Agilex Biolabs: Strong Growth and Potential Sale

Agilex Biolabs is the standout performer within the Healius group, reporting revenue growth of 13.7% for the year to date. The business operates as a standalone clinical trials and bioanalytical testing services company within Healius and has been growing strongly driven by Demand from pharmaceutical and biotechnology clients for contract research and testing services. Following multiple unsolicited approaches from credible parties, Healius has engaged UBS Securities Australia Limited to explore a potential sale of Agilex Biolabs. The company emphasised that any sale would not impact the core pathology operations, given Agilex's standalone operational structure.

An update on the proposed sale process will be provided at the full-year financial results presentation in August 2026, or earlier if circumstances require. The sale of Agilex Biolabs, if completed, would likely generate meaningful proceeds that could be deployed to reduce Debt, fund Investment in the pathology business, or be returned to shareholders — all of which would be value-relevant for HLS investors.

Conclusion

Healius' FY26 trading update presents a company navigating a genuinely difficult operating environment for its core pathology business, with subdued volumes, frozen funding, and rising labour costs creating a structural Margin compression challenge. The partial mitigation through cost containment and labour rationalisation is evident in the improved cost growth rate, but the fundamental tension between funding levels and cost Inflation remains unresolved. The strategic decision to explore a sale of Agilex Biolabs introduces a potential balance sheet catalyst that the market will watch closely, as realising the value of a high-growth, well-regarded asset could materially reshape Healius' financial position and strategic Options.