Healius delivers underlying earnings growth in FY26 results
In its FY26 full year results presentation dated 19 August 2026, Healius reported underlying revenue and earnings growth despite recording a statutory loss. Management outlined underlying revenue of $1,373.2m (up 2.1%), underlying EBITDA of $258.6m (up 8.1%), and underlying EBIT of $30.2m (up 76.6%).
The contrast with the reported result was stark. Reported net profit after tax (NPAT) came in as a loss of $415.6m, driven largely by a non-cash goodwill impairment of $332.0m.
Presented by CEO and Managing Director Paul Anderson and CFO Andrew Thomson, the results also detailed two significant strategic developments: the exploration of a potential Agilex Biolabs sale, and continued progress on the T27 transformation programme.
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FY26 group results at a glance
The FY26 result requires readers to distinguish carefully between the underlying and reported figures. Underlying metrics, which strip out non-underlying items and discontinued operations, improved across the board. The reported figures were weighed down by a large non-cash charge.
| Metric | FY26 $m | FY25 $m | Change % |
|---|---|---|---|
| Underlying Revenue | 1,373.2 | 1,344.5 | 2.1% |
| Underlying EBITDA | 258.6 | 239.3 | 8.1% |
| Underlying EBIT | 30.2 | 17.1 | 76.6% |
| Reported EBIT | (328.9) | (527.0) | 37.6% |
| Reported NPAT | (415.6) | (151.2) | (174.9%) |
The company noted that, as required by Accounting Standards, a non-cash pre-tax impairment charge of $332.0m was recognised against goodwill. This charge does not affect the group’s operations or cash position.
Interest costs fell to $49.1m (from $65.1m) on lower average debt levels. Support cost savings reached $24.4m on an annualised basis, with the full run-rate benefit expected from FY27 onwards.
CEO Commentary
Management noted that margin recovery is being driven through improving revenue quality and strict cost discipline.
Pathology: margin expansion on flat costs and better revenue mix
The Pathology division remained the core engine of the result, with margin improvement driven by a shift in revenue mix and disciplined cost control. Pathology revenue rose to $1,329.6m (up 1.8%), with underlying EBITDA of $247.9m (up 6.4%) and EBIT of $23.8m (up 65.3%).
Margins expanded across both measures. The EBITDA margin reached 18.6% (up 80bps), while the EBIT margin lifted to 1.8% (up 70bps). The improvement accelerated in the second half, with a 2H26 EBIT margin of 2.8% against 0.8% in 1H26, an increase of 200bps.
Revenue mix drivers included:
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Genomics revenue up 16.9% versus pcp
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Clinical Trials revenue up 92.9% versus pcp
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Vetnostics revenue up 3.4%
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Specialist attendances up 2.9%, while GP attendances fell 0.9%
Labour costs were held flat versus the prior period despite the Fair Work Commission decision on gender-based undervaluation for Pathology Collectors, which the company attributed to its labour optimisation programme. Consumables costs reduced to 15.3% of revenue, down from 16.2%.
On the digital front, management highlighted the rollout of Pathway (one LIS) and the deployment of AI co-workers Reva AI and Julie AI, with additional co-workers now live in production.
Agilex Biolabs: large molecule pivot drives margin surge, sale under review
Agilex Biolabs delivered a strong operational turnaround while the company simultaneously explores a strategic sale. Revenue rose to $43.6m (up 14.1%), with EBITDA of $10.7m (up 67.2%) and EBIT of $6.4m (up 137.0%). The EBIT margin expanded to 14.7%, an increase of 760bps.
Management attributed the margin expansion to the pivot towards large molecule development and the exit of the loss-making Toxicology business. The new Brisbane bioanalytical laboratory was reported to be performing ahead of expectations and serves as the benchmark operating model for footprint expansion across Brisbane, Melbourne and Sydney.
On the strategic front, Healius has engaged UBS Securities Australia Limited to explore a sale of Agilex Biolabs, following strong interest and unsolicited approaches from credible parties. The company noted an update will be provided to shareholders in advance of the AGM. No sale has been agreed.
The Agilex Biolabs sale process was formally initiated earlier in 2026 when Healius lifted its Group Underlying EBITDA guidance to $259.0m-$264.0m, with management citing Agilex’s standalone operating structure and strong revenue growth as key factors attracting credible buyer interest.
What is the T27 transformation programme?
T27 is Healius’s multi-year transformation programme, targeting mid-to-high single-digit EBIT margins by approximately December 2028. The programme is built around five pillars: Customer Service, Laboratory Modernisation, Emerging Diagnostics, Digital Technologies, and People & Ways of Working.
For investors, T27 represents the roadmap from currently thin margins (Pathology EBIT margin of 1.8%) toward sustainably higher profitability. Progress here underpins the broader investment case.
FY26 proof points included:
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$24.4m annualised corporate cost savings delivered
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Regional lab FTEs cut 24.3% versus FY25
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eReferral volumes up 39.7%, with approximately 1,500 new referrers added in 2H26
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Four AI co-workers now live in production
Balance sheet moves to modest net debt on one-off outflows
The group’s balance sheet position moved from $57.2m net cash at June 2025 to $32.8m net debt at June 2026. This deterioration was driven by one-off outflows rather than operational weakness.
The key drivers of the net cash bridge were:
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Gross operating cash flows: +$227.1m
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Lease payments: ($229.4m)
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Net capex: ($42.8m)
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Payments relating to the Lumus divestment: ($22.4m)
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Net tax paid: ($19.6m)
Within capital expenditure, maintenance capex totalled $16.5m and growth capex $26.8m. The company stated it remained well within its banking covenants for gearing and interest cover at 30 June 2026.
FY27 outlook and the road to sustainable cash flow
Looking ahead, Healius expects FY27 EBIT to be in line with consensus EBIT of $39.7m (Visible Alpha, 18 August 2026).
For Pathology, the outlook anticipates volume growth in line with MBS on a like-for-like collection centre basis, plus a modest increase in profitable sites. Management also flagged the full-year benefit of new commercial and hospital contracts (Grampians and NWT). Cost growth is expected to be contained to 3.5% for FY27, inclusive of the Fair Work Commission gender-undervaluation costs and the 4.75% Modern Award increase.
The Ramsay Health Care pathology contract, which consolidated arrangements across 13 hospitals into a uniform national framework effective 1 July 2026, represents one of the commercial agreements management flagged as contributing to FY27 volume and revenue expectations.
Due to the impact of the Fair Work Commission costs and reduced GP attendances, the T27 target of mid-to-high single-digit EBIT margins is now expected by approximately December 2028.
For Agilex, the order book and revenue conversion were reported to remain strong and in line with expectations.
Management reiterated that restoring a sustainable positive cash flow remains a key priority, with a return to cash flow positive expected in FY27.
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