Australia’s largest in vitro fertilisation provider Virtus Health appears to be treading water based on its half-year financial results, but CEO Sue Channon says a string of recent investments has it well-placed to deliver growth.

Revenue at Virtus Health (ASX:VRT) was up 5 per cent to $140 million and profit took a hit, down 14 per cent to $14.9 million.

But Ms Channon said earnings were impacted by “short term” cost impacts of infrastructure developments and growth initiatives. The company also made a number of acquisitions in 2018 – two Australian fertility clinics and one in Denmark.

“Key investments, which has included expansion initiatives in Europe, adding staff such as a chief information officer and HR staff, have created short-term headwinds,” Ms Channon told Stockhead.

Virtus provides both high-end and lower-cost services, and its premium service volumes fell by 1 per cent while the lower-cost The Fertility Centre (TFC) volumes increased by 17 per cent.

Ms Channon said Virtus had kicked off the lower-cost services movement five or six years ago, but had gradually seen competitors encroach on its territory.

Virtus’ bottom line has been affected by low-cost providers in the past.

“On the back of our investments other competitors came in to compete with us,” she said. “The low-cost end is about 30 per cent of the market, although it is hard to say with certainty, and it makes up about 17 per cent of our activity.”

She also said that Virtus would be impervious to any changes to the way IVF success stories can be marketed.

“We believe strongly on relying on the best service, the best outcomes and the best technology to patients and word-of-mouth is the best way of promoting that,” she said.

VRT shares are currently at all time lows. They closed down 1 per cent at $4.14 but hit as low as $3.91 yesterday.

Virtus Health (ASX:VRT) shares over the past year.