TIDMDEMG
RNS Number : 5512H
Deltex Medical Group PLC
07 April 2022
7 April 2022 - Deltex Medical Group plc (AIM: DEMG), the global
leader in oesophageal Doppler monitoring, today announces its
results for the year ended 31 December 2021.
Deltex Medical Group plc ("Deltex Medical" or the "Group")
Results for the year ended 31 December 2021
HIGHLIGHTS
Financial
-- revenues: GBP2.3 million (2020: GBP2.4 million)
-- International division performed well in 2021 with growth of
40% to GBP0.9 million (2020: GBP0.7 million)
-- gross margin up slightly to 70% (2020: 68%)
-- overheads flat at GBP2.7 million (2020: GBP2.7 million,
excluding exceptional items)
-- adjusted EBITDA: GBP(0.5) million (2020: GBP(0.2)
million)
-- loss for the year: GBP(1.0) million (2020: GBP(0.8)
million)
-- cash at hand (31 December, 2021): GBP0.4 million (2020:
GBP0.9 million), before GBP1.4 million (gross) fund raising
announced on 8 February 2022
Business
-- during 2021 many of Deltex Medical's principal markets were
effectively closed as elective surgical procedures were cancelled
around the world due to the pandemic. Elective surgery is now
starting to resume globally
-- many hospitals barred access to salespersons and clinical
educators for a large proportion of the year, which compounded the
sales challenges facing the Group
-- post pandemic, there is now a substantial backlog in elective
surgical procedures around the world which represents a significant
commercial opportunity for Deltex Medical as its TrueVue Doppler
technology has been shown to reduce patient length-of-stay and
hence increase hospital throughput / capacity
-- there are now encouraging signs of hospital access improving
for our sales teams
-- excellent progress was made in research and product
development during 2021, both in the development of our new, next
generation monitor which will be launched in 2022 and our new
non-invasive Doppler-based haemodynamic monitoring technology which
has broader applications within the hospital setting
-- trading in 2022 has started positively including the
announcement in January 2022 of a US$0.2 million order from the
Americas
Commenting on the results, Nigel Keen, Chairman of Deltex
Medical, said:
"2021 was a challenging year for Deltex Medical; however, as the
pandemic subsides the prospects for the Group in 2022 are
encouraging."
"The size of the backlog in elective surgery around the world
creates an opportunity to leverage the benefits of Deltex Medical's
technology, particularly in relation to increasing patient
throughput and improved outcomes."
"The expected return to normal levels of elective surgery
represents a significant commercial opportunity for the Group."
"The launch of our next generation state-of-the-art monitor
coupled with our new, easy-to-use non-invasive monitoring device,
with its broader applicability throughout the hospital, provides
opportunities for the Group to expand its addressable markets."
For further information, please contact:
Deltex Medical Group plc 01243 774 837
Nigel Keen, Chairman investorinfo@deltexmedical.com
Andy Mears, Chief Executive
Natalie Wettler, Group Finance
Director
Nominated Adviser and Joint Broker 0207 614 5900
Arden Partners plc info@arden-partners.com
Paul Shackleton
Benjamin Onyeama-Christie
Joint Broker 0203 657 0050
Turner Pope Investments (TPI) Ltd info@turnerpope.com
Andy Thacker
James Pope
Notes for Editors
Deltex Medical's technology
Deltex Medical's TrueVue System uses proprietary haemodynamic
monitoring technology to assist clinicians to improve outcomes for
patients as well as increase throughput and capacity for
hospitals.
Deltex Medical has invested over the long term to build a unique
body of peer-reviewed, published evidence from a substantial number
of trials carried out around the world. These studies demonstrate
statistically significant improvements in clinical outcomes
providing benefits both to patients and to the hospital systems by
increasing patient throughput and expanding hospital capacity.
The Group's flagship, world-leading, ultrasound-based
oesophageal Doppler monitoring ("ODM") is supported by 24
randomised controlled trials conducted on anaesthetised patients.
As a result, the primary application for ODM is focussed on guiding
therapy for patients undergoing elective surgery.
During 2021, Deltex Medical's engineers and scientists carried
out successful research in conjunction with the UK's National
Physical Laboratory ("NPL"), which has enabled the Group's 'gold
standard' ODM technology to be extended and developed so that it
can be used completely non-invasively. This will significantly
expand the application of Deltex Medical's technology to
non-sedated patients. This new technological enhancement will
substantially increase the addressable market for the Group's
haemodynamic monitoring technologies and is complementary to the
long-established ODM evidence base.
Our new non-invasive technology has potential applications for
use in a number of healthcare settings, including:
-- Accident & Emergency for the rapid triage of patients,
including the detection and diagnosis of sepsis, an important
capability for patients presenting with COVID-19 symptoms;
-- in general wards to help facilitate a real-time, data-driven
treatment regime for patients whose condition might deteriorate
rapidly; and
-- in critical care units to allow regular monitoring of
patients post-surgery who are no longer sedated or intubated.
