The Pro Medicus Ltd (ASX: PME) share price is up 8% after the ASX healthcare share announced a very strong FY24 result.
Pro Medicus describes itself as a leading healthcare informatics company, providing a full range of medical imaging software and services to hospitals, imaging centres and healthcare groups worldwide.
FY24 result
Below are some of the highlights from the 12 months to 30 June 2024:
- Revenue up 29.3% to $161.5 million
- Underlying EBIT margin improved to 69.5%, up from 67.2%
- Underlying profit before tax increased 35.3% to $116.5 million
- Net profit after tax (NPAT) increased 36.5% to $82.8 million
- Final dividend up 29.4% to $0.22 per share
- Full-year dividend up 33.3% to $0.40 per share.
- Cash and other financial assets up 27.9% to $155.4 million, with no debt
The company saw significant progress in North America, with revenue up 34.4%. Australian revenue increased 5.9%, while European revenue decreased 6.7% due to one-off revenue from a sale to a German hospital in the prior corresponding period.
Pro Medicus made numerous, large, long-term contract announcements over FY24. It won nine contracts, with a minimum total contract value of $245 million. The highlight was a $140 million, 10-year contract with Baylor, Scott and White, the largest not-for-profit healthcare system in Texas, and one of the largest in the US.
The company highlighted its solution can work across all segments of the market, from a two-person radiology practice in Melbourne, up to the largest healthcare organisations in the US.
Pro Medicus has just over 7% of the total addressable market in the US and growing, so management thinks there is still a “huge amount of runway ahead”.
Management are pleased with the rising EBIT margin, which is a “testament to the scalability and high operating leverage”.
Outlook for the Pro Medicus share price
The Pro Medicus leader Dr Sam Hupert said the increasing adoption of cloud has made the company’s implementations more streamlined, which is a “strategic advantage” because competition has been able to re-engineer their systems to be cloud-native like the Visage suite of products.
The ASX healthcare share said it continues to make “steady progress with its AI and other -ologies”, while the pipeline “remains strong”. I think this bodes well for the coming financial years.
Opportunities in Europe and Aisa are expected to be “smaller and more opportunistic” than those in the US.
Pro Medicus may be the best business on the ASX – excellent profit metrics, strong revenue growth, a great balance sheet, a growing dividend and a long growth runway. What’s a good price for this business? I’ve been too conservative in the past about its prospects, but the price/earnings (P/E) ratio just keeps rising..
There are plenty of other ASX growth shares I believe are better value.
