Shares in fertility service provider Virtus Health have plummeted after the company said slower markets and tough competition had contributed to a seven per cent fall in new IVF business in the first half of the year.
Virtus shares fell more than 17 per cent after the company said it had lost market share to cheaper competitors in Victoria, and blamed low-cost competition in NSW for a 19 per cent fall in its The Fertility Centre clinics compared to a year ago.
"The level of this volume shortfall, should it continue in the second half will have a material impact on Virtus' full year financial results compared to prior year," the company said in a market update on Tuesday.
"The exact level of the shortfall is highly dependent on fresh cycle activity in the second half of the financial year, and in particular, activity in the final quarter."
Virtus said it anticipates margin and volume pressure in Queensland in the second half of the year due to an increase in cheaper operators.
Sydney-based Virtus, one of Australia's biggest IVF providers, owns fertility clinics across Queensland, Victoria, NSW and Tasmania, as well as a clinic in Singapore and a number of centres in Ireland.
In November, Virtus warned the Australian market for IVF treatments had slowed, due to broader economic factors, and that it had lost share in that smaller market due to increased competition and a new entrant.
The company's shares dropped $1.10, or 17.7 per cent, to $5.11, a 17 month low.
