REG - Deltex Med Grp PLC - Interim results to 30 June 2024
23/09/2024 07:00
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RNS Number : 1274F Deltex Medical Group PLC 23 September 2024
Prior to publication, the information contained within this announcement was
deemed by Deltex Medical Group PLC to constitute inside information as
stipulated under the UK Market Abuse Regulation
23 September 2024
Deltex Medical Group plc
("Deltex Medical" or the "Group")
Interim results to 30 June 2024
Deltex Medical Group plc (AIM: DEMG), the global leader in oesophageal Doppler
monitoring, today announces its unaudited interim results for the six months
ended 30 June 2024 ("H1 2024" or the "Period").
HIGHLIGHTS
Financial
§ Unaudited revenue for H1 2024 was flat at £1.1 million (H1 2023: £1.1
million), on substantially lower cash-adjusted overheads
§ 39% reduction in sales and marketing costs during the Period to £259,000
(H1 2023: £425,000)
§ Cash-adjusted overheads in the Period reduced by 35% to £1.0 million (H1
2023: £1.5 million)
§ Significantly improved adjusted EBITDA loss of £274,000 (H1 2023: loss of
£361,000)
§ Cash at hand on 30 June 2024 was £326,000 (H1 2023: £107,000)
Business / commercial activities
§ Quotations growing for the new TrueVue monitor - with orders beginning to
climb, particularly from overseas territories
§ Encouraging levels of orders for the previous version of the Group's
monitor
§ 14% increase in sales of single-use probes in the International division
§ Opportunities for direct sales of Deltex Medical's technology into the UK
appear to be increasing
§ Ongoing research work carried out for the new, novel non-invasive device
during the Period
§ Natalie Wettler, current Group Finance Director, promoted to also be the
Chief Operating Officer, reflecting her increased involvement in the
operational management of the Group in 2024. While Natalie Wettler will
maintain her finance responsibilities, this will enable the CEO, Andy Mears,
to spend more time marketing and selling the new TrueVue monitor, particularly
in overseas territories
Nigel Keen, Chairman of Deltex Medical, said:
"The new TrueVue monitor is beginning to show signs of traction, particularly
in a number of overseas territories, although the timing of orders remains
difficult to predict."
"The prospects for the new, novel non-invasive device remains exciting and we
are encouraged by the results of the research carried out in the Period."
"The Board is pleased that Natalie Wettler - the Group's Finance Director -
has accepted an additional role as Chief Operating Officer. This will enable
Andy Mears, the CEO, to spend more time driving sales of the new TrueVue
monitor, particularly into overseas territories where we are seeing increasing
demand."
For further information, please contact:
Deltex Medical Group plc 01243 774 837
Nigel Keen, Chairman investorinfo@deltexmedical.com (mailto:investorinfo@deltexmedical.com)
Andy Mears, Chief Executive
Natalie Wettler, Group Finance Director & Chief Operating Officer
Allenby Capital Limited - Nominated Adviser & Broker 020 3328 5656
Jeremy Porter / Vivek Bhardwaj (Corporate Finance) info@allenbycapital.com (mailto:info@allenbycapital.com)
Tony Quirke / Stefano Aquilino (Sales & Corporate Broking)
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 control trials conducted on
anaesthetised patients. As a result, the primary application for ODM is
focussed on guiding therapy for patients undergoing elective surgery, although
sedated patients in intensive care are still an important part of our
business. The Group's new, next generation monitor makes the use of the ODM
technology more intuitive and provides augmented data on the status of each
patient.
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, which will be
released on the new next generation monitor, will substantially increase the
addressable market for the Group's haemodynamic monitoring technologies and is
complementary to the long-established ODM evidence base.
Deltex Medical's 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;
§ 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 is positioning this new,
non-invasive technology for use throughout the hospital. Deltex Medical's
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.
Deltex Medical's 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 the Group's new non-invasive technology.
Both the existing single-use ODM probe and the new, non-invasive device will
connect to the same, new TrueVue monitor which was released onto the market in
November 2023. Monitors are sold or, due to hospitals' often protracted
procurement times for capital items, may be loaned in order to encourage
faster adoption of the Group's technology.
Deltex Medical's customers
The principal users of Deltex Medical's products are currently anaesthetists
working in a hospital's operating theatre and intensivists working in ICUs.
This customer profile will change as the Group's new non-invasive technology
is adopted by the market. In the UK the Group sells directly to the NHS. In
the USA the Group sells directly to a range of hospital systems. The Group
also sells through distributors in more than 40 countries in the European
Union, Asia and the Americas.
Deltex Medical's objective
To see the adoption of Deltex Medical's new TrueVue monitor, 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.
