Nigel Keen, Deltex Medical LON:DEMG Chairman, said: “Deltex made good progress in 2016. Growing sales traction in the USA, our main focus market, and in other International markets, together with success in stabilising our UK business mean that our core revenue stream of high margin disposable probe sales has returned to growth in the second half.
“Together with cost reductions effected in the first half of the year, increasing returns from completed investments in margin improvement and well advanced product development programmes, this sales traction is improving the Company’s operating and cash performance.”
Deltex Medical Group plc (AIM: DEMG), the global leader in oesophageal Doppler monitoring (“ODM”), today gavc DirectorsTalk an update on its trading performance for the year ended 31 December 2016.
Highlights
Group revenues
Group revenues for 2016 expected to be GBP6.3m (2015: GBP6.2m: GBP6.4m including research barter sales).
Probe revenues
USA
— Total probe revenue increased c 40% for the year to GBP1.9m (2015: GBP1.3m), with H2 probe revenue (excluding research sales) up c 50% after benefit of stronger dollar
— Run-rate going into 2017 c 50% higher than at same stage in 2016 with continuing growth anticipated in 2017, both from existing and new accounts
— 30(th) platform account announced today completing a key milestone in our US expansion programme
-- Strong and growing pipeline of new accounts
International
-- Total probe revenue increased over 20% for the year to GBP1.7m and over 30% in H2 -- Largest growth in revenues from focus markets including France, Scandinavia, Peru and Korea
UK
-- Total probe revenue at GBP1.9m, a decrease of 26% (H1 decline: 36%; H2 decline: 16%)
— Positive market reception to new probes and new clinical evidence leading to improving trend in probe consumption in H2
Overall
— Return to growth in probe revenues (with the benefit of current exchange rates): up 4% over the year to GBP5.4m and over 10% in H2 to GBP3.1m
Other revenues
— Monitor and maintenance revenue down c40% to GBP0.5m as a result of monitor sales slippage into 2017 due to rescheduling of capital allocations in a small number of hospitals
-- UK sales of Casmed products up over 25% at GBP0.4m
Cash
— Cash at bank of GBP0.6m (1 July 2016: GBP0.95m including the fundraise announced in July 2016)
— All probe tip assembly brought in-house from January 2017 with planned savings in excess of GBP30,000 a month
— Substantially reduced cash burn in H2 2016 which reflects full effect of approximately GBP1m of annualised cost savings and growth in high margin US probe sales
Notice of results
The Company expects to announce its results in the week of 20 March 2017.
