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News.com.au
2 days ago
- Business
- News.com.au
Scott Power: ASX health stocks rise as Healthscope landlord agrees to rent deferral deal
ASX health stocks up 1.2% over past five days while the broader market is up 0.8% HealthCo REIT agrees to short-term partial rent deferral with troubled Healthscope and its receivers New-Zealand-based soft-tissue repair company Aroa Biosurgery delivers maiden full-year profit Healthcare and life sciences expert Scott Power, who has been a senior analyst with Morgans Financial for 27 years, gives his take on the ASX healthcare sector for the week and his 'Powerplay' stock pick. The big story for Australia's health care sector this week was Australia's second largest private hospital provider unlisted Healthscope appointing receivers after Canadian private equity owner Brookfield earlier handed the business over to its lenders owing ~$1.6 billion. The HMC Capital (ASX:HMC) controlled Healthco Healthcare and Wellness REIT (ASX:HCW) – which owns four properties tenanted by Healthscope – have struck a short-term partial rent deferral deal with Healthscope and its receivers. In 2023, HCW and the Unlisted Healthcare Fund (UHF) bought 11 privately owned hospital buildings from NYSE-listed Medical Properties Trust for a total of $1.2bn. Healthscope is the tenant in all 11 hospitals — four owned by HCW and seven by UHF. HCW owns 49.6% of UHF, with the rest owned by other large institutional investors. Under the rental deal: All outstanding rent arrears for March and April 2025 and 85% of rent for May 2025 will be paid immediately HCW and UHF will receive 85% of the rent due for the period June-August 2025 The remaining 15% deferred rent for the May-August 2025 period is due in September 2025 HCW said it had also received formal expressions of interest from alternative Australian hospital operators to re-tenant the facilities. In a note to clients Morgans' research analyst Liam Schofield wrote the deal represented positive progress, with the temporary 15% incentive lower than the 50% incentive for the initial two years agreed under the recently expired original lease agreement. "The agreement calls for the 15% incentive (from May to Aug) to be repaid in Sep-25 (suggesting there is potential for HCW to receive full rent going forward)," he wrote. "We have factored in a permanent ~20% rent reduction to the Healthscope assets, with the 15% incentive potentially pointing to a reduced rent level something closer to market (in our opinion) and above our expectations." Schofield wrote the HCW unit price would likely rise if a revised lease agreement was secured, where 100% of a slightly reduced rent (around 10-15% below the current level) was paid consistently and sustainably. However, he believes this is unlikely to happen until Healthscope is formally sold by receivers. He wrote that HCW was a diversified healthcare REIT with high-quality assets and scale. "The portfolio is valued at $1.6bn, with 57% of the portfolio exposed to private hospitals. "The financial restructure of Healthscope (a key tenant) and its capacity to pay 100% of the rent is the key catalyst (currently 50% rent abatement)." Given the uncertainty, Morgans have a hold rating on HCW and 90 cent price target based on its net asset valuation. Stronger week for healthcare stocks At 2.45pm (AEST) on Friday the S&P/ASX 200 Health Care index was up 1.2% for the past five days, while the benchmark ASX 200 rose 0.8% for the same period. "Markets are holding their ground" Power said. Power's Powerplay: Neuren on track for phase III trial Neuren Pharmaceuticals (ASX:NEU) is Power's pick of the week after holding its AGM on Tuesday. Power said a main takeaway from the AGM was that its second drug candidate NNZ-2591 continues to progress in development for multiple neurodevelopmental disorders with a pivotal trial for Phelan-McDermid Syndrome on track to start later this year. Neuren became the first company in the world to develop a treatment for Rett Syndrome with trofinetide (marketed as Daybue) approved by the US Food and Drug Administration (FDA) in March 2023. "They're planning to start the pivotal trial for Phelan-McDermid later this year and they've got plenty of cash to execute on that so are in a pretty good position." The Neuren share price is up ~10% for the week. Aroa reports maiden full-year profit for FY25 New-Zealand-based soft-tissue repair company Aroa Biosurgery (ASX:ARX) has delivered its first full-year profit since listing on