This article first appeared on GuruFocus .
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Revenue:$1.9 billion.
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Underlying EBITDA:$49 million.
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Net Profit After Tax:$13.3 million.
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Statutory EBITDA:Loss of $0.4 million.
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Statutory Net Loss After Tax:$21.3 million.
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Infinity Group Debt Provision:$46.4 million.
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Merger and Acquisition Costs:$2 million.
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Net Organic Growth:$7.1 million or 7.1%.
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ANZ Revenue Growth:9.8% after normalizations.
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Asia Revenue Growth:33.2% with a margin of 44%.
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Contract Logistics Revenue Growth:47.1%.
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Net Debt:Slightly elevated due to Infinity Group debt provision.
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Guidance for Revenue:$3.6 billion.
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Guidance for EBITDA:$97 million to $107 million.
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Release Date: February 25, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Paragon Care Ltd ( ASX:PGC ) reported strong underlying revenue of $1.9 billion and an underlying EBITDA of $49 million, indicating solid performance despite challenges.
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The company successfully managed to recover $78 million in revenue lost due to the Infinity Group issue, showcasing resilience and effective management.
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Paragon Care Ltd ( ASX:PGC ) achieved significant contract wins, including a five-year contract with the Australian Defence Force, highlighting its capability and competitive edge.
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The company reported strong growth in its Asia segment, with revenue growth of 33.2% and a margin of 44%, demonstrating successful expansion efforts in the region.
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Paragon Care Ltd ( ASX:PGC ) maintained solid margins and managed expenses well, despite challenges such as freight costs and integration expenses.
Negative Points
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The statutory EBITDA showed a loss of $0.4 million, primarily due to the full provision for the Infinity Group debt, which remains a significant financial burden.
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The company experienced delays and challenges in its integration strategy, particularly affecting freight costs and the opening of the new Brisbane site.
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Paragon Care Ltd ( ASX:PGC ) faced a decline in its MedTech segment, particularly in the vision area, which impacted overall performance.
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The company did not declare a dividend for the period, which may concern shareholders looking for immediate returns.
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Paragon Care Ltd ( ASX:PGC ) is dealing with elevated net debt levels, partly due to the unresolved Infinity Group debt, which could impact future financial flexibility.
Q & A Highlights
Q: What are the key drivers for the bottom and top end of the guidance range for the second half? A: The biggest factors are completing the 321 transition piece and ensuring the transition into the new Willawong site is completed, as there have been pressures around freight costs. These are the two biggest risk areas between the top and bottom end of the guidance range. - Carmen Riley, CEO
Q: Is the net debt guidance pre-AASB 16, and does it include assumptions around the Infinity outcome? A: The net debt guidance is post-AASB 16 EBITDA calculation and excludes any assumptions regarding the Infinity outcome. - Brendon Pentland, CFO
Q: Why was there a significant drop in MedTech revenue from the second half of FY25 to the first half of FY26? A: The MedTech revenue can be lumpy depending on the timing of sales. The decline was not a concern, and the second half is expected to be stronger based on the current pipeline. - Carmen Riley, CEO
Q: Can you provide more details on the big contract win in the contract logistics business? A: The biggest recent contract win was with Owens and Minor for distribution across Australia. The contract logistics business is expected to have a long-term sustainable revenue number with more wins anticipated. - Carmen Riley, CEO
Q: What was the $2.9 million of other income in the EBITDA result? A: The other income includes GST recoverable on the Infinity debt and interest income recognized under contractual terms with customers. The GST recoverable is due to tax office laws allowing claims on debts older than 12 months. - Brendon Pentland, CFO
Q: How does the Australian Defense Force contract compare to the Ramsey contract in terms of profitability? A: The Australian Defense Force contract is expected to deliver better gross margin dollars than the Ramsey contract, which was a low-margin business. The defense contract was won on capability rather than price. - Carmen Riley, CEO
Q: What is your sentiment around the share price given its decline and the lack of dividend? A: While the share price is lower than desired, the company is focused on delivering strong results and believes the current price does not reflect its true value. The integration process and potential recovery from the Infinity situation are expected to improve the company's position. - Carmen Riley, CEO
Q: Is Paragon Care at risk of a takeover due to the declining share price? A: No, a takeover is unlikely as major shareholders are not sellers, providing stability against such risks. - Carmen Riley, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
