Primary Health Care has forecast profit growth of up to 22 per cent as it grows its existing general practice, pathology and diagnostic imaging businesses.
But investors were unimpressed, sending the shares down 13 cents, or four per cent, to $3.15, the lowest since October 20, as the wider market lost 1.4 per cent.
Chief executive Edmund Bateman told the company’s annual general meeting in Sydney on Friday he expected net profit, excluding non-recurring items, for the 12 months to June 2012 to be $120 million to $125 million.
That would be 22 per cent higher than the 2011 figure of $102.6 million.
Earnings per share are forecast to rise 15 per cent to 20 per cent this financial year.
Dr Bateman said Primary was now positioned as a “low-cost provider of high quality healthcare services”.
“Primary is strongly focused on leveraging its business to deliver organic revenue and earnings growth across the group, supported by an external environment of underlying growth in patient demand, and regulatory stability,” he told shareholders.
Primary planned to open one new medical centre in the current financial year, Dr Bateman said.
Patient levels had grown by eight per cent in the four months to October 31 across all its medical centres, and the increase was 13 per cent at its 56 larger-scale centres, he said.
In pathology, revenue rose by five per cent in the four months to October compared with the prior corresponding period, and was in line with expectations.
In imaging, gross billings so far in the current year were up eight per cent ahead of budget, Dr Bateman told shareholders.
Dividends are likely to change in the current year, he indicated.
“For FY2012, Primary will review its cents-per-share dividend payout prudently to reflect both the improving operating environment and the resultant anticipated earnings per share (EPS) growth, as well as the benefit to shareholders in further strengthening the balance sheet,” he said.
Primary chairman Rob Ferguson said Dr Bateman had affirmed his commitment to stay as chief executive for the next three years to oversee the implementation of the strategic plans developed by each of the company’s business units.
“It is a key function of the board to look beyond the next three years and ensure there is an effective executive development and succession process in place,” the chairman said.