The Monash IVF Group Ltd (ASX: MVF) share price could fall after NSW Premier Gladys Berejiklian announced a possible $42 million package for IVF treatment in NSW if her government is re-elected.
The package would see a rebate of up to $500 for pre-IVF fertility testing, with Ms. Berejiklian stating, “we will provide assistance with out-of-pocket medical expenses related to IVF pre-screening which is often an expensive and emotionally challenging experience for women”.
The Premier also stated that the Government will expand on government-supported IVF services which is only currently available at the Royal Prince Alfred hospital, saying, “we will also make IVF an option for more women who previously may not have been able to afford it by expanding the number of NSW Government supported IVF clinics”.
If re-elected, the services would also be available at Westmead Hospital and The Royal Hospital for Women, which will provide lower cost treatments for around 6,000 women.
What Does This Mean for Monash IVF?
As I have previously said, Monash IVF’s margins have been declining as cheaper and alternative ways of accessing IVF treatment become more readily available in Australia. It’s becoming clear that there is no real competitive advantage for Monash IVF and further erosion of margins and profit may continue in the foreseeable future.
This is just further evidence of the increased competition in Australia for IVF treatment in a more cost-effective way. While NSW is only one state in the country, providing treatment for up to 6,000 women is almost half of what Monash IVF service nationally in a year so it could potentially have a big impact.
There is no real competitive advantage for Monash IVF and I believe it to be a company to steer clear of adding to a share portfolio. There are plenty of other companies out there with a more enduring competitive advantage that can provide better returns over time.
3 Proven ASX Growth + Dividend Shares - FREE REPORT
The Rask Group's top expert investment analyst has just released a free report which reveals 3 proven ASX shares. They’ve proven themselves to be reliable dividend + growth shares over a decade. Access the report now. Of course, past performance is not indicative of future performance but as he says in his free report, there are many reasons to keep a close watch on these 3 shares in 2019 and beyond.
Click here to access the free report. Absolutely no credit card details or payment required.
Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).