Durrant Pate/Contributor

Medical diagnostic company, Image Plus Consultants, has seen continued growth in its patient scan volume resulting in a marked improvement in revenues, which climbed to J$300-million for the first quarter ended May 31, 2023.

This is up from the J$281.1 million posted for the comparable period in 2022. However, net profit went down to J$64.1 million for the quarter under review compared to J$71.7 for Q1 of 2022.

Earnings per share (EPS) also suffered a decline to J$0.05 compared to J$0.07 in 2022. The seven percent first quarter increase in revenues by Image Plus, which trades as Apex Radiology, came as a direct result of the increase in scan volumes during the quarter.

During the period, Image Plus, which is in the business of diagnostic X-Ray, ultrasound, computerised tomography, nuclear medicine, fluoroscopy and intervention services completed 14,792 scans compared to 13,789 scans in the corresponding quarter of 2022. The management anticipates that its scan count will continue to grow at a healthy rate.

Notwithstanding this growth, the first quarter results were negatively affected by machine downtime for one of Image Plus’ CT units in Kingston.

However, the management was quick to emphasise, “machine downtime is in keeping with industry experience and performance. We proactively mitigate by servicing all our units however sourcing timeframes for replacement parts are not always straightforward given the complexities involved.“

With this in mind and to reduce machine downtime going forward, Image Plus has begun to explore multiple vendor relationships with a view to having more readily available options, allowing us to return to normalcy faster once a unit goes out of service. The strategy has always been that once a machine in one location is down, the company revise operating hours in other locations to meet as much of the demand of referring physicians and doctors, as well as objectives for scan count performance.

The company, which became a publicly listed entity in January this year through its successful initial public offer of shares last December, notes that such a move represents the benefit of having multiple modalities at all its locations.

Galloping expenses

During the just-ended quarter, expenses grew at a faster pace than the prior year, as cost of sales went up 17.9 per cent, reducing the gross margin to 63.9 per cent versus 67.3 per cent in the prior year. Expense increases were recorded in brokerage fees, on-call doctor fees, and medical and imaging supplies.

The management has committed that in the coming quarter, a sharper focus will be paid to inventory management to include the use and deployment of medical and imaging supplies. This is being done, as the medical diagnostic company seeks to ensure that in growing revenues, it manages costs as efficiently as possible to get all the benefits of scale.

Similarly, the administrative expense margin in the just ended quarter grew to 39.1 per cent versus 32.4 per cent in 2022, as administrative expenses grew by 28.8 per cent or J$26.3 million. A closer analysis of administrative expenses indicates that over J$4 million of the increase represented one-off costs (advertising and equipping of Ocho Rios’s new location and IT consultancy for network testing and building out of its redundancy infrastructure).

The remainder of the increase was associated with Ocho Rios’s increased rental and maintenance costs and staff costs (increase in number of staff, inflationary adjustments and costs associated with bi-annual procurement of uniforms).

New expenses

New expenses of just over J$3 million, according to Image Plus, resulted from items associated with being a publicly listed entity. Whilst these expenses were closely monitored, they were in keeping with projections, as the company seek to complete its build-out from which to scale.

The management surmised, “had our revenue projections not been impacted by machine downtime the ratios desired would have been achieved. These ratios will therefore remain as key performance indicators for management to focus on.”