Investor's Champion Blog
Provides refreshingly forthright, independent comment on predominantly small cap companies and specialist investment funds. Informed opinion, based on first-hand research, but pulls no punches in exposing management weaknesses.

Mobile Doctors – could this be the start of an IVA like trend (Remember the IVA providers were big winners in the early days)

I see that Mobile Doctors, a provider of medical reports to support personal injury insurance claims, intends to float on AIM via a reverse into an unlisted cash shell Petsome; no money is being raised on flotation.

Apparently this is yet another industry that is ripe for consolidation (find me one that isn’t) and Mobile Doctors intends to be the consolidator.

Mobile doctors suffered from exposure to the demise of certain “no win, no fee” claims managers between 2002-2004, however, 'industry dynamics' (I love that term) are apparently now stable.

Until recently, the liability for the payment of medico-legal reports was disputed by the insurance industry. However, a 2006 judgement in a case supported by Mobile Doctors (Woollard v Fowler) was favourable for the company and for the medico-legal reporting industry. This judgement determined that the liability for bearing the cost of medical reports required for personal injury claims rests with the insurance companies (poor old insurance companies forking out again!). This judgement underwrites the future of the medico-legal reporting industry but could there be challenges in the future?

Further discussions between the major players in the insurance and medico-legal reporting industries respectively were concluded in May 2007 with an agreed fee structure-agreed fee structures, ring a bell!

There isn’t anything like Mobile Doctors on the market at the moment so peer group comparison is tough. The broker points to a a valuation range of £8.1-12.2m with a mid point valuation of around £10.2m for 10.0x 2008 estimates. Sounds quite a high opening gambit to me but this sector is a mystery to me so what do I know.

Given the early excitement generated by the IVA providers this might be one to watch. I also sense a few fund raisings in the offing if Mobile Doctors gets stuck into the consolidation bit.

Good luck to Mobile Doctors.


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