the ASX in 2020. With the New Zealand financial year ending on March 31, Aroa reported a normalised EBITDA profit of NZ$4.2 million for FY25, rebounding from a NZ$3.1 million loss in FY24. Total revenue for FY25 of NZ$84.7m was an increase of 23% on the previous year and exceeded guidance of NZ$81-84m. Product revenue for the year reached NZ$84m, up 24% from the previous year, driven largely by the continued strong performance of its Myriad product family. Aroa has provided FY26 total revenue guidance of NZ$92-100m, which is 10 to 20% growth on FY25 on a constant currency basis. "They reported ahead of their guidance bearing in mind their guidance had been revised down so it was good they could slightly exceed it," Power said. "They've set themselves what we consider to be conservative guidance for '26 so we think they will come in at the upper end or above that." Power said Morgans had adjusted its sales numbers down slightly, which still has it at the top end of guidance. "We have brought our EBITDA number down quite significantly to sit at the top end of guidance for FY26 so we have our adjusted our price target back to 77 cents from 93 cents so still plenty of upside from the current share price," he said. Morgans maintains a speculative buy on Aroa. Fisher & Paykel Healthcare FY25 results beat guidance Meanwhile, New Zealand-based medical devices supplier Fisher & Paykel Healthcare (ASX:FPH) reported stronger-than-expected results for FY25, with an adjusted net profit of NZ$377.2 million, up 43% beating both market expectations (NZ$362m) and company guidance (NZ$320–370m). Revenue came in at NZ$2.02bn, up 16% and also slightly ahead of expectations. The strong result was driven by solid growth across hospital consumables, an increase in gross profit margin to 62.9% and lower-than-expected operating expenses at NZ$761m. This led to a jump in operating profit margin to 25.2%, ahead of the expected 24.5%. Fisher & Paykel Healthcare declared a final dividend of 24 cents, bringing the full-year dividend to 42.5 cents, a 2% increase. "The hospital division is showing good progress, with consumable uptake exceeding expectations," Morgans healthcare analyst Derek Jellinek wrote in a note to clients. "As for as the Homecare division goes, it should come as little surprise that growth is being driven by increased mask sales, given new product launches and abating supply chain issues." Jellinek said in the Homecare division, it was no surprise that growth was being fuelled by higher sales of its obstructive sleep apnoea (OSA) masks with new product launches and easing supply chain issues. He said despite Philips still largely absent from the OSA market following a product recall in 2021 and strong underlying demand in the sector – even with growing attention on possible impact of obesity drugs – Morgans don't expect Fisher & Paykel to significantly affect the solid growth of leader in sleep-related respiratory disorders ResMed (ASX:RMD). Lumos grows US Medicare coverage for FebriDx Lumos Diagnostics (ASX:LDX) continues to grow its US Medicare coverage for FebriDx test, a rapid point-of-care (POC) diagnostic designed to differentiate between bacterial and non-bacterial acute respiratory infections. Lumos this week announced FebriDx would be included in the medicare coverage for Medicare Administrative Contractor CGS Administrators, which is responsible for managing medicare payments in the US states of Kentucky and Ohio. Coverage by CGS at US$41.38 per test per test will be backdated to May 1, 2025. Lumos now has Medicare reimbursement from six of seven Medicare Administrative Contractors, representing more than 85% of total US Medicare payment coverage. National Government Services remains the only Medicare Administrative Contractor to be added, which Lumos said it remained committed to securing. Medicare comprises around 20-24% of the US payor mix and often sets a precedent for private payors. Lumos said achieving reimbursement coverage was a critical validation milestone on the path to meaningful adoption of FebriDx in the US. "Getting Medicare coverage in the US is an important step forward for Lumos," Power said. The views, information, or opinions expressed in the interview in th is article are solely those of the interviewee and do not represent the views of Stockhead. Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article. At Stockhead, we tell it like it is. While Aroa Biosurgery and Lumos Diagnostics are Stockhead advertisers, the companies did not sponsor this article.
