Sonic Down Despite Higher Profit, Dividend

By Glenn Dyer | More Articles by Glenn Dyer

Sonic Healthcare (SHL), the local and international diagnostics group, reported a near 15% rise in full year net profit after tax to $385 million, thanks to strong growth in its Australian and European pathology operations.

But fee cuts in the US business trimmed the gains, leaving the result short of market forecasts of $392.3 million, but up from the $335 million earned in 2012-13.

On an earnings before interest, tax and depreciation basis, the result met market hopes for a 5% rise – to $681.5 million (a rise of 5.4%).

The Sydney-based medical centre, diagnostic imaging and pathology operating company reported a 12.3% rise in revenue to $3.9 billion.

On a constant currency basis, which removes the effect of currency fluctuations, revenue growth was more subdued – up 4.8%, while net profit after tax rose by just 6.5%.

Chief executive Colin Goldschmidt said in yesterday’s statement that 2015 would see something similar in terms of performance. He said the results represent “financial and operational strength” across the company.

Sonic shares eased 1% to $17.62 (the company has been a strong performer in the past year with a 23% rise, against a 9.2% increase in the market).

There was a slight worry about the miss, but the losses on the day shrank as trading went on.

SHL 1Y – Sonic records 15% rise in profit

Sonic lifted total dividends for the year by 8.1% to 67 cents share. Final dividend is 40 cents a share, 55% franked, up from 37 cents paid for the last half of 2012-13.

The interim was lifted to 27 cents a share from 25 cents. The higher annual of 67 cents a share is well covered by earnings per share of 96.2 cents a share.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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