Deltex Medical Group plc (LON:DEMG) Chief Financial Officer Jonathan Shaw caught up with DirectorsTalk for an exclusive interview to discuss their latest trading update & platform account RNS released today
Q1: Now you’ve released a trading update and a platform account RNS this morning, can you tell us a little bit more about the two hospitals that have signed up to the Deltex technology?
A1: Yes, certainly, we’re absolutely delighted to have secured these two new hospitals onto our US platform programme. Both of them are located in the North-East of the US, one has 300 beds and the second has 400, both of these hospitals are expecting to use somewhere between 40 and 50 probes a month, once they’ve completed their initial implementation programmes which should be able to start this month and next month. This bring us, within our North-East territory, to 8 hospitals on our platform so the results of that we’re needing to hire an additional clinical trainer to support those hospitals that are implementing ODM so we’re really pleased.
Q2: You’ve hit your target of 30 platforms accounts, what does this mean for Deltex Medical?
A2: Well it means the journey hasn’t stopped, the US as you’re probably aware is our key market and we’ve had a target of reaching 30 hospital platform accounts by Labor Day last year, which was September. We didn’t quite get there, we had 28, for a number of reasons but we’re now there so it’s our magic number that gives us our planned critical mass of having substantial hospital customers. So, we’ve got this important foundation in place from which we can continue to grow so we’re still going to be adding accounts, we’re not stopping at the 30, but we’ll be able to generate returns from our recurring high margin revenues from the implementation of our products within these accounts. So, it’s a great time for us.
Q3: Deltex Medical Group plc released a trading update this morning, can you talk us through the highlights of the update?
A3: Yes, I’d be delighted to. So, our group revenues reached £6.3 million in 2016, compared to £6.2 million last year, when you exclude our non-cash what we refer to as the research sales, marginally lower unfortunately than 2015 but important for us are probe sales. These reached £5.4 million, compared to £5.2 in the previous year, and that’s coming from sustained momentum from the US which is up around 40% which to some extent offsets some of the continuing weakness that we’re seeing in the UK with the problems that seem to be suffering for the NHS. So, the highlight really for us is the continued growth in the US, which is really good, and that’s underpinned by the 30 accounts today.
The UK, whilst that was a decline, we’ve seen to some extent a slowdown of that decline in the second half and we’re optimistic that’s going to continue into 2017. That was helped by the availability of some new evidence so first was the Spanish randomised controlled trial involving 450 patients that was presented and that really updates our evidence base, the second was the presentation results of a head-to-head trial against a competitor product for which we came out on top. Coupled with that was the launch of our easier to focus Truflow probe in May so that’s really good in the UK, we’re really pleased about that.
Internationally, our international business continues to grow, it grew by around 20% to £1.7 million, led by countries such as France, Scandinavia, Peru and Korea and lots of other countries there as well.
So, from an overall picture, reasonably pleased and good underlying trends that are taking us in to 2017.
