How ParagonCare’s $3.6B FY25 Sets Up Asia Expansion and Synergy Gains
ParagonCare Limited reported a solid FY25 with $3.6 billion in revenue and $95.2 million underlying EBITDA, marking progress in its integration and growth strategy across Asia Pacific. The company is poised for further profitability improvements and expansion in FY26.
- FY25 revenue reaches $3.6 billion with 8% growth
- Underlying EBITDA of $95.2 million and net profit after tax of $31.2 million
- Successful integration of CH2 Holdings, Oborne, and ParagonCare businesses
- Expansion into Dental, Aesthetics, Robotics, and Contract Logistics
- Secured $400 million debt facility with no earnings or leverage covenants
Robust Financial Performance Amid Integration
ParagonCare Limited has delivered a strong FY25 financial performance, reporting revenue of over $3.6 billion, an 8% increase on the prior year, alongside an underlying EBITDA of $95.2 million. The company’s net profit after tax rose to $31.2 million, reflecting the full-year contributions from its merged entities, including CH2 Holdings and Oborne.
This growth comes as ParagonCare continues to integrate its acquisitions and merger activities, consolidating multiple business units onto a unified ERP system and streamlining operations across Australia and New Zealand. The company’s strategic 3-2-1 initiative, merging three businesses over two years into one team, is progressing well, with key milestones such as site consolidations and shared service rollouts achieved.
Diversification and Expansion Drive Growth
ParagonCare’s diversified healthcare distribution model spans wholesale pharmacy, medical technology, contract logistics, and clinical manufacturing. The wholesale pharmacy segment led revenue growth with an 11.6% increase, supported by strong retail pharmacy sales and the integration of Oborne’s complementary medicines business.
Newly launched business units in Dental, Aesthetics, and Robotics have broadened the company’s product and service offerings, with the Aesthetics division notably expanding across Asia. Contract logistics surged 25% to $336 million, boosted by a significant new 4PL contract with Owens and Minor, underscoring ParagonCare’s growing footprint in healthcare supply chain services.
Strategic Investments and Financial Position
ParagonCare secured a $400 million debt facility with ScotPac, structured without earnings or leverage covenants, providing financial flexibility for organic growth and acquisitions. Despite an increase in net debt to $215 million, the company maintains a manageable leverage ratio of 2.26 times EBITDA.
Operating cash flow was impacted by delayed payments from a retail pharmacy group, but management expects normalization in FY26. Capital expenditure focused on a new Brisbane site and IT infrastructure enhancements, supporting future growth and operational efficiency.
Outlook and Strategic Priorities
Looking ahead, ParagonCare anticipates continued revenue growth and improved profitability as it realizes full synergy benefits from the merger, targeting $12 million in annual savings by FY26. The company plans to expand its presence in Asia, particularly leveraging strong growth in Thailand, Japan, and Vietnam, while addressing challenges in markets like Korea.
Management also highlighted a commitment to reviewing the dividend policy in FY26, signaling confidence in the company’s financial trajectory. With ongoing investments in technology, streamlined operations, and a broadening product portfolio, ParagonCare aims to solidify its position as a leading healthcare distributor across the Asia Pacific region.
Bottom Line?
ParagonCare’s FY25 results set the stage for accelerated growth and integration gains, but cash flow and market challenges warrant close watch in FY26.
Questions in the middle?
- How will ParagonCare manage working capital pressures from delayed receivables in FY26?
- What are the prospects and timelines for scaling clinical manufacturing at Mt Waverley?
- How aggressively will ParagonCare pursue acquisitions in Asia to complement organic growth?