News.com.au
3 days ago
- Business
- News.com.au
Lunch Wrap: ASX walks tightrope; lawsuit number two looms for Paladin
Trump tariffs back on, but ASX inches higher HealthCo soars on Healthscope rent deal Paladin sued again, Viva dips, NRW wins Rio job The ASX opened Friday on a mood swing, with the ASX 200 Index bouncing between gains and losses before inching higher by 0.1% by about 1pm, AEST. Investors had gone to bed hoping Trump's global tariff campaign had been buried for good, but woke up to find it very much still kicking. Just yesterday, markets were cheering a US trade court decision that slapped down a big chunk of Trump's tariff agenda. The court ruled that the president had overstepped his authority under the International Emergency Economic Powers Act (IEEPA) by slapping tariffs on dozens of nations. Judges made it clear: it wasn't about whether tariffs were smart or dumb, the law just didn't back him. But before markets could even finish the victory lap, a higher court threw the brakes on the celebration. The US Court of Appeals stepped in with a temporary stay, meaning Trump's tariffs are still alive, at least for now. Trump's trade adviser Peter Navarro declared the tariffs are 'alive, well, healthy,' while White House press secretary Karoline Leavitt warned the Supreme Court may need to step in to protect presidential powers. Despite the chaos and a string of flashing red lights from the US economy - which includes data showing US GDP shrinking by 0.2% in Q1 - Wall Street still managed to close in the green last night. Bond yields fell, though, as traders started betting on Fed rate cuts. Meanwhile in a private White House chat, Trump met with Fed chair Jerome Powell and reportedly urged him to cut interest rates. Powell apparently reminded the president that decisions would depend on data, not tweets. To the ASX, 5 of 11 sectors were flashing red this morning. Energy stocks led the losers as oil prices slipped. Gold stocks however rallied as bullion found new sparkle, driven by tariff uncertainty and fresh US jobless data. In large caps news, Paladin Energy (ASX:PDN) is under fire again, with a second class action on the way over how it handled production guidance at its Langer Heinrich uranium mine in Namibia. The Banton Group is gearing up to file this time. The first class action was filed by Slater and Gordon on April 16, essentially on similar claims. Viva Energy (ASX:VEA) got the green light from Victoria to move ahead with its Geelong LNG terminal. But despite the tick of approval, Viva shares dipped 2%. And still in large caps, mining services firm NRW Holdings (ASX:NWH) climbed 1% after its subsidiary Primero scored a $157 million deal to build infrastructure at Rio Tinto (ASX:RIO) 's Hope Downs mine in the Pilbara. ASX SMALL CAP WINNERS Here are the best performing ASX small cap stocks for May 30 : Security Description Last % Volume MktCap PRM Prominence Energy 0.004 100% 9,000 $778,353 ERL Empire Resources 0.005 67% 319,668 $4,451,740 CR9 Corellares 0.003 50% 412,320 $2,011,213 ASP Aspermont Limited 0.007 40% 1,209,102 $12,365,938 TAS Tasman Resources Ltd 0.025 39% 455,510 $3,314,567 CZN Corazon Ltd 0.002 33% 700,000 $1,776,858 GMN Gold Mountain Ltd 0.002 33% 296,327 $8,429,639 SHP South Harz Potash 0.004 33% 404,999 $3,308,186 LOC Locatetechnologies 0.090 29% 352,514 $14,083,568 AYT Austin Metals Ltd 0.005 25% 198,136 $6,296,765 BYH Bryah Resources Ltd 0.005 25% 599,251 $3,479,814 ECT Env Clean Tech Ltd. 0.003 25% 159,004 $8,013,537 OVT Ovanti Limited 0.003 25% 507,500 $5,587,030 PRX Prodigy Gold NL 0.003 25% 1,000,000 $6,350,111 RGL Riversgold 0.005 25% 189,093 $6,734,850 TEM