Australia | Jun 08 2006
By Greg Peel
In the US, items as simple as medical gowns are consumables in 90% of US medical procedures, discarded after one use. In Australia it appears we still wash them. Blood collection kits, surgical procedure kits and other items are also available as throwaways. ITL Group (ITD) is well placed in the consumable medical supply growth industry.
Intersuisse rates ITL Group as a Buy. The stock closed yesterday at $0.26. ITL develops, manufactures and commercialises the aforementioned consumable medical supplies. The company has distribution contracts with various suppliers across Australia, North America, Europe, Japan, China, India and other parts of Asia. It also sells directly within Australia and South East Asia.
Intersuisse notes ITL is developing innovative products including, for example, the "next generation" of needle products for whole blood collection, apheresis, dialysis and oncology. The company has manufacturing facilities in Melbourne and Malaysia (Ipoh operates 24 hours, 7 days).
The company is on track to achieve 25% growth for FY06, the analysts report. The Asian market will be a key driver, with a recent Malaysian acquisition being immediately accretive. 7% of growth comes from the area of disposable gowns et al, where only 7% of Australian procedures use consumables to date. ITL boasts 30% of this particular segment in Australia.
Intersuisse is forecasting a profit of $2.8m for FY06, growing to $3.6m in FY07 and $4.7m in FY08. Earnings per share is expected to grow by 16% in FY07 and 28.9% in FY08, with the forward P/E in FY08 forecast as 5.7x.