Primary Health Care Ltd Primary Health Care Ltd Financial Year Ended Financial Year Ended 30 June 2005 30 June 2005 Results Presentation Results Presentation 9 August 2005 9 August 2005
Financial Results: Summary – EBITDA ( excl. investments ) up 36% and EBITA up 41% over prior period – Driven largely by organic revenue growth & improved margins FY2005 FY2004 FY2003 ($ Million, except EPS) growth growth Sales revenue (excl. investment/property) 190.9 151.4 26% 19% 127.0 EBITDA (excl. investment/property) 73.7 54.2 41.6 36% 30% EBITA (excl. investment/property) 61.3 43.5 32.7 41% 33% Normalised NPAT 42.2 28.7 21.9 47% 31% Normalised basic EPS (cents per share) 37.9 28.1 29% 21.9 35% Normalised = before goodwill amortisation
Financial Results: Income Statement ($ 000s) FY 2005 FY 2004 FY 2003 Medical centres 57,949 41,774 31,994 13,144 12,421 Pathology 9,655 EBITDA improvements - - Health Technology 2,597 being reflected at bottom - Investments/Properties 2,515 3,190 line with NPAT increasing EBITDA 76,205 54,195 44,839 55% over FY2004 12,367 10,704 Depreciation 8,993 EBITA 63,838 43,491 35,846 Goodwill amortised 14,219 10,651 9,350 EBIT 49,619 32,840 26,496 Interest expense 5,423 6,016 5,277 Share of associate loss - 211 201 PBT 44,196 26,613 21,018 Tax charge 8,572 8,428 16,260 Profit After Tax 27,936 18,041 12,590 Profit After Tax normalised 42,155 28,692 21,940
Financial Results: Balance Sheet 30/6/05 30/6/04 Debt to Equity $m $m 6/05 6/04 Receivables 35.1 20.5 27% 47% Investments 0.2 9.4 PP&E 107.0 94.0 EBITDA interest cover Goodwill 305.6 178.5 (assuming 6.5%) Total Assets 447.9 302.4 6/05 6/04 Liabilities 42.0 10.6 13.7x 8.9x Net Assets 405.9 291.8 Addition of HCN at balance date has increased both current Net Debt (Bills+Leases) 85.4 93.3 receivables and liabilities Equity 320.0 198.5 405.9 291.8
Financial Results: Per Share Results Reported earnings per share up 42% on prior period to 25.13cps Normalised earnings per share up 35% on prior period to 37.92cps (Normalised to remove impact of amortisation of goodwill) Final dividend of 13.0c per share taking total FY05 dividend per share to 25.0 cents (17.5 cents for FY04) fully franked Final dividend payable 12 September 2005. Record date 26 August 2005. DRP/BSP to be at 2.5% discount
Financial Results: Historical Trend Financial Results: Historical Trend Growth at bottom line PRY Normalised NPAT compounding 45 Only 3 new 40 practices 35 opened in past 2 30 $ Million financial years 25 20 15 “Normalised” to 10 remove impact 5 of Goodwill 0 Amortisation FY00 FY01 FY02 FY03 FY04 FY05
International Accounting Standards International Accounting Standards Net profit after tax estimated at $38.7m under AIFRS for 2005 vs $27.9m � Amortisation of goodwill - prohibited from 1 July 2005 � Annual impairment testing on cash generating units Anticipate write back of $51.8m to distributable reserves at 30 June 2005 Business Combinations - restate all acquisitions � Anticipate $19.8m debit to share capital account Anticipate $4.3m charge to retained profits to 30 June 2005 Share based payments – expensing of share options � Anticipate $1.8m charge to retained profits to 30 June 2005 Anticipate $1.65m charge to pre-tax profit for year ended 30 June 2006
Future Growth – Funding Capacity Current facility of $175m utilised to $87m � Capacity to fund planned roll-out � Investment for each new centre continues in line with historical � Strong cash flow with reported annual revenues again equaling cash �
Medical Centres: Patient Attendance GP patient attendances up 11.3% to 2.95m for the year “Same-centre” growth in patient attendances year on year at 7% 3 new medical centres opened successfully during year Major contribution has been from 21 centres established at 30 June 2003 Medical Centre revenues to PRY up $22.8m (24%) to $116.7m for the period with the increase in Medicare rebates as at 1 January 2005 responsible for only 4% increase in group revenue for the year
Medical Centres: Operations This year has highlighted strength of medical centre business across spectrum of practice maturity and location – EBITDA for all centres up $16.2m or 41% after head office costs – Significant margins improvements across centres – “Same-centre” EBITDA growth year on year at 35% – “Same-centre” EBITDA growth year on year for oldest 10 centres at 26% Faster ramp up to cash flow positive of newer centres c.f. historical Pipeline of new sites at various stage of development
Future Growth: Medical Centres 21 Centres opened prior to 30 June 2003 3 Centres opened in FY05 3 Centres will open 1 st Quarter FY06 4 Centres will open during balance of FY06 31 Estimated centres open at 30 June 2006
Pathology: Segment performance FY 2005 FY 2004 FY 2003 ($ 000s) growth growth Revenue 68,280 63,217 56,526 8% 11% 13,144 EBITDA 12,421 9,655 6% 28% Margin 19.3% 19.6% 17.1% 11,581 EBITA 8,342 10,921 6% 31% Margin 17.0% 17.3% 14.8% Pathology revenues up 8% with episodes up 2.5% over FY2004 EBITDA up 6%. Margin - slight decrease due to interstate expansion and increase in consumable and occupancy costs
Health Technology: HCN Acquisition New Chief Executive Officer, John Frost � New Chief Technical Officer, Matthew Bardsley � Consolidation & upgrading of key functions � Organisation restructured to provide product ownership and focus � Current focus - ongoing development and delivery of Medical Director v3 � – performance, stability, improved clinical workflow Continuing to enhance other software programmes � – expansion of decision support applications Apparent maintenance, or increase, in market share in all core applications � and products (clinical, practice management, decision support)
Key Indicators: Historical Trend Sales Revenue GP Patient Numbers 250 3,500 GP Pat. Numbers ('000s) investment/property) 3,000 Revenue $m (excl. 200 2,500 150 2,000 1,500 100 1,000 50 500 0 0 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 EBITDA EBITDA Margin EBITDA (excl. p&i)/Revenue 80 45% 40% 70 investment/property) EBITDA $m (excl. 35% 60 30% 50 25% 40 20% 30 15% 20 10% 5% 10 0% 0 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 EBITDA 2001-2005 Compound Annual Growth Rate = 31%
Focus for FY 2006 Medical Centres Roll-out of new centres Continue to meet increasing demand for medical services Consolidate IT and management platform Pathology Implement pre analytical, analytical and post analytical automation Enhance inter-state operations Health Technology Cultural change / re-engineering of operations Roll out MD3 Enhance all HCN software and products
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