SHL –6.01%: Sold off today although the worst of it was seen early with the shares recovering from their morning lows following a downgrade to guidance. Organic sales guidance is for 6% growth for the full year (no prior guidance had been provided) which is broadly inline with current consensus, however, margins are under more pressure from inflation and slower progress on cost-out initiatives such as closing surplus pathology collection centres, and this has hurt profitability.
EBITDA guidance is now for $1.6bn down from $1.7-$1.8bn, although consensus was already below the low end of the range at $1.68bn, so today’s new guide is it’s less than 5% below the current market expectations + it seems like some of the cost out ticked up more recently.
- We don’t think today’s update should have come as a huge surprise to markets
MM believes the low could now be in for SHL after a tough period
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