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ISEC Healthcare Ltd’s Latest Earnings: What Investors Should Know

Yesterday, ISEC Healthcare Ltd  (SGX: 40T) reported its 2017 first quarter earnings. The reporting period was for 1 January 2017 to 31 March 2017.

As a brief background, ISEC Healthcare (where ISEC stands for “International Specialist Eye Centre”) provides specialist medical eye care services in Singapore and Malaysia. The company was listed on the Singapore stock exchange on October 2014.

Financial highlights

Here’s a rundown on some of ISEC Healthcare’s latest financial figures for the first quarter:

1. Revenue was up 24% year-on-year to $8.46 million.

2. Net profit was $1.66 million, up 5% compared to a year ago.

3. Earnings per share (EPS) was 0.32 cents, unchanged from a year ago.

4. Cash flow from operations was $0.96 million and capital expenditure came in at $55,000. The eye care specialist generated free cash flow of $0.9 million for the reporting quarter, down from $1.1 million a year ago ($1.15 million in cash flow from operations and $35,000 in capex).

5. As of 31 March 2017, ISEC Healthcare had $21.3 million in cash and equivalents and no debt. This compares with the $26.3 million in cash and equivalents and no debt that it had in the first quarter of 2016.

In summary, ISEC Healthcare saw its revenue grow strongly, with profit following at a slower pace. The company’s EPS did not change as its weighted average share count increased to 517 million in the reporting quarter, up from 489 million a year ago. ISEC Healthcare also generated free cash flow and maintained a clean balance sheet.

Operational highlights and a future outlook

Revenue for the company’s Singapore operations doubled to $2.2 million in the first quarter of 2017 from a year ago. The acquisition of JLM Companies (in December 2016) boosted revenue by $1 million.

Meanwhile, ISEC Healthcare’s Malaysian operations recorded $6.3 million in revenue, an increase from the $5.7 million seen a year ago. Revenue benefited from higher patient visits.

ISEC Healthcare included the following commentary in its earnings regarding its outlook:

“Besides Malaysia and Singapore, the Group has identified Vietnam, China, Indonesia and Myanmar as markets with high growth potential mainly because of their large population. The Group intends to strengthen its brand and expand market share in new locations through accretive acquisitions, joint ventures or setting up of new subsidiaries.

The Group will also continue to grow its talent pool and stay at the forefront of the ophthalmology services industry by driving innovation and adopting cutting-edge procedures and technology to offer its patients the best possible treatment.

The Malaysian Ringgit weakened further against the Singapore Dollar during the 3 months under review. As a significant portion of the Group’s revenue is derived from Malaysia, the Group will continue to monitor closely the impact of the foreign exchange rate on the Group’s financial position.”

ISEC Healthcare’s shares closed at $0.31 each yesterday. Shares traded at 24 times earnings and a dividend yield of 4.7% 3.2%.


Editor’s note: The original article incorrectly stated that the dividend yield was 4.7%, it should be 3.2%


 

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.