Headline performance at the H1’17 results illustrated total revenue growth of 7% from £2.7m to £2.9m continuing from H2’16 the export-led return to growth. As flagged, performance in RoW territories was affected by ordering patterns, with order flow £0.1m lower than during the last period. Cost savings in probe tip assembly contributed to an increase in gross margin from 64% to 76%, and to a narrowing loss from £1.7m in H1’16 to £1m in H1’17.
US revenues increased by £0.3m from £0.9m to £1.2m, up 35% (or 20% at CER) including sales of single use ODM probes which grew 21% from £0.8m to £1.0m. A breakdown of performance by the company’s US sales territories showed strong growth in certain areas. This despite some staffing challenges and changes as the company redeployed sales resources to best meet the strategic potential of its accounts. Notably, Mid-Atlantic and Great Lakes both increased 56% over H116. West Coast rose 9%, plus Mid-West and North-East grew 8% and 6% respectively. The overall growth rate was dampened by the North-West and South-West which fell by 24% in the period, although a new sales team is expected to be operational during H2’17.
Total sales to distributor markets fell 9% to £0.7m with RoW distributor ordering patterns a factor – Far East and Latin America probe sales fell 47% to £83,000 (£158,000). Stable end user demand and the recent revision of ODM reimbursement in Q1’17 by the S Korean Government should mean higher probe sales in H2’17. Sales to established European territories France and Scandinavia grew 7% to £557,000. In direct markets, UK revenues appear to be bottoming, falling 3% from £1m with probe sales down 12% to £662,000 (from £752,000).
The launch in May of High-Definition Impedance Cardiography (HD-ICG) technology on CardioQODM+ platform gives the Company three leading advanced haemodynamic monitoring technologies on one platform. This allows a broader range of clinical settings to be addressed in hospitals by clinicians, whilst providing additional revenue streams to Deltex. It also creates cross-selling opportunities and could ultimately lead to greater utility of the platform. The HD-ICG sales model is based on single-use consumables and the technology could be approved for sale in the US before the end of 2017. A veterinary form of Doppler monitoring, the Vet-Q system, was recently launched: it is also based on disposable probes and has been well received.