The Healius Ltd (ASX: HLS) share price has dropped 2% in early trade despite a Federal Court win against the Australian Taxation Office (ATO).
What did Healius announce today?
Healius said the Federal Court of Australia had decided in favour of the group this morning. The ongoing court case relates to the tax treatment of healthcare practitioners’ lump sum payments.
Healius, then known as Primary Health Care Ltd, was advised in 2015 that lump sum payments made to healthcare practitioners in FY10 to FY14 were tax deductible.
The group filed an application for similar deductions for FY03 to FY07 following the advice. Healius’ legal proceedings commenced after its application for an “out-of-time objection” was rejected by the ATO.
The ruling today allows Healius to pursue a tax refund and associated interest from those payments. The group estimates that refund to be $60 million and expects the final refund to be material to its debt and cash balances.
Why are Healius shares falling lower?
Despite the favourable ruling today, Healius shares have fallen 2.06% lower in early trade.
It’s unusual to see such a big share price move, particularly given what looks like good news for Healius.
However, the group’s shares have been trading close to their 52-week high meaning it could be a broader correction.
The Healius share price has rocketed more than 10% since 15 August in a solid period for shareholders.
The company’s shares have also climbed higher this week following a trading and management update on Monday.
In the update, Healius announced an expected underlying net profit after tax of between $94 million and $102 million for FY20. At the top end of that range, this would represent a 9.4% increase on the prior corresponding period (pcp).
The group’s management team is also changing, with Scott Beattie taking over as CEO of its Medical Centres business.
Healius shares are up 26.22% since the start of January to be just ahead of the ASX 200 this year.
The post Healius shares tumble despite tax case win appeared first on Motley Fool Australia.
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The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019