Healthia Limited: Fill Your Boots!

Healthia Limited
Healthcare Services
Warren Jeffries | Analyst | Canaccord Genuity (Australia) Ltd. | warren.jeffries@canaccord.com.au | +61.3.8688.9108

25 October 2018
BUY Initiation of Coverage

PRICE TARGET A$1.35
Price (24-Oct) A$1.17
Ticker HLA-ASX Fill your boots!
52-Week Range (A$): 1.12 - 1.36
Healthia Limited (ASX: HLA) has been established to capitalise on increasing demand
Avg Daily Vol (000s) : 94.0 for allied health services in Australia, and has combined two established allied health
Market Cap (A$M): 73.8 operations in My FootDr Podiatry and Allsports Physiotherapy. HLA listed on the ASX in
Shares Out. (M) : 63.0 September 2018, raising $26.8m of new equity at $1/share for a market capitalisation
Net Debt (Cash) (A$M): 0 of $63m.
Enterprise Value (A$M): 0.0
We initiate coverage on HLA with a BUY recommendation and a Target Price of $1.35.
FYE Jun 2019E 2020E 2021E
Healthy position for consolidation: HLA’s business model is to acquire, integrate
Sales (A$M) 72.4 93.5 113.0
and leverage a network of allied health businesses with a focus on the podiatry and
EBITDA (A$M) 10.5 13.8 17.0
physiotherapy industries. HLA is in an enviable position to execute on this strategy given
Net Income
(A$M) 4.6 6.1 7.6 the consolidation credentials of the My FootDr business, which prior to HLA listing had
EPS (A$) 0.08 0.10 0.12 an established portfolio of 56 podiatry clinics, while the Allsports Physiotherapy business
EPS Growth (%) 16.8 17.3 24.9 had an established portfolio of 14 clinics. These two operations represent the key pillars
P/E (x) Adj&Dil 14.1 12.1 9.6 in a current network of 105 allied health service clinics.
EV/EBITDA (x) 8.8 7.4 6.4
Industry dynamics positive: Demand for allied health services in Australia is being
DPS (A$) 0.02 0.04 0.06
Div. Yield (%) 1.7 3.8 4.7
driven by an aging population and increasing health consciousness in society, and the
Net Debt/Equity
physiotherapy and podiatry industries represent attractive markets to capitalise on these
27.1 38.5 45.0
(%) positive industry dynamics.
1.35 Physiotherapy: Industry revenue of $1.7bn is forecast to grow at an annual rate of
2.8% from 2017 to 2022. The industry is made up of ~5,920 businesses with ~32,000
1.3 professionals registered as a physiotherapist.
Podiatry: Industry revenue of ~$0.9bn as at 2017, which represents ~12% of the ‘other
1.25
allied health services’ industry in Australia, and is forecast to grow at an annual rate
1.2
of 3.5% from 2017 to 2022. The podiatry industry is made up of ~2,390 clinics with
~5,000 registered professionals.
1.15 Acquisition metrics & consideration: HLA is looking to acquire physiotherapy and
podiatry clinics on acquisition multiples of 3 to 4.5x EBITDA, with consideration
1.1 predominantly cash. Clinicians expected to retain a minority interest in clinics acquired
by HLA, which will be represented by the issuing of Clinic Class Shares specific to
Oct -18
each clinic. Clinic Class Shares currently represent a 14.4% economic interest in the
HLA consolidated clinic earnings, which we forecast to increase to 15% in the medium-term.
Source: Fact Set
Acquisition assumptions: We are forecasting HLA to acquire physiotherapy and podiatry
Priced as of close of business 24 October 2018 clinics to the value of $12m p.a.(pre-minorities) at an average 4x EBITDA multiple. We
Canaccord Genuity (Australia) Limited has received a fee as
expect acquired annualised EBITDA to be a 50/50 split of physiotherapy and podiatry
the Lead Manager and Underwriter to the Healthia Limited earnings, and the issuing of future Clinic Class Shares in relation to minority interests will
Initial Public Offer in September 2018. represent ~15% of the acquired clinic earnings.
Earnings forecasts: We are forecasting FY19 and FY20 EPS adj. of 8.3cps and 9.7cps
respectively, which is after minority interests. We have factored in a final 2cps dividend
for FY19, and a 50% dividend payout ratio on normalised earnings thereafter.
Valuation & recommendation: We initiate coverage on HLA with a BUY recommendation
and Target Price of $1.35/share. Our key DCF valuation assumptions are a WACC of
10.0%, a cost of equity of 12.5%, and a terminal growth rate of 3% longer term.
Canaccord Genuity is the global capital markets group of Canaccord Genuity Group Inc. (CF : TSX)
The recommendations and opinions expressed in this research report accurately reflect the research analyst's personal, independent and objective views about any and all
the companies and securities that are the subject of this report discussed herein.
For important information, please see the Important Disclosures beginning on page 28 of this document.
Healthia Limited
Initiation of Coverage
Figure 1: Healthia Limited (HLA); Canaccord Genuity forecasts

Profit & Loss ($m) 2018A (PF) 2019F 2020F 2021F 2022F Valuation ratios 2018A (PF) 2019F 2020F 2021F 2022F
Sales Revenue 69.4 72.4 93.5 113.0 133.1 EPS (cps) - pre NRI's 7.1 8.3 9.7 12.1 14.7
EBITDA 9.3 10.5 13.8 17.0 20.3 EPS (cps) - normalised 7.1 8.3 9.7 12.1 14.7
Depreciation -1.3 -1.6 -2.1 -2.4 -2.7 PER (x) 16.5 14.1 12.1 9.6 7.9
EBITA 8.0 8.9 11.7 14.6 17.6 PER Rel - All Ind. 8.2% -14.3% -20.2% -29.0% -35.1%
Amort - Intangiables -0.4 -0.4 -0.4 -0.4 -0.4 PER Rel - Small Ind. 8.9% -30.3% -28.1% -36.1% -41.5%
EBIT 7.7 8.5 11.3 14.2 17.2 Enterprise Value ($m) 83.9 92.4 101.6 108.2 114.4
Net Interest Expense -1.0 -1.3 -1.5 -1.8 -2.2 EV / EBITDA (x) 9.0 8.8 7.4 6.4 5.6
NPBT 6.7 7.3 9.9 12.4 15.0 EV / EBIT (x) 10.9 10.8 9.0 7.6 6.6
Tax expense -2.1 -2.3 -3.1 -3.8 -4.5 DPS (cps) 0.0 2.0 4.5 5.5 7.0
Minorities - CCS & DBS -0.5 -0.8 -1.0 -1.3 -1.6 Dividend Yield (%) 0.0% 1.7% 3.8% 4.7% 6.0%
NPAT - pre-NRI's 4.1 4.2 5.8 7.3 8.9 Franking (%) 0% 0% 0% 0% 0%
Non-recurring items 0.0 0.0 0.0 0.0 0.0 CFPS (cps) 9.6 9.9 14.8 17.2 20.3
NPAT - reported 4.1 4.2 5.8 7.3 8.9 P / CFPS (x) 12.1 11.8 7.9 6.8 5.8
NPAT - normalised 4.5 4.6 6.1 7.6 9.3
Profitability ratios 2018A (PF) 2019F 2020F 2021F 2022F
Cash Flow ($m) 2018A (PF) 2019F 2020F 2021F 2022F EBITDA Margin (%) 13.5 14.4 14.7 15.0 15.2
Operating EBITDA 9.3 10.5 13.8 17.0 20.3 EBITA Margin (%) 11.6 12.3 12.5 12.9 13.2
- Interest & Tax Paid 3.1 3.6 4.5 5.6 6.7 EBIT Margin (%) 11.0 11.8 12.1 12.6 12.9
+/- change in Work. Cap. -0.2 -1.4 -0.2 -0.8 -0.8 ROE (%) 9.9 6.1 7.7 9.0 10.2
- other 0.0 -0.8 -0.3 -0.3 0.0 ROA (%) 12.9 9.6 10.9 12.3 13.5
Operating Cashflow 6.1 6.3 9.3 10.8 12.8 ROIC (%) 26.9 11.7 12.1 14.3 16.6
- Capex -1.7 -2.0 -2.3 -2.8 -3.3
- other 0.0 -0.8 0.0 0.0 0.0 Balance Sheet ratios 2018A (PF) 2019F 2020F 2021F 2022F
- equity acquired 0.0 -30.2 -12.7 -10.2 -10.2 Net Debt (cash) 10.2 18.7 27.8 34.5 40.7
Free Cashflow 4.3 -26.7 -5.7 -2.2 -0.7 Net Gearing (%) 21.8 27.1 38.5 45.0 49.9
- Ord Dividends 0.0 0.0 -2.4 -3.1 -3.8 Interest Cover (x) 9.7 8.3 9.5 9.4 9.2
- Equity /other -1.5 18.2 -1.0 -1.3 -1.6 NTA per share ($) -0.15 -0.21 -0.33 -0.40 -0.46
Net Cashflow 2.8 -8.5 -9.2 -6.6 -6.2 Price / NTA (x) -7.7 -5.5 -3.5 -2.9 -2.5
Cash at beginning of period 0.0 2.8 4.3 2.2 3.5 Shares on issue 63.0 63.0 63.0 63.0 63.0
+/- borrowings / other 0.0 10.0 7.0 8.0 7.0 EFPOWA (m) - fully diluted 63.0 55.3 63.0 63.0 63.0
Cash at end of period 2.8 4.3 2.2 3.5 4.3
Growth ratios 2019F 2020F 2021F 2022F
Balance Sheet Dec-17 2019F 2020F 2021F 2022F Sales revenue ($m) 4.4% 29.0% 20.9% 17.8%
Cash 1.9 4.3 2.2 3.5 4.3 EBITDA ($m) 12.0% 31.8% 23.0% 19.6%
Inventories 2.1 2.9 3.6 4.3 5.1 EBIT ($m) 11.4% 32.4% 25.5% 21.3%
PP&E 7.4 11.3 13.1 14.7 16.6 NPAT ($m) 2.8% 36.6% 26.5% 22.5%
Debtors 2.0 2.9 3.6 4.3 5.1 EPS (cps) 16.8% 17.3% 24.9% 21.4%
Intangibles 56.4 75.9 86.8 95.4 104.0 DPS (cps) 300.0% 400.0% 500.0% 600.0%
Other assets 2.5 0.0 0.0 0.0 0.0
Total Assets 72.4 97.4 109.1 122.2 135.0 Interim Analysis 1H18PF 2H18PF 1H19F 2H19F
Borrowings 16.1 23.0 30.0 38.0 45.0 Revenues 33.5 35.9 31.0 41.4
Trade Creditors 2.5 2.2 3.3 4.0 4.7 EBITDA 4.4 4.9 4.6 5.9
Other Liabilities 8.2 3.2 3.5 3.7 3.7 EBITDA margin (%) 13.2% 13.7% 14.7% 14.3%
Total Liabilities 26.9 28.4 36.7 45.7 53.4 EBIT 3.8 3.9 3.7 4.8
NET ASSETS 45.5 69.0 72.3 76.5 81.6 NPATA - normalised 2.2 1.9 2.1 2.1
EPS - normalised 3.5 3.6 3.8 4.5
DPS 0.0 0.0 0.0 2.0
Board of Directors / Substantial Shareholders Valuation 2019F

