Medica Group reported a 36% improvement in revenue in its first half on Tuesday, to £36m, amid further growth and recovery and “significant” contract renewals.
The London-listed firm said its gross profit was ahead 30% year-on-year for the six months ended 30 June, at £17.5m, while its underlying operating profit was 46% firmer at £6.21m.
Its underlying operating margin improved to 17.2% from 16.1%, while underlying profit before tax was ahead 48% at £5.89m.
Underlying basic earnings per share came in 40% firmer at 3.96p, as the board hiked the interim dividend by 4% to 0.93p.
Medica said it had cash and cash equivalents of £6.44m at period end, down from £11.64m year-on-year, although it swung to net cash of £0.86m from net debt of £0.03m at the same point last year.
“This has been another positive period of growth for Medica,” said chief executive officer Dr Stuart Quin.
“In the UK and Ireland, strong NightHawk growth has been driven by successful contract renewals with existing clients and new contract wins, and we have advanced the rollout of our ambitious FutureTech programme.
“In the UK, whilst Elective demand has returned to pre-pandemic levels, the second quarter was impacted by a shortage of radiologist capacity that limited our ability to capitalise on strong client demand.”
Dr Quin said that trend continued over the summer period, although capacity was now returning to “more normal” levels.
“We continued to grow our US business, RadMD, over the period with some exciting new client wins and we are proud to have supported a major therapy through to approval for one of our largest clients.
“RadMD continues to be well-positioned in a fast-growing, attractive international market with opportunity for further organic growth and mergers and acquisitions.”
Demand for the company’s services was at an all-time high in the UK and Ireland, Dr Quin said, as healthcare providers grappled with a “huge backlog” of patients waiting for diagnosis and treatment following the pandemic.
“Our focus during the remainder of this year and into 2023 remains on working closely with our hospital clients to help them to manage demand and, to do this, we are working hard to maximise the utilisation of existing radiologist capacity and continuing to build our network of specialist radiologists both in the UK and Ireland, as well as overseas.
“We are making progress towards this end but, as we have previously indicated, the UK and Irish healthcare markets remain capacity-constrained and as a result, demand for reporting continues to exceed the availability of radiologists.”
In the near-term, Medica said it was prioritising its “strategically important” NightHawk service, including new initiatives relating to its acute reporting offering, without impacting its ability to grow the UK business as a whole.
“In the long-term, our infrastructure, expertise, recent investments in technology, and the continued strong market demand mean we remain confident that Medica will maintain its market-leading position in teleradiology.”
At 0906 BST, shares in Medica Group were down 10.74% at 133p.
Reporting by Josh White at Sharecast.com.
