Elite Diagnostic expanding to St Ann
Elite Diagnostic Limited is setting up a third location near Drax Hall, St Ann, that is set to open for business by next July.
The medical imaging provider expects to generate business for its new branch along the north coast, including Montego Bay, even though that city, which is two parishes away, already has rivals in business there.
"There is already MRI scanners in Montego Bay and because of the highway, we thought it best to put it in St Ann," said Elite CEO Warren Chung about the choice of locations at the company's first annual general meeting in Kingston. Nationwide, Elite has four main competitors, he added.
Elite expects to spend around US$500,000 ($64 million to $70 million) on the set-up at Drax Hall, but Chung, acting on the advice of Chairman Steven Gooden, declined to comment on revenue targets.
"We are in an absolute position to attain revenue growth in the next two to three years," he said.
The planned investment in Elite Drax Hall is split $20 million to $22 million on the operating space, and $45 million on scanners that have already been acquired.
Elite is a six-year-old company that was seeded with ventures funds from NCB Capital Markets and others, and eventually listed in February of this year on the junior market of the Jamaica Stock Exchange. The company currently provides services from two places in Kingston - Holborn Road and Liguanea.
During the first quarter ending September 2018, the company made $1.8 million pretax profit on $85 million in revenues. That compares with $14 million net profit on $70 million in revenues a year earlier. Elite was affected by increased administrative cost; a spike in depreciation charges that nearly doubled from $8.8 million to $14 million for the quarter; and storage costs related to its new MRI machine waiting to be commissioned at the St Ann location.
The Liguanea location is currently breaking even, with revenue amounting to $23.7 million for the September quarter versus $9.6 million in the previous June quarter.
Elite's assets have spiked from $366 million to $588 million in the past year due to the acquisition of new equipment.
At year ending June 2018, the company was carrying three to four times more long-term debt, at $166 million, than its annual profit of $44.9 million.
"Our plan is to pay off some of those loans once the St Ann location is up and running," Chung said.