For further information please go to www.deltexmedical.com
(http://www.deltexmedical.com/)
Chairman's statement
Financial results
Unaudited revenue for the six months ended 30 June 2024 was flat at £1.1
million (H1 2023: £1.1 million).
It is encouraging that similar revenue levels to the comparative reporting
period in 2023 were achieved in the Period with a substantially lower cost
base:
§ the head count in the Period comprised 24 employees, compared with 40 in H1
2023;
§ expenditure on sales and marketing decreased by £166,000 (39%) to
£259,000 (H1 2023: 425,000); and
§ cash-adjusted overheads in the Period decreased by 35% to £996,000 (H1
2023: £1,524,000). Further information on the cash-adjusted decrease in
overheads in the Period is set out below in Note 6 of the unaudited financial
statements.
The significantly lower level of capitalised development expenditure reflects
the successful launch of the new TrueVue monitor.
Although the revenue line is not yet benefiting from a substantial volume of
sales of the new TrueVue monitor, it is encouraging that enquiries and orders
in relation to the TrueVue monitor have been growing, particularly from the
Group's network of some 40 overseas distributors.
Single-use ODM probe revenues associated with purchases by the Group's
international distributors were also encouraging, with an increase of 14% in
the Period, which helped offset a slight decline in single-use ODM probe
orders in the UK.
Notwithstanding the cost reduction programme last year, the Group remains
highly operationally geared. It is structured so that it can manufacture and
deliver significantly higher volumes of both monitors and probes without
adding substantially to its current level of overheads.
The gross margin in the Period was broadly unchanged at 67% (H1 2023: 69%).
The slight reduction in gross margin in H1 2024 reflects higher levels of
lower margin sales of probes to international distributors as well as the
effect of reduced manufacturing-related recoveries, and associated
inefficiencies, in the first half as production of the new TrueVue monitor was
ramped up.
Adjusted EBITDA, which comprises the operating loss adjusted for depreciation,
amortisation, equity-settled non-executive directors' fees, share-based
payments and certain other items, significantly improved by £99,000 with a
loss of £274,000 (H1 2023:£(361,000)).
In contrast to the first half of 2023, where the adjusted EBITDA was negative
every month, in H1 2024 there were two months when the adjusted EBITDA was
positive.
Loss before taxation in the Period was essentially unchanged at £546,000 (H1
2023: £537,000).
Cash at hand as at 30 June 2024 was £326,000 (H1 2023: £107,000).
Commercial and business activities
New 'TrueVue' monitor
There has been increasing and encouraging levels of interest in the new
TrueVue monitor in the markets where it has been launched, including the UK,
the EU and in other markets that accept the European Union's CE mark.
In the UK, the new TrueVue System has been successfully included on the NHS
Supply Chain national framework and first units have been delivered to an NHS
hospital. The Group anticipates selling further units into NHS hospitals in
the second half of the current financial year, although there remain some
uncertainties around capital expenditure budgets in the UK.
In H1 2024, orders for the TrueVue monitor from continental Europe largely
related to purchases by the Group's long-standing network of international
distributors that are gearing up to aggressively promote the new TrueVue
monitor in the fourth quarter of the year.
Sales of the new TrueVue monitor have commenced in Latin America where two
countries have completed local registration filings. The Group believes that
there should be further orders from Latin America in the second half of the
current financial year, although the timing of cash receipts from this region
can be challenging.
In anticipation of increased levels of future overseas sales, the Group's
network of international distributors has been expanded and strengthened since
the beginning of the year. In particular, new distributors have been signed up
and trained in Latin America and in South East Asia where there appears to be
encouraging levels of interest in the Group's ODM technology.
Since the beginning of the year, significant work has taken place at the
Group's Chichester headquarters across a number of disciplines relating to the
optimisation of assembly processes required for the production of the new
TrueVue monitor. A small number of minor "teething" issues were identified,
which have now been successfully addressed. Confidence in the production
processes is growing. The fully-loaded manufacturing costs for the new TrueVue
monitor are beginning to decline to anticipated levels as production volumes
and associated efficiencies climb.
To reflect the increasing involvement of Natalie Wettler in the operational
management of the Group, the Board has promoted Natalie, the current Group
Finance Director, to also be the Chief Operating Officer. In addition to
retaining her Finance Director responsibilities, she will be charged with
spending time on improving the Group's operational activities, including the
production facilities, responsibilities that Natalie has been gradually
increasing this year. This change in management structure will enable Andy
Mear's, Deltex Medical's Chief Executive Officer, to spend more time on new
sales initiatives in the UK and internationally for the new TrueVue monitor,
securing tenders for the previous version of the monitor, working more closely
with the Group's network of overseas distributors selling across the
International Division and also carrying out 'voice of the customer' market
research for the Group's new non-invasive device.