One of the key opportunities for the Group in 2022 is
positioning this new, non-invasive technology for use throughout
the hospital. Our haemodynamic monitoring technologies provide
clinicians with beat-to-beat real-time information on a patient's
circulating blood volume and heart function. This information is
critical to enable clinicians to optimise both fluid and drug
delivery to patients.
Our business model is to drive the recurring revenues associated
with the sale of single-use disposable ODM probes which are used in
the TrueVue System and to complement these revenues with a new
incremental revenue stream to be derived from our new non-invasive
technology.
Both the existing single-use ODM probe and the new, non-invasive
device connect to the same, next generation monitor which is due
for launch in 2022. Monitors are sold or, due to hospitals' often
protracted procurement times for capital items, loaned in order to
encourage faster adoption of our technology.
Deltex Medical's customers
The principal users of our products are currently anaesthetists
working in a hospital's operating theatre and intensivists working
in ICUs. This customer profile will change as our new non-invasive
technology is adopted by the market. In the UK we sell directly to
the NHS. In the USA we sell directly to more than 30 major
hospitals that appreciate the value of our evidence-based approach
to haemodynamic management. We also sell through distributors in
more than 40 countries in the European Union, Asia and the
Americas.
Deltex Medical's objective
To see the adoption of our next generation TrueVue System,
comprising both minimally invasive and non-invasive technologies,
as the standard of care in haemodynamic monitoring for all patients
from new-born to adult, awake or anaesthetised, across all hospital
settings globally.
Visit us online for further information at
www.deltexmedical.com
Chairman's Statement
Real-time oesophageal Doppler haemodynamic monitoring:
improves patient outcomes; increases hospital throughput
Introduction
As expected, 2021 turned out to be a challenging year for Deltex
Medical, although I can report that we are encouraged by the way
that 2022 has started.
Our technology is principally used during elective surgery.
Unfortunately, elective surgery was effectively closed for much of
the year as health systems across the world continued to grapple
with the impact of the COVID-19 ("Covid") pandemic whilst deciding
how best to restart elective surgery. Intensive Care Units ("ICUs")
once again filled up with mainly unvaccinated, extremely sick
patients. Staff shortages compounded the provision-of-care
challenges facing hospitals.
Although at the beginning of the pandemic, starting in late
March 2020, there was an uptick in sales of the Group's
haemodynamic monitoring technology into ICUs, this rapidly became
dwarfed by the drop-off in the use of our products associated with
the cessation of elective surgery in almost all hospitals in the
world.
In all our markets there is now a large backlog of patients
requiring elective surgical procedures. This represents a clinical
and, increasingly, a political problem, particularly for
government-funded healthcare systems. An NHS publication "Delivery
plan for tackling the COVID-19 backlog of elective care" published
on 8 February 2022 states that "Six million people are now on the
waiting list, up from 4.4 million before the pandemic."
On 1 December 2021 the UK's National Audit Office published a
report entitled: "NHS Backlog and waiting times in England". This
report states that "Under two plausible scenarios, the elective
care waiting list will be longer in 2025 than it is today."
Further, this report suggests that under one of these scenarios the
waiting list in March 2025 will contain 12.0 million patient
pathways, compared to 5.8 million in September 2021.
The size and scale of the backlog means that hospitals and
health systems should be looking to use our technology to help them
rapidly reduce the elective surgery backlog and this represents a
significant commercial opportunity for the Group. Conversely, the
sheer size and scale of the backlog may also make it challenging to
sell new technology into a stressed operating theatre environment,
as clinicians are under acute pressure to work rapidly through
operating lists. In addition, many hospitals have been slow at
reopening access in the operating theatre to people not directly
involved in the surgical process. This makes it more difficult for
our clinical educators to provide clinical support to new
clinicians who have been significantly less active in respect of
elective surgery for the last two years.
While the environment starts to normalise, we will focus our
commercial activities on hospital accounts that had previously
adopted and used the Group's TrueVue Doppler technology in the
operating theatre. In addition to driving back up usage rates from
existing users, we will separately introduce a number of different
initiatives to drive adoption of our new, non-invasive haemodynamic
monitoring technology which we will be launching later this year.
We believe that this new, broad application, non-invasive
technology will, as well as being adopted by new users, help drive
interest in, and usage of, our long-standing minimally invasive ODM
technology. This is due to the new device allowing anaesthetists to
quickly assess which of their patients will benefit from having the
use of the advanced ODM technology.
The evidence showing that the use of our Doppler-based
haemodynamic monitoring technology improves patient outcomes and
increases hospital capacity (as a result of shorter patient
length-of-stay) is strong. We believe that the next generation
monitor which we will launch in 2022 and the new completely
non-invasive device, which will also be available on this monitor,
will represent a compelling solution for clinicians and hospital
systems needing to handle their patient throughput more
effectively.
