Melbourne-based Pro Medicus Ltd (ASX:PME) shares were trading 5% higher on Thursday following the release of its 2020 half-year financial report.
For context, the broader Australian share market or S&P/ASX 200 (ASX: XJO) was trading at 7141.4, up 0.75%.
About Pro Medicus
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.
In the Rask video above, Owen explains how analysts read an annual report quickly, including the 7 pieces of information to look for. You can take one of Owen’s free finance courses by clicking here.
|This period||Last period||Change|
|Operating cash flow||16.14||6.4||152.19%|
|Dividends||6 cents||3.5 cents||71.43%|
Source: Pro Medicus Ltd announcements; author calculations, AUD million unless otherwise stated.
As can be seen above, the company’s revenue came in at $29.3 million, up $4 million. However, that figured included a once-off capital purchase last year.
Pro Medicus’ profit was $12.05 million for the period, up $2.97 million. On the cash flow statement, which is an important financial statement since it represents the underlying health of a business, operating free cash flow was $16.14 million, up $9.74 million. This was boosted by the payment of an outstanding trade receivable.
Finally, dividends declared by the company were 6 cents per share, up 71%.
The company said it was able to deliver underlying revenue growth across each key market segment, including America (43%), Europe (52%) and Australia (21%). Two of the key contracts the company won in the period were the Ohio State University Wexler Medical Center, for $9 million over 5 years, and with Nines Inc, a teleradiology platform, for $6 million over five years.
“All our numbers moved in the right direction,” Co-founder and CEO Dr. Sam Hupert said.
“If you exclude the one off capital sale in HY19 the underlying revenue growth figure is 39.1%. We were able to achieve this as a result of the significant step-up in our transaction revenue which grew by 30% compared to the previous 6 month period.”
Pro Medicus increased its cash reserves by over 20%, Dr. Hupert noted, while also buying back shares and increasing tax payments.
Finally, Dr. Hupert said the company’s implementation team once again proved its ability to deliver installs in record time, and the leads from new clients appear to be stronger than ever.
“There is no doubt we are experiencing an increased network effect generated by our growing customer base in North America, not just in the Tier 1 academic space but also other segments of the market as witnessed by the recent Nines contract.”
For a more detailed analysis of Pro Medicus, you can go to A Rich Life.
Pro Medicus shares were last seen trading around $28.70, giving the company a market capitalisation around $3 billion.
Online Value Investing Course - FREE!
How do you value an investment? Do you really understand what you’re investing in and why?
We’ve just updated our FREE business valuation course and made it available to investors like you. Complete with models, templates and tools, simply click here to access the course.
It’s completely free!