2 September 2010

Medical Solutions' long march back

20/03/2002

Shares in fully-listed diagnostics and pharmaceuticals business Medical Solutions plunged from a high of nearly 200p to a 10.5p low as a brace of profit warnings and bad news scared investors away. Since Trevor Twose vacated the chief executive role, stand-in boss Charles Green is working hard to get the business back on track. William Davidson reports.

The straight-talking Green said: 'I am here to make sure 2002 is a good year. Despite the profit warnings, Medical Solutions is not out of control. In fact, it is generating cash, and out-of-control companies do not generate cash'.

The business is divided into two divisions: cancer diagnosis and pharmaceuticals. Green said these could eventually be split. And the vultures have been circling. 'I have had offers for bits of the business which were greater than the market cap of the entire company', he said. 'Even now, I could sell the group for two or three times its market cap. I could do that without getting out of bed'.

The main drivers behind the cancer diagnostic business are PathLore and Fairfield Imaging. PathLore is a locum service for pathologists - the people who diagnose which cells are cancerous and decide on treatment. Green said there is a critical shortage of trained pathologists in the UK, with around half of the 900 posts expected remain unfilled in the next two years. It means NHS pathologists are over-worked and often have to deal with cancer tests outside their area of expertise. PathLore enables NHS trusts to get the tests done quickly, and by the right people. It has the top 48 clinical pathologists on its books. Green said they can earn more in an hour's work using PathLore than they would in two days' of traditional work.

Its CellPath arm produces training equipment for cervical smear tests, an area which is notoriously inefficient. Of the 6.4 million smear tests carried out each year, more than nine per cent are incomplete. The NHS is testing CellPath's equipment as well as a competitors'. It will award the contract on a 70:30 basis between the two companies. Even if Medical Solutions was awarded only a 30 per cent slice of the pie, finance director Andy Longstaffe estimates it would be worth 'around £15 million per annum'.

In the year to December, sales rose 64 per cent to £16.1 million, while losses swelled from £1.21 million to £1.6 million. Since the results, the share price has picked up from 15p to 28p. If Green can perform the recovery he predicts, the shares could have a lot further to go.

Sector: Health Care Equipment & Services

Companies: Source BioScience

Subscribe today


More breaking news stories.
More extended feature articles.
And a depth of analysis you
can't find anywhere else.

Subscribe today and save 50%

VCT Report 2010

VCT Report 2010 uncovers the money available

for investment in every single VCT, helping you get one step ahead in the race to attract funding for your unquoted, AIM-listed or PLUS-quoted

company.

Order VCT Report 2010 today using this online form

Cash Shells Directory 2010

A comprehensive overview of cash shells on AIM and PLUS, companies that have become a significant feature on the market landscape. For more information and to order, click here or contact our marketing team on 020 7250 7056.

Coverage of AIM, techMARK and PLUS Markets

Informative features and research on fast-growing companies, small-cap and growth stocks, penny shares, stock market tips and share recommendations, directors' dealings, company news and analysis, new issues and upcoming IPOs.

Take control of your investments

A full year's subscription to What Investment magazine for £19.95, a whopping 58% off. Get the latest news, features and expert advice on ISAs, Investment Trusts and Funds, SIPPS, Investing for Children and much much
more. Find out more here.

The Financial Times Guide to Personal Tax

is the definitive and most up-to-date guide to completing your self-assessment tax return, making sure that you get it right and on time, and showing how you can save tax. For more information and to order, click here or contact our marketing team on 020 7250 7056.

The AIM Guide Spring 2010

The new, fully updated AIM Guide is now available to buy for only £49.95 (saving you £30).

A 'must-have' for any serious investor or professional interested in the market for young, fast-growing companies. Order your copy today Hurry, as offer ends soon!

Latest small-cap and growth company news

Daily coverage of small-cap company stocks on London's junior markets AIM and PLUS, breaking news, stock research and latest share price information for investors. Full sector coverage with all the latest news on smaller listed companies, updated several times a day with financial reports, trading statements and links to further web resources.

Popular News

Latest News

Anglo Asian into profit 02/09/2010

Central Asian gold producer Anglo Asian Mining has turned a $2 million (£1.28 million) interim loss into $6.2 million first-half pre-tax profits.

Tags: AIM , Commodities , Emerging markets , Turnaround

Sector: Mining

Companies: Anglo Asian Mining

Interim advance at Abbey Protection 02/09/2010

Legal fees and related insurance and services specialist Abbey Protection has increased first-half pre-tax profits 9.3 per cent to £4.7 million.

Tags: AIM , Growth Stocks , Mergers & acquisitions

Sector: Nonlife Insurance

Companies: Abbey Protection

Johnson Service on the prowl 01/09/2010

Workwear rental and facilities management concern Johnson Service Group is feeling acquisitive after losing a first-half £2.2 million pre-tax.

Tags: Deals & contracts , Mergers & acquisitions , Turnaround

Sector: Support Services

Companies: Johnson Service

More News

Sectors

Vitesse Media Events