Medica Group PLC (LON:MGP), the computerised tomography (CT) and X-ray specialist, said it is seeing a sustained recovery in scanning activity in diagnostic services.
The group, which is focused on the UK & Ireland plus the United States and Australia, saw demand for its teleradiology services hit as healthcare organisations concentrated on combatting Coronavirus (COVID-19) but activity levels are recovering.
In the UK, the group has seen a marked increase in elective activity and continued positive growth in its NightHawk out of hours radiology reporting business since Medica’s last market update on 11 May 2021; elective activity is now at 75% of pre-COVID levels, the group reported.
The well-publicised backlog in NHS elective activity, together with an inherent growth in elective scanning, is expected to drive sustained demand into and beyond 2022.
In a business update covering the first half of 2021, the group said gross margins in its UK business have improved compared to the first half of 2020, although recent contract wins and the changing mix of business in the second half will temper this; nevertheless, management expects full-year gross margins will be in line with 2020 levels, if not better.
Medica has seen strong growth in Ireland, where the increase in scanning is putting pressure on radiology department capacity. Medica’s Ophthalmology screening contract has turned a strong performance in the first half.
Stateside, 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, Medica is starting to see patient numbers, and therefore RadMD's activity and order book conversion increase. Management expects to see a significant catch-up in activity in the rest of this year resulting in performance for the full year being in line with expectations.
"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,” said Stuart Quin, the chief executive officer of Medica.
"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," he added.