Elite Diagnostics sets up monitoring group to curtail machine downtime
Medical scans or diagnostics is a costly health service for consumers but one that remains heavily in demand, which means the equipment, such as MRI machines, is susceptible to costly breakdowns for providers.
One such company, Elite Diagnostics Limited, recently put together a group to monitor the machines in order to reduce downtime and minimise the attendant losses.
“Equipment downtime, impacting our revenue optimisation, remains a concern that we, as a board, take seriously,” said Elite Chairman Steven Gooden.
“In response, we’ve established an executive subcommittee of the board of directors to provide support to management and enhance decision and execution velocity. We anticipate the positive impact of these measures in the latter half of the current financial year,” Gooden said in a statement.
The subcommittee includes Chairman Gooden, Warren Chung, Quentin Hugh Sam, and Dr Neil Fong.
The company started a decade ago with five machines, and now operates 16 across its network in Kingston and St Ann. A typical MRI scan of the hand or head at Elite costs between $55,000 and $60,000. The cost to the company when these machines go down includes potential lost revenue on top of the cost of repairs.
For instance, the company reported a $5 million loss for the September quarter, compared to profit of $5.8 million in the 2022 period. The loss is attributed to various factors, including a 10 per cent increase in depreciation linked to new machines acquired in the last twelve months, a 70 per cent surge in finance costs related to equipment financing and debt restructuring, a 10 per cent rise in administrative expenses, and one-off maintenance expense.
Elite’s revenue rose to $196 million in the July-September quarter, up 4.4 per cent relative to the previous year.
In the past, the company dealt with machine challenges by adding redundancies where possible.
The machines cost tens of millions of dollars, and some providers have chosen to procure second-hand equipment to save on initial acquisition costs, but this can impact on downtime.
“Notwithstanding incidents of subsequent downtime for our older CT unit at Holborn Road, in keeping with our strategy of having back-up units in close proximity, the new unit at the Old Hope branch provided the necessary support for clients who required such scans,” Elite said in its September earnings report.
The company, which went public in 2018 and is listed on the junior stock exchange, has assets of about $1 billion, while its book value is estimated at $479 million. Its loans during the period grew to $344 million to September from $292 million a year earlier due to the debt associated with the acquisition of new equipment.
Despite industry challenges – machine downtime is said to be ubiquitous across the diagnostics sector – Elite expressed optimism in its outlook.
“As the industry becomes increasingly competitive, we continue to take steps to improve our services and also our relationship with our referring doctors and the general public,” the company said. “We look forward to positive results in the upcoming quarters.”