Alliance Healthcare Group Limited: FY2025 Results Analysis

Alliance Healthcare Group Limited has released its unaudited condensed interim financial statements for the twelve months ended 30 June 2025. The Group operates mainly in Singapore, providing managed healthcare solutions, GP and specialist medical services, pharmaceutical distribution, and digital health services. Below is a comprehensive analysis of its performance, key financial metrics, dividend policy, and outlook.

Key Financial Metrics

Historical Performance Trends

Alliance Healthcare Group posted a strong year-over-year recovery in FY2025. Revenue rose 13.4% to S\$77.1 million, driven by double-digit growth across Managed Healthcare Solutions (+21.1%), Mobile and Digital Health Services (+26.1%), and core GP Clinic Services (+11.9%). Net profit attributable to shareholders more than doubled to S\$1.5 million, reversing the prior year’s weak earnings. The business continues to benefit from sector tailwinds, especially in digital health and managed care solutions.

Exceptional Earnings or Expenses

• Other Income and Gains: Decreased by S\$0.4 million due to the full claim of certain government grants in FY2024 and earlier years.
• Other Losses: Mainly attributable to bad debts written off from the cessation of operations of certain overseas customers.
• Depreciation and Amortisation: Rose 17.3% YoY (to S\$4.7 million), reflecting new clinic openings and investments in technology platforms.

Dividends

The Board has proposed a final dividend of 0.1 cent per share for FY2025 (tax exempt, one-tier), subject to shareholder approval at the upcoming AGM. This is an improvement from FY2024, where no final dividend was declared.

Chairman’s Statement

“Singapore is facing rising healthcare costs, particularly in private inpatient care. This escalation has driven up insurance premiums for both individuals and corporations. Under cost pressures, payers such as health insurers and employers are seeking solutions that manage costs while maintaining high-quality care for their members and employees.

Alliance Medinet, our medical third-party administrator subsidiary, partners with insurers, physicians, and healthcare facilities to deliver quality care at a fair cost. For example, in collaboration with Farrer Park Hospital (“FPH”), Alliance Medinet offers greater predictability and transparency in facility fees through pre-agreed rates.

Our mobile care subsidiary, JagaMe, also works with FPH on the “Home Recovery Program,” enabling patients to be discharged earlier and supported in their recovery at home or other non-hospital settings. In addition, JagaMe supports five government-restructured hospitals through the Mobile Inpatient Care at Home (“MIC@Home”) program, which delivers hospital-level care at home for patients who can be safely treated outside a hospital. Leveraging its extensive home care expertise, JagaMe helps shorten hospital stays and enhance recovery outcomes. These solutions could provide growth opportunities for our Group.

Nevertheless, challenges remain. Macroeconomic uncertainties, including global trade tensions and geopolitical risks, may dampen growth and weaken business sentiment, potentially affecting both local and international demand for healthcare services and products. The Group will continue to monitor developments closely, refining its strategies to mitigate risks and capture opportunities in an evolving healthcare landscape.

The Group is also investing for future growth. As some of these new facilities and businesses are still in their early stages, it will take time for them to achieve profitability, which may affect the Group’s overall financial performance in the near term.”

Tone: The Chairman’s statement is cautiously optimistic, highlighting sector growth opportunities alongside clear acknowledgement of macroeconomic and operational risks.

Segmental Performance

• Managed Healthcare Solutions: Revenue up 21.1% YoY, boosted by new programs and higher patient volumes.
• Mobile and Digital Health Services: Revenue up 26.1% YoY, driven by strong demand for telemedicine and homecare services.
• GP Clinic Services: Revenue up 11.9% YoY, with new medical centres and support for national health initiatives.
• Specialist Care Services: Revenue up 8.1% YoY; however, segment profitability was affected by early-stage costs in new clinics.
• Pharmaceutical Services: Stable performance overall, with shifts between local and overseas sales.
• Others: Significant increase due to a new contract with the Health Promotion Board for a clinic management system.

Financial Position and Cash Flow

• Assets: Current assets increased S\$9.2 million to S\$66.6 million, reflecting higher receivables and inventory to support growth.
• Equity: Shareholders’ equity rose S\$1.7 million to S\$24.4 million on higher retained earnings.
• Liabilities: Non-current liabilities increased due to loan reclassification and ongoing investments, but net debt reduction occurred after resolving covenant breaches.
• Cash Flow: Positive operating cash flow of S\$5.7 million, with investments of S\$1.8 million in capex and technology, and S\$6.2 million used in financing (mainly lease and loan repayments).

Unusual or Significant Transactions

• No significant asset sales, IPOs, or fundraising in the period.
• No major legal disputes or natural disasters reported.
• Share buybacks: 428,000 treasury shares vested under the performance share plan.
• Related-party transactions were disclosed and in line with prior periods.

Outlook and Forward-Looking Statements

• Group expects continued growth in managed healthcare and digital health, but notes that some new businesses may take time to reach profitability.
• Ongoing macroeconomic risks from global trade and geopolitics may temper near-term demand.

Conclusion and Investment Recommendation

Overall Assessment: Alliance Healthcare Group delivered a strong rebound in FY2025, with broad-based revenue growth and a significant turnaround in profitability. The company’s investments in digital health and managed care are yielding results, and its strong balance sheet and cash generation support continued growth. However, the Group faces industry-wide cost pressures, and early-stage investments may weigh on near-term margins.

Investor Recommendations

• If you currently hold the stock: Maintain your position. The Group’s fundamentals are improving, and new initiatives are gaining traction. Watch for execution in new business lines and margin recovery as new facilities mature.
• If you do not hold the stock: Consider initiating a small position for exposure to Singapore’s growing managed and digital healthcare sectors, but be prepared for near-term profit volatility due to ongoing investments and macro uncertainties.

Disclaimer: This analysis is based solely on the company’s published financial report and does not constitute investment advice. Investors should do their own due diligence and consider their individual risk tolerance before making investment decisions.

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