By Durrant Pate/Contributor

Medical diagnostic company Image Plus Consultants Limited has flopped on its revenue growth target for this year, owing to a combination of factors including a fall-off in projected service demand and malfunctioning diagnostic machines.

Revenues at the Junior Market-listed company, which trades under the name Apex Radiology, fell for both the second quarter ended August 2024 and half-year performance. Revenues for the second quarter, declined by 3.4 per cent to $245.3 million compared to the corresponding period in 2023.

Revenues for the half year ended August 2024 closed at $539 million, representing a decline of $15 million or 2.8 per cent compared to the same period in 2023. Apex operates from four locations, three of which are in the Corporate Area at 2A Molynes Road, 3A Winchester Road and 129 Old Hope Road. It also operates at the White River North Commercial Complex, Shops 8 -10, in Ocho Rios, St Ann, offering diagnostic X-Ray, ultrasound, computerised tomography, nuclear medicine, fluoroscopy, interventional radiology, magnetic resonance imaging (MRI), and mammography services.

Factoring causing fall-off in revenue target

The revenue performance was impacted by several factors.

1. Scan volume for the six-month period to August 31, 2024, was 26,955 cases compared to 28,729 cases for the same period in the prior year, representing a decline of 6 per cent. This decline was seen across all modalities. Mammography and MRI were launched in August 2023 and February 2024, respectively. The Molynes and 129Pro scan numbers exceeded the previous year’s performance, but the volumes at Ocho Rios and Winchester were below the prior year’s performance by 1 per cent and 15 per cent respectively. 

2. There was a reduction in the CT modality case count (which accounts for a higher per patient revenue compared to other modalities) due to machine downtime at both the Ocho Rios and Winchester branches. Both units needed CT tube replacements, which are routine and triggered by high volumes. In both cases, the replacement part required was quickly identified but the repair of the units was impacted by the protracted delivery timelines from the overseas manufacturer.

Unfortunately, in August the tube received for the Winchester unit was found to be defective on arrival and had to be replaced under warranty, leading to additional downtime. CT tubes are not easily procured ahead of the need due to their delicate storage condition requirements and the necessity for the local supplier to validate replacements with the manufacturer.

3. The 129Pro CT unit malfunctioned again in Q2 and given the findings and monies already invested in that unit in FY2024, the decision was made to retire the unit. To compensate for this, patients were redirected to the Winchester location, which also extended its opening hours. As a result, the entire 129Pro branch operations were consolidated at Winchester to ensure greater efficiency and that branch transitioned to opening seven days per week instead of six to accommodate demand. 

4. Though growing, Apex’s MRI and Mammography scan count performed below expectations.

“There continues to be strong demand for MRI and we continue to work on optimising scan volumes and mix to ensure projected revenues are realised from its investments. For mammography we are exploring strategies to increase scan volumes, especially in the competitive Kingston and St Andrew market,” the company outlined.

Apex’s management in its latest quarterly report to shareholders released this week explained that, ”Despite the desired build-out of modalities, we have not achieved the targeted growth in revenue from our diversified revenue streams. We continue to take a very clinical approach to review actions needed to achieve the desired mix of scans by modality and source (private versus public patients).”

The management said it is actively scanning the market for inorganic growth opportunities that could add value to our performance.