Name Shareholding % Normalised EBITDA multiple (x)
Glen Richards - Non-Executive Chairman 4.3 6.9% EBITDA ($m) 9.3
Paul Wilson - Non-Executive Director 0.3 0.5% Target EBITDA multiple (x) 10.0
Lisa Dalton - Non-Executive Director 0.0 0.0% Net Debt (cash) ($m) 18.7
Darren Stewart - CEO Podiatry 8.0 12.6% Implied Valuation 74.8
Anthony Ganter - CEO Physiotherapy 1.1 1.8% Per Share $ 1.35
Target PE Multiple
Substantial Shareholders Shareholding % EPS (c) 8.3
Darren Stewart - CEO Podiatry 8.0 12.6% PER Target (x) 18.3
Greg Dower - Chief Development Office - Podiatry 8.0 12.6% Per Share $ 1.51
Glen Richards - Non-Executive Chairman 4.3 6.9%
Dean Hartley - Chief Information Officer - Podiatry 3.8 6.0% Discounted Cash Flow
Monash Investors 3.5 5.6% Cost of equity 12.2% WACC 9.8%
Cost of debt 5.0% Terminal Growth Rate 3.0%
Source: Company reports & Canaccord Genuity estimates / (PF) Pro Forma Net Debt/ Net debt + equity 27.1% Per Share $ 1.35
Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 2

Healthia Limited
Company Overview
Healthia (ASX: HLA) was formed to capitalise on favorable industry dynamics within
the allied health services industry, with a specific focus on the physiotherapy and
podiatry industries.
Prior to listing, HLA was the holding company of the Group that owned and operated
56 podiatry clinics under the My FootDr Podiatry brand, in addition to an orthotics
manufacturing laboratory (iOrthotics) and a 50% holding in allied health supplies
business (DBS Medical).
On listing, HLA completed acquisitions of an additional 16 podiatry clinics to the
existing My FootDr network of 56 clinics, 30 physiotherapy clinics which included the
Allsports Physiotherapy network of 14 clinics, and Extend Rehabilitation network of
seven hand therapy clinics, while ownership of the DBS Medical was increased to
75%.
On listing, HLA’s consolidated portfolio of allied health clinics and wholesale
operations were as follows:
 72 podiatry clinics that will all operate under the My FootDr brand;
 23 physiotherapy clinics of which 12 will operate under Allsports
Physiotherapy;
 7 hand therapy clinics that will operate under the Extend Rehabilitation
brand;
 1 orthotics manufacturing laboratory (iOrthodics); and
 1 podiatry wholesale business (D.B.S. Medical) of which Healthia will own
75%.
Post listing, HLA have completed the acquisition of three additional physiotherapy
clinics, increasing physiotherapy clinic numbers to 26, while a heads of agreement
remains in place for an additional physiotherapy clinic to be acquired.
HLA is now the holding company of three key subsidiary businesses operating as My
FootDr, Allsports Physiotherapy and Extend Hand Rehabilitation, while minority
interests exist across the clinic network through the issuing of Clinic Class Shares
which currently represent an economic interest of ~14.4% of clinic earnings and we
expect this to increase to 15% in the medium-term.
The retaining of minority interests by clinicians in the consolidated clinic network of
HLA represents a key component of HLA Clinician Retention Program.
Figure 2: Healthia corporate structure
Source: Healthia Prospectus

Healthia Limited
National footprint evolving

While HLA’s network of allied health clinics has a national footprint, given the origins for
both My FootDr Podiatry and Allsports Physiotherapy is Queensland, this state currently
represents ~67% of the total clinic network. We do believe though that the
concentration of operations in Queensland will diminish in the medium- to longer-term.
HLA’s network of 105 allied health clinics is operated from 90 locations, reflecting the
multi-disciplined service offering within a number of clinics. A multi-disciplined facility
will be typically anchored by a physiotherapy offering.
Figure 3: HLA’s current operational portfolio
Podiatry Physiotherapy Hand Therapy Wholesale Total Clinics
Region
Clinics Clinics Clinics Businesses / Businesses
Queensland 37 26 7 1 71
New South Wales 9 - - 1 10
Victoria 9 - - - 9
Tasmanian 2 - - - 2
South Australia 8 - - - 8
Western Australia 5 - - - 5
Northern Territory 2 - - - 2
Total 72 26 7 2 107
Source: Company reports; Canaccord Genuity
Allied health focus

What is allied health?
Allied health refers to the broad range of health professions who are not doctors,
dentists or nurses. Allied health professions aim to prevent, diagnose and treat a
range of conditions and illnesses. Allied health services include Chiropractic, Dietetics,
Occupational Therapy, Optometry, Prosthetics, Osteopathy, Physiotherapy, Podiatry,
Psychology and Speech Pathology amongst other disciplines.
Domestic allied health market highly fragmented
The allied health industry in Australia is highly fragmented with ~ 25,860 businesses,
and the two key allied health areas of focus for Healthia being physiotherapy and
podiatry have ~5,920 and ~2,390 domestic businesses respectively.
We note the My FootDr business is the largest provider of podiatry services in
Australia with 72 clinics, while within the physiotherapy industry no one operator held
more than 3% of physiotherapy industry revenue in FY17.
Consolidation rationale
The consolidation opportunity for HLA is significant given that both the podiatry and
physiotherapy industries are characterised by a high level of industry fragmentation,
while increasing demand for podiatry and physiotherapy services is being driven by an
increase in the median age of the domestic population and increased health
awareness by individuals.
Through the consolidation of the allied health businesses, HLA expects that its clinics,
and its Clinicians will optimise patient outcomes through greater interdisciplinary
cooperation and cross education, faster delivery of care due to co-location of services,
access to well-equipped facilities and reduce costs of care through its integrated
management approach.

Healthia Limited
Organic growth opportunities

Key organic growth opportunities are expected from leveraging vertically integrated
capacities such as the iOrthotics manufacturing operation and DBS wholesale, in
addition to leveraging the footprint of allied health clinics anchored by either
physiotherapy or podiatry services into a broader range of multi-disciplined offerings.
Board & Senior Management industry relevant

Board and management has significant experience in the consolidation of
professional services business, with key divisional management in both the Podiatry
and Physiotherapy operations also qualified industry practitioners and clinic owners.
Podiatry CEO Darren Stewart is a qualified podiatrist who co-founded My FootDr in
2004 with Greg Downer, who also remains with the business as Chief Development
Officer Podiatry, while a number of other key management personal also remain
operational in the business, and are qualified podiatrists and business owners.
Physiotherapy CEO Tony Ganter a qualified physiotherapist, who along with Lisa
Roach, has been integral in the growth the Allsports Physiotherapy network from a
single location in 1996 to 14 clinics at the time of being acquired by HLA. Lisa Roach
is also a qualified physiotherapist and partner in a number of the Allsports clinics and
remains in the business as Chief Operating Officer Physiotherapy.
At a board level, we also note that Chairman, Glen Richards, was the founder and
former CEO of Greencross Ltd (ASX: GXL) that was a first mover in the consolidation of
the domestic veterinary services sector. In addition, CFO Wesley Coote is the former
CFO of GXL, while Non-Executive Director Paul Wilson was a co-founder, director and
shareholder of Mammoth Pet Holding P/L (Pet Barn) prior to the merger with GXL, and
remains a Non-Executive Director with GXL today.
Both the Board and senior management are highly aligned to the performance of HLA,
holding collectively 24.1m shares, representing 38.2% of the issued capital in HLA.
Forecasts & valuation

We are forecasting consolidated FY19 EBITDA of $10.5m and FY20 EBITDA of
$13.8m. On a pro forma basis we are forecasting FY19 EBITDA of $11.3m, which
would represent growth of ~22% on pro forma FY18 prospectus forecasts.
At an EPS level, normalised for one-off costs and non-cash amortisation charges, we
are forecasting FY19 and FY20 EPS of 8.3cps and 9.7cps respectively, with a final
dividend of 2cps forecast for the FY19 period.
We have valued HLA at $1.35/share based on a DCF Valuation approach. We note our
target price of $1.35/share would equate to a FY19 PER multiple of 16.3x for HLA,
which would then be in line with the emerging industrials sector.

Healthia Limited
Business Model
HLA’s business model is to identify, acquire, integrate and manage allied health
clinics, while leveraging the wholesale businesses and scale that the HLA network and
capabilities will provide.
Growth strategies for HLA include the following:
1) Organic growth
Organic growth will be driven through the introduction of key strategies and
efficiencies gained from managing a larger group of clinics. HLA has designed and
implemented various programs to assist in generating organic growth for the clinics
including:
Implementation of education programs and Clinical Advisory Committees: Clinical
Advisory Committees will be established for both the podiatry and physiotherapy
disciplines, made up of experienced clinicians, who will oversee the clinical
governance, compliance and education programs of the Group.
Clinician Retention Program: a key initiative in the retention and engagement of its
workforce, with the key strategies being:
 Structured education and training which have been established within the My
FootDr and Allsports Physiotherapy businesses;
 Clinic Class Shares which allow for clinicians to have a minority ownership in
the practice in which they work. Clinic Class Shares are designed to create
alignment between clinicians, HLA and Shareholders (Refer to page 24 for
additional detail);
 Larger well-equipped clinics, utilising the latest technology and procedures;
and
 Community engagement which will be facilitated and leveraged though the
larger network of the broader Group
Leverage existing clinic footprint with multi-disciplined services: We note, of the 14
Allsports Physiotherapy clinics acquired, 11 practices already offer podiatry services,
with physiotherapy being the anchoring allied health service. This multi-disciplined
approach to allied health services is seen as a key driver of growth, aiming to improve
patient engagement, and is a collaborative approach to allied health care for patients.
Centralised Administration: effectively established within the My FootDr business prior
to listing, the centralised functions include finance, education, information technology,
human resources, and marketing.
Common practice management system: all clinics are expected to operate on the
Nookal practice management system which is designed for healthcare practitioners.
Currently there are 68 podiatry clinics and 14 physiotherapy clinics operating on
Nookal, and it is expected that all clinics within the current network will be operating
on the Nookal practice management system by calendar year end. The only exception
being the Extend Rehabilitation businesses of seven clinics which will run a separate
system specific to their requirements.
Patient engagement: The Group intends to work with its Clinics to attract new patients
through various marketing initiatives and campaigns (both locally and nationally), and
to enhance communication and behavioral skills to improve patient retention.