Financial results
Group revenues for the year ended 31 December 2021 were GBP2.3
million (2020: GBP2.4 million) and reflect the impact of Covid on
elective surgery. In 2021 the entire year's results were affected
by the pandemic whereas in 2020 we had reasonable activity levels
in the first quarter. Probe revenues declined by 9.6% to GBP1.9
million (2020: GBP2.1 million). Monitor revenues increased by 25%
to GBP202,000 (2020: GBP161,000) reflecting improved trading in our
International division in the year.
The consolidated gross margin in 2021 was 70% (2020: 68%). The
slight increase in gross margin reflects a number of manufacturing
efficiency savings that we were able to capture during the
year.
Overheads were flat in the year totalling some GBP2.7 million
(2020: GBP2.7 million, excluding exceptional costs of
GBP232,000).
In the year the total value of UK and US government salary
support schemes was GBP0.3 million (2020: GBP0.4 million).
Adjusted EBITDA for the year (comprising earnings before
interest, tax, depreciation and amortisation, share-based payments,
non-executive directors' fees, as well as any exceptional items)
was a loss of GBP(0.5) million (2020: GBP(0.2) million).
Loss for the year was GBP(1.0) million (2020: GBP(0.8)
million).
Cash at hand at 31 December 2021 was GBP0.4 million (2020:
GBP0.9 million). This cash resource has since been supplemented by
a fund raising of GBP1.4 million (gross) which was announced on 8
February 2022.
Business activities
Whilst our direct sales operations in the UK and the USA
struggled to gain access to customers during the year as the
majority of hospitals had put in place bans on visits by
salespeople or clinical educators, our International division saw
revenues grow by 40% to GBP926,000 (2020: GBP661,000). This growth
helps to demonstrate the potential of, and associated opportunity
with, our international network of some 40 distributors across the
world.
During 2021 the Group's research and development team focussed
on completing the development of our next generation monitor for
launch in 2022. Launch of this monitor will provide us with
immediate access to new potential revenue streams through sales of
this updated device to existing users, as well as providing a
platform for the introduction of our new non-invasive haemodynamic
monitoring technology later this year.
Employees
On behalf of the Board, I would like to thank Deltex Medical's
highly trained and dedicated employees, most of whom are based in
the UK and the USA, for their continuing efforts and dedication in
the very taxing environment which we saw throughout 2021. In these
very difficult circumstances, our employees displayed great
flexibility and fortitude, and remained responsive to our
customers' wishes throughout the year.
Current trading and prospects
As access to hospitals improves for our direct sales forces in
the UK and the USA then we expect our business to begin to
normalise.
We also anticipate that our international business will continue
to grow in 2022 and we have already announced a US$0.2 million
order from a territory in the Americas which we expect will
generate significant contracted single-use probe revenues this
year.
Following the GBP1.4 million (gross) fund raising announced in
February 2022, Deltex Medical, with the benefit of its grant
awards, will have sufficient financial resources to complete the
development of its next generation monitor and its new, broad
application, non-invasive haemodynamic monitoring technology
Our initial focus is to drive activity levels back up to those
achieved by the Group prior to the pandemic. Once attained, we
believe that there is clear scope to grow the business, both in the
UK, USA and in other international territories.
Nigel Keen
Chairman
6 April 2022
Business Review
Overview
Deltex Medical is the world leader in highly accurate
oesophageal Doppler monitoring ("ODM"), via its TrueVue platform,
which allows real-time monitoring of a patient's haemodynamic
status.
A substantial number of peer-reviewed, randomised controlled
trials have shown that an ODM-driven haemodynamic protocol can
result in statistically significant reductions in post-operative
complications, resulting in lower costs for hospitals due to
shorter patient length-of-stay. This is not only good for patients
but also increases throughput and capacity for hospitals, which
will be a key factor in the near term for reducing the backlog in
elective surgery.
Deltex Medical's technology was originally developed in an ICU
in London to assist with the treatment of acutely unwell critical
care patients. Over time demand for the Group's high fidelity
oesophageal Doppler-based haemodynamic monitoring technology has
migrated from the ICU to the operating theatre, and particularly
for elective surgery. Before the pandemic, approximately 80% of the
Group's revenues were associated with elective surgical procedures
in operating theatres. Accordingly, the cessation of elective
surgery for much of 2021 was highly disruptive to Deltex Medical's
commercial activities.
During 2021, our research and development team made impressive
and substantial progress both in completing the development of our
new, next generation TrueVue monitor and also in developing a
complementary, non-invasive haemodynamic monitoring technology
which leverages the extensive evidence base supporting the use of
our existing ODM technology. The new device allows instantaneous
non-invasive deployment anywhere in the hospital. This
substantially broadens the potential applications, and hence
addressable market size, for the Group's technology.
