27th Sep 2021 10:05
(Alliance News) - Medica Group PLC on Monday raised its dividend after a surge in first-half earnings, as demand for diagnostic imaging recovered.
Hastings, England-based Medica provides medical imaging services, such as x-rays and MRI scans, to the UK's National Health Service and Ireland's health service and to private hospitals.
Revenue in the first half of 2021 increased 56% year-on-year to GBP26.4 million from GBP17.0 million. Pretax profit jumped 69% to GBP2.2 million from GB1.3 million.
Earnings were boosted by the acquisitions of Global Diagnostics Ireland, which contributed GBP4.5 million in revenue, and of US business RadMD, which contributed GBP1.5 million.
Compared to the first half of 2019, revenue rose 20% from GBP22.0 million, but pretax profit was down 53% from GBP4.7 million. Profit in the first half of 2021 was hit by GBP1.6 million in non-underlying administrative costs, mostly related to amortisation of acquired intangible assets.
The company raised its interim dividend 4.7% to 0.89 pence per share. Last year, it paid a 0.85p per share interim dividend and a 1.70p per share final dividend.
Shares were up 3.3% to 167.80p in London on Monday morning.
In the second half of 2021 so far, Medica is trading in line with its expectations, it said. There has seen a strong recovery in elective procedures, as hospitals work their way through a backlog of cases. That will benefit Medica as hospitals will have to outsource more medical imaging services to private companies.
NHS Community Diagnostic Hubs - where patients get scans in small facilities away from hospitals, a scheme due to launch this year - will also create opportunities for Medica.
The company expects month-on-month growth in the UK to continue for the rest of the year.
"Whilst the first half of the year has demonstrated the resilience of our business model and shown month-on-month improvement in performance, post-period trading has further strengthened our confidence in the outlook for the business," Chief Executive Stuart Quin said.
By Ivan Edwards; [email protected]
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