The Integral Diagnostics Ltd (ASX: IDX) share price is having a day to forget on Friday.
At the time of writing, the ASX All Ords share is down 30% to $1.86.
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Why is this ASX All Ords share crashing?
Investors have been scrambling to the exits today after the medical imaging services provider released a very disappointing trading update.
According to the release, first-quarter revenue growth of 8.4% was achieved in Australia compared with the prior corresponding period.
As a comparison, management highlights that Medicare benefits for the states in which Integral Diagnostics operates have seen a 9.5% increase in the weighted average benefits paid, adjusted for working days.
Over in New Zealand, the company achieved a 4.1% increase in constant currency revenue compared with the prior corresponding period.
However, this growth appears to have been offset by higher-than-expected labour costs which have impacted its operating EBITDA. This has been driven by clinical staff shortages, particularly in regional areas, and cost inflation.
In light of this, the ASX All Ords share has not seen the expected operating EBITDA margin improvement it was expecting.
Management advised that it is responding to these pressures by accelerating productivity and efficiency initiatives. These actions are expected to lead to an improvement in its margin performance in the second half.
The company hasn't provided any earnings guidance for the half (or full year) but has given investors an idea of what to expect in respect to capex, depreciation, and finance costs.
Replacement and growth capex is to be in the range of $30 million to $40 million in FY 2024. Whereas depreciation of ~$45 million and finance costs of ~$22 million are forecast for the 12 months. The latter assumes that the Reserve Bank will increase rates by a further 0.25% next week.
