Highlights

  • ParagonCare (ASX:PGC) delivered FY26 Revenue of $3.7 billion, supported by expansion across healthcare distribution, medical technology and Manufacturing operations.
  • Underlying EBITDA increased to $97.2 million, while operating cash generation improved significantly during the year.
  • The company completed its integration strategy and expanded its healthcare offering across Australia, New Zealand and Asia.
  • ParagonCare is focusing on geographic expansion, operational improvements and strategic growth initiatives during FY27.

ParagonCare (ASX:PGC) has continued to build its position as a diversified healthcare distributor across the Asia Pacific region, supported by its integrated operating platform covering healthcare products, medical technology, consumables, pharmaceuticals, logistics and manufacturing. The company’s FY26 financial results highlighted continued revenue growth and progress on its integration strategy, while also reflecting the impact of one-off costs and credit-related provisions during the period.

The company reported revenue of $3.7 billion for FY26, representing growth of 1.8% compared with FY25. On an underlying basis, which adjusts for certain Business impacts and non-recurring items, revenue growth was 6.7%. Underlying EBITDA increased 2.1% to $97.2 million, reflecting continued Earnings contribution from the company’s expanded portfolio and operational initiatives.

FY26 Performance

ParagonCare’s FY26 results reflected a transition period following the completion of its broader integration activities. While statutory earnings were affected by several accounting and restructuring-related items, underlying performance showed continued business progression.

Statutory EBITDA was $50.8 million, while statutory net profit after tax recorded a loss of $16.0 million. The statutory result was impacted by an estimated Credit loss expense associated with the Infinity Group Debt exposure, along with other costs related to integration, restructuring and Acquisition activities.

Underlying NPAT for FY26 was $26.0 million, reflecting the impact of operational challenges and market conditions during the year. The company also reported improved operating cash generation of $29.1 million, representing a significant increase compared with the prior corresponding period.

Net gearing stood at 2.5 times underlying EBITDA, including the contribution from acquired businesses. Management highlighted continued focus on Working Capital Management and maintaining financial flexibility as key priorities.

Business Expansion

During FY26, ParagonCare completed its 3-2-1 integration strategy, bringing together its healthcare businesses and creating a broader platform across multiple healthcare categories and regions.

The company expanded its product and service offering through investments in value-added capabilities, healthcare solutions and strategic acquisitions. The opening of a new purpose-built Brisbane distribution centre with integrated automation is expected to support operational efficiency and future growth.

ParagonCare also expanded its regional shared services capability in Asia and continued developing its presence across healthcare markets in the Asia Pacific region.

The company secured a five-year Australian Defence Force Supply contract, adding another channel to its healthcare distribution operations and supporting Diversification across customer segments.

Segment Trends

The company’s ANZ operations continued to represent a significant part of the business, with normalised revenue growth excluding the impact of Infinity Group and the exited Ramsay Group contract.

The wholesale segment remained a major contributor, with Margin improvement supported by the exit of lower-margin operations. However, healthcare distribution markets continued to experience competitive pressures and changing supplier dynamics.

Medical Technology operations experienced mixed market conditions, with growth in certain medical device categories offset by challenges in areas including orthopaedics and vision. The segment continued to focus on expanding its product portfolio and customer relationships.

Contract Logistics delivered continued momentum, supported by higher volumes from existing customers and new customer wins. Clinical Manufacturing also recorded revenue growth, supported by increased volumes and contributions from acquisitions.

The Asia segment remained a growth area, with revenue expansion supported by both acquisitions and organic growth. Management continues to focus on using the company’s regional footprint to pursue further opportunities across healthcare markets.

Growth Strategy

ParagonCare’s FY27 strategy is focused on expanding its healthcare platform, improving operational efficiency and identifying additional growth opportunities.

The company plans to continue developing its presence across Asia, while expanding into areas including aesthetics, dental and animal health. It also intends to launch wholesale operations in New Zealand and evaluate strategic acquisition opportunities.

Growth initiatives will focus on product expansion, improving customer engagement, strengthening supplier relationships and enhancing digital capabilities. The company is also investing in technology and shared service capabilities to improve efficiency across its operations.

Operational initiatives include reviewing Warehouse requirements in Sydney, expanding support through Asian shared services and continuing improvements across business systems.

Key Risks

ParagonCare continues to face risks associated with healthcare distribution markets, including supplier relationships, customer credit exposure and changing industry conditions.

The Infinity Group debt exposure remains an important Factor for investors to monitor, with the company continuing efforts to pursue recovery Options following the administration process. The impact of this matter contributed significantly to the difference between statutory and underlying earnings during FY26.

Integration execution, market competition and supply chain conditions also remain important considerations. While the company has completed its major integration program, ongoing execution will be required to ensure operational improvements translate into sustainable earnings growth.

Future Outlook

ParagonCare enters FY27 with a broader healthcare platform and an expanded operating footprint across the Asia Pacific region. Management expects continued growth opportunities through healthcare market expansion, product diversification and operational improvements.

The company is not providing formal FY27 earnings guidance due to ongoing economic uncertainty but expects to maintain mid-single-digit revenue growth. Management remains focused on profitable growth opportunities, strategic investments and improving business efficiency.

ParagonCare also plans to commence a share buyback program during FY27, while Dividend considerations will be reviewed following the company’s half-year results.

The company’s ability to convert its expanded scale into consistent earnings growth, improve cash generation and continue expanding higher-value healthcare segments will remain key areas of focus for investors.