Blood-flow-monitoring technology firm Deltex Medical Group plc (LON:DEMG) is making headway towards its short-term target of moving past the operating cash break-even point.
In its half-year results, the group revealed a 7% rise in revenue, a substantial improvement in the gross margin to 76% from 64% in the first half of last year, and lower operating costs.
The increased focus on the US seems to be paying off, and not just because of the dollar's strength versus sterling; the company’s total revenues were up 7% year-on-year to £2.9mln from £2.7mln the year before, with US revenues up £0.3mln, or 35% (20% in constant currency terms) to £1.2mln.
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For some time the company has been frustrated at the sclerotic rate at which the National Health Service in the UK has been taking on board advice from the National Institute for Health and Care Excellence (NICE) to adopt blood flow monitoring technology, and the first half once again reflected this, with revenues from sales of Deltex’s oesophageal Doppler monitor probes down 12% to £0.7mln, while total UK revenues were 3% lower at £1.0mln.
UK probe sales in July and August continued the overall first-half trend of modest declines.
Net cash used in operating activities was £0.4mln, a dramatic improvement on the first half of last year when the company burned through £1.5mln of cash.
Loss before tax narrowed to £1.16mln from £1.80mln the previous year.
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“The company entered the traditionally stronger second half with sales traction in its US and International businesses, a difficult but improved UK trend and the prospect of incremental returns from investments made in product development,” said Nigel Keen, the company’s chairman.
“The move from a single to a multiple technology platform increases significantly the company's marketing, commercial and strategic options,” he added.
Shares in Deltex dipped 0.03p to 2.85p on the results.