Back-to-back acquisitions to give ISEC Healthcare’s profits a solid booster shot

 Bottom line will jump as more deals come onstream.

Mergers and acquisitions (M&As) will drive ISEC Healthcare’s profits in coming quarters, according to a report by Maybank Kim Eng.

Maybank Kim Eng believes that ISEC Healthcare will engage in more acquisitions in Vietnam, Taiwan, Indonesia and likely more in Malaysia.

In addition, the closure of Novena will mean significantly lower costs of over a million dollars a year. This will further boost the bottomline.

Here’s more from Maybank Kim Eng:

3Q is not historically the strongest quarter for ISEC. Topline rose 28% YoY, and NP jumped 270% mainly off a low base last year that had not yet included Dr Lee’s contributions. 9M15 NP accounted for 75% of FY15E forecast excluding expected provisions in 4Q15.

MYR weakness dragged down Malaysia contributions in SGD. In MYR terms, Malaysia revenue rose a healthy 13% YoY, bolstered by higher patient visits, but fell 2% in SGD-terms.

This was buffered by Dr Lee’s contributions which remained constant. We expect 4Q15 to be better, as corporate patients on company benefits and insurance business tend to bunch up at year-end. There will be a c.SGD2m provision for the Novena clinic closure but this is already factored into our NP forecast of SGD3.5m.