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Don’t let margins dull Medica shares

Don’t let margins dull Medica shares

A major problem that companies operating in the public health sector face is cost-cutting from their single customer, the NHS. For teleradiology outsourcer Medica (MGP), low prices are expected to hurt gross margins in the medium term. And even if the timing of certain contracts helped stabilise gross margins at 49 per cent at the half-year stage, broker Berenberg expects them to fall to 47 per cent by 2020.

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