Previous version of the TrueVue monitor
Deltex Medical often responds to large tenders for haemodynamic monitoring
technology that remain extant for a number of years. As a result, the Group
is still winning, and in some cases waiting to hear the outcome of, a number
of international tenders on which it has been working for some time with its
in-country distributors. Accordingly, the Group is still expecting to win
orders for the previous version of the TrueVue monitor; and it has sufficient
sub-assemblies and components in stock to be able to rapidly and profitably
convert these stock holdings into cash via these historic tender wins.
During the Period there was an encouraging level of orders relating to the
previous version of the monitor from a number of distributors. These orders
are likely to drive concomitant international probe revenues which is
anticipated to help build the Group's book of high margin, recurring revenues
associated with its single use probes.
It will inevitably take some time to complete all the necessary regulatory
filings for the new TrueVue monitor. Whilst these regulatory submissions are
taking place, including in the critical USA market via a 510(k) submission,
the Group is positioned to sell the previous version of the monitor in order
to help it retain market share.
US regulatory approval for the TrueVue monitor is expected to be granted
during 2025.
The veterinary version of the previous monitor has been launched in China and
the first order is expected to be received later this year.
Sale of single use probes
Single-use ODM probe revenues increased slightly in the Period to £824,000
(H1 2023: £815,000).
Probe sales in the International division, which rely on purchases by
distributors, increased by 14%. This increase helped offset a decline in probe
revenues in the UK market, believed to be associated with market uncertainty
as to the timing of the launch of the new monitor.
The Group highlights that the same single-use ODM probes are used in the new
TrueVue monitor as well as in the previous version of Deltex Medical's
monitor. Accordingly, as sales of the new TrueVue monitor increase, then probe
revenues are also expected to grow.
New product development
Notwithstanding the focus on the launch of the TrueVue monitor, Deltex
Medical's technologists have also made good progress on further research to
advance its novel, non-invasive version of Deltex Medical's ODM technology.
The Group believes that this new, non-invasive device, which should have a
substantially larger addressable market in terms of applications within
hospitals as well as in primary care settings, represents a significant
opportunity for the Group to build substantial revenues in the future.
Although this new non-invasive device is still in the research phase, the
Group is working on the basis that it will ultimately end up representing a
form of digital haemodynamic stethoscope. This will give healthcare workers,
ranging from doctors to nurses across a range of departments, immediate access
to high quality, real-time haemodynamic data in respect of their patients.
This data is expected to give rise to improved and more rapid treatment of
patients throughout a hospital or other clinical care-giving facility such as
the Accident & Emergency department or a primary care (GP) doctor's
surgery.
Further progress on the necessary research work associated with this novel
non-invasive device is expected during the second half of this financial year
as significantly less technical support will be required from the Group's
engineers to support the increase in production volumes of the new TrueVue
monitor.
Market feedback and 'voice of the customer' work continues on this new
non-invasive technology to enable the Group to develop an optimised
commercialisation plan in advance of its launch.
Current trading and prospects
The Group's performance in H1 2024 was encouraging and was broadly in line
with internal budgets.
Sales of the new TrueVue monitor are still building and have not reached their
anticipated run rate. It remains difficult to predict the timing and quantum
of orders for the new monitor, in part as many sales are carried out by
international distributors.
As expected, direct sales were a little slow over the summer months, although
a number of significant orders were received from Latin America which require
onerous documentation to be satisfied prior to shipment.
The Group remains focussed on driving up sales of the new TrueVue Monitor
whilst its technical teams continue their work on the new, novel non-invasive
ODM device.
Deltex Medical continues to take robust actions in order to attain EBITDA
positive trading.
