Capitol Health shares surge on budget update

Fred Dufour/AFP/Getty Images

Shares in Capitol Health Limited jumped after the federal government delayed planned cuts to bulk-billing for diagnostic imaging.

A short time ago, the shares were up 8.7% to $0.125.

The delay to July 2017, to allow further consultation, was announced as part of the government’s MYEFO, Mid-Year Economic and Fiscal Outlook.

The changes had been expected to cut the diagnostic imaging company’s revenue by between 5% and 7%.

“Based on the revised government timeline, the forecast immediate impact on the Company will be an increase in revenue expectations for the second half of FY17, while the Government works through the announced consultation,” says Capitol Health.

“However, the lingering uncertainty as to the exact timing and nature of cuts may further extend the recent volatility seen in referral patterns and patient volumes.”

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