February 13, 2020

Elite Diagnostic Limited booked a 29% increase in revenue to total $235.92 million compared to $182.24 million for the same period in 2018. Revenue for the 2nd quarter rose by 22% to $117.92 million (2018: $96.76 million).

The Company stated, “Revenue growth was buoyant driven by strong performance of the Liguanea and New Kingston locations, however the new St. Ann location expenses continues to weigh on the bottom line. The company had challenges with the installation and operating of MRI and CT. Both modalities were not operational in the 2nd quarter. The company expects the location to begin generating profitable revenue in the beginning of March 2020. The St Ann leasing of the Doctors offices begins in February 2020 and thus far, the company has secured 4 doctors.”

Direct costs for the period increased 45%, closing at $87.99 million, up from $60.76 million reported the prior year, while for the second quarter there was a 50% increase closing at $48.17 million (2018: $32.02 million).

As such, gross profit for the six months amounted to $147.92 million, a growth of 22% when compared to $121.49 million recorded last year. Gross profit, for the second quarter ended December 31, 2019, increased 8% to $69.75 million  from $64.74  million for the corresponding period in 2018.

Administrative expenses climbed by 3% for the period, to total $79.03 million (2018: $76.67 million). Depreciation and amortization also increased by 34% to total $35.85 million relative to the $26.70 million booked in 2018. This resulted in profit from operations of $33.04 million, a 82% increase relative to $18.12 million booked in the same period a year ago.

Finance Cost for the six months totalled $10.70 million, an increase of 12% when compared to the $9.53 million recorded for the same period last year, while foreign loss amounted to $1.22 million relative to foreign loss of $1.81 million the prior comparable period.

Profit before tax totalled $21.13  million compared to $6.79 million recorded last year, a 211% surge year over year. Following no income tax for the period, net profit for the period totalled $21.13 million relative to $6.79 million recorded the prior corresponding period. Whereas, net profit for the quarter amounted to $4.43 million, a 10% decrease compared to $4.95 million booked for the prior quarter of 2018. Management noted, “Net profit was impacted by the St. Ann location expenses.”

Earnings per share (EPS) for the period totalled $0.06 (2018: $0.02). EPS for the fourth quarter amounted to $0.013 (2018: $0.014). The trailing twelve-month EPS amounted to $0.19. The number of shares used in our calculations amounted to 353,400,000 units. ELITE’s stock price closed the trading period on February 13, 2020, at $4.02.

ELITE stated, “The company continues to see demand for imaging services and as they expand their services through the dedication of providing exceptional healthcare and customer service.”

Balance Sheet at a glance:

As at December 31, 2019, total assets amounted to $697.15 million, up 19% from the $583.94 million reported as at the previous year. The increase in total assets was as a result of the increase in ‘Property, Plant and Equipment’ to $590.13 million from $493.30 million in 2018. ‘Receivables’ also contributed to the growth closing at $37.70 million (2018: $17.31 million).

Shareholders’ Equity of $472.33 million was reported (2018: $406.28 million) which resulted in a book value per share of $1.34 (2018: $1.15).

Analyst Certification -This research report is for information purposes only and should not be construed as a recommendation. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.