Nigel Keen
Chairman
20 September 2024
Condensed Consolidated Statement of Comprehensive Income
For the period ended 30 June 2024
Unaudited Audited
Note Six months ended Six months Year
30 June ended ended
2024 30 June 31 December 2023
2023
£'000 £'000 £'000
Revenue 4 1,064 1,059 1,776
Cost of sales (353) (331) (651)
Gross profit 711 728 1,125
Administrative expenses (597) (642) (1,081)
Sales and distribution expenses (262) (427) (685)
Research and Development, Quality and Regulatory (294) (116) (217)
Exceptional Costs 9 - - (366)
Total costs (1,153) (1,185) (2,349)
Other gain 8 - 40 172
Operating loss (442) (417) (1,052)
Finance costs (104) (119) (230)
Loss before taxation (546) (536) (1,282)
Tax credit adjustment 8 - (1) -
Loss for the period/year (546) (537) (1,282)
Other comprehensive income/(expense)
Items that may be reclassified to profit or loss:
Net translation differences on overseas subsidiaries 4 6 5
Other comprehensive income/(expense) for the period/year, net of tax 4 6 5
Total comprehensive loss for the period/year (542) (531) (1,277)
Total comprehensive loss for the period/year attributable to:
Owners of the Parent (541) (532) (1,252)
Non-controlling interests (1) 1 (25)
(542) (531) (1,277)
Loss per share - basic and diluted 10 (0.03)p (0.08)p (0.11p)
Condensed Consolidated Balance Sheet
As at 30 June 2024
Unaudited Audited
Note 30 June 30 June 31 December 2023
2024
2023
£'000
£'000 (restated)*
£'000
Assets
Non-current assets
Property, plant and equipment 169 237 198
Intangible assets 6 3,894 3,986 3,965
Total non-current assets 4,063 4,223 4,163
Current assets
Inventories 11 653 824 716
Trade receivables 241 440 177
Financial assets at amortised cost - 15 -
Other current assets 136 136 87
Current income tax recoverable 81 40 84
Cash and cash equivalents 12 326 107 705
Total current assets 1,437 1,562 1,769
Total assets 5,500 5,785 5,932
Liabilities
Current liabilities
Borrowings 13 (801) (1,147) (79)
Trade and other payables 14 (814) (1,585) (855)
Total current liabilities (1,615) (2,732) (934)
Non-current liabilities
Borrowings 13,15 (1,034) (998) (1,665)
Trade and other payables 14 (87) (148) (119)
Provisions (76) (67) (71)
Total non-current liabilities (1,197) (1,213) (1,855)
Total liabilities (2,812) (3,945) (2,789)
Net assets 2,688 1,840 3,143
Equity
Share capital 16 7,254 7,091 7,204
Share premium 35,684 33,682 35,650
Capital redemption reserve 17,476 17,476 17,476
Other reserve 476 559 473
Translation reserve 177 174 173
Convertible loan note reserve 82 82 82
Accumulated losses (58,314) (57,104) (56,769)
Equity attributable to owners of the Parent 2,835 1,960 3,289
Non-controlling interests (147) (120) (146)
Total equity 2,688 1,840 3,143
* See note 14 for details on the prior year restatement relating to an
offset of a debtor and creditor balance
Condensed Consolidated Statement of Changes in Equity for the six months ended 30 June 2024 (unaudited)
Share capital Share premium Capital redemption reserve Other reserve Convertible loan note reserve Translation reserve Accumulated losses Total Non-controlling interest Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 7,204 35,650 17,476 473 82 173 (57,769) 3,289 (146) 3,143
1 January 2024
Comprehensive income
Loss for the period - - - - - - (545) (545) (1) (546)
Other comprehensive income for the period - - - - - 4 - 4 -
4
Total comprehensive income for the six-month period - - - - - 4 (545) (541) (1) (542)
Transactions with owners of the Group
Shares issued during the year 50 34 - - - - - 84 - 84
Issue expenses - - - - - - - - - -
Equity-settled share-based payment - - - 3 - - - 3 - 3
Balance at 7,254 35,684 17,476 476 82 177 (58,314) 2,835 (147) 2,688
30 June 2024
Condensed Consolidated Statement of Changes in Equity for the six months ended 30 June 2023 (unaudited)
Share capital Share premium Capital redemption reserve Other reserve Convertible loan note reserve Translation reserve Accumulated losses Total Non-controlling interest Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 6,990 33,672 17,476 527 82 168 (56,566) 2,349 (121) 2,228
1 January 2023
Comprehensive income
Loss for the period - - - - - - (538) (538) 1 (537)
Other comprehensive income for the period - - - - - 6 - 6 -
6
Total comprehensive income for the six-month period - - - - - 6 (538) (532) 1 (531)
Transactions with owners of the Group
Shares issued during the year 101 10 - - - - - 111 - 111
Issue Expenses - - - - - - - - - -
Equity-settled share-based payment - - - 32 - - - 32 - 32
Balance at 7,091 33,672 17,476 559 82 174 (57,104) 1,960 (120) 1,840
30 June 2023
Condensed Consolidated Statement of Changes in Equity for the year ended 31 December 2023 (audited)
Share capital Share premium Capital redemption reserve Other reserve Convertible loan note reserve Translation reserve Accumulated losses Total Non-controlling interest Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2023 6,990 33,672 17,476 527 82 168 (56,566) 2,349 (121) 2,228
