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HLA - HEALTHIA LIMITED


nipper
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Healthia Ltd (HLA) is an integrated group of health based companies which operate a network of podiatry and physiotherapy clinics, and B2B businesses.

Listing at $1.00 on the ASX in August 2018, the holding company of the Group owned and operated 56 My FootDr podiatry clinics, an iOrthotics orthotics laboratory and holds a 50% interest in an allied health supplies business, D.B.S. Medical. As part of the IPO raise, the Group entered into Acquisition Agreements to acquire further allied health businesses:

1. Fourteen Allsports Physiotherapy clinics, the Allsports management business and the Allsports intellectual property, including the brand;
2. Sixteen podiatry Clinics, which following acquisition are expected to be rebranded as My FootDr;
3. Nine physiotherapy clinics, which following acquisition are expected to be rebranded as Allsports Physiotherapy;
4. Seven Extend Rehabilitation branded hand therapy clinics;
5. The remaining 50% of the issued share capital of My FootDr (Cleveland) Pty Ltd, not currently owned by the company, and;
6. A further 25% of D.B.S. Medical, the holding company of the Group which owns and operates 56 My FootDr podiatry clinics, an iOrthotics orthotics laboratory and holds a 50% interest in an allied health supplies business, D.B.S. Medical..

Healthia continues to expand, acquiring smaller healthcare service providers and adding to what it has defined as its three divisions: bodies and minds (physiotherapy); feet and ankles (podiatry and orthotics) and eyes and ears (optical and audiology services).

In September, Healthia acquired the Back In Motion Health Group for $88.4 million. Back in Motion has 64 physiotherapy clinics. Analysts are commenting that with Covid restrictions easing, there will be an increased demand or such services, both from a resumption of elective surgery and subsequent recuperative plans and also a higher discretionary spend.

The first few years of HLA saw frequent capital raises and a series of acquisition. Covid kept a lid on any growth / recovery and it was not until late 2020 that the SP rose above $1.00. It is now $2.15 and the market cap is around $250 million.

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There are opportunities that Covid has thrown the way of consolidators.

The old model of sole practitioner looking to sell at three times book and have a comfortable retirement is being challenged and younger entrants want more flexibility, of not being tied to the business 5 or more days a week, 48 or more weeks a year. If you are not open you are not making money. This would have to be true for dentists, doctors, vets, through to nail clinics and beauty spas, and more than likely for Healthia when looking to grow.
 
On the other side and especially in the case of healthcare, it is possible that many patients are loyal to their healthcare provider and wary of corporate models.

COVID19 will complicate acquisition strategies. Some owners could be reluctant to sell given rising demand for their service next year. Others might delay their retirement, needing a few more years of work to recoup lost income during the pandemic.

 
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