Speed Medical Company is working to directly take over 20 laboratories by the end of 2020, through partnerships with a range of smaller local laboratories. The acquisition of the laboratory facilities will follow the completion of the required due diligence processes.
The company is set to open 11 laboratory branches in the West Delta area in the coming three weeks. Speed Medical is also looking to focus on establishing laboratory branches at various polyclinics and medium-sized hospitals to benefit from the patient traffic at these healthcare facilities. It will pay a part of its revenue to those entities to maintain its presence with them.
The 20 laboratory facilities the company is anticipating to open by the end of year will be a portion of the total 100 laboratory branches it is looking to open in this time period. A further 12 laboratory facilities will be green Speed labs.
Speed Medical is projecting ownership of a network of 200 laboratory branches across Egypt in the next four years.
The more corporate deals Speed Medical is expecting to undertake, the weaker it is expecting its net margin to be, reflecting a drop of 4.0pps expected. Higher sales will offset weaker margins in absolute terms.
Speed Medical plans to increase its average revenue per laboratory, from EGP 2.0m-EGP 2.2m per laboratory in 2020 to EGP 2.5m-EGP 2.7m in 2021. The revenues gained from its laboratories is currently the company’s major revenue contributor.
Speed Medical ventured with CityLabs in 2018 to benefit from the latter’s existence in the Suez and Delta areas. Under the venture agreement, Speed Medical manages all the laboratories, reaping all revenues, and paying all expenses.
In return, Speed Medical pays CityLabs a 7%-11% revenue split, where the former can take over CityLabs’ branches within the coming three years. Currently, the CitySpeed Labs chain operates 23 laboratory facilities, out of which 11 were initially established by CityLabs and 12 labs were mutually established with Speed Medical.
