By: Tomas Ronolski - AllPennyStocks.com News

Tuesday, February 28, 2017

The healthcare sector is expected to see a boost this year as the awareness for general health and wellness services increases. Within the sector, such wellness service provider firms are likely to show growth as a result. Ergoresearch Ltd. (TSX-Venture:ERG) is one such company which specializes in supplying medical equipment and offering pain management services. In the near future, the firm is looking to further diversify its product and services portfolio by expanding its network of clinics. The company reported earlier this morning its second quarter results with revenues hitting $3.88 million, marginally lower than the $3.96 million it had reported for the corresponding quarter of the previous year. However, the decline was mainly due to the company’s decision to discontinue its “home care” product line.

The company also saw nearly a 20 time increase in its quarterly net profit to $7,328. The increase is attributed to the cost control measures taken by the firm which slashed its selling and administrative expenses considerably. The gain in net profit also points out the increased efficiency achieved by Ergoresearch.

During the quarter, the company amply boosted its financial standing as it paid off all its long-term debt. It ended the quarter with more than $8 million in cash equivalents. The company’s liquidity is expected to help it in executing new projects in the coming months. Ergoresearch stressed that it plans to explore new collaborations or acquisitions across the country to better utilize its cash pile. It also plans to boost its R&D efforts.

The Company is expected to continue with the initiatives it started in the quarter such as expanding the scope of its services to the province of Quebec. The company introduced its sleep apnea service and the dynamic knee analysis service in some of its Equilibre laboratories in the province.

With these new additions, the company is now in a position to fully harness its resources such as real estate. The new division is named Apnee Equilibre and is led by Annie Turcotte. The service is available in four Quebec clinics including Lévis, St-Nicolas, Loretteville and Ste-Foy. Ergoresearch will be in a position to further boost its revenue by expanding the services throughout the region of Montreal.

The company’s efforts had a clear impact on their share price which showed an impressive gain of 42% in the past 12 months, with shares gaining over 29% in 2017 so far. Ergoresearch’s new projects including the expansion of its services to new areas are expected to act as major growth drivers, which could propel shares even further.

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