Optima Health Group Ltd (LSE:OPT) delivered a resilient financial performance for its fiscal year 2025, navigating sector-wide challenges with a combination of strategic acquisitions and a surge in new client contracts that support its longer-term growth trajectory.
The company posted £105 million in revenue, a 5% dip compared to the prior year. However, when adjusted for anticipated contract reductions and known business exits, underlying organic growth stood at 4.1%, outperforming the industry’s typical 3–5% growth band.
New contract wins surged to £27.2 million, a sharp increase from the £7.3 million reported in fiscal 2024. Excluding the recently awarded Armed Forces contract, the company still secured £6.2 million in fresh business, with an additional £1.9 million added since March.
Management acknowledged a slower-than-expected pace of converting new business in the latter half of the fiscal year, attributing this in part to internal resources being diverted to the Armed Forces bid and the group’s recent demerger.
Adjusted EBITDA came in at £17.6 million, down 2% year-over-year, with a margin of 16.7%. Cost control helped cushion the impact, as the firm reported lower selling and administrative expenses. Adjusted pre-tax profit totaled £12.8 million, reflecting a 4% decline, though the absence of second-half restructuring costs and fewer exceptional charges helped stabilize results.
Net debt stood at £2.2 million, with the company holding £14.8 million in cash. During the year, Optima drew £17 million from its £20 million revolving credit line to fund acquisitions and operational liquidity.
Looking ahead, Optima expects solid tailwinds from demographic and regulatory demand trends, supported by a healthy pipeline. For fiscal 2026, the company forecasts core growth of around 4%, with additional contribution from recent acquisitions like BHSF, Cognate, and Care First.
The DART program, now licensed by one NHS Trust and under review by four others, is also expected to be a key revenue driver in the coming years.
However, the company has trimmed its adjusted EBITDA forecasts for fiscal 2026 and 2027, now guiding to £18.3 million and £20.2 million, respectively—lower than previous estimates of £19.2 million and £21.6 million. The revisions reflect early-stage integration costs, slower-than-expected recovery in wage-related pressures, and costs associated with launching the Armed Forces contract.
Optima’s valuation remains attractive. Based on a refreshed DCF model into fiscal 2026, the firm’s target share price is set at 225p, equivalent to roughly 11.3x C2025 estimated EV/EBITDA. Currently, the company trades at around 9.6x and 8.8x C2025E and C2026E EV/EBITDA, placing it above occupational health peers (8.2x/7.6x) but below buy-and-build comparables (13.1x/12.4x).
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