SHARE PUNT OF THE WEEK
WHAT IS IT? Medica is Britain’s leading provider of so-called teleradiology services.
Essentially, its highly qualified team of radiologists provide outsourced interpretation of MRI scans, CT scans and X-rays for the National Health Service and private hospitals, particularly out of hours. It delivers more than 1.3m radiology reports a year.
WHAT’S THE LATEST? The East Sussex-based firm, once part of healthcare company Nuffield Health Group, floated on the stock market in March, raising £121m at 135p a share. Since then the firm’s share price has risen to 223p.
Medica published solid half-year results in September, with pre-tax profit up 14.8pc to £3.8m and revenue up 17pc to £15.7m.
Typically its radiologists work in hospitals and medical centres full-time and dedicate a few hours each week to Medica. But in June the company employed its first full-time radiologist and plans to take on more and base them in dedicated reporting centres. WHO BACKS IT? Medica’s listing has attracted the attention of some big names, with investment giant Old Mutual owning 17.5pc. Standard
Life Aberdeen is the next biggest shareholder, owning nearly 8pc of the shares.
Hargreaves Lansdown, Britain’s largest stockbroker, also holds the company in its HL Select UK Growth Shares fund.
WHY YOU SHOULD INVEST At the moment, only a small amount of NHS radiology work is outsourced to private firms. However, with the health service suffering from staff shortages, that could increase.
As the biggest provider in the market, Medica could reap most from the situation, says Charlie Huggins, manager of HL Select UK Growth Shares. He adds: ‘The reason we like this firm is it solves a problem for the NHS. The last thing we would want is for scans to go unchecked and causing people harm.’ AND WHY YOU SHOULDN’T While Medica had just under 300 radiologists working for it at the end of September, there are a shortage of qualified candidates, which could affect its ability to grow, says Huggins.
He adds: ‘Another thing is the NHS is under so much pressure financially that the prices Medica achieves for its services could fall over time.’