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    Healius (HLS shares

    A general advice question please. HLS are currently arranging for a special dividend following the sale of part of their business. Obviously a good thing for shareholders, since last dividend was in 2022. My question is what do MM feel will be in store going forward after HLS pay down their debt? Morningstar rate the stock at $ 1.98 but there is only 1 buy amongst 11 ratings. I cannot easily locate any future EBITDA, which makes we wonder whether to purchase the stock? Thank you in anticipation.

    Answer

    Hi George,

    We sold pathology company Healius (HLS) below $1.40 more than a month ago, the move was looking good until the news of the special dividend:

    • ​HLS has announced a fully franked special dividend of 41.3 cents per share, amounting to approximately $300 million. This payout is contingent upon the completion of the $965 million sale of its Lumus Imaging business to Affinity Equity Partners which is expected to complete on May 1st.

    Following the announcement HLS rallied the most since 2020, as you say the big question is what next after HLS has sold this quality asset, bearing in mind that HLS only has a market cap of ~$1bn. Profit expectations for the coming few years show growth, but from a low base. It will be down to how they execute on the transition to being a smaller business.

    • 2025 -$11mn, 2026 $15.3mn and 2027 $30m.

    We see no reason to buy HLS apart from the franking credits although the stocks likely to fall sharply when it trades ex-dividend.

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    Healius Ltd (HLS)
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