Paragon Care (PGC) H1 2025 earnings summary

Executive summary

• Revenue for HY25 reached $1.85 billion, up 28% year-over-year, reflecting the full integration of CH2 Holdings and Oborne Health Supplies.

• EBITDA increased 103% to $47.5 million, and Net Profit After Tax rose 86% to $13.2 million compared to HY24.

• Completed transformative reverse acquisition of CH2 Holdings, creating a leading healthcare wholesaler and distributor across Australia, New Zealand, and Asia.

• No dividends declared for the half-year; focus remains on integration and leveraging synergies from recent acquisitions.

Financial highlights

• Like-for-like revenue growth was solid, with pharmacy outperforming the market and Asia showing strong growth.

• Gross margin improved 111% to $163.5m, with margin percentage rising to 8.8% (HY25) from 5.4% (HY24).

• Depreciation and amortisation rose by $4.2m due to recent acquisitions; finance costs increased with higher debt levels.

• Net working capital and inventory increased due to integration and seasonal factors; net debt rose to $226.6m.

• Cash and cash equivalents at period end were $21.7m, up from $19.9m at 30 June 2024.

Outlook and guidance

• Continued focus on integration, operational efficiency, and cost rationalisation.

• Cross-selling and bundled offerings to drive organic growth; acquisition pipeline in place for further expansion.

• Borrowings and finance costs increased due to working capital needs and business growth, expected to revert to historical levels in the second half.

• Additional income tax expense of $2.2m may be recognized in H2 FY25 due to a change in thin capitalisation treatment.