Monash IVF (ASX:MVF) provides assisted reproductive services (ARS) and associated services such as ultrasounds and genetic testing. It has 23 ARS clinics across Australia and four service centres. There are 15 ultrasound clinics and two genetics laboratories. Monash has grown to now account for 21% market share for stimulated cycles in Australia and 20% market share for frozen embryos.
Monash was included in the inaugural NAPS ANZ portfolio which commenced on 1 Jan 2023. When the portfolio was reset on 1 Jan 2024, Monash was retained as it was still one of the top two healthcare stocks. There was however a partial sell down to reweight the portfolio to equal weightings. It has been the third best performer since the portfolio commenced with an annualised return of 49.2%.
The StockRank has advanced 5 points to 90 since the release of the half year results on 23 February. This is primarily due to the improvement in the Value score. The price has increased 3%, so the change in the Value score is due to improvements in the underlying fundamentals, not a declining price. Earnings per share (EPS) have increased, therefore lowering the PE ratio. Likewise, sales, cashflow, dividends and book value have all improved.
Revenue grew by 21.7% in 1H FY24. The biggest contributor to growth has been the Australian IVF business. Within this, the contributors in order of significance were:
Acquisitions of additional practices
Price increases of 5% - 8% comparing 1H FY24 with 1H FY23
Organic market share growth
Industry growth
The Day Surgery Unit has also made a significant contribution to growth, with the opening of the Day Surgery Unit on the Gold Coast in October 2023. The Ultrasound division made a small contribution to growth, along with the International division.
The two main components of IVF treatments are stimulated cycles and frozen embryo transfers. Of those, stimulated cycles account for 54% of total IVF patient treatments. Stimulated cycles grew by 5.1% across the industry for 1H FY24 as measured by Medicare data. This compares with 15.1% growth for Monash. Over the last four years Monash has increased their share of this market by 3.6% to 20.9%.
Source: Monash, 1H FY24 Results Presentation, 23/2/24
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