Another 50k director buying today… it’s either an incredibly coordinated IR exercise or consensus from management that SHL is undervalued

Another 50k director buying

Director Kate Spargo has made a ~ $75k purchase on market.

AFR's Chanticleer has a feature on Goldschmidt - https://www.afr.com/chanticleer/the-quiet-doctor-who-built-a-16b-global-empire-20250925-p5mxyg

The longstanding CEO, Dr. Colin Goldschmidt, has decided to hang it up after more than three decades at the helm and will formally retire at the company's AGM in November.

His overall stewardship has been a success, despite the struggles in more recent years.

Probably a good time for a successor. The chosen one Dr. Jim Newcombe, is also an insider.

Looks a pretty solid result to me. Obviously the market expected better - down over 10% today

Their forward guidance is very positive "EPS growth up to 19%" for FY26, although less in constant currency terms

I hold some in Super. Solid, safe and well managed, although possibly a bit boring for SM. Upside is capped, because most revenue comes from governments. But of course this also caps the downside.

If you buy at the current price, you get a basically 4% partially franked dividend yield, plus steady high-single-digit growth. Pretty safe 10 - 15% annual return if you hold for a few years

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

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