Our key challenge for 2022 is to ensure that, as hospitals open
up and the volume of elective surgery increases, the Group is able
to capitalise on these increased activity levels in operating
theatres as well as capturing all the upside associated with our
new non-invasive Doppler-based technology.
COVID-19
When Covid first emerged in 2020, the Group initially
experienced increased demand for its TrueVue Doppler technology in
ICUs, as clinicians worked to establish the optimal treatment
protocols for severely sick Covid patients.
Over the last two years Covid treatment protocols have improved
and the importance of haemodynamic monitoring as a part of optimal
Covid treatment is now better understood. However, in developed
countries the number of patients in ICUs has declined, in large
part as vaccination rates have increased substantially, resulting
in a decline in demand for the Group's oesophageal Doppler
technology in ICUs for the treatment of ventilated Covid
patients.
Around the world there is now a substantial backlog in elective
surgical procedures as a result of the closure of operating
theatres during the pandemic.
A chart published by the British Medical Association showed the
increase in the NHS backlog of elective care from 4.4 million
people at the start of the pandemic to 6.1 million in December
2021.
A second chart published by the National Audit office showed
that under two plausible scenarios, the NHS backlog in March 2025
could be substantially higher than today, with one estimate putting
the backlog as high as 12.0 million.
This backlog in elective care, which is a global phenomenon,
represents a significant commercial opportunity for Deltex Medical
as use of its TrueVue Doppler technology should result in greater
patient throughput in respect of elective surgery, and hence
increased hospital capacity.
One of the largest challenges that the Group, in common with
most medical device companies, currently faces is that many
hospitals around the world have restricted access to salespersons
and clinical educators to help reduce the risk of the spread of
Covid within hospitals.
Visits by Deltex Medical salespersons and clinical educators
within the operating room environment results in appropriate levels
of operating theatre staff trained in the use of ODM. The Group has
internal studies which show that higher probe usage in these units
is associated with recent visits by Deltex Medical employees.
Conversely, it also has data which show that hospitals which have
not been visited by a Deltex Medical employee for some time
typically display reduced probe usage. As a result, one of the key
challenges which the Group is focussing on this year is improving
access for its direct sales force to hospitals in the UK and the
USA.
The Group is considering a number of strategies to improve
customer access, including possibly collaborating with larger
groups which, as a result of their size and financial resources,
have better reach and penetration into the operating theatre
market.
Covid has also had a significant adverse effect on global supply
chains, particularly in respect of semiconductors and raw
materials. This has created issues for the Group's product
development activities, and, in particular, contributed materially
to the slippage of the launch of our next generation monitor from
2021 into 2022.
During 2021 the Group adopted a number of work-from-home
protocols. Whilst working from home has had some advantages for
some of our employees, it has also created challenges as the
Group's research & development ("R&D") teams were forced to
carry out complex development work remotely and without full access
to Deltex Medical's research laboratories located in our
headquarters in Chichester.
These Covid challenges should be seen in the context of the
Group's pre-pandemic results when the Group had positive adjusted
EBITDA of GBP0.4 million in 2019 and revenues nearly twice the 2021
level. (2021 revenues: GBP2.3 million; 2019: GBP4.3 million). Our
primary focus is to return the business to these previously
achieved activity levels, and then start to build profitable growth
thereafter.
Product development and innovation
The ability to innovate and drive haemodynamic monitoring
technology forward remains a key component of the Group's
strategy.
The need for the new, next generation monitor has been apparent
for some time. In 2021 a substantial proportion of our R&D
activities were focussed on bringing this monitor to market. We
anticipate launching the new, next generation monitor later this
year.
Much of our product development work has been assisted by a
number of competitively-won grant awards. For example, in 2021 the
Group was notified of grant awards worth approximately GBP0.6
million (gross) (2020: nil), including a prestigious Smart Award
from Innovate UK. Work eligible for the latest grant starts in
April 2022.
One notable grant award related to collaborative work between
Deltex Medical and the UK's National Physical Laboratory ("NPL")
based in Teddington. This collaborative research work has enabled
the Group to extend the application and utility of its oesophageal
Doppler monitoring, including the development of a non-invasive
device with broad utility.
Deltex Medical's oesophageal Doppler is classified as a
minimally-invasive device; however, it still requires the insertion
of a probe down the oesophagus of a sedated or anaesthetised
patient. The requirement for the patient to be sedated has
historically limited the application of our ODM technology.
However, development work carried out in 2021 with NPL has enabled
Deltex Medical to develop a new, non-invasive haemodynamic
monitoring device which can be placed at the base of the patient's
neck (the suprasternal notch) to generate real-time, highly
accurate data on the haemodynamic status of the patient. This
non-invasive device, which can provide clinicians with an instant
measurement of a patient's haemodynamic status, will significantly
expand the possible applications and size of the addressable market
for the Group. In addition to adoption by new users, this
non-invasive device should help drive interest in, and usage of,
our long-standing minimally invasive ODM technology as the use of
the new device will allow anaesthetists to assess which of their
patients will benefit from the more intense monitoring available
through the use of the TrueVue system.
