Revenues fall by nearly 50% at listed MedTech business
Medical technology business, Surgical Innovations, has reported a revenue drop of 49% to £2.59m (2019: £5.10m) in its interim results for the six months ended 30 June 2020.
The Leeds-based business also recorded an adjusted EBITDA loss of £0.46m (2019: £0.65m profit), with a pre-tax net loss of £2.58m compared to a net loss of £0.33m in the corresponding period last year.
Cash generated from operations was £0.54m (Year ended 31 Dec 2019: £0.67m), and the firm reported an adjusted operating loss of £0.87m (2019: £0.22m profit).
However, the business says it was able to take “early and decisive” actions to mitigate the effects of the Covid-19 pandemic, protecting core skills and capabilities whilst preserving its financial resources.
It notes the fall in revenue was caused by the suspension of elective surgery in the UK and several other major international markets in response to the pandemic.
The business says that since then, revenues have shown signs of recovery, with this improvement continuing into the third quarter.
In the first quarter, group sales were 74% of those in the corresponding quarter in prior year, falling to 31% in quarter two but rebounding to 72% in quarter three to 31 August.
Surgical Innovations specialises in the design, manufacture, sale and distribution of medical products, primarily for use in minimally invasive surgery.
The Group currently employs approximately 100 people across two sites.
CEO David Marsh and Group financial controller Charmaine Day said the company had worked hard to make sure it has a strong capital and balance sheet.
Marsh added: “It has been tricky to plan the business around an ever changing situation with the pandemic, but we were able to protect our cash flow and stabilise the business financially. We also took advantage of support from the Government.
“The business is financially stable and some amazing work has been done during the lockdown to ensure that.”
He said it was encouraging to see the health sector adapting itself to the ongoing situation, by setting up Covid only hospitals or wards to enable elective procedures to continue safely.
And he noted the massive surge of discarded single use items of PPE has made the industry more aware of Surgical Innovations’ own continued emphasis on the importance of sustainability.
“Our plan is that by November 1 we will have our entire team back at work in a safe environment,” he said.
“Our sales managers have been working throughout the lockdown and we now have five major trusts in the UK undertaking evaluations of our products.”
Company chairman, Nigel Rogers, said: “The company has shown great resilience, proactively navigating a very challenging period resulting from the Covid-19 pandemic.
“Following early signs of recovery first seen during May 2020, the company is now well positioned to rejuvenate with stable finances, broad international markets, streamlined processes and environmentally sustainable products that are increasingly being recognised as ideally suited to a post-Covid world.
“Since the period end, revenues have continued to improve. In the current quarter to date, sales have recovered to a level exceeding 70% of that achieved in the prior year comparative, and there are good indications that this can be built upon going into the final quarter.
“This encouraging picture underpins our planned return to normal working practices for sales and marketing teams imminently, and for operational activities to resume by the end of October 2020.
“The demand for elective surgery in all of our key markets continues to build; indeed, there is a growing backlog of urgent cases and an increasing recognition that safe working practices to segregate Covid-19 treatment from regular caseloads is essential.
“This pent-up demand, coupled with the sustainable credentials of our product offering, lead us to be confident of the prospects for continuing recovery and a return to profitable growth in coming months.”
