By Michael Smith
Medical imaging software company Pro Medicus has assured investors its stellar run is far from over as it eyes new revenue streams from cardiology and artificial intelligence, but cautions it will be unable to deliver 30 per centplus annual profit growth forever.
Chief executive Sam Hupert said he remained confident the company’s software, which enables hospitals and radiology clinics to stream medical images to mobile devices, would remain ahead of its competitors.
‘‘We spend the bulk of our R&D on making sure the core product stack keeps moving forward. Our best form of competitive advantage is to keep moving faster than the competition,” said Mr Hupert, who co-founded the company in 1993.
‘‘You are either quick or dead, and you don’t want to be dead. You have to keep moving.”
Pro Medicus shares jumped as high as 12 per cent yesterday, closing just short of its record high a fortnight ago, after posting higher-than-expected fullyear earnings and margins. Shares closed $9.41 higher at $141. The company floated at $1.15 a share in 2000.
The $14 billion Melbourne-based company’s ability to deliver strong revenues, margins and dividend growth without taking on debt makes it a rare player in the technology space.
Mr Hupert and his co-founder Anthony Hall hold a 48 per cent stake in the company. He said there were no plans to sell that stake down.
Its core product, Visage, is used by radiologists in North America, Australia and Europe. It was the first provider to shift to cloud-based services during the pandemic and hopes to retain the lead on competitors with new products using AI.
Pro Medicus is also looking to expand the application for its software to cardiology and other health services using medical imaging.
‘‘They continue to report metrics that puts them right at the top of listed companies globally,” Wilson Asset Management portfolio manager Tobias Yao said.
‘‘The initial technology was unique. It was like streaming Netflix rather than buying a VHS set from Blockbuster. That technological advantage has only increased as they embraced cloud and more recently spatial computing.”
Analysts were upbeat yesterday, saying the company still has a low penetration rate of 7 per cent in its biggest market of North America.
Full-year net profit rose 36.5 per cent to $82.8 million on revenue up 29.3 per cent to $161.5 million. The company lifted its annual dividends by 33 per cent to 40$ a share, with a 22$ fully franked final dividend.
Mr Hupert would not give an earnings forecast for the year ahead, but said he was confident about margin growth and said the company’s market penetration rates would accelerate. However, maintaining growth rates of 30 per cent-plus year-on-year would get ‘‘harder as the base gets bigger”.
Wilsons Advisory analyst Melissa Benson told clients: ‘‘Overall, the result was largely per expectations (in line with consensus), with material leverage being delivered [to the upside] as they continue to implement their Visage product in broader and larger US institutions.”
The firm will implement its biggest contract, with Dallas-based Baylor Scott & White Health, next month. Its clients range from two-man operations to hospitals with thousands of staff.
Licensed by Copyright Agency. You must not copy this work without permission.