Healthia Limited
2) Acquisitions
Consolidation will be a key pillar in HLA’s growth strategy, for which there will be
significant opportunity given the fragmented nature of the allied health industries that
HLA is operating in.
Targeted acquisition criteria is as follows:
 Targeted acquisition multiplies of 3.0x to 4.5x EBITDA for both podiatry and
physiotherapy acquisitions. We note HLA paid 4x EBITDA for the one
physiotherapy acquisition subsequent to listing;
 Podiatry Clinics – revenues of >$0.45m and 1.5 or more podiatrists;
 Physiotherapy Clinics – revenues of >$0.8m and 4 or more physiotherapists;
and
 Clinics to be located in capital or major regional cities with populations of
>40,000.
Integration credentials established: Both the My FootDr and Allsports Physiotherapy
businesses have established track records of consolidation, with 41 clinics acquired
across the two groups in the 24-months prior to listing. We note for My FootDr that
this includes the acquisition of the Balance Podiatry Group in December 2016 which
consisted of 11 podiatry clinics and the iOrthotics business.
3) Greenfield openings
Both the My FootDr and Allsports businesses have opened 2 new clinics each in the
past two years. HLA will peruse the opening of new clinics where:
 a multidiscipline allied health practice can be anchored by physiotherapy and/ or
podiatry services, which is already evident within the Allsports Physiotherapy
network of 14 clinics. Additional services may include hand therapy, fracture
clinics, pilates, paediatric, nutritionists, sports doctors, and
 a professional service and footwear retail practice can be co-located within a
shopping centre location.
The benefits of the roll out strategy include the low levels of capital required to set up,
and utilisation of the podiatry and physiotherapy systems which have already been
developed and rolled out through the existing network.
4) Vertical integration
A large portfolio of clinics should allow HLA scale benefits with regards to the sourcing
of goods, services and equipment. HLA owns and operates an Orthotics Laboratory
and manufacturing operation, iOrthotics, and an allied health supplies business in
DBS Medical, which allows the Group to vertically integrate a number of the core
supply functions of the Group’s podiatry businesses.
We also note that HLA will consider acquiring further wholesale businesses where
such an investment would further the strategic objectives of the Group.

Healthia Limited
Divisional Operations & Brands

Podiatry
The Podiatry operations currently consist of a network of 72 podiatry clinics that
operate under the My FootDr brand, of which 56 clinics were owned by HLA prior to
listing. The Podiatry operations also incorporate an orthotics manufacturing laboratory
in iOrthotics, and a 75% ownership in DBS Medical Supplies. Both iOrthotics and DBS
Medical Supplies were also incorporated into the My FootDr operations prior to HLA
listing.
Key services provided by My FootDr clinics include biomechanical assessments, laser
fungal nail treatment, diabetic screening, sport injury management and other general
foot care. The iOrthodics and DBS Wholesale operations supply to both the existing
My FootDr network and third parties.
My FootDr
My FootDr Podiatry (My FootDr) was found in Bulimba, Queensland, in 2004 by
podiatrists Darren Stewart and Greg Dower. The business expanded from a single
clinic to 19 podiatry clinics by 31 December, 2016, then merged with the Balance
Podiatry Group of 12 clinics.
By February 2018, the My FootDr network had expanded to 56 podiatry clinics and
was the largest portfolio of podiatry clinics in Australia.
On listing, My FootDr has increased its network to 72 podiatry clinics, 11 of which are
located within the Allsports Physiotherapy network of practices. All podiatry clinics
within the division will operate under the My FootDr brand.
Portfolio concentration remains significant in Queensland where 37 of the 72
expected clinics will be located, representing 51% of the podiatry network; however, a
national footprint has been established.
Figure 4: My FootDr Podiatry portfolio
Source: Company reports, Canaccord Genuity

Healthia Limited
Senior Management team

The Podiatry operations will continue to be managed by the established My FootDr
management team. We note that all senior management listed below are qualified
podiatrists who have been responsible for founding podiatry businesses, in addition to
acquiring and integrating businesses into an established network.
Figure 5: My Foot Dr Management
Founding Podiatrist Job Title - Healthia Founded
Darren Stewart Chief Executive Officer - Podiatry The My FootDr Group
Glen Evangelista Chief Operating Officer - Podiatry The Balance Podiatry Group
Dean Hartley Chief Information Officer - Podiatry iOrthotics
Gregory Dower Chief Business Development Officer The My FootDr Group
iOrthotics
iOrthotics is an Orthotics Manufacturing Laboratory which was established as part of
the expansion of the Balance Podiatry Group in 2009 by Glen Evangelista (COO
Podiatry), Dean Hartley (CIO Podiatry) and Damian Vassallo. My FootDr acquired 100%
the business as part of the merger with Balance Podiatry in December 2016.
iOrthotics designs and manufactures custom made milled foam rubber EVA (Ethyl
Vinyl Acetate) and 3D printed polypropylene orthotic devices, using computer software
and hardware. R&D undertaken by iOrthotics has established systems to produce 3D
printed orthotics which reduce wastage and cost effective against other production
methods.
The iOrthotics business provides the Group with an integrated vertical solution for the
buying of custom orthotics for the My FootDr podiatry practices. As the number of
podiatry clinics owned by HLA increases, iOrthotics production numbers are also
expected to increase.
iOrthodics has recently added a second 3D printer for the expanded My FootDr
podiatry network, which will also allow for increased levels of third party sales.
DBS Medical
Supplies
DBS sells podiatry and foot care supplies and equipment to podiatrists, hospitals,
medical centres, nursing homes and allied health professionals in Australian, New
Zealand, the South Pacific, Singapore and Hong Kong.
DBS has been in operation for over 15 years and is based in Byron Bay New South
Wales. The business contributes to HLA’s vertically integrated approach and also
benefits from sales to third parties.
My FootDr owns ~75% of the ordinary shares on DBS Medical Pty Ltd, the owner of
DBS Medical, while founders own the remaining 25% of the shares and they remain
employed in the business.

Healthia Limited
Physiotherapy
The Physiotherapy operations currently consist of 33 clinics which comprises 26
physiotherapy clinics and seven hand rehabilitation clinics. The Physiotherapy
operations were established through the acquisition of the Allsports Physiotherapy
network of 14 clinics, with additional acquisitions resulting in a current portfolio that
also includes 12 independent physiotherapy clinics and the seven Extend Hand
rehabilitation clinics.
The physiotherapy clinics provide a broad range of physiotherapy services, including
musculoskeletal, sports, pilates, hydrotherapy, women’s health and paediatrics, while
the Extend Rehabilitation clinics are specifically focused on hand and upper arm
rehabilitation.
Allsports
Physiotherapy
Allsports Physiotherapy was co-founded by physiotherapists Tony Ganter and Lisa
Roach in 1992. Tony and Lisa were integral in expanding Allsports Physiotherapy from
a single location in Jindalee, Queensland, to a 14-clinic network by February, 2018,
with 12 clinics branded Allsports Physiotherapy and two branded Q Pilates
Physiotherapy.
The Allsports Physiotherapy operation is now responsible for the growth in the
physiotherapy network which now includes its established 14-clinic network, the
addition 12 remain independently-branded physiotherapy locations and the seven
Extend Rehabilitation hand therapy clinics.
Allsports multi-disciplined approach established

We note that within the 14 Allsports Physiotherapy clinics acquired on listing that
complimentary allied health services were already incorporated into the network as
follows:
 Podiatry – 11 clinics (acquired by Healthia on listing);
 Hand therapy – 3 clinics (acquired by Healthia on listing)
 Pilates – 4 clinics (continue to be owned by third parties).
The multi-disciplined approach currently undertaken by Allsports can be expected to
be applied across the expanded network, which is seen as a key organic growth
strategy for the consolidated Group.
Senior management team remains
The Allsports Physiotherapy operations will continue to be managed by the existing
management team, who are qualified physiotherapists who have been responsible for
founding physiotherapy businesses, in addition to acquiring and integrating
businesses into an established network.
Figure 6: Allsports Management
Founding
Physiotherapists Job Title - Healthia Founded
Tony Ganter Chief Executive Officer - Physiotherapy The Allsports Group
Lisa Roach Chief Operating Officer - Physiotherapy The Allsports Group

Healthia Limited
Extend
Rehabilitation
Extend Rehabilitation was founded in Brisbane, Queensland, in 2002 by Mary Mitchell
(physiotherapist) and Wilma Walsh and Marguerite Copley (occupational therapists).
Extend Rehabilitation is specifically focused on caring for the hand and upper arm
region; including injuries to the hand, wrist, elbow and shoulder, and neck, as well as
offering general musculoskeletal physiotherapy.
We note prior to being acquired by HLA, three of the seven Extend Rehabilitation
clinics were already operating within an Allsports Physiotherapy facility.
Financial Information
Profit and loss
Revenues: HLA will derive the majority of its revenues from the provision of
physiotherapy and podiatry services, with patients paying for services on a per
consultation or per procedure basis.
We note that within Podiatry revenues are also derived from the sale of goods
including orthotics, retail shoes and other medical equipment and consumables.
The Podiatry operations benefit from the vertically integrated iOrthotics laboratory and
manufacturing business, which supplies both the My FootDr clinic network and third
party podiatry clinics, as does the DBS Wholesale operation.
Other income is generated from the collection of rental/ facility fees from other allied
health businesses who pay a fee to co-locate with the physiotherapy practices.
Expenses: HLA’s largest expense item relates to employee costs which reflects the
professional service nature of the business. Employee expenses over the historical
and forecast pro forma period are steady at 58 to 59% of revenues.
Occupancy expenses have ranged 10.2% in FY16 to a forecast 11.6% in FY19 on a
pro forma basis. The uplift into FY19 largely reflects a number of the Allsports
Physiotherapy clinics moving into larger facilities in recent years for which the full
benefit is yet to emerge.
Other operating expenses have been reduced as a percentage of revenue as the
business has grown and are forecast to be ~19% of FY19 pro forma revenues from
22% for FY16. The most significant cost items here are associated with consumables
for practices, insurances, marketing and IT related costs.

