Abu Dhabi medical services firm Response Plus has the investors' pulse
New project wins and solid financial results are what has caught their attention
Response Plus Holding, a Dh2.77 billion ADX listed firm, has announced stellar results for the third quarter. It is a leading medical services company and fulfils requirements for specialized onsite medical staffing.
Some of its largest customers are in oil and gas, chemicals and construction sites, where it takes care of medical emergencies. In addition, Response Plus even assists in the smooth functioning of mega-events like ICC Men's T20 World Cup, music shows, etc. In a nutshell, it is the most prominent UAE company in its domain.
During the first nine months, RPM made Dh197.7 million in revenues compared to only Dh2.1 million over the same period in 2020, signifying an eye-popping 9,205 per cent gain. Gross profits rose sharply to Dh60.1 million in contrast to a loss of Dh0.4 million, while net profit had a remarkable growth to Dh40.1 million versus a net loss of Dh3.9 million.
Winning clients over
RPM successfully bagged some marquee customers this year, which has enabled it to post the rise in revenues. Clients include Abu Dhabi Health Services Co. (SEHA), Mafraq Hospital (200 ICU facility), Emirates Global Aluminium, Schlumberger, Abu Dhabi Police, Larsen & Toubro and Trojan Contracting.
In addition, RPM signed agreements for several key events and integrated ambulance fleet management for hospitals.
The financial profile of RPM is solid. Total assets have risen to Dh280.48 million from a paltry Dh5.61 million. However, even after this growth, long-term debt is minuscule at Dh6.10 million. And current liabilities are at Dh63.62 million, which means liquidity ratios are excellent.
Moreover, total general and administrative expenses for the period are Dh20.1 million compared to Dh3.5 million earlier, growing at a much slower rate compared with revenues. This augurs well. Moreover, RPM has also created long-term assets to the tune of Dh13.40 million.
Prepping for overseas
Revenues are likely to get a substantial boost due to its exceptional pipeline. The management has confirmed that its work for National Petroleum Construction Company (NPCC) will start in November, while that for China Machinery Engineering Corporation (CMEC) has started.
RPM has also improved its business development and marketing department to prepare itself for an aggressive expansion abroad. In the coming year, it plans to pursue opportunities in Saudi Arabia, Oman and Ethiopia. By next year, it plans to expand into India, which could potentially be a gamechanger.
On an annualized basis, RPM shares are trading at 52 times 2021 earnings per share. It's expensive, but it's a fast-growing UAE company in the medical services field and is suited for growth investors.