Double-digit revenue growth for Surgical Innovations
Leeds-based Surgical Innovations Group has reported a 25% rise in annual revenues after overcoming a product supply issue in the first half of its financial year.
The designer and manufacturer of medical equipment for key hole surgery, listed on the AIM, saw revenues rise to £10.9m in the year ending December 31 2018; a rise from £8.7m in the previous year. Pre-tax profits rose to £515,000 from £371,000.
The group’s half results had been constrained by reduced activity levels in NHS surgery and by the temporary loss of a key supplier’s product. The supply delays related to products for its UK distribution business, Elemental Healthcare, which it acquired in 2017.
Surgical Innovations said: “However, the strong rebound expected in the second half has been delivered. The Group now looks forward to further progress in 2019 under the leadership of newly appointed CEO, David Marsh.”
The Group said that revenue from its SI Brand products accounted for a major part of the increase in revenue, when taking into consideration the full year effect of the acquisition of Elemental Healthcare. It added: “There was a slow start to the year in the UK NHS, and a hiatus in the supply of a key distribution product, Cellis, for much of the year, which has now been resolved. There were also headwinds from pricing pressure from customers in some product areas, which were countered by competitive pricing, resulting in higher sales volume without sacrificing gross margin.”
Surgical Innovations also added that it still had appetite to secure further acquisitions in the future. The firm said: “We have evaluated a number of potential acquisition targets during the year, and have taken a select few that appear to meet our strict criteria forward for more detailed consideration. Ultimately, none of these have progressed to an advanced stage for a variety of sound reasons.
“We continue to seek businesses which offer complementary opportunities to accelerate the rate of growth of the Group’s activities, either through new products and/or geographies. Indeed, the recent changes to our management structure are partly designed to increase potential deal flow and offer greater flexibility in future integration of one or more suitable targets, should they arise.”
Chairman, Nigel Rogers, said: “I am pleased to report that the anticipated sharp recovery in performance in the second half of the year has been achieved, and the Group delivered strong results for the year. The market share momentum we achieved in the second half of the year has carried on into 2019, and we are confident about the outlook for the full year.
“The integration of Elemental Healthcare into the Group has been completed, paving the way for a new management structure with additional capacity to take the Group’s business to the next level.
“We have made contingency arrangements in the event that the UK exits the EU on 29 March 2019 without reaching an appropriate withdrawal agreement, although we remain hopeful that these precautions will be rendered unnecessary.”