Market developments
The majority of the Group's activities are currently centred
around the treatment of human patients within the hospital setting.
However, we have also been developing our haemodynamic monitoring
platform for use in veterinary applications in the treatment of
small animals in a number of different sites around the world.
Although the size of this market is currently quite small, we
believe that it has the potential to grow. Accordingly, we are
working closely with, and supporting technologically, a number of
key opinion leading veterinarians who are interested in the
application of the Group's TrueVue Doppler technology in the
treatment of sick animals.
Regulatory
Deltex Medical designs and manufactures Class II medical devices
which it sells around the world. As a result, its business
activities can be significantly affected by changes to regulations.
At any time there are typically a number of regulatory changes
under consideration from the regulatory bodies governing such
devices.
Fortunately, to date the effect on the Group from Brexit has
been relatively limited, although we have been forced to register
our products in Spain, despite having sold into the Spanish market
for more than 15 years. The post-Brexit regulatory regime is still
evolving and we keep actual or prospective changes in regulations
under close review.
In Europe we are currently in the process of transitioning from
the Medical Device Directive to the Medical Device Regulation
("MDR"). The European MDR comprises a new set of regulations that
govern the production and distribution of medical devices in
Europe. Compliance with this new regulation is mandatory for
medical device companies that want to sell their products into the
European marketplace.
There are certain provisions within the MDR which, if enforced
in a timely manner, could help Deltex Medical. For example, there
is an increasing requirement for manufacturers of medical devices
to generate their own body of efficacy data, and not to rely on
third party data in regulatory submissions. Deltex Medical benefits
from a substantial body of published literature relating to the use
of its technology which shows statistically significant effects
associated with improving patient outcomes and reducing patient
length-of-stay. As the MDR comes into effect we anticipate that the
value and utility of the Group's own scientific evidence base
should continue to increase.
Three principal divisions: UK, USA and International
Deltex Medical structures its commercial activities around three
divisions: the UK; the USA and International.
Although in 2021 access to customer accounts was extremely
limited, we have had some notable successes with long-standing
customers in both the UK and the USA. For example, at some
institutions we have been able to stay in close contact remotely
with anaesthetists, which has resulted in a steady stream of probe
usage, albeit at much lower levels than before the pandemic
started. However, it is clear that where our sales personnel are
unable to obtain meaningful access to anaesthetists, or other
appropriate operating theatre staff, then probe usage typically
declines.
Over recent months there have been encouraging signs where we
have been able to start to re-engage with operating theatre
personnel in a number of hospitals. As hospitals open up again, we
plan to expand the size of our sales team in the USA and focus on
our existing accounts, which should help us to start to drive up
high margin single-use probe revenues.
The International division performed well in 2021 with growth of
40% to GBP0.9 million (2020: GBP0.7 million). The Group's
distributor in France achieved strong activity levels, partly as a
result of a long-term contract with the Association of Public
Hospitals in Paris. In January 2022 one of the Group's distributors
in the Americas won contracts worth some US$0.2 million which
combined the sale of monitors with predetermined and contracted
probe sales to a number of public hospitals.
Not all of the Group's international distributors performed
strongly during the pandemic. Many of these distributors comprise
businesses focussed on selling equipment and consumables into
operating theatres which, similar to Deltex Medical, have seen much
lower activity levels in 2021.
Conclusion
The Covid pandemic is transitioning to becoming endemic in the
community and the elevated vaccination rates around the world mean
that hospitals are now starting to open up access to suppliers, and
their sales teams, once again. They are also starting to work hard
to reduce their respective backlogs in elective surgery.
We made a number of important steps forward with our product
development programmes in 2021 and look forward to the launch this
year of the next generation monitor as well as the finalisation of
the new, non-invasive device with substantially larger addressable
market size.
In February 2022 we announced a GBP1.4 million (gross) fund
raising which will, among other things, enable us to take advantage
of the substantial grant finance that totalled GBP0.6 million
(gross) that we were awarded last year.
Our key challenge for 2022 is to release the next generation
TrueVue monitor, along with our new non-invasive ultrasound device,
and see elective surgery activity levels return to the levels that
were being achieved before the Covid pandemic became evident.
