REG - Deltex Med Grp PLC - Half-year Trading Update

Deltex MedicalAnnouncement

04/07/2024 07:00

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RNS Number : 0636V  Deltex Medical Group PLC  04 July 2024

Prior to publication, the information contained within this announcement was
deemed by the Group to constitute inside information for the purposes of
Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310.

 

4 July 2024

 

Deltex Medical Group plc

("Deltex Medical" or the "Group")

 

Half Year Trading Update

 

Deltex Medical Group plc (AIM: DEMG), the global leader in oesophageal Doppler
monitoring, provides a trading update following the end of the first half of
its current financial year on 30 June 2024 ("H1 2024").

 

Key highlights:

 

·    Unaudited revenues for H1 2024 were £1,064k (H1 2023: £1,059k),
excluding a further £92k of orders received in H1 2024 awaiting components or
payment prior to shipment

·    EBITDA positive for two months during H1 2024; continuing improvement
in EBITDA expected in the second half of the current financial year ending 31
December 2024 ("H2 2024")

·    Cash at hand on 30 June 2024 was £325k (H1 2023: £107k)

·  Probes unit sales increased by 16% across the Group, driven by growth
from International markets

·    Successful award by NHS Supply Chain ("NHSSC") of the national
framework tender for the new TrueVue System to be eligible for purchase

·    Group headcount as at 30 June 2024: 24 (H1 2023: 40)

 

Trading update

 

Unaudited revenues for the six months ended 30 June 2024 were £1,064k (H1
2023: £1,059k) with a further £92k in orders in-hand either awaiting
components or payment in advance of shipping. Included within these
outstanding orders is the first part of a new tender won in Latin America for
our legacy ODM+ monitor and purchased by our distribution partner as part of
the last time buy announced on this device in April 2024. These orders are
expected to be shipped in July and the associated revenues recognised. Cash at
hand on 30 June was £325k.

 

Group probe unit sales increased overall by 16% year on year, driven by unit
growth from International of 21%, despite significantly reducing the
Group-wide sales teams. Whilst International probes margins are lower than
probe margins achieved on direct sales in the UK and USA, the quantum of the
probe growth seen in the International division offsets the lower margins and
provides us with a larger sales footprint.

 

Revenues generated in H1 2024 and including the orders in hand but not shipped
as at 30 June 2024, meant that we met the internal expectations agreed by the
Board for H1 2024. These revenues were achieved with a significantly reduced
headcount, following the Company restructure in H2 2023, giving an annualised
cost saving of c.£1m. In our internal models we were anticipating a monthly
EBITDA loss in H1 2024, however, the Company was EBITDA positive for two
months in H1 2024 and this would have been three months if we had been able to
ship the orders received in June. EBITDA is expected to continue to improve in
H2 2024.

 

We continue to showcase the new generation TrueVue monitor around the world
and are receiving great interest, with increasing orders received for trials
and demonstration by our reseller partners, as well some initial small orders
from customers new and old.

 

Progress continues for the new 2MHz non-invasive device, with the required
crystals now sourced and delivered; prototyping of the new device can now be
taken forward.

 

Nigel Keen, Chairman of Deltex Medical said:

"We have made good progress during H1 in selling and creating pipeline for the
new TrueVue System into the UK and EU with many of our European distribution
partners purchasing the new monitors and starting to give clinical
demonstrations to their customer base.

 

The significant growth in our probe unit sales into the International markets
shows that our plan to focus more into International markets is working, and
we expect to see this continue through H2 and remain confident for the rest of
the year."

 

 

 

For further information, please contact:

 

 Deltex Medical Group plc                                        01243 774 837
 Nigel Keen, Chairman                                            investorinfo@Deltexmedical.com
 Andy Mears, Chief Executive
 Natalie Wettler, Group Finance Director

 Allenby Capital Limited - Nominated Adviser & Broker            020 3328 5656
 Jeremy Porter / Vivek Bhardwaj (Corporate Finance)              info@allenbycapital.com
 Tony Quirke / Stefano Aquilino (Sales & Corporate Broking)

 

Notes for Editors

Deltex Medical's technology

Deltex Medical's TrueVue System uses proprietary haemodynamic monitoring
technology to assist clinicians to improve outcomes for patients as well as
increase throughput and capacity for hospitals.

Deltex Medical has invested over the long term to build a unique body of
peer-reviewed, published evidence from a substantial number of trials carried
out around the world. These studies demonstrate statistically significant
improvements in clinical outcomes providing benefits both to patients and to
the hospital systems by increasing patient throughput and expanding hospital
capacity.

The Group's flagship, world-leading, ultrasound-based oesophageal Doppler
monitoring ("ODM") is supported by 24 randomised control trials conducted on
anaesthetised patients. As a result, the primary application for ODM is
focussed on guiding therapy for patients undergoing elective surgery, although
sedated patients in intensive care are still an important part of our
business. The Group's new, next generation monitor makes the use of the ODM
technology more intuitive and provides augmented data on the status of each
patient.

Deltex Medical's engineers and scientists carried out successful research in
conjunction with the UK's National Physical Laboratory ("NPL"), which has
enabled the Group's 'gold standard' ODM technology to be extended and
developed so that it can be used completely non-invasively. This will
significantly expand the application of Deltex Medical's technology to
non-sedated patients. This new technological enhancement, which will be
released on the new next generation monitor, will substantially increase the
addressable market for the Group's haemodynamic monitoring technologies and is
complementary to the long-established ODM evidence base.

Deltex Medical's new non-invasive technology has potential applications for
use in a number of healthcare settings, including:

§ Accident & Emergency for the rapid triage of patients, including the
detection and diagnosis of sepsis;

§ in general wards to help facilitate a real-time, data-driven treatment
regime for patients whose condition might deteriorate rapidly; and

§ in critical care units to allow regular monitoring of patients post-surgery
who are no longer sedated or intubated.

One of the key opportunities for the Group is positioning this new,
non-invasive technology for use throughout the hospital. Deltex Medical's
haemodynamic monitoring technologies provide clinicians with beat-to-beat
real-time information on a patient's circulating blood volume and heart
function. This information is critical to enable clinicians to optimise both
fluid and drug delivery to patients.

Deltex Medical's business model is to drive the recurring revenues associated
with the sale of single-use disposable ODM probes which are used in the
TrueVue System and to complement these revenues with a new incremental revenue
stream to be derived from the Group's new non-invasive technology.

Both the existing single-use ODM probe and the new, non-invasive device will
connect to the same, new TrueVue monitor which was released onto the market in
November 2023. Monitors are sold or, due to hospitals' often protracted
procurement times for capital items, may be loaned in order to encourage
faster adoption of the Group's technology.

Deltex Medical's customers

The principal users of Deltex Medical's products are currently anaesthetists
working in a hospital's operating theatre and intensivists working in ICUs.
This customer profile will change as the Group's new non-invasive technology
is adopted by the market. In the UK the Group sells directly to the NHS. In
the USA the Group sells directly to a range of hospital systems. The Group
also sells through distributors in more than 40 countries in the European
Union, Asia and the Americas.

Deltex Medical's objective

To see the adoption of Deltex Medical's new TrueVue monitor, comprising both
minimally invasive and non-invasive technologies, as the standard of care in
haemodynamic monitoring for all patients from new-born to adult, awake or
anaesthetised, across all hospital settings globally.

 

For further information please go to www.deltexmedical.com
(http://www.deltexmedical.com/)

 

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