Trading update and full year outlook
26/07/2022 07:00
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RNS Number : 6871T Medica Group PLC 26 July 2022
26 July 2022
Medica Group Plc
Trading update for the period ended 30 June 2022 and full year outlook
Strong first half performance in NightHawk services with recovery in Elective
to pre-pandemic levels and continued growth in Ireland and RadMD
Medica Group Plc (LSE: MGP, "Medica", the "Company" or the "Group"), an
international provider of high-quality telemedicine services, is pleased to
announce an unaudited trading update for the six-month period ended 30 June
2022, as well as setting out the outlook for the remainder of the year.
The Company expects to report its unaudited half year financial results on 26
September 2022. The Board continues to expect the full year financial
performance will be in line with expectations.
Trading update
Demand for Medica's services remains strong, driving continued growth across
the business. We expect Group revenue for the period ended 30 June 2022 to be
£36.0 million, in-line with expectations and representing an increase of 36%
over the same period last year. On a like for like ("LFL") basis, excluding
the positive impact of RadMD in the US which was acquired during the
comparative period, Group revenue is expected to increase 27% over the same
period last year.
The UK business has continued to perform well during the period. We have seen
strong ongoing demand for our NightHawk services with expected revenues of
£16.2 million, representing an increase of 14% over the same period last
year. NightHawk growth has been driven by a combination of underlying market
growth, successful contract renewals with existing clients and net new
contract wins. Additionally, demand remains high for Elective reporting
services as our NHS clients deal with the continued backlog resulting from the
Covid-19 pandemic. Medica has been actively recruiting radiologists to support
this demand but, at present, this remains a capacity-driven market where
demand is exceeding the availability of radiologists across the market in the
UK and Ireland. Elective revenues have recovered to pre-pandemic levels and
are expected to be £9.9 million for the period, representing an increase of
61% over the same period last year.
We are pleased to have successfully launched our new Picture Archiving and
Communication System (PACS) in the UK in February 2022 as the first key
deliverable of our FutureTech programme. Further progress is planned during
the remainder of 2022 and into 2023 as we continue to invest in our
teleradiology reporting platform to deliver efficiencies in our core
teleradiology reporting process and drive productivity.
Medica Ireland performed strongly during the period, exceeding our
expectations. Revenue is expected to be £5.6 million, representing an
increase of 24% over the same period last year. This was driven by a
combination of an increased number of scan and reporting contracts in
ultrasound and x-ray plain film, as well as a significant increase in the
number of new out-of-hours teleradiology hospital clients. Medica has also
expanded its partnership with Ireland's leading health insurer, providing
diagnostic services at a new state-of-the-art clinic in Dublin. Additionally,
the Medica Vision diabetic retinopathy screening service is performing to plan
and supporting the National Screening Service in Ireland to return to
pre-pandemic levels of patient screening.
In April 2022, we reported that RadMD had significantly increased the size of
its combined backlog and pipeline by 34% since acquisition with the team
having secured contracts with additional sizeable pharmaceutical and biotech
companies in a number of therapy areas. For the period, RadMD revenue is
expected to be £4.3 million, 15% ahead of the second half of last year
following the acquisition in March 2022, with further strong growth expected
in the second half of 2022 as the contracted orderbook converts into revenue.
Whilst we have seen some inflationary pressure on our cost base, we have
continued to carefully control costs and progress our FutureTech programme,
which will support productivity and efficiency improvements and mitigate
against further inflationary pressure over time. Overall, our cost base
remains controlled and is tracking in line with expectations.
We started the year with net cash((1)) of £3.9 million. During the period,
working capital continued to be carefully managed and our cash conversion
remained strong. After taking into account contingent consideration payments
for the RadMD and Global Diagnostics Ireland (now Medica Ireland)
transactions, net cash((1)) at 30 June 2022 was £0.6 million.
Outlook
We continue to experience strong demand across our business and expect growth
to be driven by the same factors currently at play.
We expect an increase in demand for our reporting services in the UK and scan
and reporting services in Ireland as national health services tackle the
significant backlog of elective patients waiting for diagnosis and treatment.
Medica continues to be well-positioned to capitalise on this growth and the
focus remains on recruitment and collaborative working with our network of
highly skilled sub-specialist radiologists, ophthalmologists, radiographers,
sonographers and other clinical experts, to increase our reporting capacity.
Additionally, the demand for imaging expertise in clinical trials continues to
drive the market opportunity for RadMD and the team remains focused on
developing our service offering and expanding both our client and radiologist
reader network. We anticipate strong growth in reported results in RadMD as
the pipeline and orderbook for clinical imaging services continues to develop.
The Board continues to expect that the full year financial performance will be
in line with expectations.
In addition, we continue to evaluate strategic acquisition opportunities, on a
highly selective and disciplined basis, to expand the scale and breadth of our
existing telemedicine services and supplement organic growth.
Dr. Stuart Quin, Chief Executive Officer of Medica, commented:
"Medica has made good progress assisting our clients in managing the backlog
of patients requiring scanning and reporting services, as well as responding
to an increasing need for our emergency reporting service in the UK and
Ireland. Demand for our services is expected to remain high and, to address
this, we continue to work to increase our reporting capacity by adding new
reporters to our network and through improvements to our technology platform
to support increased productivity. Further, we are growing our RadMD team to
support the increase in clients and growth in our order book and to build the
pipeline for the remainder of 2022 and beyond. I am pleased the business has
continued its strong momentum and I remain confident that we can continue to
deliver on our ambitious growth strategy."
(1) Net cash is a non-IFRS measure and is calculated by subtracting bank
borrowings from cash and cash equivalents.
For further information, please contact:
Medica Group Plc: +44 (0)33 33 111 222
Stuart Quin, Chief Executive Officer
Richard Jones, Chief Financial Officer
FTI Consulting +44 (0)20 3727 1000
Victoria Foster Mitchell
Sam Purewal
Liberum (Joint Broker) +44 (0)20 3100 2000
Phil Walker
Richard Lindley
Numis (Joint Broker) +44 (0)20 7260 1000
Freddie Barnfield
Duncan Monteith
Euan Brown
About Medica Group PLC
Medica (LSE:MGP) is an international provider of high-quality telemedicine
services. It is the market leader in teleradiology in the UK and Ireland,
working with more than 100 NHS Trusts and HSE hospitals in Ireland, in
addition to private hospitals, insurance groups and diagnostic imaging
companies. Its network of consultant radiologists, radiographers and
specialist doctors interpret and report MRI, CT, ultrasound and X-ray images
on behalf of healthcare providers, using Medica's bespoke, secure technology
platform for fast and responsive delivery. The company's core services include
NightHawk, an urgent, out-of-hours offering available to clients 24/7 with
dedicated pathways for stroke and major trauma, and Elective, for routine
reporting.
In Ireland, Medica carries out patient scanning, as well as reporting, and
runs a diabetic retinopathy screening programme for the National Screening
Service. Through its US business, RadMD, Medica provides global pharmaceutical
and biotech companies, as well as contract research organisations with
specialist imaging services for clinical trials.
For more information, please visit: www.medicagroupplc.com
(http://www.medicagroupplc.com/)
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