Nigel Keen, Chairman of Deltex Medical LON:DEMG, commented on the results: “2016 was a transitional year for Deltex Medical and our progress means we have entered 2017 with considerable confidence. Sales are growing well in the USA and other export markets which resulted in 2016 probe revenues up 40% and 24% respectively. Furthermore, we have seen positive signs of the UK business stabilising.”
“Q1 2017 sales in the USA, including a small number of monitor sales, were over 50% ahead of the equivalent period in 2016 in local currency, those International distributors who order probes monthly are all running ahead of or at the same levels of last year and UK revenues were marginally ahead of 2016. We have continued to make small cost reductions as opportunities present themselves and in addition we have temporarily reduced our US staff costs as we move to deploy our resources closer to the best growth opportunities. Since January 2017, we are now benefiting from the full impact of manufacturing improvements with anticipated savings of over GBP30,000 a month.”
“We have completed a key phase in our US expansion plan with the attainment of a critical mass of 30 platform accounts. We are focusing our resources on driving increased use of our probes in these accounts whilst continuing to add new platform accounts in the existing territories. March 2017 was the first month where fixed US sales staff costs were covered by the gross margin on that month’s probe sales. We are now fully benefiting from investments already made in margin improvement and, with the pending launch of the first of a range of new products, expect to generate additional revenues from investments made in research and development as we move towards our next generation haemodynamic workstation platform.”
Deltex Medical Group plc (AIM:- DEMG), the global leader in oesophageal Doppler monitoring (ODM), today announced its audited results for the year ended 31 December 2016.
Key performance measures
-- US probe revenues up 40% to GBP1.9m (25% growth in local currency)
o Weaker sterling held back US profitability by GBP0.1m with reported costs and revenues up GBP0.3m and GBP0.2m respectively
o 28 of 30 target platform accounts at the year-end, target of 30 met in January 2017
o Primary focus now shifted to probe growth in US platform accounts; redeploying resources to support best growth opportunities
o Continued strong growth in Q1 2017 together with reduced costs meant that March 2017 was the first month where the contribution from US probe sales covered fixed US sales staff costs
-- International probe revenues up 25% at GBP1.7m
o 15% increase in volume with an additional net GBP0.1m revenue growth from currency movements and sales mix
-- UK probe revenues down 26% at GBP1.9m. Trend improving: H1 down 36%, H2 down 17%
o Down 10% in Q1 2017 with monitor and third party sales meaning that total UK revenues in Q1 2017 are slightly ahead of Q1 2016
-- Monitor income down to GBP0.4m from GBP0.6m -- Second half operating loss, before non-cash costs, of GBP0.2m (2015: GBP1.0m).
Operating Highlights
-- New, easier to use, TruVue probes introduced globally -- Excellent results presented from largest ever randomised controlled trial of ODM -- EU R&D grant awarded for pilot project with new Velocity Pressure Loop displays
— Successful field trials completed of additional non-invasive haemodynamic monitoring modality; launch pending
Statutory results
-- Revenue flat at GBP6.3m (2015: GBP6.4m) -- Gross margins improved to 68% (2015: 63%) -- Operating loss reduced to GBP2.4m (2015: GBP3.5m) -- Cash at 31 December 2016 of GBP0.6m. An additional GBP0.4m raised in March 2017
