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Primary Health flags improved earnings

AAP logoAAP 25/11/2016

Primary Health Care expects to improve its annual underlying profit as the private health care company anxiously awaits the federal government's extensive review of the industry.

Chief executive Peter Gregg told the company''s annual general meeting he expects to exceed the previous year's underlying profit of $104 million in the current financial year, without providing more specific details.

Primary operates 71 medical centres, 138 imaging sites, 100 laboratories and 100 collection centres following the sale of non-core assets as part of a strategic review.

The company has cut costs and closed collection centres, introduced new healthcare professional recruitment packages aimed at recruiting more GPs, and diversified its medical centres business into private billing and bulk billing.

Primary is also looking at pathology opportunities in south east Asia, where it is looking to partner with local operators. Pathology is the group's biggest division, and the second biggest pathology chain behind rival Sonic Healthcare.

Chairman Robert Ferguson said the government's ongoing health care review is "unsettling", but reassured shareholders that the company is ready for any proposed changes.

"We're alert to the need for the business to be able to cope with all the different contingencies," Mr Ferguson told the meeting.

The federal government is conducting five separate healthcare reviews, including an analysis of the Medicare benefits schedule, private health insurance, and prostheses, which has spooked some investors about the industry's growth prospects.

The Turnbull government plans to slash bulk-billing incentive payments to pathology companies that provide services such as blood tests, pap smears and x-rays.

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