Comprehensive income
Loss for the period - - - - - - (1,257) (1,257) (25) (1,282)
Other comprehensive income for the period - - - - - 5 5 - 5
-
Total comprehensive income for year - - - - - 5 (1,257) (1,252) (25) (1,277)
Transactions with owners of the Group
Shares issued during the year 214 2,171 - - - - - 2,385 - 2,385
Issue expenses - (193) - - - - - (193) - (193)
Transfers - - - (54) - - 54 - - -
Balance at 7,204 35,650 17,476 473 82 173 (57,769) 2,349 (146) 3,143
31 December 2023
Condensed Consolidated Statement of Cash Flows
For the period ended 30 June 2024
Unaudited Audited
Six months Six months Year
ended
ended
ended 31
30 June
30 June
December 2023
2024
2023
£'000
£'000
£'000
Cash flows from operating activities
Loss before taxation (546) (536) (1,282)
Adjustments for:
Finance costs 104 119 230
Depreciation of property, plant and equipment 39 38 110
Amortisation of intangible assets 84 20 23
Loss on disposal of property, plant and equipment - - 11
Write off of research and development projects not taken forward - - 141
Modification gain on convertible loan note - (89) (89)
Non-Executive Director fees 40 - 91
Share-based payment expense 3 32 -
Other gain - (40) (83)
Effect of exchange rate fluctuations 4 6 5
(272) (450) (843)
Decrease/(increase) in inventories 71 (3) 105
(Increase)/decrease in trade and other receivables (113) 25 332
(Decrease)/increase in trade and other payables (44) 147 (691)
Decrease in staff advances - - 15
Increase in provisions 5 3 7
Net cash used in operations (353) (278) (1,075)
Interest paid (82) (98) (191)
RDEC taxes received - 71 71
Net cash used in operating activities (435) (305) (1,195)
Cash flows from investing activities
Purchase of property, plant and equipment - (6) (9)
Proceeds from sale of loan monitors 12 - -
Capitalised development expenditure (net of grants) (11) (236) (361)
Interest received 1 - -
Net cash used in investing activities 2 (242) (370)
Cash flows from/ (used in) financing activities
Issue of ordinary share capital - - 1,887
Expenses in connection with share issue - - (193)
Net movement in invoice discounting facility 72 (38) (106)
Standby loan facility drawdown - 250 250
Principal lease payments (29) (22) (52)
Net cash generated from financing activities 43 190 1,786
Net (decrease) / increase in cash and cash equivalents (390) (357) 221
Cash and cash equivalents at beginning of the period 705 471 471
Exchange loss on cash and cash equivalents 11 (7) 13
Cash and cash equivalents at the end of the period 326 107 705
Notes to the condensed consolidated interim financial statements
1. Reporting Entity
These condensed consolidated interim financial statements ('Interim Financial
Statements') are the consolidated financial statements of Deltex Medical Group
plc, a public company limited by shares registered in England and Wales, and
its subsidiaries ('the Group'). Deltex Medical Group plc is quoted on the AIM
market of the London Stock Exchange. The address of the registered office is
Deltex Medical Group plc, Terminus Road, Chichester, PO19 8TX, registered
number 03902895. These Interim Financial Statements are as at and for the
period ended 30 June 2024.
The Group is principally involved with the manufacture and sale of advanced
haemodynamic monitoring technologies.
2. Basis of accounting
These interim financial statements are for the six months ended 30 June 2024.
They are unaudited and do not include all the information required for a
complete set of IFRS financial statements. However, selected explanatory notes
are included to explain events and transactions that are significant to an
understanding of the changes in the Group's financial position and should be
read in conjunction with the Group's last annual consolidated financial
statements as at and for the year ended 31 December 2023 (Annual Report &
Accounts 2023).
These interim financial statements do not constitute statutory accounts within
the meaning of Section 434 of the Companies Act 2006. The summary of results
for the year ended 31 December 2023 is an extract from the published
consolidated financial statements of the Group for that year which have been
reported on by the Group's auditors and delivered to the Registrar of
Companies. The Independent Auditor's Report on the Annual Report &
Accounts for 2023 was unqualified.
These interim financial statements have been prepared applying the accounting
policies and presentation that were applied in the preparation of the Group's
published consolidated financial statements for the year ended 31 December
2023 and are expected to be applied in the preparation of the financial
statements for the year ending 31 December 2024. There are no accounting
pronouncements which have become effective from 1 January 2024 that have a
significant impact on the Group's interim financial statements. The Group has
not early adopted any other standard, interpretation or amendment that has
been issued but is not yet effective.
