REPORTING SEASON: Sonic Healthcare Ltd (SHL)

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Figure 1: Sonic Healthcare Ltd 12 month chart


Sonic Healthcare (SHL) new entrants and Medicare changes cut profit.

 Sonic Healthcare Limited (SHL) reported a solid result in line with the company’s November 2014 guidance and shows that SHL is on track to meet its full year 2015 guidance. The result was helped by the company’s small strategic acquisition over the last year and solid organic client growth.

 Pathology Australia revenue lifted by 29% to $579 million. This was below SHL’s regular growth rates in this division because of low volume growth in the first quarter and unexpected Medicare fee cuts from November 2014. Revenue from SHL’s European pathology division grew 30%, helped by its German acquisition.

 US sales lifted by 21% to $430 million boosted by a lift in market share, but earnings were hit by new entrants offering cheaper costs for similar products.

 Imaging revenues were up 9% to $207 million impacted by the sale of the last of Sonic’s imaging businesses in New Zealand in March 2014. Revenue from Medical Centre sales lifted by 9% to $180 million.

 Currency movements are expected to help lift SHL’s results in second half. Sonic expects EBITDA growth of 2% – 4% for the 2015 financial year.

 SHL will pay a $0.29 interim dividend to shareholders on 25 March 2015.


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Juliana Roadley, Market Analyst,