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Highlights

  • Sonic Healthcare is a medical diagnostics group which offers laboratory and radiology services
  • 1HFY24, its base business revenue grew by 15% YoY to AUD 4,267 million
  • The Vanguard Group, Inc has the maximum stake in SHL with a shareholding of nearly 5.01%

Sonic Healthcare Limited (ASX: SHL) is a healthcare organisation which specialises in laboratory medicine/pathology, radiology, general practice medicine, and corporate medical services. Based in Sydney, Australia, Sonic serves regions in Europe, North America and Australasia.

In the first half of the financial year 2024 (1HFY24), total revenue of the company jumped 5% YoY to AUD 4,306 million, with a 15% YoY rise in base business revenue to AUD 4,267 million. Growth in base business revenue was backed by three synergistic acquisitions.

The period saw a 47% drop in net profit to AUD 202.0 million and a 2% increase in dividend to AUD 0.43 per share.   

Top 10 shareholders of SHL

The top 10 shareholders of SHL have around 22.57% shareholding in the company, with the highest stake held by The Vanguard Group, Inc with a shareholding of nearly 5.01%.

Recent business update

On 20 March 2024, the company shared that it has inked binding agreements to acquire Dr Risch, a Switzerland based full-service medical laboratory company. This company manages around 650 employees across its 13 laboratories located across Switzerland. One laboratory of Dr Risch is situated in Vaduz, Liechtenstein.

This transaction is expected to support EPS from 2025. With the expected synergies, the return on invested capital is anticipated to surpass cost of capital of SHL.  

Outlook

The company expects its FY24 EBITDA to fall in the range of AUD 1.7 – 1.8 billion, with expectation leaning towards the lower end, while net interest expense is expected to reach AUD 125 million (higher than its earlier forecast shared in August 2023), attributed to factors such as further acquisitions.

The company expects its performance in FY25 and beyond to be driven by significant organic revenue growth in the base business, improved revenue through recent acquisitions and contract ventures, and fee adjustment in several market and contracts.

Share performance of SHL

SHL shares closed 1.81% lower at AUD 25.99 apiece on 17 April 2024. In the last 12 months, SHL’s share price has declined by almost 27.46% and in the last six months, it has dropped by nearly 12.58%.

The 52-week high of SHL is AUD 36.57, recorded on 24 April 2023 and the 52-week low is AUD 26.155, recorded on 16 April 2024.

SHL Daily Technical Chart, Source: REFINITIV

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 17 April 2024. The reference data in this report has been partly sourced from REFINITIV.