Ann: Half Yearly Report and Accounts, page-12

"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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