Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn


Primary Health flags $575m writedowns hit

Simone Ziaziaris  |  21 Jul 2017Text size  Decrease  Increase  |  

Page 1 of 1

SYDNEY - [AAP] Primary Health Care (ASX: PRY) will take a $575-million hit in its full-year results after deciding to write down the value of its medical centres as it repositions its bulk billing business.

The company on Friday said the non-cash impairments relate primarily to its Medical Centres unit, which in February booked a 36 per cent drop in earnings before interest and tax as bulk billing revenue fell.

That disappointing performance contributed to a 69 per cent fall in first-half profit.

Primary said it also expects its full-year underlying profit to come in at the lower end of its already downgraded guidance at about $92 million, compared to $96.8 million in 2016.

Acting chief executive Malcolm Ashcroft said the business overhaul was taking longer than expected and had not yet translated into an improvement in the medical centres' profit performance.

"This has necessitated the impairment review of the carrying value of goodwill in Medical Centres," Mr Ashcroft said.

He added that Primary is streamlining both the corporate and divisional head offices, which will generate approximately $6 million in pre-tax annualised savings.

"The substantial reduction in the capital cost of healthcare practitioners and on-going capital expenditure discipline has enabled us to continue to reduce debt and to self-fund our requirements including investing in our growth plans across the business," Mr Ashcroft said.

"We remain confident that the building blocks are in place for the repositioning of our Medical Centres division and that this repositioning will, in itself, deliver significant value creation to Primary."

At 1025 AEST, shares in the medical centre and pathology operator were 0.83 per cent lower at $3.57.


AAP logo image

© [2017] Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.