Bell Potter

In this daily reporting season update, we provide first impressions on key takeouts from companies reporting today, including Primary Healthcare (PRY) and Link Administration Holdings (LNK) with links through to more detailed reports.

Primary Healthcare (PRY)

Divisional EBIT: MCBB EBIT down 31% to $49.6m, Pathology up 1% to $119.5m, Imaging up 29.5% to $29m. Medical Centres: 153 new GP recruits translated to FTEs increase by 39, or 4.2%, to 959. Gross Billings were steady 416m but share of revenue was down 310 bps to 42.9%. EBITDA margin was down -856 bps on higher costs. Pathology: Revenue was up 4.4% on, EBITDA +0.8% but margin down -51 bps due to opening 124 additional collection centres and rent increases, and higher consumable costs. Imaging: Revenue up 2%, EBITDA down 6.6% with margin down -160 bps.

Outlook: In FY 2018 Primary will roll out four new medical centres and expand IVF into Perth. The progressive unwinding of the Medicare rebate freeze is expected to deliver annualised benefits of $3.5 million in FY 2019. With a solid start to FY 2018, we continue to deliver on the Board‐endorsed strategy and on transitioning Primary to a business that is flexible, diversified and patient‐centric.

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Link Administration Holdings (LNK)

Net operating cash flow up 12% to $216.5m. Divisional Performance: Fund Administration Operating EBITDA up 23% to $118m (lower than our forecast of A$139m), Corporate Markets Operating EBITDA down $6.2m to $50.7m (slightly above our forecast $42.8m, Information, Digital and Data Services Operating EBITDA was up 25.3% to $55m (above our forecast $48m).

Outlook: “We are pleased with the progress of our existing business and look forward to the opportunities that will evolve in the coming years. We are carrying good earnings momentum into FY2018.”

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