Healthia Limited
Prospectus Forecasts
Figure 7: Prospectus forecasts
($m) - unless stated FY18 FY19 Pro FY19 FY19

Pro Forma Forma Statutory Underlying1
Revenues 69.4 71.8 66.9 66.9
Other Income 1.0 0.8 0.7 0.7
Employee expenses (40.9) (41.9) (39.0) (39.0)
% of revenue -59% -58% -58% -58%
Occupancy expenses (7.7) (8.7) (8.0) (8.0)
% of revenues -11% -12% -12% -12%
other expenses (12.4) (11.7) (13.6) (11.1)
% of revenue -18% -16% -20% -17%
EBITDA 9.3 10.3 7.0 9.5
EBITDA margin 13.5% 14.3% 10.4% 14.1%
EBIT 7.7 8.5 5.3 7.8
NPAT 4.6 5.1 2.3 4.6
NPATA 5.0 5.5 2.6 4.9
Minorities - CCS & DBS 0.5 0.8 0.7 0.7
Minorities - (% of NPATA) 9.9% 13.7% 25.8% 13.7%
NPATA - Excl. minorities 4.5 4.8 1.9 4.3
Shares on issue 63.0 63.0 55.3 55.3
EPS - Adj 7.1 7.6 3.5 7.7
Source: Healthia Prospectus & CG estimates / 1. Statutory forecasts excluding one-off costs of
$2.5m.
Key points to consider:

Pro forma FY18 and FY19 prospectus forecasts reflect the 12-months expectations for
HLA’s operations as at listing which consisted of the 102 allied health clinics and the
wholesale businesses of iOrthotics and DBS Wholesale (HLA 75% owned).
FY19 statutory forecasts reflect the following:
 a full 12-month period of the My FootDr business of 56 podiatry clinics owned
by HLA prior to listing, in addition to the iOrthotics and DBS Wholesale (50%
owned prior to listing); and
 contributions from business acquired by HLA on listing which includes the
additional 16 podiatry clinics, 30 physiotherapy clinics (including the seven
hand therapy clinics), and the increased ownership in DBS Wholesale from
50% to 75%.
FY19 underlying forecasts comprise HLA’s statutory EBITDA forecast of $7m, to which
we have excluded acquisition costs of $1.9m and listing costs of $0.6m to establish
an underlying FY19 EBITDA forecast of $9.5m, which provides the basis for our
forecasts from FY19 and beyond.

Healthia Limited
Prospectus Forecasts - Divisional

Figure 8: Prospectus forecasts - Divisional
FY18 FY19 FY19 FY19
($m) - unless stated
Pro Forma Pro Forma Statutory Underlying1
Revenues
Physiotherapy 27.1 28.2 23.5 23.5
Podiatry 42.3 43.6 43.4 43.4
Total Revenues 69.4 71.8 66.9 66.9
EBITDA
Physiotherapy 3.3 3.8 3.2 3.2
Margin 12.1% 13.5% 13.5% 13.5%
Podiatry 10.9 11.4 11.3 11.3
Margin 25.7% 26.2% 25.9% 25.9%
Total Divisional EBITDA 14.3 15.4 14.4 14.4
Corporate overheads (4.8) (5.0) (7.5) (5.0)
Total Pro Forma EBITDA 9.3 10.3 7.0 9.5
Source: Healthia Prospectus & CG estimates / 1. Statutory forecasts excluding one-off costs of
$2.5m.
Physiotherapy
Pro forma forecasts reflect 12 months of the 30 physio therapy businesses that were
acquired on listing which consists of the 14 Allsports Physiotherapy clinics, the
network of seven Extend Hand therapy clinics and nine independent physiotherapy
clinics.
On a statutory basis, the contribution from the 30 physiotherapy clinics is only
captured from the listing date.
Podiatry
Pro forma forecasts reflect 12 months of the 56 My FootDr clinics, the additional 16
podiatry clinics acquired on listing and the iOrthotics and DBS Wholesale (75% HLA
owned post listing).
Statutory forecasts reflect a full 12 month contribution from the 56 My FootDr clinics,
iOrthotics and DBS Wholesale (50% HLA pre-listing) which were all owned by HLA prior
to listing, and then the additional 16 clinics and increased ownership in DBS
Wholesale (75% from 50%) from the date of listing.
Corporate overheads
On a pro forma basis corporate overheads of $5m largely reflect the head office
function established through HLA’s ownership of the My FootDr business prior to
listing. We expect the established corporate overhead function will be able to absorb
the expanded operations post listing and absorb further consolidation activity in the
medium-term.
On a statutory basis, corporate overhead forecasts of $7.5m include costs of $1.9m
in relation to the acquisitions completed on listing, while additional costs and charges
of $0.6m were made in bringing the Healthia Group to market through an IPO. Both
the $1.9m and $0.6m are considered one-off costs.

Healthia Limited
Canaccord Genuity Forecasts

Figure 9: HLA forecasts - CG estimates
FY19F FY19F FY19F FY19F FY20F
($m) - unless stated Pro Forma Pro Forma Prospectus CG CG
Prospectus CG Est plus Acq Underlying1 Estimate Estimate
Revenues 71.8 77.3 66.9 72.4 93.5

Other income 0.8 0.8 0.7 0.7 0.9
EBITDA 10.3 11.3 9.5 10.5 13.8
EBITDA margin 14.3% 14.6% 14.1% 14.4% 14.7%
Depreciation (1.4) (1.6) (1.3) (1.6) (2.1)
Amortisation (0.4) (0.4) (0.3) (0.4) (0.4)
EBIT 8.5 9.4 7.8 8.5 11.3
NPAT 5.1 5.7 4.8 5.0 6.8
NPATA 5.5 6.0 5.1 5.4 7.2
Minorities - CCS / DBS (0.8) (0.8) (0.7) (0.8) (1.0)
Minorities - % of NPATA 13.6% 13.6% 13.6% 14.5% 14.5%
NPATA – Excl minorities 4.8 5.2 4.4 4.6 6.1
SOI - weighted ave. 63.2 63.2 55.3 55.3 63.2
EPS 7.6 8.2 8.0 8.3 9.7
DPS 0.0 0.0 0.0 2.0 4.5
Source: Healthia Prospectus & CG estimates / 1. Statutory forecasts excluding one-off costs of $2.5m / CCS –
Clinic Class Shares
Key assumptions in CG estimates:

We have based our FY19 forecasts off statutory prospectus estimates, and after
excluding $2.5m of one-off costs ($1.9m of acquisition costs & $0.6m of IPO costs)
we have established underlying prospectus forecasts for FY19 revenues and
underlying EBITDA of $66.9m and $9.5m, respectively.
After applying our acquisition assumptions (see below) to underlying FY19 prospectus
estimates, we have forecast consolidated FY19 and FY20 EBITDA of $10.5m and
$13.8m, respectively.
At an NPATA level (post minorities) we estimate FY19 NPATA of $4.6m, EPS of 8.3cps,
and FY20 NPATA of $6.6m, EPS of 10.4cps.
Minorities largely reflect the Clinic Class Shares, in addition to the 25% ownership
retained by the founders of DBS Wholesale. We have assumed minority interests will
increase to 14.5% of NPATA in FY19 and FY20, from 13.6% as per FY19 pro forma.
This reflects an expectation that minority interests associated with future clinic
acquisitions will progressively increase to 15% on average going forward.
We note the minority interests associated with the Clinic Class Shares relates only to
earnings within the Physiotherapy and Podiatry clinic network, and not the iOrthotics
or DBS Wholesale businesses; hence, the economic interest of Clinic Class
Shareholders at a consolidated NPATA level is slightly lower to that at a clinic level.
Acquisition & growth assumptions:

We have forecast HLA to acquire physiotherapy and podiatry clinics up to a total
valuation $12m p.a. (pre minorities) at a 4x EBITDA multiple, which would result in
consideration payable by HLA of $10.2m p.a. based on clinicians retaining a 15%
economic interest in acquired clinics going forward.

Healthia Limited
We have assumed acquired EBITDA of $3m p.a. (pre minorities) to be acquired evenly
over a 12-month period, or make a 50% contribution in the year of acquisition. The
exception here being in FY19 in which we have assumed $3m of acquired EBITDA will
contribute $1m in FY19 (33.3%) and $2m in FY20 (66.6%). This is a result of HLA
listing in September, but we are comfortable that an investment in acquisitions of
$12m (pre minorities) in total will still be made.
We have also assumed organic growth rates for both the Physiotherapy and Podiatry
operations at this stage of 3%.
Divisional Forecasts – Canaccord Genuity

Figure 10: HLA Divisional Forecasts - CG estimates
FY19F
FY19F FY19F
Pro Forma FY19F FY20F
($m) - unless stated Pro Forma Prospectus
CG Est plus CG Forecast CG Forecast
Prospectus Underlying1
Acq
Revenues
Physiotherapy 28.2 31.7 23.5 27.0 41.5
Podiatry 43.6 45.6 43.4 45.4 52.0
Total Revenues 71.8 77.3 66.9 72.4 93.5
EBITDA
Physiotherapy 3.8 4.3 3.2 3.7 5.7
Margin 13.5% 13.6% 13.5% 13.6% 13.7%
Podiatry 11.4 11.9 11.3 11.8 13.5
Margin 26.2% 26.2% 25.9% 25.9% 25.9%
Total Divisional EBITDA 15.2 16.2 14.4 15.4 19.1
Corporate overheads (5.0) (5.0) (5.0) (5.0) (5.3)
Total EBITDA 10.3 11.3 9.5 10.5 13.8
Total margin 14.3% 14.6% 14.1% 14.4% 14.7%
Source: Healthia Prospectus & CG estimates / 1. Statutory forecasts excluding one-off costs of $2.5m.
Physiotherapy
The physiotherapy operations derive revenues from physiotherapy services, with
patients paying on a per-consultation or per-procedure basis.
We note that eight of the 30 physiotherapy clinics acquired by HLA have undergone
practice relocations or renovations since late 2016. These relocations/ renovations
have been undertaken to provide the practice a larger physical foot print to increase
the number of physiotherapists and introduce new allied health services to leverage
the facility.
Seven of the eight renovated clinics were within the Allsports Physiotherapy network.
The Physiotherapy operations are forecast to achieve FY19 EBITDA margins of ~13.6%
(pro forma 13.5%), which is up from 12.1% on pro forma FY18.
With regards to acquisition assumptions, we assume on a fully consolidated basis that
clinics acquired will deliver EBITDA of $1.5m p.a. and be acquired on a 4x EBITDA
multiple. We assume those clinics acquired are done so achieving a 14% EBITDA
margin on being consolidated into HLA, and help move the divisional margin longer-
term to 14%.
The one physiotherapy acquisition completed post listing is achieving annualised
revenues and EBITDA of $0.8m and $0.1m respectively, representing EBITDA margins
of 14.6%.

