Primary Health Care shares are going nuts

Sean Gallup/Getty Images

Primary Health Care, whose earnings were threatened by limits on Medicare rebates for pathology tests, has turned around its profit outlook to the positive.

A short time ago, the shares were up more than 21% to $2.68.

Late last year the company sounded a warning on its revenue growth because of a freeze on the indexation of rebates from Medicare.

Primary Health Care today posted a 28.5% rise in profit to $68.6 million for the six months to December, putting it on track to meet guidance of $110 million to $115 million for the full year.

Revenue rose 4.6% to $835 million.

Managing director Peter Gregg says the company has made good progress.

“The second half will be stronger with projects underway to drive margin expansion and recycle capital,” he says.

“The difficult trading conditions have, in part, come about due to the government’s desire to reduce spending on frontline healthcare.”

However, Gregg says there is strong underlying demand for healthcare services with a growing and ageing population.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.