Nova Leap Health Corp. (TSXV:NLH) has largely flown under the radar despite more than 8,600% revenue growth over the past three years
Capital Ideas Media | February 22, 2021 | SmallCapPower: COVID-19’s impact on long-term care homes has been devastating. This could, however, turn out to be a major catalyst for the home healthcare industry, especially as more of the large Baby Boomer demographic becomes too elderly to take care of themselves.
(Originally published on Capital Ideas Media on January 5, 2021)
This is what initially drew us to Nova Leap Health Corp. (TSXV:NLH) – that and its #2 ranking out of 400 in the Globe and Mail’s Top-Growing Canadian companies, with 8,602% revenue growth from the beginning of 2017 to the end of 2019.
Nova Leap Health has been an active acquirer of home healthcare businesses, mostly in United States but some in Canada. The Company’s services include dementia care, companionship, personal and respite care, cooking and meal preparation, light housekeeping, transportation, medication reminders, and medication administration by nursing staff, with a focus of providing clients with independence and quality of life in their own homes.
Home healthcare is a highly-fragmented industry and Nova Leap has successfully targeted businesses with revenues of between US$1 million and $15 million and positive EBITDA, with a strong brand and solid reputation.
Nova Leap Health then focuses on improving these newly-acquired businesses, growing organically through enhanced sales and marketing strategies as well as operational efficiencies that include improved training and investment in staff.
Importantly, the Company has managed to grow without excessive shareholder dilution – it currently has just 65.6 million shares outstanding (approximately 77.4 million fully-diluted), about 38% of which are owned by Nova Leap insiders.
COVID-19 has weighed on the Company’s revenue in 2020 (it slipped 4.4% year-over-year during Q3 2020 to US$4.2 million but rose 6.2% quarter over quarter), yet Nova Leap Health has remained EBITDA positive since Q1 2019.
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