Healthia Limited
Podiatry
The Podiatry segment also derives gross revenues from services, with patients paying
on a per-consultation or per-procedure basis; however, Podiatry also derives revenue
from the sale of goods including orthotics, retail shoes and other medical equipment
and consumables.
The Podiatry business currently comprises 72 My FootDr podiatry clinics, the
iOrthotics laboratory and manufacturing operations, and the DBS Wholesale business
which provides consumables to podiatry clinics within the My FootDr network and to
third parties.
Podiatry is forecast to achieve pro forma EBITDA margins of ~26%, which reflects
margins of ~26% from the clinics and a similar margin from the combined iOrthotics
and DBS Wholesale operations, with iOrthotics achieving margins in excess of 40%.
Figure 11: Podiatry revenue splits – FY19F Figure 12: Podiatry EBITDA splits – FY19F
DBS , 10% DBS , 4%

iOrthotics , iOrthotics ,
6% 11%
Podiatry ,
Podiatry ,
84%
85%
Source: Company reports & CG estimates Source: Company reports & CG estimates
Balance sheet
Figure 13: Balance Sheet forecasts
($m) - unless stated Dec-172 2019F 2020F 2021F 2022F
Cash 1.9 4.3 2.2 3.5 4.3
Inventories 2.1 2.9 3.6 4.3 5.1
PP&E 7.4 11.3 13.1 14.7 16.6
Debtors 2.0 2.9 3.6 4.3 5.1
Intangibles 56.4 75.9 86.8 95.4 104.0
Other assets 2.5 0.0 0.0 0.0 0.0
Total Assets 72.4 97.4 109.1 122.2 135.0
Borrowings 16.1 23.0 30.0 38.0 45.0
Trade Creditors 2.5 2.2 3.3 4.0 4.7
Other Liabilities 8.2 3.2 3.5 3.7 3.7
Total Liabilities 26.9 28.4 36.7 45.7 53.4
NET ASSETS 45.5 69.0 72.3 76.5 81.6
Source: Company reports & CG estimates / 2. Prospectus: 1H18 Pro Forma
On listing, Healthia raised $26.8m of new capital which was deployed as follows:
 Fund acquisitions - $17.6m;
 Fund exists shareholders - $2.5m;
 Working capital - $2.0m;
 Acquisition costs and charges - $2.3m; and

Healthia Limited
 Total cost of the offer (legal, accounting and brokers) - $2.4m.
HLA, on listing, has drawn debt of $15m, with an additional $22m of capacity which
will be deployed for acquisition purposes. Based on pro forma forecasts, HLA had a
leverage ratio (Debt: EBITDA) of 1.5x, which has a cap of 2.5x.
We note on listing, deferred consideration of $2.5m is applicable to the vendors of the
My FootDr business if the Podiatry operations EBITDA is >$11m for the FY19 period.
We expect this will be paid in FY20.
Our annual acquisition assumptions are for HLA to acquire physiotherapy and podiatry
clinics for a total consolidated valuation of ~$12m p.a., and that on average the
issuing of Clinic Class Shares as part consideration will represent a 15% economic
interest in the acquired clinics, with the balance of ~$10.2m in consideration being
funded by HLA through existing debt capacity and operating cashflow. This is in line
with prospectus guidance for an annual investment of >$10m in cash applicable to
HLA.
Capex has been forecast at an annual rate of 2.5% of Group revenues which accounts
for both planned capital expenditure as well as contingency for ongoing maintenance
capital expenditure.
A dividend pay-out ratio of 40 - 60% of NPATA is the targeted ranged, with the first
distribution expected to be paid in October 2019. We have assumed a 50% dividend
pay-out ratio at this stge.
Figure 14: HLA – gearing metrics
($m) - unless stated 2019F 2020F 2021F 2022F
Net debt/ equity 25% 38% 45% 50%
Leverage ratio (Debt: EBITDA) 1.8 2.0 2.0 2.0
Source: Company reports & CG estimates
Cashflow
With around 90% of revenues related to providing clients a professional service which
are typically paid on a per-consultation or per-procedure basis, we expect a high
conversion rate of EBITDA to operating cashflow b/f interest & tax (OCFBIT), which we
estimate will be >90% on a continuing basis.
We note our FY19 forecasts reflect some initial working capital investment for the
broader network and expectations around additional acquisition growth near-term.
Figure 15: Cashflow forecasts
FY18
($m) - unless stated FY19F FY20F FY21F FY22F
Pro Forma
EBITDA 9.3 10.5 13.8 17.0 20.3
Net movement in working capital -0.2 -0.6 -0.5 -0.8 -0.8
OCFBIT 9.2 9.8 13.6 16.2 19.5
Interest & tax paid (3.1) (3.6) (4.5) (5.6) (6.7)
Operating cashflow 6.1 6.3 9.1 10.6 12.8
EBITDA to OCFBIT % 98% 94% 97% 97% 96%

EBITDA to OCF % 65% 62% 65% 63% 65%
Source: Company reports & CG estimates

Healthia Limited
Valuation & recommendation

For HLA, we have derived a $1.35/share Target Price based on a DCF Valuation
methodology.
Our DCF Valuation methodology incorporates a WACC of 10% which is derived from a
4.75% risk free rate, a 1.35x beta and a 5.5% equity risk premium.
For HLA we have assumed a terminal growth rate of 3%.
Figure 16: DCF Valuation Summary
Valuation ($m)
PV of Cash flows 2019 to 2021 (9.9)
PV of Cash flows 2022 to 2028 43.1
PV of Terminal Cash flow 83.2
Total PV 116.4
Less: Net Debt 25.0
Less: Minority Interest 6.4
PV Equity 85.0
PV per share $1.35
Source: Company Reports, CG estimates

Healthia Limited
Industry Overview
Australian physiotherapy industry
Physiotherapy services account for approximately 1% of the national health care
spend with published data indicating that the Australian physiotherapy industry in
2016-2017 generated total revenue of over $1.6 billion, provided over $693 million in
wages and returned profits of over $312 million.
The physiotherapy services industry is involved in the provision of allied healthcare
services. In private practice, patients are predominantly seeking sports and
musculoskeletal and orthopaedic interventions.
Approximately 71% of patients attending a physiotherapy clinic are self-referred, whilst
only about 20% rely on a GP referral.
The Physiotherapy Board of Australia has estimated a physiotherapy workforce that
comprises around 32,000 professionals registered as a physiotherapist as at June
2018, with approximately 21% of the workforce aged between 25 to 29 years of age
and 40% of the workforce aged between 25 to 34 years of age.
Figure 17: Physiotherapists registered by age group
8000
7000
6000
5000
4000
3000
2000
1000
0
< 25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 > 80
Source: Physiotherapy Board of Australia
Approximately 48% of physiotherapists in Australia operate in Victoria (19%) and New

South Wales (29%) and 67% of total registered physiotherapists are women.
Market trends
IBIS World has reported that in the five years through to 2016-17, industry revenue is
reported to have risen by an annualised rate of over 3.5% and is forecast to grow at
2.8% annually in five years from 2017 to 2022.
Australia’s ageing population is expected to drive continued growth in demand for
physiotherapy services, along with the projected rise in disposable incomes and
increase in health consciousness.
The number of consumers opting to take up private health insurance has also
contributed to industry growth, with appropriate extras cover reducing out of pocket
expenses for patients.
Increased specialisation is expected to occur over the next five years, resulting in a
rising number of physiotherapy establishments across Australia. There are an
increasing number of institutions now offering Bachelor and postgraduate degrees in
Physiotherapy which will allow the industry to keep up with the rising demand for more
specialised physiotherapy services.

Healthia Limited
Key Statistics
 the physiotherapy industry is highly fragmented, and no one operator held more
than 3.0% of the physiotherapy industry revenue in 2016-2017;
 private health participation drives industry revenue, as extra covers typically cover
these services and encourages clients to increase their take up of subsidised allied
health services;
 the demand for physiotherapy services increases when there is an increase in
participation of organised and casual sports; and
 the physiotherapy industry has sensitivity to levels of household disposable
income as services are generally not covered by Medicare.
Growth Drivers for physiotherapy

The Australian physiotherapy services industry appears to be in the growth phase of
its economic cycle, with the industry currently growing faster than the Australian
economy at a forecast 2.8% from 2017 to 2022.
The growth within the industry as a whole has been contributed to by the following
factors:
Private health insurance membership – unlike most health services, physiotherapy
services are generally not covered by Medicare. Physiotherapy is one of the four major
‘extras’ categories to which health insurers make payments; the others being dental,
optometry and chiropractic.
IBIS World forecasts for continued growth in private health insurance out to 2022
should be positive for demand in physiotherapy services, with total private health
insurance membership forecast to increase domestically to ~13m in 2022, from
~12m in 2018.
Population median age – population growth and an increase in the median age of
Australians is expected to positively drive demand for physiotherapy services.
Consequently, Australia’s aging population is expected to be positive for industry
revenue.
Health consciousness – as individuals become more health conscious, they are more
likely to use a variety of health services, which includes physiotherapy.
Industry structure and Competitive landscape

To provide physiotherapy services in Australia, and access public and private funding,
physiotherapists are required to complete a university degree and subsequently be
registered with the Australian Health Practitioner Regulation Agency (AHPRA) and
registered with the Physiotherapy Board of Australia. The Physiotherapy Board of
Australia is appointed by AHPRA to oversee the industry.
Physiotherapists are educated at universities in Australia, for which there are 15
universities, and courses are typically a four-year undergraduate program. There are
~31,000 physiotherapists working in the Australian physiotherapy industry, of the
32,000 registered.
There are reported to be over 5,920 physiotherapy businesses in Australia with 75.9%
of these businesses located in the states of Victoria, New South Wales and
Queensland. The Physiotherapy Services industry is characterised by a low level of
competition. The industry’s top four enterprises accounted for less than 10% of
industry revenue in 2016-17, with no one enterprise accounting for more than 3% of
industry revenue in 2016-17. The Australian physiotherapy industry remains highly
fragmented.

