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Paragon Care Ltd (PGC)

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Question asked 04/12/2025

Paragon Care Ltd (PGC)

Hi James & Team, What a Topsy Turvy Year. Your timely Analysis & Reports helped me ride the waves.. Thank you and Merry Xmas to you all. Paragon Care has completed its recent merger & acquisitio program and is successfully integrating their global reach throughout Asia It is looking interesting with Analyst forecasts reading a strong uplift in EPS and growth. Although not widely followed. The CEO assumes the MD post in 2026 with a management team now experienced in integration challenges. Last reviewed back in 2022, I think it is time for an update. I would appreciate your views and expectations Merry Xmas

Answer

H Richard,

For subscribers not familiar with PGC its a $410mn healthcare supplier that provides medical equipment, devices, consumables, and technical servicing to hospitals, clinics, aged care, and veterinary sectors across Australia, NZ, and Asia. It makes money by selling these products and earning recurring revenue from maintenance, distribution, and consumables.

The market has punished PGC over the last few months with the stock down over 50% from its July high. Revenue is forecast to edge up from $3.6bn in FY25 to $3.7bn in FY26 with a small downgrade by Hartley’s on Wednesday not helping.

In FY25 PGC reported underlying EBITDA of $95.2 million illustrating the thin margins considering the large turnover. It has a reasonable cash buffer. However, its balance sheet carries significant debt/liabilities and working-capital complexity, so it isn’t “cash-rich,” and liquidity depends heavily on its ability to manage receivables, payables, and inventory. If interest rates do rise it could severely impact the company’s profitability.

With turnover well under $100k on most days it’s not a stock for MM but if it was, we would be neutral ~25c.

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Paragon Care Ltd (PGC)

LAST UPDATED 04/12/2025 12:25

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