Medica Group; trading update

Medica Group (MGP.L, FTSE Small Cap Index, Market Cap 129m, 116p, 1.3% of JIC Portfolio and 0.0% of JIC Top 10)

Trading update for its first half finished 30thJune.

Conclusion: Strong growth as expected. With 33 new radiologists in H1 that bodes well for growth in H2, although at this stage the company says results are anticipated to be in line with market expectations. If this was a very highly valued company an “in-line” trading update would probably not be enough. However, Medica is valued at just 15.1x December 2018 forecasts for 39% growth. Recently the shares have been weak, suggesting expectations are low. The chart does not look great and hopefully today’s announcement will get it going in the right direction. I only have a 1.3% holding and do not quite have enough conviction to add at this stage. Happy Holder!  

Revenue is anticipated to be £18.6m, up 18% on H1 2017.

It recruited a net 33 radiologists, nicely up on the 19 added in H1 2017. It now has a total of 339 radiologists.

It expects the company’s performance to be in line with market expectations.

John Graham, Chief Executive Officer of Medica, commented:
“Medica continues to make good progress with its strategic objectives of developing the core business and broadening the services we offer. We have increased market penetration of our NightHawk and Cross Sectional services and delivered double-digit organic revenue growth in the first half of 2018. We have also added 33 radiologists and have a strong pipeline for further recruitment during the rest of the year. Our first half performance gives us confidence that we remain on track for the full year.”

Screen Shot 2018-07-25 at 07.30.57