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RNS Number : 0491G
Medica Group PLC
22 July 2021
22 July 2021
Medica Group Plc
Trading and Business Update for the six months ended 30 June
2021
Medica Group Plc (LSE: MGP, "Medica" or the "Company"), the UK
and Ireland market leader in the provision of teleradiology
services and a US expert in imaging services for clinical trials,
today announces an unaudited trading update for the six months
ended 30 June 2021, as well as a business update.
The Company expects to report its financial results for the six
months ended 30 June 2021 on 27 September 2021. Medica also plans
to hold a Capital Markets Day on 7 September 2021.
Trading update
Overall, the Group had a positive first half performance with
the UK and Ireland performing strongly against a backdrop of a
sustained recovery in activity in diagnostic services.
United Kingdom
We are pleased to report a marked increase in Elective activity
and continued positive growth in our NightHawk out of hours
reporting since our last market update on 11 May 2021.
As our NHS partners successfully resume their focus on the
backlog of cases arising from the pandemic, Elective activity has
continued to grow month-on-month and is now 75% of pre-Covid
levels*. We expect this recovery to continue and to strengthen over
the summer period as elective scanning activity in the NHS
continues to increase. However, we are yet to see the full impact
of the removal of Covid restrictions and the rate of
hospitalisation and hence remain cautious on the impact this may
have on NHS scanning capacity. The well-publicised backlog in NHS
elective activity, together with inherent growth in elective
scanning, is expected to drive sustained demand into and beyond
2022.
As expected, NightHawk continues to perform strongly and this is
being driven by underlying demand, gradual easing of lockdown
restrictions, service expansions, contract extensions and tender
wins.
The combination of an increasing mix of Elective revenues, the
positive impact of increasing volumes from existing NightHawk
contracts and cost efficiencies has resulted in gross margins being
above 2020 levels in the first half. Whilst we expect this to be
tempered by the impact of contract wins and changing case mix in H2
2021, the overall outlook for gross margins for the full year is at
least in line with 2020 levels.
Ireland
We have also seen strong growth in Ireland during the first six
months of the year as we are increasingly working with hospitals
and healthcare providers to scan patients as part of recovery
efforts, as well as to report elective cases. In parallel, the
increase in scanning is putting pressure on radiology department
capacity and, in line with our strategy, we are increasingly
supporting out-of-hours reporting provision across Ireland. In
addition, our Ophthalmology screening contract has reported a
strong performance in the first half.
United States
Reported revenues for RadMD, acquired in March 2021, have
continued to grow although this growth has been tempered by a
continuation of slower-than-normal patient recruitment into
existing clinical trials due to the ongoing pandemic. As
restrictions are lifted across the US, we are starting to see
patient numbers, and therefore RadMD's activity and orderbook
conversion increase. We expect, in line with 2020 under previous
ownership, to see a significant catch-up in activity in H2
resulting in performance for the full year being in line with our
expectations.
Business update
In the UK, the FutureTech programme is advancing in line with
our plan and we are on target to deliver the new Sectra Picture
Archiving and Communication System in Q1 2022. We have continued to
expand the roll-out of our augmented intelligence tool such that
the vast majority of computerised tomography head scans are
routinely screened for intracranial haemorrhage prior to the image
being reported by the radiologist. We are also pleased to have
expanded our multi-disciplinary team support for clients, as well
as having launched a new Cardiac Magnetic Resonance service.
In Ireland, the integration of Global Diagnostics, now
re-branded as Medica Ireland, is largely complete. We have
strengthened the team by hiring an Operations Director and have
made good progress winning new clients, as well as expanding our
independent sector relationships.
In the US, RadMD has strengthened the team appointing a Head of
Operations, Chief Commercial Officer and Finance Manager to support
and drive business growth.
Finally, the MedX joint venture (JV) with Integral Diagnostics
(IDX) in Australia is now using a new Virtual Desktop
Infrastructure (VDI) reporting solution. The solution allows
radiologists in Australia to report with no loss of image quality
on MedX, Medica or IDX workstations with shorter deployment
timescales and easier day-to-day support. The second phase of our
strategy for the JV is now underway to continue to diversify our
service offering into new areas of telemedicine and expand into new
markets.
Dr. Stuart Quin, Chief Executive Officer of Medica,
commented:
"The recovery of elective scanning activity in health services
is now well underway . Medica is seeing a sustained recovery in
Elective scanning volumes as a result, as well as a sustained
strong performance of our NightHawk business in the UK due to
continued growth from existing customers, good progress with new
client wins, and providing expanded services to existing
clients.
"We continue to execute against our strategy and are pleased
with the progress of the ongoing integration of our recent
acquisitions in Ireland and the US. As a result of our considerable
efforts over the last 18 months to position our business for the
Covid recovery, combined with our expansion into new markets and
services in the US, Ireland and Australia, we are well placed to
continue our ambitious growth trajectory at Medica."
*Monthly activity volumes compared to the average monthly
volumes for the period January and February 2020.
For further information, please contact:
Medica Group Plc:
Stuart Quin, Chief Executive
Officer
Richard Jones, Chief Financial
Officer +44 (0)33 33 111 222
FTI Consulting
Victoria Foster Mitchell
Sam Purewal +44 (0)20 3727 1000
Investec Bank plc (Joint Broker)
Sara Hale
Daniel Adams
Virginia Bull +44 (0)20 7597 5970
Liberum (Joint Broker)
Bidhi Bhoma
Richard Lindley
Euan Brown +44 (0)20 3100 2000
About Medica Group PLC
Medica is the market leader in the UK and Ireland for the
provision of teleradiology services, providing outsourced
interpretation and reporting of MRI (magnetic resonance imaging),
CT (computerised tomography), ultrasound and plain film (x-ray)
images. Medica also offers diabetic retinopathy screening in
Ireland.
Medica contracts with the largest pool of consultant
radiologists in the UK and Ireland, performing remote access
teleradiology across its customer base of more than 100 NHS Trusts
in the UK, the Irish HSE, private hospital and insurance groups, as
well as diagnostic imaging companies. This enables the Company to
offer a fast, responsive service. In addition, Medica operates in
Australia and New Zealand through MedX, a 50:50 Joint Venture with
Integral Diagnostics Limited Pty.
The Company currently offers two primary services to hospital
radiology departments:
-- NightHawk - urgent reporting service
-- Elective - includes routine cross-sectional reporting on MRI
and CT scans, and routine plain film reporting on x-ray images.
These services are underpinned by Medica's bespoke, secure IT
platform that provides market-leading linkage between a hospital's
Radiology Information System (RIS) and consultant radiologists who
contract with the Company. Direct RIS access ensures that where the
wider patient medical history is available, it can be reviewed by
the consultant as part of every report.
Through its subsidiary, RadMD, in the United States, Medica also
provides pharmaceutical and biotech clients and contract research
organisations (CROs) with high quality, complex imaging services
for international clinical trials. RadMD has gained vast experience
in the space, having contributed to over 500 international clinical
trials, in all phases of clinical research from proof of concept to
phase III and with expertise in oncology, as well as a wider range
of therapeutic areas including medical devices, neurology and
cardiovascular.
For more information please visit: www.medicagroupplc.com
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