Morningstar

Morningstar, Inc.

Equity Bottom-Up

No-moat Virtus Health reported results broadly in line with expectations after a challenging second half that was marred by market share losses in the price-sensitive markets of Queensland and Tasmania, offset by growing contribution from burgeoning offshore operations now in four countries. Reported net profit after tax of AUD 30.8 million on group revenue of AUD 262.1 million, up 2% and 9%, respectively, tracked our forecast of AUD 31.7 million and AUD 266 million, respectively. We are…

We raise our fair value estimate for no-moat Virtus Health to AUD 6.35 per share from AUD 6.20, given the impact to earnings following its acquisition of Trianglen Fertility Clinic, a full-service IVF provider located in Copenhagen, Denmark. The purchase consideration comprises DKK 141.5 million, or about AUD 30 million, in cash, with the remaining DKK 15 million, or AUD 3.2 million, in debt.
Analyst: Chris Kallos, CFA

No-moat Virtus Health reported a good first-half fiscal 2018 result in line with our expectations on an aggregate basis. With underlying NPAT of AUD 17.4 million and group revenue of AUD 133.8 million, up 18% and 1.8%, respectively, the company remains on track to meet our fullyear forecasts. Although our earnings forecasts remain unchanged, we trim our fair value estimate to AUD 6.20 per share, from AUD 6.50 previously, after incorporating guidance for effective tax of 30% and capital…

Australia

Virtus Health Limited provides health care services. The Company offers clinical, scientific, diagnostic services, and day surgery for reproductive and fertility health care. Virtus Health serves patients and operates reproductive health and fertility clinics throughout eastern Australia.

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