Healthia Limited
This industry structure results in more localised competition between physiotherapy

clinics.
The largest of the other corporate groups is Health Networks Australia (owned by
Zenitas Limited, an ASX listed company) with approximately 39 practices spread
across NSW, Victoria, Western Australia and Queensland representing less than 3.0%
market share. The business operates under two core brands, Health Networks
Australia and Lifecare.
We note that the ASX-listed Zenitas (ASX: ZNT | Not Covered) has recently entered into
a binding Scheme Implementation Deed with a private group to be acquired for
$1.46/share. The Scheme consideration implies a market capitalization for ZNT of
$122m, which represents a FY18 EV/EBITDA (underlying) multiple of 11.9x based on
consensus data.
The transaction has had the support of the board and is expected to be completed
with ZNT stock last trading at $1.09 prior to the bid, and a 3-month VWAP of $1.04.
Two of the other main corporate operators (Back in Motion Health Group and The
Physio Co) in the industry represent less than 3.0% of industry revenue. Back in
Motion is a franchise and operates in over 60 locations.
The Physio Co provides mobile physiotherapy services, primarily to the geriatric
services niche market.
Australian Podiatry industry

The Australian podiatry industry is typically reported as part of “Other Health Services”
in Australia in relation to market size. In 2016-2017, Other Health Services generated
total revenue of over $7.2 billion, with podiatry contributing to approximately 12%, or
$864 million, of total Other Health Services revenue.
The podiatry services industry is involved in the provision of allied healthcare services.
Podiatrists are typically dedicated to the diagnosis, preventative and management of
medical conditions and injuries of the foot, ankle and lower limb. These services may
also include skin and nail problems, foot and ankle injuries and issues in relation to
gait and walking.
The Podiatry Board of Australia has estimated a podiatry workforce that comprises
around 5,000 professionals registered as podiatrists as at 31 December, 2017, with
approximately 22% of the workforce aged between 25 to 29 years of age and 40% of
the workforce aged between 25 to 34 years of age.

Healthia Limited
Figure 18: Podiatrists registered by age group
1200
1000
800
600
400
200
0
< 25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 > 80
Source: Podiatry Board of Australia
Approximately 60% of podiatrists in Australia operate in Victoria (32%) and New South
Wales (28%) and 60% of total registered podiatrists are women.
Market trends
In the five years through to 30 June, 2017, IBIS World estimates Other Health
Services industry revenue to have risen by an annualised rate of over 3.5% and is
forecast to grow at 2.4% annually in five years from 2017 to 2022 and reach $8.1bn.
The industry growth is expected to be driven from Australia’s ageing population, the
projected rise in disposable incomes and increase in health consciousness.
The number of consumers opting to take up private health insurance has also
contributed to industry growth, with appropriate extras cover reducing out of pocket
expenses for patients. In 2016-17, private health insurance was forecast to cover in
excess of 2.6 million podiatry sessions.
Key statistics
 the podiatry industry is highly fragmented and there are no major players in the
space, and the My FootDr network of 72 clinics is the materially the largest in
Australia;
 people in the age range of 18 to 64 years of age generally seek out Other Health
Services more regularly;
 awareness of podiatry services is low with less than half the population aware of
the services a podiatrist can offer;
 private health participation drives industry revenue, as extra covers typically cover
these services and encourage clients to increase their take up of subsides allied
health services; and
 the podiatry industry has sensitivity to levels of household disposable income as
only a small portion of services covered by Medicare and other third-party insurers
such as Department of Veterans Affairs, NDIS, WorkCover and other not for profit
organisations.
Growth drivers for podiatry services

The Australian Podiatry services industry appears to be in the growth phase of its
economic cycle, and represents ~12% of the total allied health services industry.
Industry growth is expected to continue given the following:

Healthia Limited
Private health insurance membership – The incidence of private health insurance with
extras cover for podiatry services is relevant to the podiatry services industry, as
patients with private health insurance have lower out-of-pocket costs and are more
likely to visit the podiatry.
As for physiotherapy, continued growth in private health insurance out to 2022 should
be positive for demand in podiatry services.
Population median age – population growth and an increase in the median age of
Australians is expected to positively drive demand for podiatry services. Consequently,
Australia’s aging population is expected to be positive for industry revenue.
Awareness – community awareness of what services a podiatrist provides is still
growing with market research conducted by My FootDr in 2017 indicating that less
than half the population is aware of what a podiatrist offers. Furthermore, when
people suffer a foot condition only 1 in 10 Australians surveyed said they would visit a
podiatrist first, with 80% defaulting to their general practitioner.
As the awareness of the services that are provided by a podiatrist increase, so should
the demand for these services.
Health consciousness – Australians are becoming more concerned about maintaining
good health (health consciousness) and are more likely to use a variety of health
services such as podiatry. Health consciousness is forecast to rise and expected to
flow through and positively affect industry revenue.
Industry structure and Competitive landscape

To provide podiatry services, and access public and private funding, podiatrists are
required to complete a university degree and subsequently be registered with the
Australian Health Practitioner Regulation Agency (AHPRA). The Podiatry Board of
Australia is appointed by AHPRA to oversee the industry.
Podiatrists are university educated in Australia, for which there are nine universities,
and courses are typically a four-year undergraduate program. There are ~5,000
podiatrists working in the Australian podiatry industry, with ~69% of all podiatrists
being employed in private practice. The remaining podiatrists are employed in
community health, hospitals or in academic roles.
IBIS World estimates there to be ~ 2,390 podiatry businesses in Australia, and the
Podiatry services industry is characterized by a low level of competition. My FootDr is
the largest private practice group in Australia with no other competitors, representing
more than 1% of industry revenue. The Australian podiatry industry remains highly
fragmented.
The industry structure results in more localised competition between podiatrists.

Healthia Limited
Clinic Class Shares

HLA’s business model allows for Clinicians to have continued ownership in the
practice in which they work via Clinic Class Shares. Clinic Class Shares have and will
be issued to:
 clinicians as part consideration for the acquisition of a clinic by HLA;
 clinicians acquiring shares for consideration; and
 Any other holder that is approved by the relevant board for consideration.
Clinic Class Shares are designed to create alignment between the economic interests
of clinicians and shareholders by providing the holder with an economic interest in the
performance of a given clinic in the Group. The Clinic Class Shares are non-voting
shares.
Holders of Clinic Class Shares will be able to receive a cash dividend calculated by
reference to the earnings derived from the clinic relating to the class of Clinic Class
Share in circumstances were, at the directors discretion, a dividend is declared by the
relevant Subsidiary to the Company.
The terms of the Clinic Class Shares will restrict any more than 48 Clinic Class Shares
being issued in any class, which given that each Clinic Class Shares entitles the holder
to up to 1% of the NPAT generated by the relevant clinic, the effect of this is that the
holders of Clinic Class Shares will not hold an economic interest of greater than 48%
of the earnings generated by any clinic, ensuring HLA retains economic control over its
subsidiaries, in addition to owning all of the voting shares in them.
By way of example, each Clinic Class Share relates to a specific clinic, therefore if HLA
owns 80 clinics the maximum number of Clinic Class Shares that could be issued is
3,840, being 80 classes (representing 80 Clinics) multiplied by 48 shares per class.
On listing, there were 1,227 Clinic Class Shares in 46 different classes (46 clinics) on
issue in HLA’s operating Subsidiaries. Subsequent to listing, and the acquisition of an
additional three physiotherapy clinics in which Clinic Class Shares were component of
the consideration, there are currently 1,297 Clinic Class Shares on issue across 50
classes (clinics).
The 1,297 Clinic Class Share represents a 14.4% economic interest in the earnings of
the group and this is expected to increase in the medium-term with Clinic Class
Shares as a forecast to represent on average 15% of consideration for clinic
acquisitions going forward.
We note also that the economic interest of the Clinic Class Shares relates specifically
to the performance of the physiotherapy and podiatry clinics, and excludes any impact
from the iOrthotics and DBS wholesale operations.

Healthia Limited
Key Risks - Healthia

Key risk applicable to Healthia include:
 Integration of clinics acquired on completion of the listing which may result in
higher integration costs and greater-than-expected disruption to senior
management and existing operations.
 Acquisitions will be a key pillar in the growth of Healthia and there are risks
around due diligence, execution and liability risk associated with acquisitions.
 Retention and attracting high quality clinicians as clinicians will be a major
driver of revenues in providing professional services. The Clinician Retention
Program has been developed on the basis that Clinic Class Shareholders
contribute capital to acquire Clinic Class Shares and share in future earnings
and capital growth of a given clinic. .
 Key management personal, of which many are founders of businesses within
the Healthia group.
 Competition risk, albeit HLA’s current markets of physiotherapy and Podiatry
remain highly fragmented at this stage; however, new entrants may be
attracted on the back of Healthia forming.
 Impairment of intangibles that have arisen from goodwill as a result of
acquisitions.
 Private healthcare insurance coverage and membership reductions could
impact total expenditure in allied health industries targeted by Healthia.
 Renewal of lease agreements with existing acquisitions which if not renewed
would result in a move of premise and potential disruption to the business.
 Regulation risk applicable to the businesses of Healthia which would be
outside the control of the Group.
 Technology around the systems applicable to operating the operations for
which any disruption could adversely impact the operational and financial
performance of the Group.

Healthia Limited
Board and Management

Board
Glen Richards – Chairman & Independent Non-Executive Director
Glen Richards is a veterinary surgeon and the founder and former CEO of Greencross
Limited, Australia’s largest pet care company.
Glen spent 10 years building a multi-million-dollar integrated pet care empire, which
now operates more than 130 veterinary hospitals and 200 pet care retail stores in
Australia and Animates in New Zealand.
Paul Wilson - Independent Non-Executive Director
Paul was a co-founder, director and shareholder of Mammoth Pet Holdings Pty Ltd
(Pet Barn) prior to the merger with Greencross Limited.
Prior to founding Mammoth, Paul was the Chief Operating Officer of ShopFast,
Australia’s largest online grocery retailer (sold to Coles in 2003). Paul has worked in
the retail industry for 26 years with roles including, General Manager of Caltex/Boral
JV, Vitalgas.
Paul will be Chairman of the Audit and Risk Committee and a member of the
Remuneration and Nomination Committee
Lisa Dalton - Independent Non-Executive Director
Lisa is an experienced director, senior executive and company secretary with expertise
in the healthcare, medical, utilities, manufacturing, childcare, energy, mining and
construction sectors.
She has experience in leading teams responsible for strategy, governance, risk
management, human resources, communication, stakeholder relations and program
management. Lisa has participated in 4 successful ASX listings in the past 5 years.
Lisa has strong practical experience in fit for purpose governance, risk management,
strategic planning and motivating teams to find solutions to complex issues.
Darren Stewart – Chief Executive Officer Podiatry
Darren is a registered podiatrist and in 2004 co-founded My FootDr podiatry centres
with Greg Dower. The two had grown the group to 12 clinics by December 2015.
In 2015, Darren and Greg saw the opportunity to grow their network of clinics via the
acquisition of well-established podiatry clinics. Before merging with Balance Podiatry
in December 2016, they had grown the network to 19 clinics.
Darren continues to be an active podiatrist, while providing strategic leadership and
direction to the My FootDr group.
Anthony Ganter – Chief Executive Officer Physiotherapy
Tony has over 25 years’ experience in the management and operation of private
physiotherapy and sports medicine clinics and high performance medical teams in
professional sport. He possesses knowledge of the professional, administrative and
management skills required to operate physiotherapy and sports medicine centres.
Tony remains active as a treating physiotherapist which enables him to keep in touch
with the challenges of both professional health care and clinic ownership.