The interim financial statements were approved for issue by the board of
directors of the Group on 20 September 2024.
3. Use of judgements and estimates
In preparing these interim financial statements, management has had to make
judgements and estimates that affect the application of the Group's accounting
policies and the reported amounts of assets, liabilities, income and expenses.
Although these estimates are based on the directors' best knowledge of the
amount, event or actions, it should be noted that actual results may differ
from those estimates.
The significant judgements and estimates made by the directors in applying the
Group's accounting policies and key sources of estimation uncertainty were the
same as those disclosed in Annual Report & Accounts 2023.
4. Revenue
The following table provides an analysis of the Group's sales by revenue
stream and markets. This information is regularly provided to the Group's
CODM:
For the six months ended 30 June 2024 (Unaudited)
Direct markets Indirect markets
Probes Monitors Other Probes Monitors Other Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
UK 186 12 22 - - - 220
USA 134 - 26 - - - 160
France - - - 179 9 4 192
Latin America - - - 85 67 1 153
Portugal - - - 126 - - 126
Scandinavia - - - 33 5 1 39
South Korea - - - 38 - - 38
Other countries 1 - - 42 91 2 136
321 12 48 503 172 8 1,064
For the six months ended 30 June 2023 (Unaudited)
Direct markets Indirect markets
Probes Monitors Other Probes Monitors Other Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
UK 212 113 15 - - - 340
USA 156 4 20 - - - 180
France - - - 248 - 2 250
Scandinavia - - - 49 - 1 50
Latin America - - - 37 - - 37
Hong Kong - - - 6 62 - 68
Portugal - - - 63 - - 63
Other countries 5 - 1 39 22 4 71
373 117 36 442 84 7 1,059
For the year ended 31 December 2023 (Audited)
Direct markets Indirect markets
Probes Monitors Other Probes Monitors Other Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
UK 394 113 42 - - - 549
USA 287 20 40 - - - 347
France - - - 283 - 2 285
Portugal 185 - - 185
Latin America - - - 91 16 - 107
Scandinavia 64 4 1 69
Hong Kong - - - 6 62 - 68
South Korea 47 5 4 56
Other countries 10 6 3 56 32 3 110
691 139 85 732 119 10 1,776
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 at the point
the service is carried out.
Period ended Year ended
30 June 2024 30 June 2023 31 December 2023
£'000 £'000 £'000
Sale of goods 1,046 1,038 1,732
Maintenance income 18 21 44
1,064 1,059 1,776
The following table provides information about trade receivables and contract
liabilities from contracts with customers. There were no contract assets at
either 30 June 2024 or 31 December 2023.
30 June 30 June 2023 31 December
2024
2023
£'000 £'000 £'000
Trade receivables which are in 'Trade and other receivables' 298 440 177
Contract liabilities (46) (48) (44)
The following aggregated amounts of transaction prices relate to the
performance obligations from existing contracts that are unsatisfied or
partially unsatisfied as at 30 June 2024:
2024 2025 2026 2027 Total
£'000 £'000 £'000 £'000 £'000
Revenue expected to be recognised 23 14 2 7 46
5. Segmental analysis
Assessment of performance and the allocation of resources are made on the
basis of results derived from the sale of probes, monitors and other products
analysed by territory, of which revenues and gross margins are regularly
reported to the Group's Chief Executive Officer, who has been identified as
the Chief Operating Decision Maker (CODM). The CODM also monitors a profit
measure described internally as 'adjusted earnings before interest, tax,
depreciation and amortisation, share-based payments, non-executive directors'
fees, as well as any exceptional items' (Adjusted EBITDA). However, this
measure is reported at a Group level rather than an operating segment which is
based on the nature of the goods provided rather than the geographical market
in which they are sold.
