Medtech group on track for sustainable growth as revenues climb
Leeds-based Surgical Innovations Group has posted record revenues in its audited results for the year ended 31 December 2023.
The business, which designs, makes and distributes medical technology for minimally invasive surgery, says revenues rose 6% to £12.01m (2022: £11.34m) – slightly exceeding expectations and amounting to the largest recorded revenues for the firm in a financial year.
Surgical Innovations also reports a pre-tax loss of £728,000 (2022: £57,000 loss) and adjusted EBITDA profit of £0.20m (2022: £0.70m) – in line with expectations.
Chairman, Jonathan Glenn, said: “I am pleased to report that the company finished the year with record revenues and entered 2024 with an encouraging order book.
“While we faced some operational challenges during the period, recent actions taken by the Board to improve operational efficiencies, together with continued increasing sales momentum, give the Board confidence that we have put the business onto a sustainable growth trajectory for 2024 and beyond.
“The emphasis on sustainability is addressed by the company’s reposable™ technology and we remain well placed to take advantage as the backlog in surgery is addressed.
“Strategic product launches further demonstrate the group’s commitment to innovation and its ability to identify and capitalise on market opportunities. The promising order book provides a stable foundation for future profitable growth in revenue generation.”
The business says its UK sales grew 8% year-on-year, with the UK market, including OEM sales, representing 64% of total revenues. Sales in Europe were up 7%, back above pre-pandemic levels.
Surgical Innovations adds it conducted a comprehensive review of its manufacturing operations and supply chain, with initiatives to improve operational efficiencies starting to yield results.
David Marsh, CEO, said: “Our strong revenue from last year has continued into this year, despite headwinds from the junior doctor strikes.
“Our UK business has bounced back quickly after each strike. Fundamentally it’s a strong business and the suppliers we have keep coming back to us. We continue to see good demand for our products going into the next quarter.”
He said the firm had coped well with challenges which had included the need to improve efficiency – partly achieved through increased manufacturing automation – as well as dealing with issues around its supply chain, rising costs and regulatory compliance.
Marsh said the company can capitalise on significant opportunities to produce its own new products, including a device called LogiTube™, a gastric calibration tube designed to meet the specific needs of the obesity market in the UK.
He said the ongoing drive for greater sustainability in the industry was also a promising avenue for the business.
He noted that many of Surgical Innovations’ products are based on a “resposable” concept, in which the products are part re-usable, part disposable, offering an environmentally responsible solution at a cost that is competitive against fully disposable alternatives.
Also today, Surgical Innovations confirmed it has agreed two new distribution contracts.
The first is a five-year exclusive contract with Boston-based Microline Surgical Inc and the second a three-year exclusive arrangement with Paris-based Peters Surgical.
The new agreement with Microline continues a relationship which started in 2007 with Surgical Innovations’ subsidiary, Elemental Healthcare, distributing the Microline portfolio of products in the UK.
The new contract continues the distribution of Microline products by Elemental for a further five years and, at the current run rate, will be worth an estimated £9m in sales over the period of the contract.
Elemental’s agreement with Peters has an estimated sales value in excess of £1.5m over the contract period.
Marsh said: “The renewal of both these agreements is a clear demonstration of the confidence that suppliers have in our UK Elemental sales team.
“The strength of these relationships is further underpinned through Microline and Peters’ existing agreements to distribute Surgical Innovations branded products in the USA and India respectively.”
