Nigel Keen, Chairman of Deltex Medical, commented:
“The successful £2,050,000 fund raising in February 2018 has put the Group in a stronger financial position – allowing us to improve our business structure.
“We made a number of changes to the Group in the first half – the appointment of a new CEO in June and a revised business strategy – which mean that Deltex Medical is much better positioned for the second half of the year and 2019.
“The lower cost base that the business now operates has given the Group a stronger platform from which to develop.
“Strategically we are now prioritising profitability over securing new customers – and believe that by working more closely with our existing customers we will start to generate incremental revenues more quickly from new product launches on the TrueVue System.”
Deltex Medical Group plc (LON: DEMG), the global leader in oesophageal doppler monitoring today announced its results for the six-month period ended 30 June 2018.
Andy Mears appointed as CEO in mid-June
Revised strategy of building a stable business by focussing on driving revenues from existing customers
Programme of cost reduction and business stabilisation launched in the first half
– significantly accelerated and expanded since June with a significant reduction in sales and marketing costs
Focus on developing relationships with existing customers also expected to help the generation of incremental revenues from new TrueVue System product launches
Publication of the large multicentre FEDORA study showing a 76% reduction in total post-operative complications for low and moderate-risk patients using Deltex Medical’s oesophageal doppler haemodynamic monitoring technology
A strong prior year comparator for Monitor sales and a number of one-off events associated with Probe revenues (including currency affects, changes in ordering by two large US accounts and a temporary inventory adjustment by a French distributor) resulted in revenues being held back to £2,325,000 (2017 H1: £2,877,000)
Substantial reductions in overheads: estimated annualised cost savings of c.£2,000,000 to be achieved from actions taken:
· c.£750,000 from actions prior to June
· c.£1,250,000 from actions since appointment of new CEO
33% reduction in employee numbers to 56 at 31 August (31 December 2017: 84)
30% reduction in sales and distribution costs to £1,373,000 (2017 H1: £1,949,000)
14% reduction in total costs to £2,796,000 (2017 H1: £3,265,000)
Operating loss (before exceptional costs) of £999,000 (2017 H1: £1,082,000)
Cash on balance sheet at 30 June 2018 of £1,065,000 (31 December 2017: £219,000)