Paragon Care Ltd ("PGC") - Healthcare upside!!

**percy** · 19-02-2018, 04:07 PM

Originally Posted by malus

Contemplating my minor "toe in the water" shareholding in this Company and their offer currently open to retail shareholders at A$0.725.

Fully underwritten, so I assume that's why share price got down to, but not below the offer price of A$0.725 during the market turmoil of the past few weeks?

Institutions took up their allocation of A$44.8m. Now it's the retail holders turn with $25m being sort.

Entitlement documents are in the post... I was not over confident about the efficiency of delivery given the 'shortish' offer period (closes 26 Feb), spent sometime this afternoon finding my personalised offer document on the Paragon site... now navel gazing as I consider picking up my entitlement and whether I attempt to add to that holding by applying for up to $25,000 (that's 34,482.75862 shares @ A$0.725) additional shares.

Thoughts??

Percy... I assume you're in boots and all??

No.
The first half was not up to what I expected.
A lot of talk they will catch up in their second half.
With a lot more shares on issue, I can't see see that happening.
I very much doubt an acquisition ,or organic growth increasing their eps.
Therefore I am sitting this capital raise out.
That said I did hear the intos were scaled heavily.
I did point out to the company NZ shareholders do not get enough time.
NZ post blames Australia post,Australia post blames NZ post.!
Last cap raise they did, the company secretary got their share registry to email me the form,which I then emailed onto Craigs,who took them up for me.
ps.

**malus** · 19-02-2018, 05:25 PM

The first half was not up to what I expected.
A lot of talk they will catch up in their second half.

Yes, I did note what their first half year report said and have extracted and inserted below:

PRINCIPAL ACTIVITY

The principal continuing activity of the consolidated entity is the supply of durable medical equipment, devices and consumable medical products to hospitals, medical centres and aged care facilities.

Revenue and Earnings

The Company’s revenue was $52.5m for the six months ended 31 December 2017 (down 4.5% over the prior corresponding period). EBITDA for the half year was $5.4m (down 19% over the prior corresponding period) and NPAT was $2.8m (down 24% over the prior corresponding period). This result is in line with the Company’s 1H18 revenue and earnings guidance provided on 27 December 2017.

As advised at the Company’s Annual General Meeting held on 22 November 23017 earnings for 1H18 have been impacted by greater seasonality in revenues (compared to 1H17) and one-off operating expenses, which led to a $1.2m decline in EBITDA this half compared with the comparable period in 2017. The Company’s gross profit margin of 39% remained unchanged, with lower revenues leading to a $0.8m reduction in EBITDA. Operating expenses increased by $1.1m as a result of:

• Increased investment into future growth – including investments into new Services & Technology businesses and the restructure of sales team to drive regional penetration; these investments were partially offset by wage decreases in other business units • The establishment of a new South Australian warehouse and recruitment of new management team

The Company expects to deliver strong full year earnings, driven by organic growth initiatives and recent acquisitions with the second half of the financial year stronger than the first half, given particularly pronounced seasonality in revenues this financial year. The Company expects a strong slant to 2H18 given historical trends and the seasonal nature of hospital procurement.

Paragon maintains its FY18 revenue guidance of $125m to $135m, and EBITDA guidance of $18m to $19m. Paragon will provide a further earnings upgrade once it finalizes recent acquisitions

A lot of talk they will catch up in their second half.
With a lot more shares on issue, I can't see that happening.
I very much doubt an acquisition ,or organic growth increasing their eps.

It will test how good their acquisition diligence and purchase pricing is!

Therefore I am sitting this capital raise out.

Fair enough, now I've sorted out my personalised entitlement document and can make payment from my Aussie bank account using Bpay, I've got flexibility to make up my mind and action when and if it suits.

**percy** · 26-01-2018, 12:57 PM

The latest small bolt on acquisition of South Australian, Anaequip Medical,makes sense.

**trader_jackson** · 01-02-2018, 09:12 PM

What is going on?
Share price slipped, albeit temporarily, into the 74's today...
If only I had cash to buy

**Joshuatree** · 01-02-2018, 09:46 PM

TALK is PIE are wanting to sell out before a weak result. They went under 5% recently and MAY have an 8 million share overhang still to unload.

**Well Endowed** · 02-02-2018, 11:16 AM

PIE possibly learned a lesson or two from Trilogy about positions in stocks with relatively low turnover (compared to holding-size). Interesting they'd take such a haircut given they bought in at levels up to 93c. In my opinion their fund performance in recent quarters seems to be lagging a bit too....

Personally I'd think with it currently trading mid 70s that a slightly softer result was already fully priced in.

**Joshuatree** · 02-02-2018, 12:36 PM

Yes they have telegraphed a lower result. we will see what PIE do .

**percy** · 02-02-2018, 12:45 PM

The current strong down trend continues.
From a broker's research dated 30/1/2018.;PGC has continued its aggressive acquisition program with the completion of three bolt-on acquisitions in recent weeks.Earnings are strongly skewed to the second half.
Share price target $1.12 ie 45.45% higher than today's 77 cents,and that does not include dividends.

**LAC** · 02-02-2018, 12:59 PM

Have recently dipped my toes into this one, I have liked all that I have read so far, will be interesting to see their results. Current price looks good for a top up personally.