Hours-long queues for COVID-19 tests have caused a pre-Christmas headache for thousands of Australians but investors in pathology stocks have little to cry about.
ASX-listed medical testers Sonic Healthcare, Healius and Australian Clinical Labs all recorded their highest closing prices of the year on Tuesday as test volumes surged throughout the country. New South Wales reported 151,443 tests and Victoria 92,262 tests.
Australian Clinical Labs (ACL) surged 12.2 per cent to close at $5.60 after the company issued a profit upgrade off the back of strong demand for coronavirus and other medical testing.
Later that day, the company’s private equity backer Crescent Capital Partners said it would not be selling any of its escrowed shares even though it would be entitled to do so from February. Crescent partner Peter Lyon-Mercado observed that in light of the Omicron variant of COVID, pathology operators were likely to maintain a critical role in the health sector moving forward.
Sonic Healthcare hit a year-to-date closing price high of $45.47, while Healius, which owns the Laverty and Dorevitch testing centres, hit its highest closing price for the year at $5.37.
Sonic is up 38 per cent for the year, Healius shares are up 42 per cent and ACL is up 63.7 per cent since listing on the ASX in May.
All three companies say it’s tough to predict future testing demands and will not give guidance.
However, ACL’s chief executive Melinda McGrath said yesterday that the company expects “heightened volumes of COVID-19 testing to continue during the remainder of 2021-22 due to the impact of new variants and outbreaks, the lifting of travel restrictions and increased demand for both commercial and travel testing”.
Medicare is currently rebating doctors about $100 per test for people with symptoms and pathology services are charging $145 for optional tests.