The unaudited operating segment results for the six months ended 30 June 2024
are:
Probes(1) Monitors Other Unallocated Total
£'000 £'000 £'000 £'000 £'000
Revenues 824 183 57 - 1,064
Adjusted gross profit(2) 548 138 41 - 727
Sales and marketing costs - - - (259) (259)
Administration costs - - - (533) (533)
R&D costs - - - (137) (137)
Quality and regulation costs - - - (72) (72)
Adjusted EBITDA - - - - (274)
1. Managed care service revenue is categorised as probe revenue
2. Gross profit excluding the depreciation charge relating to monitors
loaned to customers and production equipment (£14,000)
The unaudited operating segment results for the six months ended 30 June 2023
were:
Probes(1) Monitors Other Unallocated Total
£'000 £'000 £'000 £'000 £'000
Revenues 815 201 43 - 1,059
Adjusted gross profit(2) 572 145 21 - 738
Sales and marketing costs - - - (425) (425)
Administration costs - - - (587) (587)
R&D costs - - - (1) (1)
Quality and regulation costs - - - (86) (86)
Adjusted EBITDA - - - - (361)
1. Managed care service revenue is categorised as probe revenue
2. Gross profit excluding the depreciation charge relating to monitors
loaned to customers and production equipment (£10,000)
The audited operating segment results for the year ended 31 December 2023
were:
Probes(1) Monitors Other Unallocated Total
£'000 £'000 £'000 £'000 £'000
Revenues 1,425 258 93 - 1,776
Adjusted gross profit(2) 928 165 36 (101) 1,028
Sales and marketing costs - - - (782) (782)
Administration costs - - - (905) (905)
R&D costs - - - (14) (14)
Quality and regulation costs - - - (187) (187)
Adjusted EBITDA - - - - (860)
1. Managed care service revenue is categorised as probe revenue
2. Gross profit excluding the depreciation charge relating to monitors
loaned to customers and production equipment (£4,000) and including
exceptional items (£101,000)
The reconciliation of the profit measure used by the Group's CODM to the
result reported in the Group's consolidated SOCI is set out below:
Unaudited Audited
30 June 30 June 31 December
2024
2023
2023
£'000
£'000
£'000
Adjusted EBITDA (274) (361) (860)
Non-cash items:
Depreciation of property, plant and equipment (39) (38) (110)
Amortisation of development costs (84) (20) (23)
Non-executive directors' fees and employer's NIC (31) (71) (91)
Gain on convertible loan note - 89 89
Write off of research and development projects not taken forward - - (141)
Share-based payment expense (3) (32) -
Change in accumulated absence cost liability (11) (24) 1
Cash item: Other tax income - 40 83
(168) (56) (192)
Operating loss (442) (417) (1,052)
Finance costs (104) (119) (230)
Loss before tax (546) (536) (1,282)
Tax credit on loss - (1) -
Loss for the period/year (546) (537) (1,282)
6. Cash-adjusted overheads and capitalised development costs
In November 2023, the Group's new monitor development project, the TrueVue
monitor, became available for sale and consequently amortisation of the
capitalised costs for that project commenced from that date. Expenditure
incurred in periods up until November 2023, in respect of the development of
the new monitor, has been capitalised whereas expenditure incurred after
November 2023 on this project is charged to the Consolidated SOCI in the
period in which it is incurred. Development costs capitalised for the six
months to 30 June 2024 were £11,000 (six months to 30 June 2023: £435,000).
The Group reviews the cash-adjusted overhead as part of its monthly financial
review at a Group level.
A reconciliation between overheads in the Consolidated SOCI and cash-adjusted
overheads is shown below:
Unaudited Audited
30 June 30 June 31 December
2024
2023
2023
£'000
£'000
£'000
Total overhead costs excluding exceptional costs (1,153) (1,185) (1,983)
Capitalised development expenditure (11) (435) (627)
Non-cash items:
Depreciation of property, plant and equipment 39 38 110
Amortisation of development costs 84 20 23
Non-executive directors' fees and employer's NIC 31 71 91
Gain on convertible loan note - (89) (89)
Share-based payment expense 3 32 -
Change in accumulated absence cost liability 11 24 (1)
157 (339) (493)
Cash-adjusted overheads (996) (1,524) (2,476)
7. Dividends
The Directors cannot recommend the payment of a dividend for 2024 (2023: nil).
8. Tax credit on loss
Unaudited Audited
30 June 30 June 31 December
2024
2023
2023
£'000 £'000 £'000
Research and development tax credit adjustment - 1 (1)
Adjustment in respect of prior years - - 1
Total current tax - - -
Total deferred tax - - -
Total tax credit adjustment - 1 -
There was no other gain amount for the six months to 30 June 2024 (six months
to 30 June 2023: £40,000). This comprises tax income arising from the
Research and Development Expenditure Credit scheme which is accounted for as a
government grant.
9. Exceptional items
As permitted by IAS1, 'Presentation of Financial Statements', certain items
are presented separately in the Consolidated SOCI as exceptional items where,
in the judgement of the directors, they need to be presented separately by
virtue of their nature, size or incidence to obtain a clear and consistent
presentation of the Group's underlying business performance.
Unaudited Audited
30 June 30 June 31 December
2024
2023
2023
£'000
£'000
£'000
Payments in lieu of notice - - 107
Redundancy costs - - 98
Legal and professional costs relating to redundancies - - 19
Write off of research and development projects not taken forward - - 142
- - 366
10. Loss per share
Basic loss per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares issued
during the year.
