Australian Clinical Labs (ASX: ACL) has been collecting both swabs and earnings as a wave of COVID-19 testing propped up revenue by 61.2 per cent in the December half, reaching $538 million and thus surpassing its entire revenue for FY20.
Formed as a spin-off of Healthscope’s Australian pathology business in 2015, ACL listed on the ASX in May last year with a net profit after tax (NPAT) forecast for 1H22 of $22.4 million, but that figure has instead shot up by a multiple of almost six to hit $130.3 million.
The result also beats guidance of up to $128 million as released on 21 December, but shares have fallen back by 3.18 per cent amidst a broader market sell-off and an expected moderation of COVID testing as the virus transitions to an endemic status.
It has been a similar story for competitor Sonic Healthcare (ASX: SHL) which saw a 22 per cent rise in its global revenue in the half, and like ACL its shares have dropped up sharply in early 2022 as testing wanes.
ACL opened a purpose-built lab in Brisbane in November with dedicated clinical trials and community laboratories, and the following month completed its $70 million acquisition of Medlab Pathology, doubling its market share in NSW to 20.4 per cent and securing a 6.5 per cent share in QLD as a market entry platform.
The company's chief executive officer and managing director Melinda McGrath says Australian Clinic Labs has played an essential role in the country's response to COVID over the past two years in what has at times been a challenging operating environment.
"At the same time the team have delivered growth in our core business, driven operational improvements across the organisation while simultaneously completing two acquisitions," she says.
“The strong result achieved in 1H FY22 demonstrates the value of the significant prior investment in the business which resulted in further operating leverage, efficiencies, improved productivity and increased automation and digitisation.
"There exist several opportunities to continue to grow the business including via our commercial offering and our established clinical trials business. We have strong foundations in technology and systems and a highly experienced performance-driven management team to execute our well-defined growth strategy."
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