Symbion Result Is A Takeover Tonic

The Age

Thursday March 1, 2007

Nabila Ahmed

A DEFIANT Symbion Health has reiterated it is in no hurry to take part in industry consolidation, after unveiling first-half results that analysts said would guard against opportunistic predators.

Chief executive Robert Cooke, who rejected a $2.3 billion takeover offer from rival Primary Health last month, said that while Symbion wanted to participate in consolidation of the healthcare sector, he did not view it as "a fire sale".

Since Primary's failed bid, Ramsay Health Care and Healthscope have expressed interest in Symbion's assets. "I can't see any urgency for us to sell anything," Mr Cooke said. "I can nearly make a case for us to buy a couple of things."

With better than expected results in its pharmacy business and growth in pathology and consumer divisions, Symbion reported net income of $59.1 million for the six months to December 31, compared with a $54.1 million loss a year earlier when it split from Mayne Group. Analysts were satisfied with Symbion's work in radiology, where earnings margins remained flat. Other operators suffered a decline in that division due to wage pressures and tough industry conditions.

Earnings before interest and tax rose 16 per cent to $94 million in the half, and Mr Cooke promised improvement in the second half. He expects the full-year result to "be broadly in line" with that growth.

Shaw Stockbroking analyst Brent Mitchell said that while the company, which saw operating profit before one-off items slip 0.4 per cent to $46.9 million in the half due to higher interest payments on debt, still had to work through the repercussions from the divestment out of Mayne Group.

Symbion announced an interim dividend of 4.25?, up from 4? a year earlier, to be paid on March 30.

The stock tracked the broader market to close 10?, or 2.6 per cent, weaker at $3.79.

© 2007 The Age

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