Pro Medicus is expecting years of strong growth, managing director Sam Hupert says

Pro Medicus is expecting years of strong growth, says managing director Sam Hupert, despite already booking huge growth over the past few years.

Pro Medicus CEO Sam Hupert. Picture: Stuart McEvoy

Pro Medicus “should consider” a share split, chairman Peter Kempen has told the company’s annual general meeting, while the company is predicting “years” of strong growth to come.

The diagnostic imaging software company has delivered exceptional returns for shareholders over the past decade, coming in at an annualised rate of 70.5 per cent, and a one-year total shareholder return of 151.6 per cent.

Managing director Sam Hupert was reluctant to comment on the company’s rampaging share price gains when asked at the company’s AGM on Monday, but did say that Pro Medicus had a large untapped market, with just a 7 per cent market share in the US currently.

Pro Medicus’s software suite allows physicians to interact with and read radiology scans remotely, with the company’s proprietary software delivering a fast, high quality user experience which its competitors had failed to emulate, Dr Hupert said.

Dr Hupert said Pro Medicus could realistically target 85 per cent of the US market, indicating it had many years of growth to come.

“We really believe, particularly in the US, we have a huge amount of addressable runway ahead of us,’’ Dr Hupert said.

Dr Hupert said the company was ahead of its growth budget for the current financial year.

“We anticipate to grow every year and grow strongly,’’ he said. ”We set our budgets on that basis, and we are ahead of that budget as we sit here today.

“We’ve had two contract renewals worth at minimum $130m, we’ve done three major implementations since July, we are looking at an increased pipeline across all opportunities, we are well positioned for AI as it becomes mainstream.”

On the company’s results for the most recent financial year, Dr Hupert said “I think it’s fair to say that every single financial metric moved in the right direction’’.

The company delivered a record profit of $82.8m last financial year, up 36.5 per cent, on revenue of $161.5m, up 29.3 per cent.

Dr Hupert described Pro Medicus as having a start-up mentality around innovation and a conservative approach on the financial front.

“The fact that we have retained earnings and no debt means that we have a bit of dry powder not only to return to shareholders but to invest in the business as we need to and look at M&A if anything meets our criteria,” he said.

Pro Medicus CEO Sam Hupert. Picture: Stuart McEvoy

Dr Hupert said Pro Medicus’s intellectual property provided a significant barrier to entry for its competitors.

“Our technology is totally, different. It was built from the ground up,’’ he said.

Dr Hupert said the company’s products blended about “15 to 20 unique technologies blended together.”

“It’s not a simple thing to copy. We do think we have been ahead. We tell the market 18–24 months.

“The other thing is we’re not standing still. We’ve been in cloud four years. We’re already moving to the next thing, while others are still trying to get into cloud.’’

When asked about the possibility of a share split, Mr Kempen said he believed it was something the board “should consider’’.

He said there were not many companies on the ASX which had a share price worth north of $200, and a split should be pondered to make the shares more accessible for retail shareholders.

“It has been raised before, and it has been on my mind in recent times,’’ Mr Kempen said.

“The board hasn’t discussed it, but I think it’s something we should consider.’’

Pro Medicus shares have more than doubled over the past year, up from $88.34 this time last year to $223.28, valuing the company at more than $23bn.

Mr Kempen said the company had ample financial capacity to take advantage of any acquisition opportunities which might arise.

“The board considered a small number of acquisition opportunities during the course of the year which met our criteria, but to date none have given rise to a transaction,’’ Mr Kempen said.

Pro Medicus shares were trading 3.1 per cent higher on Monday afternoon at $228.71.