Australia | Sep 04 2024
By Tim Boreham
ASX code: ((PME))
Shares on issue: 104,424,882
Market cap: $15.65bn
Chief executive officer and co-founder: Dr Sam Hupert
Board: Peter Kempen (chair), Dr Hupert, Anthony Hall (co-founder and executive director), Anthony Glenning, Dr Leigh Farrell, Deena Shiff, Alice Williams
Financials (year to June 30, 2024): revenue $161.5m (up 29%), net profit $82.8m (up 36.5%), earnings per share 79.1c (up 36%), cash and investments $155.5m (up 28%)
Identifiable major shareholders: Dr Sam Hupert 24.07%, Anthony Hall 24.11%
The home-grown, giant-killing radiology software outfit is proving that its technologies are suitable for more than just the sandstone' academic hospital institutions from which it first gained its foothold in the US market.
All up, in the year to June 30, 2024 the company won nine new contracts with a total contract value of $245m. This includes the biggest to date, the Dallas, Texas based integrated delivery network (IDN) Baylor, Scott and White Health.
A recent omnibus of five contract wins was notable not just for the value - a collective combined minimum of $45m - but for the varied nature of the clients.
These included paediatric hospitals in Ohio and Florida, private radiology chains and Florida's Moffitt Cancer Centre.
The jobs are characterised by software-as-a-service (annuity) revenue based on minimum transaction levels.
Despite chatter that the company is priced to perfection, Pro Medicus shares soared 13% in the two trading days after the August 14 disclosure of a 36% full-year profit surge, to $82.79m.
CEO and co-founder Dr Sam Hupert describes a "record year in all metrics, not just revenue and profit but also in terms of new sales and completed implementations".
He says the company's products are proving to be suitable for "virtually all segments of the market" from smaller groups to some of the largest IDNs and academic medical centres.
"It has been the most successful year in the company's history on all fronts," he chimes.
Coming from the clouds
Pro Medicus provides diagnostic imaging, practice management and image archiving software to hospitals and radiology practices.
Rather like cloud-based, book-keeping pioneer Xero, Pro Medicus claims to be the only genuine internet-based provider, in a profession that still likes its pencils and clipboards.
The company was founded by Melbourne general practitioner Dr Hupert and his technologist friend Anthony Hall in 1983. Back then clouds came in three key varieties: cirrus, cumulus and stratus.
The company's key products are Visage RIS (as in radiology information system) and the cornerstone Visage 7 (enabling users to consolidate information requiring multiple views into a customized single platform).
The image storage tool Visage Open Archive was introduced in 2017, with Visage Workflow Management emerging in 2020.
Not the America's Cup, but better
At the height of the global financial crisis, Pro Medicus acquired the California-based Visage Imaging for a knock-down -$5m.
It was the company's Alan Bond' moment (a reference to Kerry Packer buying back his Nine Network from the failed Perth mogul for a knock-down sum).
The purchase price was quickly validated, because Pro Medicus shed Visage Imaging's unwanted research arm shortly after for $15m.
Dr Hupert says the company was in the right place at the right time. (But you make your own luck, don't you?)
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