Listed medtech firm releases results early as it reviews outlook in midst of challenging trading
Surgical Innovations, the designer and manufacturer of medical equipment for key hole surgery, has released its half-year results a day early after reassessing its outlook for the remainder of the financial year.
The Leeds-headquartered firm this morning released results for the six month period ended 30 June, which showed that it dropped into pre-tax losses of £326,000; down from pre-tax profits of £94,000 in the previous year. Meanwhile, its revenue reduced slightly to £5.1m, down from £5.2m in 2018.
As a result, N+1 Singer have reduced FY19 revenue forecasts for the firm from £12m to £10.6m and adjusted pre-tax profit forecasts from £1.09m to £390,000. They have taken a similarly prudent view with FY20 forecasts.
Surgical Innovations said: “The Board has reassessed its outlook for the rest of the financial year based on the continuing challenging market conditions and reduced revenue expectations, anticipating relatively modest growth in the second half of 2019 compared to the first half.
“These trading conditions are primarily driven by what we believe are temporary factors, and we are more optimistic beyond the present political uncertainty that NHS funding and activity levels will rise in response to growing pent up demand. ”
The AIM-listed group said the results reflected a difficult trading environment, which had “been adversely affected by constraints in UK health spending and widespread uncertainty.”
The businesses added: “We have continued to invest in people and product development, gained in market share, and ensured that the business is well placed to benefit from an upturn.”
Today’s subdued results follow a trading update Surgical Innovations issued on 7 June, which stated that although the year began positively momentum was not carried into the second quarter as orders in the UK and Europe were “lower than expected.”
However, revenues in the US and key Asian markets continued to show expected levels of growth.
David Marsh become Chief Executive in March and the business has “strengthened the executive team, including the recruitment of senior managers with functional responsibility for Operations and Compliance” since.
The firm added: “The additional investment and overhead directed towards new product development and quality assurance will continue to strengthen our ability to navigate the complex regulatory environment as we move towards MDR in coming months.”
As a result of the reduced revenues, the firm also anticipates adjusted operating profits will show an increase in the second half of the year, albeit significantly lower than previously expected.
Chairman of SI, Nigel Rogers, said: “We have continued to adapt to challenging circumstances, which are both industry-wide and transitory in nature. Whilst trading conditions in the short term are very disappointing, the investment made in people and products position us well to take advantage of market opportunities. Our executive team has been strengthened, and has the drive, expertise and experience to achieve future success.“
