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Growing sales of its surgical blood monitoring probes boosted Deltex Medical’s (LON:DEMG) underlying performance over the past twelve months.
Deltex made £0.3mln in the six months to December before one-offs and the cost of setting up an operation in the US.
Over the whole of 2013, revenues from surgical probes rose 24% to £5.5mln, with the UK 26% higher, the US up by 13% and French sales ahead by 37%. Deltex said it had now trebled its probe sales since 2008.
The loss before non-cash and US market development costs in 2013 fell to £286,000 from £1.06mln in 2012 driven by the increased revenues from probes.
Nigel Keen, Deltex’s chairman, said progress in the US in particular had been faster than anticipated with three new hospitals now using dedicated trainers to demonstrate how to use its oesophageal Doppler monitoring (ODM) systems.
“We have market leading positions and increased growth rates in the more developed markets for our products and have momentum in the roll-out of our dedicated trainer programme as more hospitals start to adopt at scale,” Keen said.
Revenues overall for the year rose £400,000 to £7.2mln, with a loss of £2.1mln after £599,00 for setting up in the US and a further £1.2mln after a switch to retaining title on ODM monitors supplied for research. Cash at the end of the year was £1.5mln (2012: £0.7mln).
Ewan Phillips, Deltex’s chief executive, said it had been a good year and the second in a row it had hit its targets for growth in surgical probes.
At one point, he said, Deltex saw only the UK as a potential growth market, but now this is becoming the core that drives growth overseas.
“We were stuck for a while as the only market where growth was visible was UK, but now we have France, which is the second largest market after the UK, and the beginnings in the US and Canada.
“The UK may now become the cash cow to fund expansion elsewhere,” he adds.
Separately, the company announced it had released of the first batch of its new training aid, an oesophageal Doppler patient simulator.
The simulator is contained within a mannequin of the upper half of the body and allows probe insertion through either mouth or nose, correct identification of aortic blood flow and probe focus.
It is compatible with Deltex’s CardoQ-ODM and the CardioQ-ODM+ monitors, the latter incorporating an arterial pressure signal.
The idea is get doctors to become familiar more quickly with using ODM.
A lot of doctors find excuses not to use it, said Phillips, but with the new aid they can get the knack in a safe environment.
Broker Zeus Capital says 2013 was the year Deltex “set the foundations” for future growth.
“The US market opportunity for ODM is substantial and warrants the efforts the company is making to increase the number of dedicated trainers in key locations,” says analyst Dr Gary Waanders.
“The clear benefits of ODM, both for healthcare systems (cost reductions and more efficient use of resources) and patient outcomes (reduced length of stay in hospital, better clinical performance), will ensure that the technology establishes a strong, international user base with sustainable and growing revenues.”
Chris Thomas at Arden Partners points out that the strong operational performance last year stands in “sharp contrast” to the share price performance.
“This disconnect provides a highly attractive opportunity for investors,” says Thomas, who has a ‘buy’ recommendation.
Shares closed 10% higher at 14.98p.