is this a bargin or what ??

  1. 635 Posts.
    SHAW Analyst Comments: Medicare behind MIA’s march
    26/05/03 By: Shane Bannan

    Medicare negotiations:

    MIA Group Limited (MIA) is up 40% over the past 6 weeks with the motivating force being the likely settlement of the radiology industry’s negotiations with the Commonwealth Government under Medicare. The current 4 year agreement expires 30 June 2003 and with Medicare representing 65% of MIA’s domestic revenues the importance of these negotiations can’t be ignored.

    How much might they be worth?

    The negotiated terms of the funding agreement aren’t known but we would assume a continuation of the 6% annualised increase in expenditure. Supporting positive sentiment are the Govt’s endeavours as part of its “Bulk Billing” reform package to encourage greater co-payment expenditure for non-hospitalised patients.

    MIA trading:

    One hurdle to be cleared is next week’s up-date on trading conditions. Key points of focus are the performance of the Australian Radiology business (following the slump on profit margins in H1 from EBITA/ Sales 24.3% to 21.4%), and the trend in operating losses of OmniLabs (UK – A$1.8m in H103). It also affords the opportunity for new CEO, Paul Mirabelle, to reaffirm or otherwise the group’s strategic direction.

    Outlook:

    We assume a recovery in operating margins and otherwise erred on the side of generosity when having regard to levels of Commonwealth Government expenditure, further acquisitions and the organic growth of a de-regulating UK National Health Scheme. Accordingly we do not find MIA particularly compelling.
 
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