GENERAL ADVICE ONLY 

13th February 2025

Pro Medicus Limited: Earnings Report Analysis

1. Overview

Pro Medicus Limited has reported a robust financial performance for the half-year ended December 31, 2024. The company has demonstrated significant growth in both revenue and profitability, driven by continued expansion in North America and successful contract acquisitions. Key highlights include a 42.7% increase in after-tax profit and a 31.1% rise in revenue compared to the previous year.

Key Impact News:

• Strengthened presence in North American markets through major contract wins and extensions.
• Implementation of performance-based incentives to drive future growth.

2. Financial Performance

Revenue & Growth Trends

• Half-Year Revenue 2024: $97.20 million
• Half-Year Revenue 2023: $74.11 million
• Revenue Growth: 31.1% increase year-over-year

Fiscal Year 2023 revenue also saw substantial growth, increasing from $74.11 million in FY 2022 to $97.19 million in FY 2023.

Margin & Profitability Metrics

• After Tax Profit (Half-Year Ended 12/31/2024): $51.74 million
• After Tax Profit (Half-Year Ended 12/31/2023): $36.25 million
• Profit Growth: 42.7% increase year-over-year
• Earnings Per Share (Half-Year Ended 12/31/2024): Basic 49.53¢
• Earnings Per Share (Half-Year Ended 12/31/2023): Basic 34.71¢

The underlying profit before tax also rose by 42.9% from $48.93 million in the first half of 2023 to $69.92 million in the first half of 2024.

Business Segment Performance

• Radiology Information Systems (RIS) Revenue (FY 2023): $7.824 million
• Picture Archiving Communications Systems (Visage 7/PACS) Revenue (FY 2023): $89.33 million
• Revenue from Visage 7/PACS increased by approximately 34.4% from $66.78 million in FY 2022 to $89.33 million in FY 2023.

3. Guidance and Expectations

• Final Franked Dividend for 2024: $22.99 million (up from $17.76 million)
• Interim Franked Dividend for 2025 (Declared 02/13/2025): $26.13 million (up from $18.80 million)

On August 28, 2024, Pro Medicus granted 41,030 performance rights under its long-term incentive plan. These rights will vest based on earnings per share (EPS) and total shareholder returns (TSR) performance over three years, contingent upon four years of service starting July 1, 2024.

4. Strategic Considerations

• Share-Based Payments Expense: Increased to $1.42 million in the first half of 2024 from $784k in the same period in 2023.
• Depreciation and Amortisation Expenses: Decreased to $3.15 million from $4.41 million.
• Gross Wages and Salaries: Increased to $17.83 million from $15.97 million, reflecting growth in the workforce to support expansion.

The company continues to invest in its human capital and operational capabilities to sustain long-term growth prospects.

5. Financial Position

Assets

• Trade Receivables (31/12/2024): $52.95 million (up from $47.91 million)
• Other Receivables (31/12/2024): $111k (down from $148k)
• Net Carrying Amount of Intangible Assets (31/12/2024): $21.06 million (up from $20.07 million)

Liabilities

• Accumulated Amortisation and Impairment (31/12/2024): ($64.19) million (up from ($61.47) million)
• Trade Payables (30/06/2024): $575k (down from $1.739 million)
• Other Payables and Accruals (30/06/2024): $9.141 million (up from $8.460 million)
• Deferred Revenue – Current (30/06/2024): $16.04 million (down from $17.05 million)
• Deferred Revenue – Non-Current (30/06/2024): $28.67 million (up from $25.85 million)

Despite the increase in trade receivables and deferred revenue non-current, the company has maintained a stable asset base with no identified impairment indicators for its Cash Generating Units as of December 31, 2024.

6. Investment and Financial Instruments

• Total Investments in Debt Instruments and Managed Funds (07/2024-12/2024): $33.93 million (up from $30.97 million)
• Total Other Financial Assets (07/2024-12/2024): $41.26 million (up from $38.84 million)
• Forward Exchange Foreign Contract (07/2024-12/2024): $901k (new liability)
• Investment in Elucid Bioimaging (07/2024-12/2024): $7.34 million (no change)

The Group continues to manage its investment portfolio actively, measuring all investments at fair value through profit or loss. The investment in Elucid Bioimaging remains classified as Level 3, subject to high uncertainty, with no change in its fair value during the period.

7. Taxation

• Income Tax Expense (31 Dec 2024): $(21.53) million (up from $(13.91) million on 31 Dec 2023)
• Deferred Tax Movement (31 Dec 2024): $1.40 million (up from $0.68 million on 31 Dec 2023)
• Foreign Currency Exchange Gain (31 Dec 2024): $123k (down from $249k on 30 Jun 2024)
• Intangible Assets Adjustment (31 Dec 2024): $(296k) (down from $183k on 30 Jun 2024)
• Employee Share Trust Unvested Share-Based Payments (31 Dec 2024): $55k (down from $1.40 million on 31 Dec 2023)

The significant increase in deferred tax movement reflects changes in the company’s tax position and deferred tax liabilities.

8. Key Metrics Summary

9. Reporting Period: 07/2024-12/2024

This analysis covers the financial performance and strategic initiatives of Pro Medicus Limited for the period from July 2024 to December 2024, highlighting significant growth metrics, investment activities, and operational changes that position the company for continued success in the competitive healthcare technology sector.