Todays half year result looks to be solid for SHL, with a healthy 8.4% YoY growth in revenue and operating leverage leading to a 17.0% growth in Net Profit and 15.5% growth in EPS. Debt is well within covenant and below historic ratios, even with the LADR acquisition due to occur 1 July it is expected to stay that way.

Organic growth of 6.1% and full year EBITDA guidance of A$1.7-1.75b is maintained, yet the market has currently knocked 3% off the share price. The market as a whole is down 1% which will be a factor, but it seems the market was looking for a better result and with a PE in the high 20’s having high expectations.

I bought a little under a year ago on what was 12 month lows with a thesis that the comparable out of COVID were driving the price down, but Sonic remained a high quality and growth company that was a leader, hence justified a high PE. I expected the market to take time to realise this and re-price accordingly, with a year set a minimum holding which would be towards the end of March.

The price had been trading around my buy price for the last 6 months and I have recently been looking at selling to fund what I see as better opportunities. I will continue to review commentary on the result, but my first impression is it was fine and holding until at least the 12 month target is justified, but would exit if the price lifted 10% from here, seeing that as a good price and better opportunities for further upside elsewhere.

Disc: I own RL

Some coordinated directory buying again. 3 directors buying between roughly $10k at the low end to $43k at the high end.

Not earth shattering and a weak signal, but good to see nonetheless.

Market will not like this, profit downgrade for FY24. Revenue growth remains solid, but the "margin improvement" initiatives having been slower to deliver.

Held in RL and SM

This will be short and sweet. I was recently speaking to an employee of a Sonic Healthcare subsidiary - who are doing a lot of the Covid-19 testing on behalf of many governments (lack of resources, specialists etc) - and they indicated governments were paying them a whopping $150 PER TEST. That is an insane amount....well at least I think so.

Disc: not held

H1 FY 2021 results

•  Revenue A$4,432 million (33% growth)
•  EBITDA A$1,307 million (89% growth) ? Net profit A$678 million (166% growth)
• Net profit A$678 million (166% growth)

Strong balance sheet

•  Gearing at record low level
•  Available liquidity ~A$1.3 billion (pre-interim dividend)

Interim dividend $0.36 per share

20-Aug-2020:  Media Release Full Year Results to 30 June 2020   and   CEO Presentation Full Year Results to 30 June 2020   plus   Preliminary Final Report

Highlights:

• Sonic Healthcare is playing a key role in combating the COVID-19 pandemic in its markets, whilst continuing to provide essential routine healthcare services
• FY2020 underlying EBITDA (excluding AASB 16 impact) of A$1,109 million (24 June 2020 trading update ~A$1,075 million)
• Underlying revenue growth of 11.5% to A$6.8 billion (excluding AASB 16 impact)
• Underlying net profit growth of 6.5% to A$552 million (excluding AASB 16 impact)
• FY2020 final dividend maintained at A$0.51 per share (full year up 1.2% to A$0.85)

Not too bad.  I don't hold SHL, but they're on my watchlist as one of the better quality larger healthcare names on our market.  I prefer CSL and RHC.  I currently hold RHC.