Deltex Medical Group plc (LON:DEMG) Chief Executive Officer Ewan Phillips caught up with DirectorsTalk to discuss their interim results and the three new platform accounts added to their US network
Q1: Now, results out today, can you talk us through the highlights?
A1: The highlights are a sort of mixed bag so top of the list is the revenues, the disposables are pretty much flat but underneath that where we’ve been in the last 2 or 3 years really focussing on the US we’ve seen another step up in our growth rate in the States, that was up to about 40% in the first half with more to come, in fact our underlying rate is a bit better than that, north of 50%. The rest of our export markets are all getting good tractions so the numbers at the half year are a bit less representative but they’re still up over 10% and the difficult bit is the UK which I think people know the NHS is in all sorts of problems at the moment, there we were down 36%. So overall we were flat, the good news is looking forward if we carry on, even with those sorts of trends and I think we’ll do better in the UK and better elsewhere, we’re starting to move forward back into growth and into positive territory.
Q2: Now you mentioned the US and the UK, you’ve seen good progress in the US operations, can you talk us through what new initiatives Deltex Medical Group has put in place for the UK market?
A2: Well for the UK we’ve had a thorough review of what we’ve been doing and I suppose our big conclusion is that the UK, the NHS, really isn’t in a good place to do wide scale quality improvement, our central value proposition is if you look after patients better using our technology they will do better, they’ll have fewer complications, they’ll go home earlier, you’ll spend less money sorting out the complications, unfortunately the NHS are just too difficult for them to sort of drive good care when everyone’s trying to ration. So we’re really focussed back in on to the individual doctor who really wants to make a difference to his patient and is empowered to make a difference to his patient so we’re really just working very much on a doctor by doctor type of methodology rather than trying for a whole system change which is what we’re still trying to do elsewhere. Stand back from that, we knew there was some developments coming through this year which are key which reassert our messages so in May we were able to launch our new probes which are quite a lot easier to use, certainly for the beginner, easier to focus, taking their focus better and then we had results from a big government-funded multi-centre trial in Spain which came out in June. They’ve been presented but not yet published but they’re stunning, they just really enforce that what we do is really really really good for patients, it makes a profound difference to their long term life and life expectancy. Thirdly we had in July, again presented rather than published yet, the first proper head to head between ourselves and the other leading technology in our space in the UK and as we would expect, based on all the evidence to date, we funnily enough delivered vastly superior outcomes so those things taken together is easy to use, it works, has a huge impact and it’s better than all the competition, I think that’s going to start to help us just to stop the rot and move back into growth.
Q3: Now you’ve released news that you’ve added 3 new platform accounts to your network in the US, can you talk a little bit more about that?
A3: Yes it’s good news, we’re up to 27, this is on a 3-year programme, and we’re aiming to get to 30 which is what we sort of designate as a decent platform from which to start to roll out across the States. Now we’ve got 5 established territories and we got passed our local targets in 3 of those so far so we’ve got 2 to go, those are the ones where we’ve had a change in personnel, and some of those territories they really are starting to sort of roll out into the sister hospitals through the networks, in others we’re still building. So 27 is a good solid place, we’re pretty close to the 30, we should get there in the next few days, weeks or months and we decide to move into how do we then go and roll out across the whole States in a way that’s attractive in terms of the cash returns.
Q4: So do you think that Deltex Medical Group is well positioned for the full year?
A4: I think so, as I said because of the momentum in all the export markets, particularly the States, the UK is a much smaller part of the business now and even that looks to be going a bit better, July and August were are not far off flat so the trends are getting better so that’s good. Hold all those things, you just start to move the whole thing back into growth and pulling through with the momentum we’ve established, were growing in every country we’re focussed on apart from the UK, that’s really going to pull Deltex Medical Group through quite nicely.
