Contract extensions, new business and new service lines underpinned significant growth at pathology provider Viapath in 2018.
The Group, which is operated by Serco in partnership with Guy’s and St Thomas’ and King’s College Hospital NHS Foundation Trusts, said it had met all of its objectives during the year, including double digit growth in EBITDA, which was up 31% at £7.1m.
Major developments included the extension of its contract with Bedford Hospital to 2020, the launch of direct-to-consumer service Nutris and preferred bidder status for the South London NHSE Genomics Tender.
Revenue increased by 6.7% to £122m on the back of higher volumes from its Guy’s and St Thomas King’s College Hospital contracts. Cost of sales rose from £85m to £88.9m, while administrative expenses were up just shy of 7% at £29.8m, leaving operating profit of £2.8m against £1.3m in 2017.
The company said it had continued to invest in improving core infrastructure, such as the new blood transfusion laboratory information management system, due to open on the Guy’s site in the second half of this year. At the same time, it reported significant cost reduction, with the planned cost improvement programme of £3.9m exceeded by £1.8m at £5.7m.
Gross margins improved from 25.6% to 27.1% while net assets remained broadly in line with the previous year at £47.4m.
Independent chairman David Bennett said a major development during the year was the decision of its core customers to commence the tender for the pathology and laboratory services for the South East London Sustainability and Transformation Partnership. The new tender will succeed Viapath’s current contracts which run to the end of September 2020, and are expected to last through to September 2035, with the option to extend to 2040.
‘Participating in this tender has been a major focus for the second half of 2018 and will continue to be so for much of 2019,’ said Bennett. ‘Winning this tender is, of course, central to Viapath’s future although we will also continue to pursue other initiatives including the continued growth of our third party referrals business and continuing to develop new and improved tests to broaden our offering and to respond to changing healthcare needs and scientific advances, all while continuing to look for opportunities to improve our current operations.’