MGP.L Regulatory News (MGP)

8 July 2020

Medica Group Plc

Trading Update

Medica Group Plc (LSE: MGP, "Medica" or the "Company"), the UK market leader in the provision of teleradiology services, announces a trading update for the six months ended 30 June 2020.

Medica expects revenue for H1 2020 to be £17.0 million, compared to £22.0 million in H1 2019, due to the impact of the COVID-19 pandemic on radiology reporting activity, as previously announced. Medica's cash position remains robust and, despite the decline in revenues, there has been limited impact on the Company's cash generation, with a cash balance of £20.0 million at 30 June 2020 compared to £16.5 million at 31 December 2019.

Further to the announcement on 20 May 2020, reporting activity has continued to improve towards levels experienced before the pandemic and the Company returned to profitability in June 2020. To note, Medica has not required any government funding to support its business and the Company has not furloughed any staff.

For NightHawk, the Company's out-of-hours service, reporting activity has returned to around 95% of the level experienced prior to the COVID-19 pandemic. The Company expects to maintain this level of activity following the ease of restrictions imposed by the UK government in an attempt to curb the spread of the virus, notwithstanding a return to national or regional lockdowns resulting from subsequent peaks of infection.

The Company's routine (elective) reporting has started to increase steadily and is now around 10% of the level experienced prior to the COVID-19 pandemic. Medica expects its routine reporting volumes to continue to increase in the coming months, as NHS hospitals work to process the substantial backlog of elective procedures and government restrictions are eased.

Despite the reduction in reporting activity during the period, capacity has strengthened and recruitment has been strong as radiologists realise the benefits of Medica's secure and reliable home-reporting capabilities. In addition, the pandemic has had a limited impact on the Company's ability to drive forward projects in support of the new strategy, which was announced in March 2020. Medica has also taken advantage of the reduction in workload to initiate an operational excellence programme and to accelerate training and implementation of new clinical protocols to improve the quality of its services.

Further to the announcement on 30 March 2020, Richard Jones will be joining Medica as Chief Financial Officer on 3 August 2020.

Dr. Stuart Quin, Chief Executive Officer of Medica, commented:

"Whilst demand for our services was significantly impacted during the period, particularly our routine service due to the suspension of elective procedures, we are encouraged to see a continuing improvement in activity. This is particularly evident for our Nighthawk service, with activity now similar to pre-COVID-19 levels. We continue to work closely with our clients to provide timely reporting of imaging for elective procedures as they actively manage waiting lists that have built up over the past months.

"I want to thank all involved at Medica who have ensured the high level of service we offer the NHS has been sustained during this challenging time. I recognise the professionalism and commitment shown by our reporters working in the front line and our team working hard to maintain our services from their homes. As a result, Medica has been able to quickly adapt and respond to client's needs, strengthening its position as a leader in the provision of teleradiology services."

Medica plans to provide an update on guidance for the full year and publish its financial results for the six months ended 30 June 2020 on 14 September 2020.

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About MEDICA

MEDICA is the UK market leader in the provision of teleradiology services, providing outsourced interpretation and reporting on MRI (magnetic resonance imaging), CT (computerised tomography) and plain film (x-ray) images. The Company currently offers three primary services to hospital radiology departments: NightHawk, an out-of-hours service, routine cross-sectional reporting on MRI and CT scans, and routine plain film reporting on x-ray images.

MEDICA has developed a bespoke secure IT platform that provides market-leading linkage between a hospital's Radiology Information System (RIS) and Consultant Radiologists who contract with MEDICA. Direct RIS access ensures that the full wider patient information is available and reviewed with every report.

The Company contracts with the largest pool of consultant radiologists outside of the NHS and has been trusted to provide more than 1.3 million examinations annually across its customer base of more than 100 NHS Trusts and various private hospital groups and diagnostic imaging companies. For more information please visit www.medicagroup.co.uk 

About Teleradiology

Teleradiology is the electronic transmission of radiological patient images, including plain film (x-rays), CT scans and MRI scans, from one location to another for the purposes of diagnostic interpretation and reporting.