Shares in Deltex Medical Group plc (LON:DEMG) zipped higher on Friday as the blood-flow monitoring specialist told investors it is starting to see the benefits of its new business strategy.
Back in September, Deltex said it was planning to slash its sales and marketing cost base in a bid to boost profitability.
The group, which makes oesophageal Doppler monitoring (ODM) equipment, said the cost cuts allowed it to deliver “substantially improved profitability and cash generation” in the final quarter of last year.
As a result, Deltex expects to turn an underlying profit (EBITDA) this year.
“The initial results from the new business strategy of building a more stable business as a result of improved profitability and cash generation are most encouraging; we are looking forward to seeing further progress during 2019,” said chairman Nigel Keen.
Overall, revenues for the year ended 31 December 2018 were slightly behind expectations at around £5.0mln (2017: £5.9mln) and full year losses before exceptional items are expected to be “broadly in line” with market expectations. Gross cash on the balance sheet at 31 December 2018 was £0.6mln (2017: £0.2mln).
Shares surged 25% to 1.19p on Friday.