Healius Faces Profitability Challenges Amid Cyclone Impact and Restructuring
Healius Limited reported a 5.7% rise in FY25 revenue driven by pathology growth, while underlying EBIT fell 27% impacted by cyclone disruptions and restructuring. The company advances its pathology strategy and cost savings post-Lumus divestment.
- FY25 revenue up 5.7% to $1.34 billion, led by pathology segment
- Underlying EBIT declined 27.2% to $17.1 million, affected by Tropical Cyclone Alfred
- Lumus Imaging divestment completed, simplifying business model
- Annualised support cost savings of $7.3 million achieved, $8.5 million more planned
- Pathology strategy execution progressing with focus on genomics, customer service, and labour cost reduction
Healius Financial Overview
Healius Limited closed FY25 with a solid 5.7% increase in group revenue to $1.34 billion, primarily driven by growth in its pathology division. This marks a continuation of the company’s focus on higher-value diagnostics, including a notable 34.7% surge in genomic diagnostics revenue. However, underlying earnings before interest and tax (EBIT) fell sharply by 27.2% to $17.1 million, reflecting operational challenges and one-off impacts.
The reported EBIT loss widened to $527 million, heavily influenced by a substantial $495 million goodwill impairment charge in pathology and restructuring costs following the divestment of Lumus Imaging. Despite these non-cash and non-recurring items, management emphasised the underlying business’s resilience and strategic progress.
Operational Highlights and Strategic Execution
The pathology segment showed encouraging signs with 6% revenue growth, underpinned by a 3.3% volume increase and improved revenue mix favoring specialists and B2B clients. The company has invested in expanding its collector workforce and call centre staff, which has improved service levels but also increased labour costs. A detailed labour cost optimisation plan is underway to address this.
Healius continues to execute its T27 strategic plan, aiming for a high single-digit EBIT margin by FY27. Key initiatives include digital transformation with the rollout of Medway Collections Portal 2.0, enhanced customer service, laboratory modernisation, and expansion into emerging diagnostics. The digital program is on track for completion by December 2025, after which related spending will become business as usual.
Divestment and Capital Management
The sale of Lumus Imaging, completed in May 2025, has simplified Healius’s business model and enabled the repayment of debt. The company ended FY25 with a net cash position of $57.2 million and secured a new $300 million debt facility maturing in 2028. Healius remains committed to a conservative capital management approach until earnings consistency is restored.
Challenges and Outlook
FY25 was not without headwinds. Tropical Cyclone Alfred caused an estimated $3.5 million EBIT impact due to temporary laboratory and collection centre closures in Queensland and Northern NSW. Additionally, Agilex Biolabs faced geopolitical uncertainties that stalled revenue growth, though management expects a recovery in FY26 supported by a strong order pipeline.
Looking ahead, Healius reaffirms its guidance for continued revenue growth consistent with second-half FY25 levels, labour cost containment, and delivery of $15 million to $20 million in annualised support cost savings by the end of FY26. The company’s focus remains on improving profitability through operational efficiencies and strategic growth in higher-margin diagnostic services.
Bottom Line?
Healius’s FY25 results reveal a company in transition, balancing growth in advanced diagnostics with cost pressures and strategic realignment as it targets sustainable profitability by FY27.
Questions in the middle?
- How will Healius manage labour cost pressures while expanding its pathology services?
- What is the full financial impact and recovery timeline from Tropical Cyclone Alfred?
- Can Agilex Biolabs overcome geopolitical headwinds to return to growth in FY26?