Andy Mears
Chief Executive
6 April 2022
Consolidated statement of comprehensive income
For the year ended 31 December 2021
2021 2020
Note GBP'000 GBP'000
-------------------------------------------------------- -------------------- -------------------
Revenue 3 2,259 2,398
Cost of sales 4 (684) (757)
-------------------------------------------------------- -------------------- -------------------
Gross profit 1,575 1,641
Administrative expenses (1,585) (1,472)
Sales and distribution expenses (957) (964)
Research and Development, Quality and Regulatory (207) (246)
Impairment reversal on trade receivables 24 - 11
Exceptional costs 9 - (232)
-------------------------------------------------------- -------------------- -------------------
Total costs 4 (2,749) (2,903)
-------------------------------------------------------- -------------------- -------------------
Other operating income 10 312 469
-------------------------------------------------------- -------------------- -------------------
Other gain 7 57 171
-------------------------------------------------------- -------------------- -------------------
Operating loss (805) (622)
-------------------------------------------------------- -------------------- -------------------
Finance costs 6 (173) (172)
-------------------------------------------------------- -------------------- -------------------
Loss before taxation (978) (794)
Tax credit on loss 7 12 9
-------------------------------------------------------- -------------------- -------------------
Loss for the year (966) (785)
-------------------------------------------------------- -------------------- -------------------
Other comprehensive expense
Items that may be reclassified to profit or
loss:
Net translation differences on overseas subsidiaries (2) (6)
-------------------------------------------------------- -------------------- -------------------
Other comprehensive expense for the year,
net of tax (2) (6)
-------------------------------------------------------- -------------------- -------------------
Total comprehensive loss for the year (968) (791)
-------------------------------------------------------- -------------------- -------------------
Total comprehensive loss for the year attributable
to:
Owners of the Parent (969) (804)
Non-controlling interests 1 13
-------------------------------------------------------- -------------------- -------------------
(968) (791)
-------------------------------------------------------- -------------------- -------------------
Loss per share - basic and diluted 11 (0.17p) (0.15p)
-------------------------------------------------------- -------------------- -------------------
Consolidated balance sheet
As at 31 December 2021
2021 2020
Note
GBP'000 GBP'000
------------------------------------- ---- -------- ------------------
Assets
Non-current assets
Property, plant and equipment 12 264 305
Intangible assets 13 3,135 2,554
Financial assets at amortised cost 16 157 153
------------------------------------- ---- -------- ------------------
Total non-current assets
Current assets 3,556 3,012
Inventories 15 796 895
Trade receivables 16 455 576
Financial assets at amortised cost 16 15 15
Other current assets 16 91 122
Current income tax recoverable 69 61
Cash and cash equivalents 413 853
------------------------------------- ---- -------- ------------------
Total current assets 1,839 2,522
------------------------------------- ---- -------- ------------------
Total assets 5,395 5,534
------------------------------------- ---- -------- ------------------
Liabilities
Current liabilities
Borrowings 18 (702) (159)
Trade and other payables 18 (1,478) (1,416)
------------------------------------- ---- -------- ------------------
Total current liabilities (2,180) (1,575)
------------------------------------- ---- -------- ------------------
Non-current liabilities
Borrowings 18 (1,028) (993)
Trade and other payables 18 (228) (274)
Provisions 20 (57) (51)
------------------------------------- ---- -------- ------------------
Total non-current liabilities (1,313) (1,318)
------------------------------------- ---- -------- ------------------
Total liabilities (3,493) (2,893)
------------------------------------- ---- -------- ------------------
Net assets 1,902 2,641
------------------------------------- ---- -------- ------------------
Equity
Share capital 21 5,849 5,773
Share premium 26 33,502 33,444
Capital redemption reserve 26 17,476 17,476
Other reserve 26 573 505
Translation reserve 26 133 135
Convertible loan note reserve 26 82 82
Accumulated losses 26 (55,588) (54,648)
------------------------------------- ---- -------- ------------------
Equity attributable to owners of
the Parent 2,027 2,767
Non-controlling interests (125) (126)
------------------------------------- ---- -------- ------------------
Total equity 1,902 2,641
------------------------------------- ---- -------- ------------------
Consolidated statement of changes in equity
For the year ended 31 December 2021
Capital Convertible Non-
Share Share redemption Other loan note Translation Accumulated Total controlling
capital premium reserve reserve reserve reserve losses interest
Total
equity
----------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
---------------- ------------ -------------- ------------------- ------------- -------------- ------------ ------------ ------- ------------------
Balance at 1
January
2021 5,773 33,444 17,476 505 82 135 (54,648) 2,767 (126) 2,641
Comprehensive
income
Loss for the
period - - - - - - (967) (967) 1 (966)
Other
comprehensive
income for the
period - - - - - (2) - (2) - (2)
---------------- ------------ -------------- ------------------- ------------- -------------- ------------ ------------ ------- ------------------
Total
comprehensive
income for
year - - - - - (2) (967) (969) 1 (968)
Transactions
with
owners of the
Group
Shares issued
during the
year 76 58 - - - - - 134 - 134
Equity-settled
share- based
payment - - - 95 - - - 95 - 95
Transfers - - - (27) - - 27 - - -
