Healius boss says company’s economics have been upended as wages rise
Healius chief executive Maxine Jaquet says higher rents and wages have upended the pathology testing group’s economics at the same time as revenue growth is becoming harder to generate, as she defended the company’s performance against criticism from Tanarra Capital.
The investment fund, founded by former Lazard managing director John Wylie, is Healius’ second-largest investor and has an 8.5 per cent stake in the company. It is demanding a major overhaul and is angry at the collapse in the group’s profit margins and share price.
Earlier this week, it accused Healius of run “extremely poorly”, and said the management and the board did not have enough “skin in the game”.
Healius, formerly known as Primary Health Care, is one of the largest pathology and radiology providers in the country. Its share price soared during the COVID-19 pandemic as demand for testing boomed. Since then, however, it has stumbled by unsuccessfully expanding into different parts of the healthcare sector such as clinical trials, leaving it with too much debt.
The COVID-19 pandemic was a boon for Healius as demand for testing soared. Flavio Brancaleone
On Thursday, Ms Jaquet told investors there was too much capacity in the industry and volumes were not growing, in part because of a GP shortage with less doctor visits leading to fewer referrals for pathology tests.
The company, which she has led since March, was attempting to “reset” its cost base. “There used to be 6000 pathology collection centres in Australia. There are now 6600 centres in a market where volumes are actually lower over the past four years,” she said.
Healius shares fell 33 per cent on Wednesday to a 24-year low after the company issued new shares at a hefty discount to reduce debt
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