Sonic Healthcare is on the hunt for a new chief executive of its troubled United States pathology business – its third in two years.
A job advertisement posted on healthecareers network on Wednesday said the company was looking for candidates with leadership experience in medicine and business. The successful candidate will take on the role in Sonic’s US head office in Austin, Texas.
Sonic’s US pathology business accounts for about 22 per cent of the $7 billion company’s revenue. In the first half of the 2014 financial year US revenue hit $411 million. On a statutory basis revenue rose 12 per cent, but in constant currency revenue was flat.
The executive search comes less than two years after the current CEO David Bryant took over the job from his predecessor David Schultz in September 2012.
“There has been some churn in this role,” an analyst who declined to be named said. “I thought they had a fairly stable CEO [in Mr Bryant].”
Mr Schultz originally joined Sonic in 2005 when the company bought Texas-based Clinical Pathology Laboratories, the company he founded. His retirement lead to the appointment of Mr Bryant.
Sydney-based Sonic is undertaking a $US60 million cost cutting initiative in its US business in order to boost earnings at a time when revenue growth is hard to come by.
The introduction of US President Barack Obama’s Patient Protection and Affordable Care Act, dubbed Obamacare, was expected to boost revenue given more Americans would have access to healthcare. But the country’s big pathology players Quest and LabCorp have admitted some “uncertainty” around the impact of the policy changes.
Sonic was forced to update the market on the US division’s performance in December 2013 when the two big competitors announced earnings downgrades. “Whilst there are currently certain pressures in the US market, which Sonic has discussed in previous announcements and reports, Sonic has experienced substantial earnings growth in its US business for the 5 months to 30 November 2013, and expects to continue to do so for the full 2014 and 2015 financial years, largely as a result of the US$60 million cost out program that has previously been announced,” the company said at the time.
The company is slated to announce its full year results to the market on August 19. Sonic did not immediately respond to requests for comment.