Tempest Minerals 0.005 25% 421,040 $2,938,119 VML Vital Metals Limited 0.003 25% 494,000 $11,790,134 VRC Volt Resources Ltd 0.005 25% 1,155,003 $18,739,112 WBE Whitebark Energy 0.005 25% 100,000 $2,749,334 NHE Nobleheliumlimited 0.011 22% 557,421 $5,395,725 OLL Openlearning 0.018 20% 145,461 $7,240,120 AZL Arizona Lithium Ltd 0.006 20% 3,857,357 $26,351,572 PIL Peppermint Inv Ltd 0.003 20% 200,000 $5,690,224 LKY Locksleyresources 0.079 20% 28,480,896 $9,680,000 CC5 Clever Culture 0.019 19% 5,784,516 $28,252,645 Mining media company Aspermont (ASX:ASP) has clocked up its 35th straight quarter of subscription growth, with subs now making up 75% of total revenue. Recurring subscription revenue hit $11.2 million, up 4% year-on-year, while overall group revenue dipped 6% to $6.7 million. EBITDA was negative, but the company is still debt-free and sitting on $700k in cash. Tempest Minerals (ASX:TEM) has tightened up sampling at its Sanity gold target in WA's Yalgoo project, and the results are looking promising. By increasing the sample density, it's sharpened the definition of a strong and continuous gold anomaly, pointing to the potential for a large-scale mineralised system. TEM says Sanity sits in a juicy bit of ground, backed by rock chips grading as high as 7g/t gold. Healthco Healthcare and Wellness REIT (ASX:HCW) surged after striking a lifeline deal with troubled hospital operator Healthscope and its receivers, agreeing to partially defer rent payments across several properties. That deal helped settle nerves about HealthCo's income stream and brought a bit of clarity to an otherwise messy situation. Investors clearly liked the look of the stabilised cash flow, and piled in fast. ASX SMALL CAP LOSERS Here are the worst performing ASX small cap stocks for May 30 : Code Name Price % Change Volume Market Cap BLZ Blaze Minerals Ltd 0.002 -33% 142,857 $4,700,843 AOA Ausmon Resorces 0.002 -25% 357,633 $2,622,427 BMO Bastion Minerals 0.002 -25% 500,000 $1,807,255 RAN Range International 0.002 -25% 3,198,946 $1,878,581 MGA Metalsgrovemining 0.061 -25% 50,000 $8,539,020 WNX Wellnex Life Ltd 0.300 -22% 47,583 $26,092,038 AVE Avecho Biotech Ltd 0.004 -20% 1,597,010 $15,867,318 EVR Ev Resources Ltd 0.004 -20% 519,000 $9,929,183 PLC Premier1 Lithium Ltd 0.009 -18% 1,932,215 $4,048,666 REZ Resourc & En Grp Ltd 0.015 -17% 492,052 $12,089,504 DAF Discovery Alaska Ltd 0.010 -17% 25,000 $2,810,816 KPO Kalina Power Limited 0.005 -17% 2,468,473 $17,597,818 OEL Otto Energy Limited 0.005 -17% 888,386 $28,770,059 TEG Triangle Energy Ltd 0.003 -17% 500,999 $6,267,702 CML Connected Minerals 0.130 -16% 10,139 $6,410,523 ADG Adelong Gold Limited 0.006 -14% 59,334,827 $9,782,403 OM1 Omnia Metals Group 0.012 -14% 820,682 $3,039,284 QXR Qx Resources Limited 0.003 -14% 700,000 $4,586,151 SRJ SRJ Technologies 0.013 -13% 15,005 $9,083,671 1CG One Click Group Ltd 0.007 -13% 398,955 $9,423,039 AX8 Accelerate Resources 0.007 -13% 235,331 $6,377,510 HFY Hubify Ltd 0.007 -13% 43,849 $4,089,090 CRD Conradasiaenergyltd 0.620 -12% 158,139 $132,939,151 DBO Diabloresources 0.015 -12% 58,660 $2,296,970 IN CASE YOU MISSED IT Stockhead's Tylah Tully looks at White Cliff Minerals' (ASX:WCN) exploration at Danvers, where continuous, high-grade copper and silver mineralisation at surface has been confirmed. Tylah also breaks down the latest from West Coast Silver (ASX:WCE),which has started drilling to test extensions of known high-grade mineralisation at its Elizabeth Hill project in Western Australia. At Stockhead, we tell it like it is. While White Cliff Minerals and West Coast Silver are Stockhead advertisers, they did not sponsor this article.
