"The Future is bright, they just got to sort out the Profit...

"The Future is bright, they just got to sort out the Profit Margins and Operating costs."

Several anecdotes and a number of channel checks by others over the past 6 months were indicating a bit of a land grab for qualified and experienced pathology staff, which were in short-supply.

I suspect this is a primary reason for the sloppy operating margin performance in the half. And the margin impact is twofold: the obvious part, higher costs, but staff shortages results in capacity under-utlilisation and reduced ability to fractionalise fixed costs due to the foregone revenue.

Problem is that companies like SHL are effectively paid by the government for their services on a contracted rate, so when their costs go up, they need to simply cop it in the short-term, before re-contracted pricing terms restore margins.

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