Healthia Limited
Management
Wesley Coote – Chief Financial Officer & Company Secretary
Wesley is the former Chief Financial Officer and Company Secretary of Greencross Ltd.
Prior to Greencross, Wesley worked in Chartered Accounting where he provided
businesses advice within the health & property sectors and financial services industry.
Wesley holds a Bachelor of Commerce from the University of Queensland and is a
member of the Institute of Chartered Accountants, as well as a member of the
Governance Institute of Australia.
Lisa Roach – Chief Operating Officer Physiotherapy
Lisa has over 25 years’ experience in the physiotherapy private practice sector. Lisa
graduated from the University of Queensland in 1991 and joined Allsports
Physiotherapy in its year of inception in 1992. She is a founding partner in several of
the Allsports clinics throughout Brisbane and on the Gold Coast.
After spending 10 years in a clinical physiotherapy position Lisa moved to take on the
growing full-time role of business management and to oversee the evolving strategic
development for the Allsports Group.
In addition to the management of daily clinical operations, Lisa has been responsible
for the development of new initiatives for the group including complimentary allied
health services, university partnerships, education, teaching, and mentoring in private
practice.
Glen Evangelista – Chief Operating officer Podiatry
Glen founded Balance Podiatry in 2002 and co-founded iOrthotics in 2009. Balance
Podiatry were Australia’s first national podiatry brand with 11 clinics throughout Qld,
WA and the Northern Territory. Glen saw an opportunity to transform traditional
podiatry services through a medical-retail model through the location of clinics within
retail shopping centres.
Glen has extensive experience in multi-site podiatry and allied health service delivery
and management, greenfield expansion, footwear retail, shopping centre leasing,
clinic acquisitions, database marketing, and the integration and business
development of podiatry clinics.
Glen has been the Chief Operating Officer of the My FootDr group since December
2016, and is responsible for managing the national podiatry service, driving business
development
Chris Banks – Chief Commercial Officer
Possessing over a decade of professional experience across finance and strategy,
Chris initially joined Healthia in the role of Commercial Manger.
Prior to My FootDr, Chris worked for the Bank of Queensland (BoQ) where he held a
number of strategic leadership positions. During this time, Chris was responsible for
managing a range of projects and initiatives across the corporate development and
business banking divisions.
Before BoQ, Chris gained over eight years’ experience in corporate finance with KPMG
and Ernst & Young, advising on corporate transactions. Chris is a member of
Chartered Accountants Australia and New Zealand and holds a Masters in Applied
Finance.

Healthia Limited
Appendix: Important Disclosures

Analyst Certification
Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the
recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and
objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring
analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the
specific recommendations or views expressed by the authoring analyst in the research.
Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons of
Canaccord Genuity LLC and therefore may not be subject to the FINRA Rule 2241 and NYSE Rule 472 restrictions on communications
with a subject company, public appearances and trading securities held by a research analyst account.
Sector Coverage
Individuals identified as “Sector Coverage” cover a subject company’s industry in the identified jurisdiction, but are not authoring
analysts of the report.
Investment Recommendation
Date and time of first dissemination: October 24, 2018, 16:30 ET
Date and time of production: October 24, 2018, 12:48 ET
Target Price / Valuation Methodology:
Healthia Limited - HLA
For HLA we have derived a $1.35/share Target Price based on a DCF Valuation methodology. Our DCF Valuation methodology
incorporates a WACC of 10% which is derived from a 4.75% risk free rate, a 1.35x beta and a 5.5% equity risk premium. For HLA we have
assumed a terminal growth rate of 3%.
Risks to achieving Target Price / Valuation:
Healthia Limited - HLA
Integration of clinics may prove most expensive or challenging than anticipated. Executing on Acquisitions. Retention of key staff and
clinicians. Competition may enter the market on the back of HLA's consolidation activity. Private Health Insurance levels may decline and
impact total allied health spend.
Distribution of Ratings:
Global Stock Ratings (as of 10/24/18)
Rating Coverage Universe IB Clients
# % %
Buy 556 63.25% 46.40%
Hold 202 22.98% 30.20%
Sell 14 1.59% 21.43%
Speculative Buy 107 12.17% 63.55%
879* 100.0%
*Total includes stocks that are Under Review
Canaccord Genuity Ratings System

BUY: The stock is expected to generate risk-adjusted returns of over 10% during the next 12 months.
HOLD: The stock is expected to generate risk-adjusted returns of 0-10% during the next 12 months.
SELL: The stock is expected to generate negative risk-adjusted returns during the next 12 months.
NOT RATED: Canaccord Genuity does not provide research coverage of the relevant issuer.
“Risk-adjusted return” refers to the expected return in relation to the amount of risk associated with the designated investment or the
relevant issuer.
Risk Qualiﬁer
SPECULATIVE: Stocks bear significantly higher risk that typically cannot be valued by normal fundamental criteria. Investments in the
stock may result in material loss.
12-Month Recommendation History (as of date same as the Global Stock Ratings table)

Healthia Limited
A list of all the recommendations on any issuer under coverage that was disseminated during the preceding 12-month period
may be obtained at the following website (provided as a hyperlink if this report is being read electronically) http://disclosures-
mar.canaccordgenuity.com/EN/Pages/default.aspx
Required Company-Specific Disclosures (as of date of this publication)

Healthia Limited currently is, or in the past 12 months was, a client of Canaccord Genuity or its affiliated companies. During this period,
Canaccord Genuity or its affiliated companies provided investment banking services to Healthia Limited.
In the past 12 months, Canaccord Genuity or its affiliated companies have received compensation for Investment Banking services from
Healthia Limited .
In the past 12 months, Canaccord Genuity or any of its affiliated companies have been lead manager, co-lead manager or co-manager
of a public offering of securities of Healthia Limited or any publicly disclosed offer of securities of Healthia Limited or in any related
derivatives.
Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking
services from Healthia Limited in the next three months.
The primary analyst, a member of primary analyst's household, or any individual directly involved in the preparation of this research, has
a long position in the shares or derivatives, or has any other financial interest in Healthia Limited, the value of which increases as the
value of the underlying equity increases.
An analyst has visited the material operations of Healthia Limited. No payment was received for the related travel costs.
Healthia Limited Rating History as of 10/23/2018

AUD1.35
AUD1.30
AUD1.25
AUD1.20
AUD1.15
AUD1.10
Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 Oct 15 Jan 16 Apr 16 Jul 16 Oct 16 Jan 17 Apr 17 Jul 17 Oct 17 Jan 18 Apr 18 Jul 18 Oct 18
Closing Price Price Target
Buy (B); Speculative Buy (SB); Sell (S); Hold (H); Suspended (SU); Under Review (UR); Restricted (RE); Not Rated (NR)
Past performance
In line with Article 44(4)(b), MiFID II Delegated Regulation, we disclose price performance for the preceding five years or the whole period
for which the financial instrument has been offered or investment service provided where less than five years. Please note price history
refers to actual past performance, and that past performance is not a reliable indicator of future price and/or performance.
Online Disclosures
Up-to-date disclosures may be obtained at the following website (provided as a hyperlink if this report is being read electronically)
http://disclosures.canaccordgenuity.com/EN/Pages/default.aspx; or by sending a request to Canaccord Genuity Corp. Research, Attn:
Disclosures, P.O. Box 10337 Pacific Centre, 2200-609 Granville Street, Vancouver, BC, Canada V7Y 1H2; or by sending a request
by email to disclosures@canaccordgenuity.com. The reader may also obtain a copy of Canaccord Genuity’s policies and procedures
regarding the dissemination of research by following the steps outlined above.
General Disclaimers
See “Required Company-Specific Disclosures” above for any of the following disclosures required as to companies referred to in this
report: manager or co-manager roles; 1% or other ownership; compensation for certain services; types of client relationships; research
analyst conflicts; managed/co-managed public offerings in prior periods; directorships; market making in equity securities and related
derivatives. For reports identified above as compendium reports, the foregoing required company-specific disclosures can be found in
a hyperlink located in the section labeled, “Compendium Reports.” “Canaccord Genuity” is the business name used by certain wholly
owned subsidiaries of Canaccord Genuity Group Inc., including Canaccord Genuity LLC, Canaccord Genuity Limited, Canaccord Genuity
Corp., and Canaccord Genuity (Australia) Limited, an affiliated company that is 50%-owned by Canaccord Genuity Group Inc.
The authoring analysts who are responsible for the preparation of this research are employed by Canaccord Genuity Corp. a Canadian
broker-dealer with principal offices located in Vancouver, Calgary, Toronto, Montreal, or Canaccord Genuity LLC, a US broker-dealer
with principal offices located in New York, Boston, San Francisco and Houston, or Canaccord Genuity Limited., a UK broker-dealer with
principal offices located in London (UK) and Dublin (Ireland), or Canaccord Genuity (Australia) Limited, an Australian broker-dealer with
principal offices located in Sydney and Melbourne.

