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Company Overview: Healius Limited (ASX: HLS) is a healthcare company offering medical and health-related services and healthcare technology solutions to medical and allied health professionals. HLS generates revenue from various segments.
Points to Note About HLS’s Retail Entitlement Offer
Funds’ Utilisation
The fund raising is expected to strengthen HLS’s balance sheet, reduce net debt, and create a buffer against adverse market conditions. Further, the proceeds of the fund raising will be used to fund the company’s:
Key Risks and Challenges
Failure to meet the terms and conditions of the Offer may become a hurdle for the group. The company is exposed to risks from a shortage of qualified professionals, regulatory challenges, and intense competition.
Outlook:
For FY24, HLS aims to grow margins and profitability, owing to market recovery. It targets to leverage its well-established brands and capabilities in targeted segments and improve return on invested capital. Further, HLS anticipates the Pathology market to trend higher, while the Imaging market is expected to continue with its current growth rates. For FY24, underlying EBITDA is expected to be between AUD 383 and AUD 393mn, with an EBIT is expected to be in the ambit of AUD 95 to AUD 105mn.
Stock Update
HLS expects growth in margin owing to volume recovery, cost reset strategy, organic growth, and development pipeline in the pathology market. It focuses on its core R&D strengths and enhances its market position in FY24 and beyond. The stock has witnessed a dip of ~16.6% in the last month, and over the last six months, it has declined by ~51.0%. The stock has a 52-week low and 52-week high of AUD 1.182 and AUD 3.138, respectively, and is currently trading below the 52-week high-low average. At the market close of 28 November 2023, HLS was trading at a price of AUD 1.415.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is neither an Indicator nor a guarantee of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 28 November 2023. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual’s appetite for upside potential, risks, holding duration, and any previous holdings. An ‘Exit’ from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
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