I will start my answer by suggesting that nobody really knows what drives market prices up and down. But the following are some facts that may be a contributor to the issue. For the period from 1st July, 2019 until the 31st January, 2020, IVF cycles across Australia (and this is all cycles, not just VRT cases) totaled 26,569. This was up on the same period for the previous financial year (so 1st July, 2018 until 31st January, 2019) by 578 cycles or a tick over 2%. That marginal improvement is around about the percentage seen for the last few years. However the number from 1st February, 2020 until 31st May, 2020 were 12,522 cycles, down by 3,984 cycles on the previous corresponding period. The statistics for June are not yet available but the cycle total so far this year (39,121) is now down by 8% over the previous year as a result of the COVID outbreak and the cancellation of elective surgery. I have no idea as to whether Virtus cycle numbers will be in line with the overall drop but if they are, and they probably are, it may mean a drop in Australian cycle revenue of about $16m to $17m. I have no idea what the results from the UK, Ireland, Denmark and Singapore will look like and nor do I have any feel for the cost reductions that ensued from the closure of elective surgery and the standing down of staff here but the result may be a little unpleasant. I hope not of course. We just have to wait and see. The hope is that the revenue isn't lost completely. The hope is that next financial years cycle numbers will increase by the numbers lost this financial year just completed. I wouldn't buy any more shares now until I see the result and get an understanding how July and August is travelling.
VRT Price at posting:
$2.62 Sentiment: Hold Disclosure: Held
