Primary Health Care Ltd Disappointing financials led the stock lower

Disappointing financials led the stock lower: Primary Health Care Ltd (ASX: PRY) stock fell over 11.8% on February 15, 2017 due to weak financial result from the group. The group reported a revenue rise of only 1.8% to $808.7 million for half year ended on December 31, 2016 but underlying earnings before interest and tax performance was even worse as it slipped by 12.8% to $81.9 million. These weak results were mainly on the back of volatile healthcare policy with Medicare rebate freeze and Government policy changes. As a result, the underlying net profit after tax fell 14.7% to $41.9 million. Consequently, the group reduced their interim dividend to 4.8 cents per share from 5.6 cents. Meanwhile, PRY invested in specialties like dermatopathology and in Approved Collection Centres (“ACCs”). Imaging achieved 59% rise against prior corresponding period driven by operating cost programs. However, Medical Centres division’s Bulk Billing EBIT fell 36%, impacted by the lower than expected healthcare practitioner recruitment.    

 

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