+ Surge in revenue. 2H20 revenue leapt 26% YoY to S$83mn. Patient admissions rose as border closures and work from home gave households in Singapore more time to seek regular check-ups and opt for elective procedures. Border closures also raised the availability and capacity of dentists to undertake procedures.
+ Healthier balance sheet. Net debt declined from S$75mn in FY19 to S$20mn in FY20. FCF generated was S$19mn. Another S$47mn was collected from the disposal of Aidite in 1H20. Q & M announced a special DPS of 2.5 cents to return S$19mn to shareholders from the proceeds of its sale of Aidite. In January 2021, its final 12.2% stake in Aidite was sold for net proceeds of S$17mn and a net gain of S$5mn. Special dividends could thus be repeated in FY21. We have not incorporated its most recent disposal in our FY21e numbers.
+ Maiden revenue from PCR. Maiden revenue of S$2.2mn came from the sale of kits and laboratory tests of COVID-19 PCR. Gross margins were 63%. Approval of the laboratory, under 51% subsidiary Acumen Diagnostics, was only secured in September 2020. We model in revenue of S$33mn from PCR tests for FY21e.
– Pandemic impact on Malaysia and new openings. Revenue in Malaysia was flat at around S$9.8mn. Lockdowns and movement restrictions hurt patient volumes. New clinics opened in FY20 also fell to six from 21 in FY19.
We expect record core earnings in FY21e. Enablers would be:
The company will be providing quarterly updates from FY21 onwards.