Supply chain and manufacturing disruptions persist at medtech firm
Surgical Innovations Group warns manufacturing productivity and supply chain disruptions mentioned in its June update have continued, and are now likely to hit profitability in the second half of the year.
In an update today the group, which designs, makes and distributes medical technology for minimally invasive surgery, says a complete operational review of both its manufacturing operations and supply chain is currently being undertaken, using an industry specialist.
It adds: “While measures are already being introduced to improve efficiencies and productivity, they will take time to benefit the overall margin.
“A series of planned price increases has been implemented however, some of these will be phased in over time due to the fixed term nature of contractual agreements.
“The Board now expects the group to report a modest profit at the adjusted EBITDA level for FY23, with better momentum in FY24.”
Leeds-based Surgical Innovations says its forward-looking orderbook remains positive, providing confidence that revenues for the year to 31 December 2023 will meet the Board’s expectations.
The group notes its UK business continues to perform above FY22, driven by sustainability messaging having a positive impact on activity.
Key international markets, Japan and Europe, remain strong and, while slower than anticipated, new geographic territories are beginning to gain traction.
As of 31 August 2023, the group had £2.30m in available headroom including a £1m undrawn invoice discounting facility, which gives it access to sufficient capital to support its expected revenue growth in the second half of the year and beyond (30 June 2023: £2.41m, including the undrawn facility).
The company confirmed in May 2023 that Jon Glenn would succeed Nigel Rogers as chairman at the time of the announcement of interim results in September.
As the transition of responsibility as chair has been conducted smoothly, the Board now considers it appropriate for Glenn to take on the role of chair with immediate effect.
Rogers has reiterated his commitment to remain on the Board as an independent non-executive director until a suitable candidate to succeed him has been appointed.
