Primary Health Care Limited

PRY Details

Following a review of its unaudited results for FY 2017, Primary Health Care Limited (ASX:PRY) has confirmed guidance for FY 2017 at the lower end of its previous range at $92 million Underlying NPAT. A decline in Medical centers underlying EBIT performance is expected to be partially offset by a robust performance in Imaging, a modest increase in Pathology on the back of historically strong results, and savings in finance costs. The company expects to book a non?cash impairment charge of approximately $5751 million, relates to Medical centers goodwill and underperforming sites, including the ex?Symbion sites. Importantly, the impairment is a non?cash balance sheet adjustment and has no impact on banking covenants.

Additional investments are being made to grow HCP recruitment, to increase HCP support services, to enhance the Primary brand, and to diversify service offerings away from an historical reliance on the Medicare Benefits Schedule. During the year company made substantial progress on this repositioning, with closing GP numbers at record levels and over 150 new GPs signed on, representing an increase of over 35% on the prior year. However, the transition is taking longer than expected and has not yet translated into an uplift in Medical center’s profit performance with preliminary Underlying EBIT for FY 2017 of approximately $50 million (FY 2016: $72 million). The company will release its FY17 results on 18 August 2017. We maintain an “Expensive” recommendation on the stock at the current price of $3.63


PRY Daily chart; (Source: Company reports)

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