The severe and early flu season is impacting elective surgical procedures globally, which has been exacerbated by further industrial action by doctors in the UK. A short-term issue with component supply from an OEM partner (now resolved) has compounded the shortfall in trading in Q4. As a result, FY25E revenues are expected to be ~£11.5m (vs SCMe £12.4m), with a corresponding impact on profits and cash. The Net Debt position has however improved from the HY position of £0.8m to £0.4m as of today. Whilst frustrating, management has been pro-active in positioning the group for when recovery comes, with these self-help measures expected to positively impact in FY26. As such, we are relatively sanguine about the short-term downgrades, but adjust our TP in line with our forecast changes to 1.4p (from 1.7p).
