As one of Australia’s leading providers of medical imaging and diagnostic services, Integral Diagnostics (ASX: IDX) plays a vital role in supporting clinicians to provide optimal treatment for their patients.
With 67 radiology clinics under their umbrella, IDX is a prominent provider of radiology services to multiple communities across Western Victoria, Queensland, Western Australia and New Zealand.
Unfortunately, the business has been negatively impacted by COVID and the flu across all jurisdictions. The disruption to operations is seeing vulnerable patients refraining from routine radiology and monitoring, and causing a strain on staffing.
The external impacts of COVID are also affecting the business with high expenditure still required due to ongoing use of personal protective equipment. And getting that equipment to the clinics is another issue entirely with supply chain disruptions resulting in delivery delays. Reduced workforces elsewhere are seeing vital equipment repair and maintenance being delayed too, consequently slowing organic growth initiatives with more equipment downtime.
The Company did experience a brief rebound once the initial COVID shenanigans subsided, however the high incidence of reinfections and the emergence of a particularly bad influenza strain have seen things relapse.
In spite of all this, IDX has seen organic revenue growth of $4.8 million (1.6%) within Australia alone. New Zealand operations saw a revenue decline of $3.4 million, equivalent to 7.4%. This loss is attributed to competition from referrer owned radiology practices.
The Company deployed $10.4 million over FY22 to grow the business, developing three new sites in Queensland and Perth. The future acquisition pipeline remains strong, with the Company focussed on snapping up radiology clinics that expand their presence with existing referrers. Recent strategic acquisitions include Peleton Radiology in Queensland, and Horizon Radiology in New Zealand.
“The operating environment continues to be disrupted by COVID-19, as well as by influenza through the winter months, adversely affecting patient activity and operational costs,” said IDX’s CEO, Dr Ian Kadish. “We remain grateful to frontline healthcare workers across IDX, and elsewhere, who continue to provide world class healthcare in a challenging environment. Despite current COVID-19 and influenza impacts, diagnostic imaging will continue to play an integral role in healthcare diagnosis and treatment going forward. We have recently announced three targeted acquisitions that deepen our service offering in existing geographies and we are focussed on optimally integrating these acquisitions.”
Samantha Freidin is a business journalist at Emerald Financial whilst also completing a Masters of Marketing and Digital Communications at Monash University.
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