---------------- ------------ -------------- ------------------- ------------- -------------- ------------ ------------ ------- ------------------
Balance at
31 December
2021 5,849 33,502 17,476 573 82 133 (55,588) 2,027 (125) 1,902
---------------- ------------ -------------- ------------------- ------------- -------------- ------------ ------------ ------- ------------------
Consolidated statement of changes in equity
For the year ended 31 December 2020
Capital Convertible Non-
Share Share redemption Other loan note Translation Accumulated Total controlling
capital premium reserve reserve reserve reserve losses interest
Total
equity
----------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
---------------- ------------ -------------- ------------------- ------------- -------------- ------------ ------------ ------- ------------------
Balance at 1
January
2020 5,249 33,230 17,476 439 82 141 (53,823) 2,794 (139) 2,655
Comprehensive
income
Loss for the
period - - - - - - (798) (798) 13 (785)
Other
comprehensive
income for the
period - - - - - (6) - (6) - (6)
---------------- ------------ -------------- ------------------- ------------- -------------- ------------ ------------ ------- ------------------
Total
comprehensive
income for
year - - - - - (6) (798) (804) 13 (791)
Transactions
with
owners of the
Group
Shares issued
during the
year 524 217 - - - - - 741 - 741
Issue expenses - (3) - - - - - (3) - (3)
Equity-settled
share- based
payment - - - 39 - - - 39 - 39
Transfers - - - 27 - - (27) - - -
---------------- ------------ -------------- ------------------- ------------- -------------- ------------ ------------ ------- ------------------
Balance at
31 December
2020 5,773 33,444 17,476 505 82 135 (54,648) 2,767 (126) 2,641
---------------- ------------ -------------- ------------------- ------------- -------------- ------------ ------------ ------- ------------------
Consolidated statement of cash flows
for the year ended 31 December 2021
2021 2020
GBP'000 GBP'000
--------------------------------------------------- -------------------- ---------------------
Cash flows from operating activities
Loss before taxation (978) (794)
Adjustments for:
Net finance costs 173 172
Depreciation of property, plant and equipment 74 103
Amortisation of intangible assets 40 40
Write off of research and development projects
not taken forward - 222
Modification gain on convertible loan note - (119)
Share-based payment expense 95 39
Other tax income (57) (52)
Effect of exchange rate fluctuations (2) (6)
--------------------------------------------------- -------------------- ---------------------
(655) (395)
Decrease in inventories 89 13
Decrease in trade and other receivables 148 680
Increase/(decrease) in trade and other payables 191 (303)
Increase/(decrease) in provisions 6 (11)
--------------------------------------------------- -------------------- ---------------------
Net cash used in operations (221) (16)
Interest paid (131) (132)
Income taxes received 61 80
--------------------------------------------------- -------------------- ---------------------
Net cash used in operating activities (291) (68)
Cash flows from investing activities
Purchase of property, plant and equipment (23) (6)
Capitalised development expenditure (net
of grants) (621) (165)
--------------------------------------------------- -------------------- ---------------------
Net cash used in investing activities (644) (171)
Cash flows from / (used in) financing activities
Issue of ordinary share capital - 253
Expenses in connection with share issue - (3)
Net movement in invoice discount facility 43 (23)
Standby loan facility drawdown 500 -
Principal lease payments (41) (37)
--------------------------------------------------- -------------------- ---------------------
Net cash generated from financing activities 502 190
--------------------------------------------------- -------------------- ---------------------
Net decrease in cash and cash equivalents (433) (49)
Cash and cash equivalents at beginning of
the period 853 908
Exchange loss on cash and cash equivalents (7) (6)
--------------------------------------------------- -------------------- ---------------------
Cash and cash equivalents at end of the
period 413 853
--------------------------------------------------- -------------------- ---------------------
1. Nature of the financial information
This Results Summary containing condensed financial information
for the year ended 31 December 2021 should be read in conjunction
with the Deltex Medical Group Plc's Annual Report & Accounts
2021 which were in accordance with UK-adopted International
Accounting Standards. The consolidated financial statements have
been prepared under the historical cost convention and on a going
concern basis.
Financial information contained in this document does not
constitute statutory accounts within the meaning of section 434 of
the Companies Act 2006 ('the Act'). The statutory accounts for the
year ended 31 December 2020 have been filed with the Registrar of
Companies and those for the year ended 31 December 2021 will be
filed with the Registrar of Companies following the Annual General
Meeting. The report of the independent auditor on those statutory
accounts was unqualified, did not draw attention to any matters by
way of emphasis and did not contain a statement under section
498(2) or (3) of the Act. The report for year ended 31 December
2020 of the independent auditor on those statutory accounts was
unqualified and did not contain a statement under section 498(2) or
(3) of the Act. The report drew attention by way of emphasis to the
matters set out in the going concern accounting policy regarding
the inherent uncertainties regarding Covid-19 and the impact on
demand for the Group's products. The auditor's opinion was not
modified in respect of these matters.
2. Accounting policies
The Group's principal accounting policies can be found on pages
47 to 49 of the Group's Annual Report & Accounts 2021.
