Surgical Innovations recovers from supply issues earlier in the year

Leeds-based Surgical Innovations has experienced “significantly stronger” trading in the second half of the year, resulting in Group revenue for the full year of £11m.

This represents growth of approximately 25% over 2017, with underlying revenue growth – adjusted for the effect of the acquisition of Elemental Healthcare Limited in August 2017 – of approximately 8%.  The designer and manufacturer of medical equipment for key hole surgery, listed on the AIM, said gross margin was within target range and the resulting increase in pre-tax profits was anticipated to be in line with Board expectations and market consensus.

The Group continued to be cash generative, with closing net cash balances of approximately £36,000, compared with net debt at the start of the year of £73,000.

This morning’s trading update comes after the firm experienced a difficult first half trading period. In May, Surgical Innovations said it was expecting revenues to drop by around £1.2m during 2018 due to a supply issue with a product.

It reduced its revenue expectations for 2018 by approximately 10%, or £1.25m, on the “cautious assumption” that sales did not resume.

The company said it was experiencing delays in the supply of products for its UK distribution business, Elemental Healthcare, which it acquired in 2017, which are sourced from Meccellis Biotech SA.