HLS -16.04%: When it rains, it pours! HLS today provided commentary at their AGM via the CEO’s presentation that was disappointing, insofar as while they said that pathology volumes have increased by 4.5% for the year to date, with revenues growing by 5.9%, they put a big caveat on how that revenue would translate into earnings due to cash draw from investments and inflationary pressures, in terms of goods and labour.
They flagged a strategy day in the 1Q where the new HLS would be unveiled (post sale of the Lumus Imaging business) while they also said they expect a “material” increase in Pathology earnings in 2H25, but it felt like they were still experiencing a number of challenges, and the much anticipated turnaround in Pathology + the return of capital to shareholders following the sale of Lumus, is looks like it will take longer than first thought.
- Additionally, we were left somewhat confused by the rhetoric from the CEO and got the sense that HLS is going no-where until the strategy day next year, unless they get bid in the meantime.
MM is now neutral HLS
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