Profit jumps sharply at Elite

Drax Hall branch of Elite now completed

Elite Diagnostic last traded on the Junior Market a $6.40 to be up 117 percent for 2019 and is one of three stocks on that market to more than double, this year.
Investors feel there is more to gain from investing in the stock of this technological business as they continue to buy into the stock and pushed the price as high as $7.50 after the company posted full-year results in August.
Elite reported net profit for the June quarter at $24.6 million compared to $3 million for the similar period a year ago. A strong increase in revenues and a fall in repairs of equipment and administrative expenses compared to the year-ago period helped with the strong growth in profit. Profit before tax for the 12 months grew 32 percent to $47.4 million compared to $35.8 million for the similar period a year ago. Gross cash inflows amounted to $103 million but the company had net borrowing of $8 million and purchase of property, plant and equipment amounting to $135 million, down from $295 million purchased in the prior year.
Revenues were $115 million for the 4th quarter, an increase of 46 percent over the $79 million for the same period last year. Revenues for the 12 months to June 2019 jumped 35 percent to $404 million compared to $298 million for the similar period a year ago. The directors in their report to shareholders accompanying the financials, stated, “the increase in revenue was due to greater utilization of the Liguanea branch which also extended their hours of operation”.
Importantly, revenues not only grew year over year but for each of the last 7 quarters it increased quarter to quarter. For the 2020 fiscal year, revenues should hit $500 million from the two Kingston locations. Cost of sales remains static in dollars, in spite of the sharp rise in revenues.
Direct cost rose from $28 million in the June 2018 fourth quarter, to $30 million in 2019 and from $117 in the year to June 2018 versus just $119 million in 2019 and $96 million in 2017. Increased growth from the two existing locations should have a powerful impact on profits, resulting from the near static direct cost.
Administrative cost fell from $36 million to $33 million in the June quarter of 2019 but rose sharply by 52 percent for the year to $152 million. Depreciation charge climbed from $$7.5 million for the quarter to $14 million in 2019 and moved from $28 million to $56 million for the year.

Elite enjoying a long period of increased quarterly growth in revenues since December 2017.

A loss of  $8 million on exchange in the June 2019 quarter and reduced profit by $10 million for the full twelve months. Excluding this loss, earnings per share for the quarter would have been 9.5 cents instead of the 7 cents reported and the full year 16.7 cents versus 13 cents reported. Finance cost climbed from $16 million in the 2018 fiscal year to $20 million for 2019.
The company closed the fiscal year with shareholders’ equity of $447 million, loans borrowed amounting to $196 million, cash funds of $94 million, current assets of $119 million and current liabilities of $50 million.
“Demand for imaging services remains strong and the company continues to execute its plan providing exceptional patient care, excellent service, expanding its services and gaining market share.
The construction of the new St Ann (Drax Hall) location is completed and the company expects to open its doors in September 2019. This new location will have full imaging services and doctors’ offices,” the directors reported.
IC forecast earnings for the full year ending 2020 at 55 cents, on this basis the stock is priced at a PE ratio of 12, but the next two years is when the full pay off will take place when the expansions should be maturing.

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