Australian Clinical Labs Reports Increase in Revenue Amid Rising Demand for COVID-19 Testing

The COVID-19 outbreaks in New South Wales and Victoria have led to an increase in demand for testing, and this trend is expected to show in the pathology network results Australian Clinical Laboratories (ASX: ACL).

Australian Clinical Labs, which was enrolled in May, is the third largest pathology network in Australia. Pathology is a branch of medicine that tests for diseases, including (but not limited to) COVID-19.

Pathology accounts for 70% of all healthcare decisions and represents a market of over $ 5 billion in Australia.

While the stock got off to a mixed start, its price has started to take off in the past two months and is now more than 25% above its IPO price of $ 4 per share.

Australian Clinical Labs expects big profit

This morning, ACL shares topped $ 5 after the company revealed how much it expects to benefit from the Delta outbreak, when it comes to its results for the first half of fiscal 22 .

Its revenues are between $ 398.1 million and $ 414 million, which is between 29.5% and 34.7% more than its prospectus forecast of $ 307.4 million.

Net income after tax is expected to be between $ 63.7 million and $ 70 million, which would be between 177.9% and 205.6% higher than the $ 22.9 million forecast before listing.

Although vaccinations are gradually reversing the trend in NSW and are expected to do so in Victoria soon, the company said forecasts assume a reduction in COVID-19 testing in the next quarter.

However, he also said his non-COVID activity has also seen sustained success.

The revised forecast followed a strong full year result for fiscal 21 with revenue of $ 674.4 million and profit of $ 88.7 million. While the former was only up 29% from FY 120, the latter was up 659%.

Australian Clinical Labs Stock Price Table (ASX: ACL)

Other beneficiaries?

While Australian Clinical Labs is the newest pathology stock on the block, it’s not the only company to have benefited from the demand for COVID-19 testing.

Its two large-cap peers Sonic health care (ASX: SHL) and Healius (ASX: HLS) have also been very successful, both from a share price point of view and financially over the past 18 months.

Healius is up almost 80% since January 2020 and Sonic is up almost 40%.

Sonic increased profit 149% to $ 1.3 billion, and Healius rose 179% to $ 148.4 million.

There are also a handful of small caps that make testing easier, including the test kit vendor. Atomo diagnostic (ASX: AT1) and Rhinocé (ASX: RNO).

Sonic (ASX: SHL), Healius (ASX: HLS), Atomo (ASX: AT1) and Rhinomed (ASX: RNO) stock price chart

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