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Pro Medicus (ASX:PME) Reports Healthy Profit Growth, Shares Rise 6% – Is It A Buy?

Pro Medicus Limited (ASX: PME) shares are up more than 6% after the healthcare company reported its half year result.

Pro Medicus is a Melbourne-based software owner and developer, licensing products to large US hospitals and Australian radiology clinics. The company has offices in Richmond, Victoria, Berlin, Germany and in the United States.

Pro Medicus’ Half Year Result

Pro Medicus reported that revenue increased by 59.4% to $25.3 million. Revenue rose by 40% in North America, 30% in Australia, and 204% in Europe.

The company reported that underlying profit after tax grew by 79.9% to $9.2 million and reported profit after tax increased by 184.3% to $9.1 million.

One great statistic about Pro Medicus was that its EBIT margin increased to 51.8% (click here to learn what EBIT means). Its FY18 EBIT margin was 48.5%, meaning growing scale is making each additional revenue dollar more profitable.

The company said that it remains debt-free and had $24.7 million cash at the end December 2018.

In recent months Pro Medicus has announced its European subsidiary won a contract extension worth at least $3 million with a large German Government hospital network. In November 2018 the healthcare software company also announced a $27 million, seven-year contract with Partners Healthcare in the US for the Massachusetts General Hospital and Brigham and Women’s Hospital.

Pro Medicus Dividend

The company decided to declare a 3.5 cents per share interim dividend, which represents an increase of 40% and also declared a special dividend of 2.5 cents per share.

Pro Medicus Management Comments

Pro Medicus CEO Dr Sam Hupert said: “The interim result was particularly pleasing in that we saw solid growth in all three major jurisdictions…From being relatively unknown as recently as five years ago, we have become one of the leading providers in healthcare imaging in North America.”

Is Pro Medicus A Buy?

Investors certainly seem to think so, with the share price up more than 6% today.

I wish I could go back in a time machine and buy Pro Medicus shares when they were under $1, but I don’t think I could call it a buy at this stage with how strongly the share price has risen over the past six months, it looks very expensive, but it could still be a winner over the long time.

2 ASX Growth Shares That May Be Trading At Better Value Than Pro Medicus

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