Levers to lead Elite to Montego Bay
Medical service provider Elite Diagnostic Limited plans to set up its fourth location, a project now in the lap of its new CEO, who has a remit to grow the business. “Over the next 12 to 18 months we will be in Montego Bay,” said CEO Harvey Levers...
Medical service provider Elite Diagnostic Limited plans to set up its fourth location, a project now in the lap of its new CEO, who has a remit to grow the business.
“Over the next 12 to 18 months we will be in Montego Bay,” said CEO Harvey Levers in an interview with the Financial Gleaner.
Levers, a former banker, led Nuthall Memorial Hospital in St Andrew as CEO for a decade prior to joining Elite in July. He replaced Warren Chung who served as CEO from inception until September 2021. Chung continues to serve as a director.
Levers said the expansion to Montego Bay would be funded by a combination of debt and internal cash resources, but was mum on the location, saying only that it was outside the city centre.
The decision to set up operations in the resort city emerged after market research revealed it would perform better than other possible sites in Portmore, St Catherine or Mandeville, Manchester.
Elite Diagnostic offers radiology and imaging services. The company, which went public and listed on the junior stock market in February 2018, operates two locations in Kingston and one in Drax Hall, St Ann.
Levers said he wants to expand Elite’s appeal beyond its niche to become “a household name”.
“We want at least one location in the north, south, east, and west [of Jamaica],” he said without divulging what that meant in terms of number of branches.
The company currently operates 14 revenue-generating machines, with most being MRI and CT scanners, he said. The company wants to add more machines, but it’s expensive and at times prohibitive. Levers said each machine costs between US$300,000 to US$1 million, or $150 million in local currency on the high end. That price equates to just under a third of the company’s capital, which amounted to $479 million at year ending June 2022.
Elite is looking to reduce redundancy, that is, down time for machines during periods of repair. Describing it as an industry phenomenon, Levers said MRI and CT scan machines tend to be susceptible to planned and unplanned repairs due to their multiple complicated parts.
“We will increase the stock of machinery, so if one is down then we will have a backup nearby. So that we will never have to tell a customer that we cannot make an appointment right now,” he said.
The new location in Montego Bay will require its own equipment, but Levers downplayed any likelihood of tapping the capital market with an additional public offering of shares over cash or debt options.
Over the next two to three years the company plans to branch out into new related health services to increase revenue from customers. Levers however declined to give specifics at this time.
“We have not yet decided on which branch of healthcare would be the best move financially for our shareholders,” he said. “We know that we want to diversify because we can only satisfy so much within the imaging industry and no more.”
Chairman Steven Gooden described the expansion to Montego Bay as the company’s “major goal for the financial year ending June 2023”, in a statement in the company’s annual report.
Elite Diagnostic grew revenue during the two years under the pandemic, but its profits have vacillated.
Revenue increased to $624 million for the financial year, ending June, compared to $507 million the previous year. Net profit recovered to $49 million from $1.9 million in the same period.
Elite grew revenue by 23 per cent even during periods of pandemic-related lockdowns but ‘administrative and other expenses’ grew at a similar pace, which neutralised the top line gains on a percentage basis.
“Even with all the foregoing, the management recognises that there is no room for complacency. In recognition of this, we are considering moving beyond diagnostics and into other areas of health care. Such initiatives will be carefully planned, and we will provide information as those plans take greater shape,” Gooden said.