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UK — Allied Healthcare benefits from foreign exchange rate

07 May 2010

Allied Healthcare International Inc. (AHCI:NSQ), the US quoted provider of temporary staffing services to the health care and social care industries in the UK, has issued financial results to its fiscal 2010 second quarter ended 31 March 2010.

In the second quarter of fiscal 2010 (three months), total revenue increased by +9.1%, to $60.3 million, compared with $55.3 million reported during the same period in fiscal 2009. Allied's Homecare revenue grew by +16.2% to $51.6 million, while Nursing Homes revenue declined by -31.1% to $4.1 million and Hospitals revenue declined by -6.1% to $4.6 million. After the favourable impact of currency exchange of $5.2 million, revenue increased by +18.4% year-on-year to the reported $65.5 million.


Total gross profit for the second fiscal quarter increased by +7.1% to $18.4 million, from $17.2 million for the comparable quarter in fiscal 2009. Gross profit as a percentage of revenue was 30.4%, compared with 31.0% for the comparable prior-year period. Foreign exchange increased gross profit by +$1.5 million to the reported $19.9 million for the 2010 second fiscal quarter.

Selling, general and administrative expenses (SG&A) for the second fiscal quarter was $15.1 million (24.9% of revenues), an increase of by +5.1%, from $14.4 million (26.0% of revenues) reported last year. Foreign exchange increased costs by $1.2 million to the reported $16.3 million for the 2010 second fiscal quarter.

Operating income for the second quarter of fiscal 2010 increased by +17.5% to $3.3 million from $2.8 million a year ago. Foreign exchange increased operating income by +$0.3 million to the reported $3.6 million for the 2010 second fiscal quarter.

Income from continuing operations for the second quarter of fiscal 2010 was $2.6 million, or $0.06 per diluted share, compared with $2.1 million, $0.05 per diluted share, reported during the 2009 second fiscal quarter.

For the six months of fiscal 2010, total revenue increased by +9.0%, to $127.3 million, compared with $116.9 million for the same period in fiscal 2009. Allied's Homecare revenue grew by +16.7% to $108.2 million, while Nursing Homes revenue declined by -31.7% to $9.2 million and Hospitals revenue declined by -7.0% to $9.9 million. After the favourable impact of currency exchange of $7.6 million, revenue increased by +15.4% year-on-year to the reported $134.9 million for the fiscal 2010 six-month period.

Total gross profit for the six months of fiscal 2010 increased by +7.1% to $38.5 million, from $36.0 million for the comparable period in fiscal 2009. Gross profit as a percentage of revenue was 30.3%, compared with 30.8% for the comparable prior-year period. Foreign exchange increased gross profit by +$2.3 million to the reported $40.8 million for the fiscal 2010 six-month period.

Allied Healthcare CEO, Sandy Young, said "Allied's Homecare revenue increased by +16.2%, compared to the same quarter last year due to the success we had in implementing new contracts in quarter three and quarter four of last year in our London area."

"The pending U.K. political change from the general election is impacting local authority and Primary Care Trusts decision making while they await the future direction of policy making related to health and social care."

"While all the main political parties support more care at home, which is away from more expensive residential care, the method of procurement and the extent of some of the current initiatives, like personalisation and independent budgets, should become clearer over the next twelve months."

"We continue to believe that the current market dynamics, such as an aging population, the lower cost of Homecare provision, the continued consolidation of local authority suppliers and the continued increase in demand from Primary Care Trusts, all favour future growth in demand for Homecare services."

"However, there will be an inevitable tightening of public sector budgets and we may see some price pressures arising from the current state of the public finances."
 
At close of play in New York yesterday Allied's shares were down by -4.3% to US$2.45.

 

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