Aussie lab test company Healthscope sees growth in NZ pathology business
Australia’s Healthscope is confident of winning more contracts for pathology services in New Zealand where it already services 65 percent of the population.
The size of the company’s business in New Zealand and its ambitions for more growth have been detailed in a prospectus for a share offer in Australia.
“Operationally, Healthscope is focused on extracting further economies of scale, including cost synergies, through the operational integration of its expanding laboratory network,” the prospectus says.
The company trades under the Labtests, SCL and Northland brands, and as at May 19, 2014, it operated 13 labs across New Zealand. It will seek additional DHB contracts as they come up and says it is well positioned to win them.
The company already has 10 contracts with district health boards in New Zealand. It provided lab testing services for more than five million patient episodes in the 12 months ended Dec. 31, 2013. Its Labtests Auckland does 33 percent of total annual volume of DHB pathology work in New Zealand, according to the prospectus.
The document says Healthscope is a market leader in New Zealand and management estimates it services 65 percent of the population. The Auckland contract started in September 2009 and runs until September 2020.
In December 2011 the company was awarded a new pathology contract in the Canterbury region. It acquired Medlab South in 2012. It also has a veterinary pathology business called Gribbles Veterinary.
The company prospectus does not disclose earnings for New Zealand, lumping them in an international division which also operates in Malaysia, Singapore and Vietnam.
Earnings before interest, tax, depreciation and amortisation for the international pathology division rose to $A44.5 million in the 2013 financial year from $A38.7 million in the 2013 year.