Surgical Innovations prepares for £1.2m revenue drop

Leeds-based Surgical Innovations is expecting revenues to drop by around £1.2m during 2018 due to a supply issue with a product.

The designer and manufacturer of medical equipment for key hole surgery, listed on the AIM, issued a trading update this morning stating it was reducing revenue expectations for the current financial year by approximately 10%, or £1.25m on the “cautious assumption” that sales do not resume in the current year.

The company said it was experiencing delays in the supply of products for its UK distribution business, Elemental Healthcare, which it acquired last year, which are sourced from Meccellis Biotech SA.

 Since 2015, Elemental has been the exclusive UK distributor of a range of biological matrices under the brand Cellis, which are used in complex abdominal wall and breast reconstruction procedures. Surgical Innovations said: “During 2017, Meccellis began to undertake a transition to a new notified body for European regulatory approval, including the recertification of its existing products, and the certification of new products. 

This transition has encountered delays which were not anticipated until very late in the process, and despite mitigating actions taken by both Meccellis and Elemental to ensure continuity of supply, it is apparent that product availability will have a continuing impact on revenues of SI Group in the current financial year.

“The SI Board has determined that it would be prudent to exclude revenues from Cellis products from current year expectations until such time as there is certainty regarding the availability of current and new products in this range following regulatory approval.”

Surgical Innovations said that revenues from other segments its activities were unaffected. The board anticipates that pre-tax profit will show modest growth during the financial year ended 31 December 2017.

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