Deltex Medical Group plc (LON:DEMG) has praised the “significant progress” made so far in 2017 as it looks to make good on its aim of moving through the operating cash break-even point.
At its AGM later today, chairman Nigel Keen will tell investors that sales and margins are both higher compared to last year, while operating costs have been reduced.
US performance still booming
The strong performance in the year-to-date owes a lot to Deltex’s continued growth across the pond where it has signed up more customers and generated higher revenues from its Oesophageal Doppler monitoring (ODM) equipment.
Back in January the group reached its target of 30 key accounts and has added another two since. On top of that, Keen will tell investors today that Deltex is in the process of tying up another two accounts over in the States.
All in all, US revenues for the five months to the end of May are up 40% compared to the same period in 2016.
UK still challenging but remains profitable
Over on this side of the Atlantic, business in its home UK market has been “challenging”, as the company puts it, for the past few years now, with the well-documented financial issues of the NHS hitting order numbers.
Deltex said that theme has continued into 2017, but added that the UK division remains profitable and is stabilising. This time last year, sales were off 25% year-on-year, so far in 2017 they’re just 3% behind.
The goal is to get the UK division back into growth, which it hopes to do by the end of this year.
Rest of World sales slightly ahead too
The growth has been a little less furious in Deltex’s international business where probe consumption is growing “satisfactorily”.
Revenues for the first five months of 2017 are currently slightly ahead of last year’s, although the timing differences on large orders from distributors in Peru and South Korea means first half sales are likely to end being lower than in 2016.
“Positive response" to latest product
Keen will also tell the AGM that he has been “encouraged by the positive response” to Deltex’s new High Definition Impedance Cardiography (HD-ICG) product, which it launched last month.
The module is part of the company’s CardioQ-ODM+ monitoring platform and provides a continuous indirect measurement of central blood flow.
As a non-invasive system it is ideal for monitoring patients who are awake and in critical care or undergoing surgery.
The product is on track to be launched to Deltex’s international distributors in September and in the US as soon as the AIM-quoted firm receive clearance from the Food and Drug Administration (FDA).
ODM has a place in thoracic surgery as well
Deltex already has heaps of evidence to show that monitoring blood flows using its technology during and immediately after surgery enables patients to leave hospital quicker and with fewer post-op complications.
Today it added more weight to this argument by posting the “excellent results” of a recent trial, which looked into the use of ODM in thoracic surgery.
The randomised trial showed that ODM more than halved complications and reduced the length of stay in hospital by two days.
“This is excellent news for large numbers of patients undergoing lung resection with one in five of them avoiding a dangerous, life shortening, complication,” said chief executive Ewan Phillips.
“The trial allows us to target thoracic surgery on top of those other specific types of surgery where the value of ODM has previously been demonstrated.”