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GB : Medica Group - On-track for 2021, further re-rating ahead

Medica reported FY2020 results this morning which given the prelim update in January were largely as expected. A resilient performance in the NightHawk business (+4%) offset COVID driven weakness in the Elective Business (-49%) meaning group revenue of £36.8m was as expected. EPS of 3.47p was also largely as anticipated. More importantly, the business appears to be tracking in-line with our 2021 forecasts as the Elective recovery gathers pace and hence we don’t expect any changes to estimates. Over the next five years we expect Medica to deliver a 22% EPS CAGR to 2025, to diversify its revenue base and to generate c.30% of its market cap in cash. Despite this it still trades at a c.30% discount to peers. As such it remains remains the Top Pick across all 23 of the stocks in our universe.


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