Deltex Medical revenue falls as it 'stabilises' business

Oesophageal Doppler monitoring company Deltex Medical Group updated the market on its trading for 2019 on Wednesday, reporting “good progress” with the execution of its new strategy.

The AIM-traded firm said costs were further reduced in the year ended 31 December, and a number of steps were taken to refocus the business.

It said together, those measures contributed to the generation of cash during the year, as well as the creation of a “stable platform” to target profitable growth.

The board noted that the healthcare market was continuing to evolve, particularly in the United States, where an increasing focus on patient safety and reducing avoidable complications, such as acute kidney injuries, were helping to highlight the benefits of haemodynamic monitoring.

Pressure from 'payers' to lower hospital-related costs was also helpful for Deltex’s ‘TrueVue’ technology and market position, the company added.

Overall revenues for the year ended 31 December were around £4.3m, down from £5m, which the directors said reflected the implementation of the new strategy focussed on generating profitable revenues, and the ending of distribution of lower margin third-party products in the UK, which had estimated annual sales in 2018 of £0.4m.

The reduction in low-margin revenues was offset at an operating level by the positive results of the new strategy, the board claimed, with Deltex expecting to report positive adjusted EBITDA for the year.

Cash on the balance sheet at 31 December totalled £0.9m, up from £0.6m year-on-year.

“During 2019 the management team successfully completed the reconfiguration of the group and has established a stable platform from which the business can now expand,” said chairman Nigel Keen.

“The £0.9m of cash on the balance sheet - up £0.3m up from a year ago - provides tangible evidence that the first part of our strategy has been successful.

“With the business now stabilised, the next stage of the execution of the strategy is focussed around generating profitable growth.”

At 1216 GMT, shares in Deltex Medical Group were up 7.14% at 1.5p.