The loss per share calculation for six months to 30 June 2024 is based on the
loss of £545,000 and the weighted average number of shares in issue of
1,891,934,069.
For the six months to 30 June 2023, the loss per share calculation is based on
the loss of £538,000 and the weighted average number of shares in issue of
703,227,881.
For the year ended 31 December 2023, the loss per share calculation is based
on the loss of £1,257,000 and the weighted average number of shares in issue
of 1,181,214,755.
While the Group is loss-making, the diluted loss per share and the loss per
share are the same.
11. Inventories
Inventories at 30 June 2024 include the following finished Goods: 8,709 probes
(30 June 2023: 16,800) and 100 monitors (30 June 2023: 113).
12. Cash at bank
Unaudited Audited
30 June 30 June 31 December
2024
2023
2023
£'000 £'000 £'000
Cash at bank 326 107 705
13. Borrowings
Unaudited Audited
30 June 2024 30 June 2023 31 December 2023
Current Non-current Current Non-current Current Non-current
£'000 £'000 £'000 £'000 £'000 £'000
Invoice discount facility 151 - 147 - 79 -
Standby loan facility 650 - 750 - - 650
Bridging loan facility - - 250 - - -
Convertible loan note - 1,034 - 998 - 1,015
801 1,034 1,147 998 79 1,665
14. Trade and other payables
Unaudited Audited
30 June 2024 30 June 2023 31 December 2023
Current Non-current Current Non-current Current Non-current
£'000 £'000 £'000 £'000 £'000 £'000
Trade payables 193 - 600 - 173 -
Other payables 82 - 90 - 89 -
Social security and other taxes 97 - 145 - 94 -
Lease obligations 61 87 55 148 58 119
Contract liabilities 46 - 48 - 44 -
Employee short-term benefits 34 - 48 - 23 -
Accrued expenses 301 - 599 - 374 -
814 87 1,585 148 855 119
In the prior year, a non-current other receivable was recognised of £159,000.
The amount outstanding related to a trade receivable due from the
non-controlling interest in the Group's Canadian subsidiary. Within trade and
other payables in the prior year, was an amount of £249,000, payable to the
non-controlling interest in the Group's Canadian subsidiary. These balances
have been offset in the interim financial statements, with the prior year
balances being restated as a net payable of £90,000. The offset balance as at
30 June 2024 is a net payable of £82,000.
15. Convertible loan note
The convertible loan note recognised in the Condensed Consolidated Balance
Sheet is calculated as:
Financial liability Equity component Total
£'000 £'000 £'000
Carrying amount at 1 January 2024 1,015 82 1,097
Interest expense 63 - 63
Interest paid (44) - (44)
Carrying amount at 30 June 2024 1,034 82 1,116
The convertible loan note falls due for repayment in June 2026. The
convertible loan note is, at the option of the loan note holder, convertible
at any time into new ordinary shares of 1 penny each at a conversion price of
4 pence per share.
16. Share capital
In January 2024, 49,372,352 new ordinary shares of 1 pence each were issued at
a price of 0.17 pence per ordinary share to satisfy certain current and former
non-executive directors' fees for the year ended 31 December 2023.
There were no share options exercised during the six months ended 30 June 2024
or the six months ended 30 June 2023.
17. Seasonal fluctuations
Revenues in our Distributor markets are traditionally higher in the second
half of the financial year due to the purchasing patterns of customers.
18. Foreign exchange rates
The following are the principal foreign exchange rates that have been used in
the preparation of the condensed consolidated interim financial statements:
Unaudited Audited
30 June 2024 30 June 2023 31 December 2023
Average Closing Average Closing Average Closing rate
rate
rate
rate
rate
rate
Sterling/US dollar 1.27 1.26 1.23 1.27 1.24 1.27
Sterling/Euro 1.17 1.18 1.14 1.16 1.15 1.15
Sterling/Canadian dollar 1.72 1.73 1.67 1.68 1.68 1.69
19. Distribution of the announcement
Copies of this announcement are sent to shareholders on request and will be
available for collection free of charge from the Group's registered office at
Terminus Road, Chichester, PO19 8TX, United Kingdom. This announcement is
available, free of charge, from the Group's website at www.deltexmedical.com
(http://www.deltexmedical.com)
20. Cautionary statement
This announcement contains forward-looking statements which are made in good
faith based on the information available at the time of its approval. It is
believed that the expectations reflected in these statements are reasonable,
but they may be affected by several risks and uncertainties that are inherent
in any forward-looking statement which could cause actual results to differ
materially from those currently anticipated. Nothing in this document should
be considered to be a profit forecast.
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