Telstra is considering a strategic review for the healthcare sector

Telstra’s health department is a black box, reporting its revenue figures under a non-discrete ‘other’ category – and revenue only. As such, it makes it difficult for analysts to get a good picture. On the other hand, healthcare is miles away from Telstra’s core business, and even if Health achieved $50 million in EBITDA, that wouldn’t change anything. In terms of numbers, Health’s fiscal 2023 income was $305 million, up $62 million from the prior year thanks to organic growth and the acquisitions of MedicalDirector and PowerHealth.

Poor health

Zooming out, Telstra is weathering a storm in its network applications and services, which led to it cutting its full-year profit guidance in February. The department suffered a rapid deterioration in demand for professional services, with revenue falling 12 percent from a year earlier to $233 million. Telstra is reviewing its domestic business operations, but has not specified exactly how it will cut costs and whether a restructuring will involve job cuts.

Founded in 2014, Telstra Health has had its ups and downs. In late 2016 it looked more like a failed experiment, rudderless and without leadership, following the departure of former Telstra Health director Shane Solomon and director Tim Kelsey. A year later it was forced to write down $77 million in a takeover spree that cost Telstra $240 million, but resulted in it owning stakes in a series of separate companies but without a platform to bring them all together. But it has since consolidated its operations and management has supported the company’s growth in 2020 by making additional acquisitions in the hope that it can make a significant contribution to the company’s size and success. In 2022 Telstra Health told The Australian Financial Statement the goal was to reach $500 million in sales by 2025.

Today, Telstra Health consists of the National Cancer Screening Register, national domestic and sexual violence advice service 1800Respect, practice management software company MedicalDirector, digital prescription service Fred IT – the sexiest asset of the bunch – and solutions focused on aged care and healthcare. first nations health care services.