Lidco's losses widen as UK revenue stumbles

Lidco reported that its first half losses deepened on Tuesday after revenues suffered from a longer than expected sales cycle.

For the six-month period ended 31 July, the blood monitoring company reported a loss of £1.27m, up 26% from the year before, while revenue sank by 8% to £3.6m.

The reduction in revenue was driven by a 9% drop in UK sales, which make up the bulk of the outfit’s business, due to weaker capital sales, though the AIM traded company said it expected a bounce back in the second half of the year.

At 31 July Lidco was debt free and had cash and cash equivalents of £2.1m, down from £4m at the same point last year.

Matt Sassone, chief executive of Lidco, said: "Our focus remains on transitioning the business to a 'Software as a Service' business model. Customer feedback, especially in the US, to this differentiated approach to pricing is very positive. To date we have been able to take over $1m market share in the US and have established an exciting sales pipeline which continues to grow. "

As a result of its efforts to transform the US business, Lidco reported a 61% increase in recurring US revenues to £0.6m and a 95% decrease in capital sales to £20,000.

"I have personally visited a number of key prospects in the US over the past weeks and I am confident that our proposition resonates with customers, albeit the sales cycle is longer than originally anticipated. In the second half of the year we expect to benefit further as we convert more of our US pipeline together with a higher level of capital sales in the UK and contributions from new third-party distribution agreements," said Sassone.

Lidco also signed a three-year distribution agreement with Chinese medical device specialists Shenzhen Antmed which will see the company deliver its blood pressure transducer products to the UK market.

Shares in the company were down 2.27% at 5.38p at 1247 BST.