Surgical Innovations expecting bumper second half

The AIM-traded firm told shareholders at its annual general meeting that profitability was also expected to be “slightly ahead” of the corresponding period last year, with it also anticipating “much stronger results” in the second half of the year.

Executive chairman Nigel Rogers said export sales of SI branded products were gaining increasing traction in many overseas markets, as a result of product range extensions, additional sales resources and business development initiatives.

“We anticipate further opportunities to improve our market share across several key geographical markets to be delivered in the coming months,” he told the meeting.

“Market conditions in the UK during the first half of the year have been challenging as a result of reduced activity levels of elective surgery in the NHS, and the supply chain disruption in respect of the Cellis range of biological matrices.”

Rogers said there were positive signs that NHS hospitals were continuing to return to normalised activity levels, with recent government policy announcements regarding a longer-term funding settlement for the NHS described as “encouraging”.

“Distribution sales in the UK market will also benefit from additional product lines taken on during the first half of the year, and the renewal of a number of key contracts.

“Revenues from OEM customers have been steady, and are expected to increase in the second half of the year, following the redesign of certain key products and additional revenues from precision engineering products.”

Rogers said the company’s management had used the period of subdued demand to bear down further on working capital, delivering “significant reductions” in inventory levels and strong cash flow.

“The group is expected to have little or no net debt at 30 June.”

Surgical Innovations said its interim results for the first half of the year would be released in September.