Yahoo
15-02-2025
- Business
- Yahoo
Australia's HealthCo says HMC Capital among suitors for Healthscope hospitals
(Reuters) - Australia's HealthCo Healthcare and Wellness REIT said on Friday that a consortium led by David Di Pilla's HMC Capital had approached it for a possible buyout of Healthscope hospitals. Healthscope, which is the country's second-largest private hospital operator with about 38 hospitals, accounts for nearly 59% of HealthCo's gross earnings and has a market value of A$1.5 billion, the real estate investment trust said in a statement, without giving any further details. HealthCo is majority owned by Di Pilla with a more than 22% stake, as per LSEG data. HealthCo forked out A$1.20 billion ($757.68 million) in 2023 to acquire Medical Properties' Healthscope hospital portfolio, a chain of 11 private hospitals in a deal that was backed by asset manager HMC Capital. Earlier, New York-headquartered private equity firm Brookfield acquired Healthscope in 2019 only for them to sell some of Healthscope's hospitals to Medical Properties. HealthCo said on Friday it had been approached by "capable and qualified parties to potentially tenant the 11 hospitals including a consortium led by HMC Capital's private equity division." Shares of HealthCo, which have fallen about 12% since their debut in 2021, gave up early gains to close flat. HMC Capital's managing director for real estate, Sid Sharma, said, "The pressures around private health insurance and wage costs are well documented... VMO (visiting medical officer) retention is high. What needs to be rectified... is the capital structure." Asset manager HMC launched Australia's largest initial public offering of last year through DigiCo REIT, a new digital infrastructure real estate trust focused on data centers. HealthCo logged a 5% growth in funds from operations (FFO) to 4.2 Australian cents per share in the first half of the year and reaffirmed its full-year FFO forecast of 8.4 cents apiece. ($1 = 1.5838 Australian dollars) Sign in to access your portfolio
Reuters
14-02-2025
- Business
- Reuters
Australia's HealthCo says HMC Capital among suitors for Healthscope hospitals
Feb 14 (Reuters) - Australia's HealthCo Healthcare and Wellness REIT ( opens new tab said on Friday that a consortium led by David Di Pilla's HMC Capital ( opens new tab had approached it for a possible buyout of Healthscope hospitals. Healthscope, which is the country's second-largest private hospital operator with about 38 hospitals, accounts for nearly 59% of HealthCo's gross earnings and has a market value of A$1.5 billion, the real estate investment trust said in a statement, without giving any further details. HealthCo is majority owned by Di Pilla with a more than 22% stake, as per LSEG data. HealthCo forked out A$1.20 billion ($757.68 million) in 2023 to acquire Medical Properties' Healthscope hospital portfolio, a chain of 11 private hospitals in a deal that was backed by asset manager HMC Capital. Earlier, New York-headquartered private equity firm Brookfield acquired, opens new tab Healthscope in 2019 only for them to sell some of Healthscope's hospitals to Medical Properties. HealthCo said on Friday it had been approached by "capable and qualified parties to potentially tenant the 11 hospitals including a consortium led by HMC Capital's private equity division." Shares of HealthCo, which have fallen about 12% since their debut in 2021, gave up early gains to close flat. HMC Capital's managing director for real estate, Sid Sharma, said, "The pressures around private health insurance and wage costs are well documented... VMO (visiting medical officer) retention is high. What needs to be rectified... is the capital structure." Asset manager HMC launched Australia's largest initial public offering of last year through DigiCo REIT, a new digital infrastructure real estate trust focused on data centers. HealthCo logged a 5% growth in funds from operations (FFO) to 4.2 Australian cents per share in the first half of the year and reaffirmed its full-year FFO forecast of 8.4 cents apiece. ($1 = 1.5838 Australian dollars)