Going concern
The Directors have reviewed detailed budgets and forecasts until
30 June 2023, which take into account, among other things, the
possible continued effects of Covid on the Group's business. This
review indicates that the Group is expected to continue trading as
a going concern based on projected net cash flows derived from
sales of the Group. In February 2022, the Group raised GBP1.4
million (gross) through a share subscription which provided
additional cash resources to the Group. In addition, the Group
agreed a 12 month extension to the standby loan facility which is
now repayable on or before 31 December 2023.
The Directors consider that they have reasonable grounds to
believe that the Group will have adequate resources to continue in
operational existence for the foreseeable future and it is
therefore appropriate to prepare the financial statements on the
going concern basis.
3. Revenue
For the year ended 31 December 2021
Direct markets Indirect markets
Probes Monitors Other Probes Monitors Other Total
------------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ---------- ----------------- ------------------ -------------------- ----------- ----------
UK 524 60 86 - - - 670
USA 561 55 47 - - - 663
France - - - 489 29 8 526
Scandinavia - - - 105 - 2 107
South Korea - - - 134 - 2 136
Portugal - - - 35 - - 35
Other countries 10 - - 53 58 1 122
------------------ ---------- ----------------- ------------------ -------------------- ----------- ----------
1,095 115 133 816 87 13 2,259
------------------ ---------- ----------------- ------------------ -------------------- ----------- ----------
For the year ended 31 December 2020
Direct markets Indirect markets
Probes Monitors Other Probes Monitors Other Total
------------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------ ---------- ----------------- ------------------ -------------------- ----------- ----------
UK 652 102 83 - - - 837
USA 858 16 26 - - - 900
France - - - 170 - 10 180
Scandinavia - - - 95 - 2 97
South Korea - - - 159 - 1 160
Portugal - - - 86 - - 86
Other countries 15 32 - 78 11 2 138
------------------ ---------- ----------------- ------------------ -------------------- ----------- ----------
1,525 150 109 588 11 15 2,398
------------------ ---------- ----------------- ------------------ -------------------- ----------- ----------
The Group's revenue disaggregated between the sale of goods and
the provision of services is set out below. All revenues from the
sale of goods are recognised at a point in time; maintenance income
is recognised over time.
2021 2020
GBP'000 GBP'000
-------------------- -------- ------------------
Sale of goods 2,192 2,338
Maintenance income 67 60
-------------------- -------- ------------------
2,259 2,398
-------------------- -------- ------------------
The following table provides information about trade receivables
and contract liabilities from contracts with customers. There were
no contract assets at either 31 December 2021 or 31 December
2020.
31 December 31 December
--------------------------------------------
2021 2020
--------------------------------------------
GBP'000 GBP'000
-------------------------------------------- ----------- -----------
Trade receivables which are in 'Trade and
other receivables' 455 576
Contract liabilities (57) (58)
-------------------------------------------- ----------- -----------
The following aggregated amounts of transaction prices relate to
the performance obligations from existing contracts that are
unsatisfied or partially unsatisfied as at 31 December 2021:
2022 2023 2024 Total
GBP'000 GBP'000 GBP'000 GBP'000
------------------------- ------------------- ---------------- ------------------ -------------------
Revenue expected to be
recognised 36 7 14 57
------------------------- ------------------- ---------------- ------------------ -------------------
Revenue recognised in 2021 which was included in contract
liabilities at 31 December 2020 amounted to GBP54,000. Revenue
recognised in 2020 included in contract liabilities at 31 December
2019 amounted to GBP46,000.
4. Dividends
The directors cannot recommend payment of a dividend (2020:
nil).
5. Basic and diluted loss per share
The loss per share calculation is based on the loss of
GBP967,000 and the weighted average number of shares in issue of
580,712,339. For 2020, the loss per share calculation is based on
the loss of GBP798,000 and the weighted average number of shares in
issue of 526,448,659. While the Group is loss-making, the diluted
loss per share and the loss per share are the same.
6. Subsequent events
On 8 February 2022, the Group raised GBP1,396,000, before
expenses, through subscription for 111,720,000 new Deltex Medical
ordinary shares at a price of 1.25 pence per share.
Also on 8 February 2022, the standby loan facility which was set
up on 20 September 2021, was extended for an additional year, and
is repayable in full on or before 31 December 2023. As already
noted, the facility is provided by Imperialise Limited, a company
controlled by Nigel Keen. The interest rate remains unchanged on
the facility at 8% per annum, and is unsecured.
Distribution of Annual Report and Accounts
The Group will also shortly be posting a copy of the Annual
Report and Accounts for the year ended 31 December 2021 to
shareholders, together with a Notice of Annual General Meeting to
be held at 11.00 am on 18 May 2022 at the offices of DAC Beachcroft
LLP, 25 Walbrook, London, EC4N 8AF.
A copy of the Annual Report and Accounts and of the Notice of
Annual General Meeting will also shortly be available from the
Company's website at www.deltexmedical.com
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