Looks like a good acquisition by Austco to expand their foot print and 3.5x earnings.

Austco Healthcare Limited enters into a Term Sheet for the Acquisition of Healthcare Communications Business, Amentco.

Austco intends to merge Amentco's extensive business with its current operations, spanning hundreds of sites. Key personnel from Amentco will be retained to facilitate a seamless transition for both customers and employees. This acquisition is anticipated to yield substantial revenue synergies by enabling cross-selling of products and services and streamlining operational processes.

Decent revenue growth, but I was expecting a higher NPAT result. This year should be strong though for the following reasons -

• record order book of $36m
• Software revenue up strongly by 66% to $8.5m, driving margins and set to continue
• The Technocorp acquisition to drive revenues and profits this FY along with the extra investment is sales and marketing
• An offshore team was setup to test and source products costing $1.1m, which will no longer be required after August, expect a saving of around $900k
• Trade receivables are $12m, up $5m on this time last year, which is very significant.

So putting this all together, I would expect Sales to come in at around $52m for FY24 up $10m on FY23. Adding back the saving on R&D of $900k, I would guess that AHC could achieve at least $4m in NPAT. Working on a 15x multiple I would value the business at around $0.21 cents for this FY.

Good result for Austco and very pleasing to see their order book at at a record high. Software revenues although small are growing rapidly, which bodes well for the business as this gives them the highest margins.

Austco expects 15% increase in Rev and 73-93% in profit to $1,450 to $1,650 profit. Order book sits at near record $21.3m

25 January 2022 ASX Release

Austco Healthcare expects improved profit for 1HFY22

Austco Healthcare Limited (ASX: AHC) (“Austco Healthcare”) advises that it expects to report strong revenue from customers for 1HFY22, leading to improved Net Profit After Tax (NPAT).

Revenue from customers

Better than expected second quarter revenue from customers underpin an estimated 15% increase in 1HFY22 revenue to $16.0m compared to $13.9m in the prior comparative period.

Further, our Open Sales Order book (confirmed orders) remains robust and currently sits at $21.3m. Whilst the Company continues to successfully manage challenges related to the supply chain crisis, risks still exisit for the business, which will need to be navigated throughout FY22.

Grant & Other Income

Austco Healthcare has continued to access government stimulus packages, primarily from the USA. For 1HFY22 Austco Healthcare expects to book $0.7m in Grant & Other Income which is the same level of Grant & Other Income booked in 1HFY21.

Net Profit After Tax

As a result of the better underlying business performance, Austco Healthcare expects NPAT for 1HFY22 to improve as compared to the prior comparative period, 1HFY21, per the table below.

Austco Healthcare plans to release its half year results on Friday, 25 February 2022. Authorised by the Board of the Company.

Net Profit After Tax

Reported/Statutory (‘000s)

Improvement

 1HFY21

 $827

 1HFY22 (unaudited)

 $1,450 to $1,600

75% to 93%~ENDS~

Austco have announced and maintenance contract of $1.6m over the next 5 years today. I think there could be quite a few more announcements like this one to come. With staff shortages and the pressure of Covid, hospitals will be looking for ways to become more efficient, which is exactly what the Tacera Nurse Call system does, keeping track of staff allowing them to do their jobs more efficiently.

ASX Announcement 1 November 2021

Austco Healthcare awarded AUD $1.6m contract to maintain its implemented Tacera Nurse Call system

Austco Healthcare Limited (ASX:AHC) (Austco) has been awarded a new AUD $1.6 million contract to maintain its industry leading Tacera Nurse Call platform installed at the 700-bed Ng Teng Fong General Hospital (NTFGH) and the 400-bed Jurong Community Hospital.

NTFGH was the first hospital in Singapore to be designed and built together from the ground up as an integrated healthcare development. They deliver patient-centered services in a seamless and integrated manner for better patient care, greater efficiency and convenience.

The maintenance contract commences in November 2021 and will expire in September 2026.

Clayton Astles, CEO of Austco, said “This five-year maintenance agreement with NTFGH further cements the strategic partnership between our companies and follows the announcement in December 2020 of the $1.3 million refresh of our Tacera Nurse Call system. The works on the refresh are still underway, somewhat delayed due to COVID-19 restrictions, but are due to be completed later this financial year.”

This announcement was approved for release to the ASX by the Disclosure Committee. ~ Ends ~

Loved this interview featuring our Wini on the investment case for AHC. Really worth a listen to get an overview of this business. https://shows.acast.com/shares-for-beginners/episodes/weekend-watchlist-austco-healthcare-asxahc?fbclid=IwAR2QhQasSegK9PmWO6Ym49PXQp194bHhM1RUiGDRvxfu-6czHz1wrUF3GtE

Whats not to like here -

$41m market cap

$7.8m cash no debt

$33.2 Enterprise value 

My forecast is NPAT 3.5m as they achieved $1.4m second half FY21

PE to enterprise value of 9.5

Record order book of $20.1m, FY 21 rev $31m

Directors buying recently for SMSF at $0.15 now trading at $0.14

Potential aquisitions on the horizon

Covid opening play as sales have been slowed due to access to hospitals and sourcing of components.

Conservatively it should trade on a PE of 15 giving me a value of $0.18