Deltex reports 'large opportunity' despite delays to new monitor

Esophageal monitoring technology company Deltex Medical Group announced on Friday that its year-to-date revenues were ahead of its full-year 2021 figures.

The AIM-traded firm also said it had a “large advanced opportunity” in its pipeline, which if successful, could provide a further boost to revenue in the short-term.

It said it had made good progress towards completing its next-generation ‘TrueVue’ monitor.

“The group's original intention had been to ship the new monitor and subsequently invoice customers this year,” the board said in its statement.

“However, regulatory approvals needed before the new monitor can be launched onto the market will take several more weeks to be completed, including further testing.

“This delay has been caused by headwinds associated with strains in global supply chains that delayed the start of the approval process, including the completion of the testing for regulatory compliance.”

During 2022, Deltex said it had shown the new monitor to a number of customers, with a view to them purchasing the monitor.

The group reported that interest was “strong”, adding that it had already won a tender in respect of the new monitor at a price point “significantly higher” than price levels typically achieved for the current monitor.

“Deltex Medical expects strong demand from its distributors and end-users in relation to replacing legacy monitors, once the New Monitor has been released for sale.

“The business has been tightly managed and therefore operating costs are lower than originally anticipated.

“However, in order to help fund the increased cash requirements associated with the unexpected delay in the launch of the mew monitor, Nigel Keen, the company's largest shareholder and chairman, has agreed to provide further cash support to Deltex Medical, on arm's length commercial terms.”

As a result, the board said it had entered into an agreement with Imperialise - a company controlled by Keen - for a loan of £0.25m by extending the existing £0.5m standby loan facility put in place and announced on 20 September last year, which was now fully drawn down.

The interest rate on the facility would remain at 8% per annum, with the loan remaining unsecured.

“The £0.75m standby loan facility is repayable in full on or before 31 December 2023.”

At 1408 GMT, shares in Deltex Medical Group were up 9.68% at 0.85p.

Reporting by Josh White for Sharecast.com.