Q: LifeWorks 2021 financials (albeit two years old) did not appear 'great' to me. What is 5i's assessment of Telus's acquisition of Life Works, and the competitive strength and profit potential of the 'Telus Health' combined business? Thank you. Edward
5i Research Answer:
Lifeworks did not have a great 2021, for sure, but prior to that it experienced close to ten years of rapid growth. Sales doubled from 2014 to 2020 and cash flow tripled. We would consider the acquisition 'OK' but maybe not great. T continually looks for low capital, steady businesses to offset its high capital telecom exposure. Telus Health, while growing, still represents just a low amount of T's total business exposure. In the last quarter revenue was $428MM, less than 10% of total ($4.9B). The division we think has more growth potential, and being less regulated is always a good thing, but it is not quite ready to move the needle of the whole company much, just yet.