Healthia Limited
The authoring analysts who are responsible for the preparation of this research have received (or will receive) compensation based upon
(among other factors) the Investment Banking revenues and general profits of Canaccord Genuity. However, such authoring analysts
have not received, and will not receive, compensation that is directly based upon or linked to one or more specific Investment Banking
activities, or to recommendations contained in the research.
Some regulators require that a firm must establish, implement and make available a policy for managing conflicts of interest arising as
a result of publication or distribution of research. This research has been prepared in accordance with Canaccord Genuity’s policy on
managing conflicts of interest, and information barriers or firewalls have been used where appropriate. Canaccord Genuity’s policy is
available upon request.
The information contained in this research has been compiled by Canaccord Genuity from sources believed to be reliable, but (with the
exception of the information about Canaccord Genuity) no representation or warranty, express or implied, is made by Canaccord Genuity,
its affiliated companies or any other person as to its fairness, accuracy, completeness or correctness. Canaccord Genuity has not
independently verified the facts, assumptions, and estimates contained herein. All estimates, opinions and other information contained
in this research constitute Canaccord Genuity’s judgement as of the date of this research, are subject to change without notice and are
provided in good faith but without legal responsibility or liability.
From time to time, Canaccord Genuity salespeople, traders, and other professionals provide oral or written market commentary or
trading strategies to our clients and our principal trading desk that reflect opinions that are contrary to the opinions expressed in this
research. Canaccord Genuity’s affiliates, principal trading desk, and investing businesses also from time to time make investment
decisions that are inconsistent with the recommendations or views expressed in this research.
This research is provided for information purposes only and does not constitute an offer or solicitation to buy or sell any designated
investments discussed herein in any jurisdiction where such offer or solicitation would be prohibited. As a result, the designated
investments discussed in this research may not be eligible for sale in some jurisdictions. This research is not, and under no
circumstances should be construed as, a solicitation to act as a securities broker or dealer in any jurisdiction by any person or company
that is not legally permitted to carry on the business of a securities broker or dealer in that jurisdiction. This material is prepared for
general circulation to clients and does not have regard to the investment objectives, financial situation or particular needs of any
particular person. Investors should obtain advice based on their own individual circumstances before making an investment decision.
To the fullest extent permitted by law, none of Canaccord Genuity, its affiliated companies or any other person accepts any liability
whatsoever for any direct or consequential loss arising from or relating to any use of the information contained in this research.
Research Distribution Policy
Canaccord Genuity research is posted on the Canaccord Genuity Research Portal and will be available simultaneously for access by all
of Canaccord Genuity’s customers who are entitled to receive the firm's research. In addition research may be distributed by the firm’s
sales and trading personnel via email, instant message or other electronic means. Customers entitled to receive research may also
receive it via third party vendors. Until such time as research is made available to Canaccord Genuity’s customers as described above,
Authoring Analysts will not discuss the contents of their research with Sales and Trading or Investment Banking employees without prior
compliance consent.
For further information about the proprietary model(s) associated with the covered issuer(s) in this research report, clients should
contact their local sales representative.
Short-Term Trade Ideas
Research Analysts may, from time to time, discuss “short-term trade ideas” in research reports. A short-term trade idea offers a near-
term view on how a security may trade, based on market and trading events or catalysts, and the resulting trading opportunity that may
be available. Any such trading strategies are distinct from and do not affect the analysts' fundamental equity rating for such stocks. A
short-term trade idea may differ from the price targets and recommendations in our published research reports that reflect the research
analyst's views of the longer-term (i.e. one-year or greater) prospects of the subject company, as a result of the differing time horizons,
methodologies and/or other factors. It is possible, for example, that a subject company's common equity that is considered a long-
term ‘Hold' or 'Sell' might present a short-term buying opportunity as a result of temporary selling pressure in the market or for other
reasons described in the research report; conversely, a subject company's stock rated a long-term 'Buy' or “Speculative Buy’ could be
considered susceptible to a downward price correction, or other factors may exist that lead the research analyst to suggest a sale over
the short-term. Short-term trade ideas are not ratings, nor are they part of any ratings system, and the firm does not intend, and does not
undertake any obligation, to maintain or update short-term trade ideas. Short-term trade ideas are not suitable for all investors and are
not tailored to individual investor circumstances and objectives, and investors should make their own independent decisions regarding
any securities or strategies discussed herein. Please contact your salesperson for more information regarding Canaccord Genuity’s
research.
For Canadian Residents:
This research has been approved by Canaccord Genuity Corp., which accepts sole responsibility for this research and its dissemination
in Canada. Canaccord Genuity Corp. is registered and regulated by the Investment Industry Regulatory Organization of Canada (IIROC)
and is a Member of the Canadian Investor Protection Fund. Canadian clients wishing to effect transactions in any designated investment
discussed should do so through a qualified salesperson of Canaccord Genuity Corp. in their particular province or territory.
For United States Persons:

Healthia Limited
Canaccord Genuity LLC, a US registered broker-dealer, accepts responsibility for this research and its dissemination in the United States.
This research is intended for distribution in the United States only to certain US institutional investors. US clients wishing to effect
transactions in any designated investment discussed should do so through a qualified salesperson of Canaccord Genuity LLC. Analysts
employed outside the US, as specifically indicated elsewhere in this report, are not registered as research analysts with FINRA. These
analysts may not be associated persons of Canaccord Genuity LLC and therefore may not be subject to the FINRA Rule 2241 and NYSE
Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst
account.
For United Kingdom and European Residents:
This research is distributed in the United Kingdom and elsewhere Europe, as third party research by Canaccord Genuity Limited,
which is authorized and regulated by the Financial Conduct Authority. This research is for distribution only to persons who are Eligible
Counterparties or Professional Clients only and is exempt from the general restrictions in section 21 of the Financial Services and
Markets Act 2000 on the communication of invitations or inducements to engage in investment activity on the grounds that it is being
distributed in the United Kingdom only to persons of a kind described in Article 19(5) (Investment Professionals) and 49(2) (High Net
Worth companies, unincorporated associations etc) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005
(as amended). It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons. This material is not for
distribution in the United Kingdom or elsewhere in Europe to retail clients, as defined under the rules of the Financial Conduct Authority.
For Jersey, Guernsey and Isle of Man Residents:
This research is sent to you by Canaccord Genuity Wealth (International) Limited (CGWI) for information purposes and is not to be
construed as a solicitation or an offer to purchase or sell investments or related financial instruments. This research has been produced
by an affiliate of CGWI for circulation to its institutional clients and also CGWI. Its contents have been approved by CGWI and we are
providing it to you on the basis that we believe it to be of interest to you. This statement should be read in conjunction with your client
agreement, CGWI's current terms of business and the other disclosures and disclaimers contained within this research. If you are in any
doubt, you should consult your financial adviser.
CGWI is licensed and regulated by the Guernsey Financial Services Commission, the Jersey Financial Services Commission and the Isle
of Man Financial Supervision Commission. CGWI is registered in Guernsey and is a wholly owned subsidiary of Canaccord Genuity Group
Inc.
For Australian Residents:
This research is distributed in Australia by Canaccord Genuity (Australia) Limited ABN 19 075 071 466 holder of AFS Licence No
234666. To the extent that this research contains any advice, this is limited to general advice only. Recipients should take into account
their own personal circumstances before making an investment decision. Clients wishing to effect any transactions in any financial
products discussed in the research should do so through a qualified representative of Canaccord Genuity (Australia) Limited. Canaccord
Genuity Wealth Management is a division of Canaccord Genuity (Australia) Limited.
For Hong Kong Residents:
This research is distributed in Hong Kong by Canaccord Genuity (Hong Kong) Limited which is licensed by the Securities and Futures
Commission. This research is only intended for persons who fall within the definition of professional investor as defined in the Securities
and Futures Ordinance. It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons. Recipients of
this report can contact Canaccord Genuity (Hong Kong) Limited. (Contact Tel: +852 3919 2561) in respect of any matters arising from, or
in connection with, this research.
Additional information is available on request.
Copyright © Canaccord Genuity Corp. 2018 – Member IIROC/Canadian Investor Protection Fund
Copyright © Canaccord Genuity Limited. 2018 – Member LSE, authorized and regulated by the Financial Conduct Authority.
Copyright © Canaccord Genuity LLC 2018 – Member FINRA/SIPC
Copyright © Canaccord Genuity (Australia) Limited. 2018 – Participant of ASX Group, Chi-x Australia and of the NSX. Authorized and
regulated by ASIC.
All rights reserved. All material presented in this document, unless specifically indicated otherwise, is under copyright to Canaccord
Genuity Corp., Canaccord Genuity Limited, Canaccord Genuity LLC or Canaccord Genuity Group Inc. None of the material, nor its
content, nor any copy of it, may be altered in any way, or transmitted to or distributed to any other party, without the prior express written
permission of the entities listed above.
None of the material, nor its content, nor any copy of it, may be altered in any way, reproduced, or distributed to any other party
including by way of any form of social media, without the prior express written permission of the entities listed above.

Healthia Limited: Fill Your Boots!

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Healthia Limited: Fill Your Boots!

Uploaded by

Copyright:

Available Formats

Healthia Limited

Warren Jeffries | Analyst | Canaccord Genuity (Australia) Ltd. | warren.jeffries@canaccord.com.au | +61.3.8688.9108

BUY Initiation of Coverage

Figure 1: Healthia Limited (HLA); Canaccord Genuity forecasts

Board of Directors / Substantial Shareholders Valuation 2019F

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 2

Source: Healthia Prospectus

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 3

National footprint evolving

Allied health focus

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 4

Organic growth opportunities

Board & Senior Management industry relevant

Forecasts & valuation

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 5

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 6

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 7

Divisional Operations & Brands

Source: Company reports, Canaccord Genuity

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 8

Senior Management team

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 9

Allsports multi-disciplined approach established

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 10

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 11

($m) - unless stated FY18 FY19 Pro FY19 FY19

Key points to consider:

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 12

Prospectus Forecasts - Divisional

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 13

Canaccord Genuity Forecasts

Revenues 71.8 77.3 66.9 72.4 93.5

Key assumptions in CG estimates:

Acquisition & growth assumptions:

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 14

Divisional Forecasts – Canaccord Genuity

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 15

DBS , 10% DBS , 4%

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 16

 Total cost of the offer (legal, accounting and brokers) - $2.4m.

EBITDA to OCFBIT % 98% 94% 97% 97% 96%

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 17

Valuation & recommendation

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 18

Approximately 48% of physiotherapists in Australia operate in Victoria (19%) and New

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 19

Growth Drivers for physiotherapy

Industry structure and Competitive landscape

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 20

This industry structure results in more localised competition between physiotherapy

Australian Podiatry industry

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 21

Figure 18: Podiatrists registered by age group

Growth drivers for podiatry services

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 22

Industry structure and Competitive landscape

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 23

Clinic Class Shares

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 24

Key Risks - Healthia

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 25

Board and Management

Buy Target Price A$1.35 | 25 October 2018 Healthcare Services 26