Monash IVF eyeing China for growth

Strong demand for IVF treatment helped Monash IVF post a 27.6 per cent jump in first-half net profit, and upgrade its annual net profit guidance.

The Australian fertility company behind the world's first IVF pregnancy 43 years ago is looking to take advantage of China's recent relaxation of its one-child policy.

Monash IVF is looking at China, which is already the biggest IVF market in the world, due to its 1.36 billion population, as well as Malaysia and Australia to expand its operations, chief executive James Thiedeman told AAP.

Mr Thiedeman said the recent relaxation of the one-child policy in China, which took effect from January 1, makes the country very attractive.

"That presents a fantastic opportunity for a provider like Monash, which has a very strong brand credibility over in Asia, so that's where we're looking.

"There are a large number of women at a more advanced maternal age who have one child and who will be seeking the opportunity to have a second child and so our understanding, our intelligence is telling us that the waiting list in many of the existing IVF clinics in China are up to two years in length," he said.

At worst, a woman in Australia would wait a month to see one of Monash IVF's doctors, he said.

Monash operates more than 40 IVF clinics, ultrasound practices and service centres across Australia and Malaysia.

Monash IVF is seeking a partnership with an existing IVF operator in China, "largely because we would want to derisk any entry into that market place. And having a partner who knows the nuances of that market would be very important," Mr Thiedeman said.

Business is booming for Monash IVF, which saw IVF treatments rise 17.3 per cent to 9,090 in the first-half ended December 31 from a year ago.

First-half net profit rose 27.6 per cent to $14 million from $11 million a year earlier. The result was also boosted by its two recent acquisitions in NSW and four per cent price increase.

Monash IVF Friday forecast a 25-30 per cent rise in annual net profit, mainly due to growth in IVF patient treatment demand continuing in January and February, and recent acquisitions of Sydney Ultrasound for Women and Monash IVF Bondi Junction.

The group had previously forecast net profit growth of around 25 per cent.

In fiscal 2015, Monash IVF booked a net profit of $21.4 million, more than a four-fold jump from $4.9 million a year ago.

Monash IVF's bullish guidance and solid first-half results led to a sharp jump in the company's share price.

At 1430 AEDT, the company's shares were up 11 cents, or 7.3 per cent, to $1.625 in a flat Australian market.


*Net profit rose 27.6pct to $14m vs $11m

*Revenue jumped 31.6pct to $79.3m vs $60.3m

*Dividend up 23.1pct to 4cts vs 3.25c

3 min read
Published 26 February 2016 at 9:19am
Source: AAP