First Impression: Sonic Healthcare-SHL- FY16 result

Bell Potter

Net operating cash flow up 38% to $708m | Segment EBITA; Pathology up 27% to$625.1m; Radiology down 14% to $47.7m; IPN & Other $42.3m, up 4.x | Outlook: “Sonic expects EBITDA growth of approximately 5% for 2017 on a Constant Currency basis,, excluding potential upside from any future business acquisitions and Australian regulatory reform. The guidance allows for A$5M of new rent expense for the properties sold and leased back in 2016. Net interest expense is expected to increase by 5-10% from the 2016 level of A$63M on a Constant Currency basis (excluding future business acquisitions), mainly as a result of higher margins on CHF debt, which in 2016 was drawn from a low margin short term bridge facility. The effective tax rate is expected to be approximately 25%.”


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