Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Sonic Healthcare (ASX:SHL) share price soars 13% on strong HY23 result

The Sonic Healthcare Ltd (ASX: SHL) share price has jumped 13% after reporting a very healthy profit in HY23.

Sonic is a global leader in pathology. It does various tests for doctors and patients, including COVID tests.

HY23 result

Here are some of the highlights from the FY23 half-year result:

  • Base business (excluding COVID testing) revenue, up 9% year over year to $3.7 billion
  • COVID revenue of $379 million
  • Total revenue down 14% to $4.08 billion, but up 22% compared to HY20 (pre-pandemic)
  • EBITDA (EBITDA explained) of $920 million, down 40% year over year, but up 33% on HY20
  • Net profit after tax (NPAT) of $382 million, down 54%, but up 50% on HY20
  • Operating cashflow of $785 million, down 25%, but up 47% on HY20
  • Interim dividend up 5% to $0.42 per share

Sonic Healthcare revealed that its base business organic revenue growth is “gaining momentum”, with January 2023 revenue up 10% compared to January 2020.

The underlying drivers of growth for the business are being enhanced by post-pandemic catch-up testing. But, Sonic is also expecting ongoing COVID testing. January 2023 COVID revenue was A$32 million. I think this is helpful for the Sonic Healthcare share price.

Sonic also said that it has a major focus on costs, with base business margins remaining in line with pre-pandemic levels, including the labour cost. It’s focusing on automation and efficiency gains to help. Procurement savings for consumables are also expected to help.

Growth plans

The business is “currently progressing several acquisition and contract opportunities.”

Growth is expected in genetic testing, including prenatal tests, as well as exclusive or limited provider tests. It mentioned its 19.99% stake investment of Microba Pty Ltd (ASX: MAP), a microbiome testing provider. This is a rapidly-growing field of “personalised, precision healthcare”.

Genetic sequencing helps analyse microorganisms within the body that contribute to disease or promote wellness. Demand for testing for clinicians and consumers is expected to grow.

Sonic also has a 20% stake in Harrison.ai, which is developing ‘best-in-class’ AI diagnostic tools. The AI tools are aimed to help with efficiency and quality across its global operations.

The business also sees growth potential with hospitals and other healthcare providers outsourcing, or perhaps a joint venture laboratory service.

Final thoughts on the Sonic Healthcare share price

I’m not surprised to see that the market likes this result.

COVID-19 testing revenue continues to flow into the business, at a relatively high margin.

Profit has risen considerably compared to pre-COVID times and I think it’s a good sign that base revenue growth is accelerating.

With a growing dividend and plans for growth in various ways, I think the Sonic share price is still attractive for the long-term.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report — or get it emailed to you — for FREE by CLICKING HERE NOW or the button below.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.
Skip to content