REG - Deltex Med Grp PLC - Interim Results
20/09/2022 07:00
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RNS Number : 9308Z Deltex Medical Group PLC 20 September 2022
The information contained within this announcement was deemed by the Company
to constitute inside information as stipulated under the UK Market Abuse
Regulation
20 September 2022
Deltex Medical Group plc
("Deltex Medical" or the "Group")
Interim results to 30 June 2022
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 2022 (the "Period").
HIGHLIGHTS
Financial
§ Group returns to growth with revenues up 8% to £1.2 million (H1 2021:
£1.1 million)
§ International division revenues up 39% to £555,000 (H1 2021: £399,000)
§ Gross margin increased to 74% (H1 2021: 64%) as a result of improved
manufacturing efficiencies and the positive effect of weak sterling on US
dollar-denominated revenues
§ Adjusted EBITDA loss of £418,000 (H1 2021: loss of £242,000; the 2021
figure included receipt of £193,000 in furlough payments)
§ Operating loss of £0.6 million (H1 2021: £0.5 million) reflecting
increased commitment towards international sales and marketing spend
§ Cash at hand on 30 June 2022 of £0.6 million (H1 2021: £0.6 million)
Commercial
§ Strong performance from the International division, with further growth
expected
§ Commercial activities in the UK and the USA modified, via a number of new
initiatives, to target growth assuming that restricted access within hospitals
is now the 'new normal'
§ Since the start of H2, we have received two orders in the USA for monitors
from new accounts: one from a healthcare system covering multiple hospitals
and the second from a large university hospital; both of these accounts had
been close to ordering before the pandemic, but have now decided to proceed
with the TrueVue Doppler technology
§ Good progress made towards completing the new, next generation monitor,
despite ongoing supply chain challenges. The launch of the monitor is expected
later this year and we expect strong demand from distributors in relation to
replacing legacy monitors
Nigel Keen, Chairman of Deltex Medical, said:
"I am delighted that the Group has returned to growth after suffering severe
disruption to its business as a result of the pandemic."
"Our International division is performing strongly, with further growth
anticipated. In addition, there are preliminary but encouraging signs that US
hospitals are beginning to start to order our monitors after long delays due
to Covid-19."
"Our technical teams continue to make good progress with our new, next
generation monitor. The hardware is largely complete; we are now finalising
the software and regulatory compliance. This new product is expected to help
increase activity levels in all territories."
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
Allenby Capital Limited - Nominated Adviser and Broker 020 3328 5656
Jeremy Porter / Vivek Bhardwaj (Corporate Finance) info@allenbycapital.com (mailto:info@allenbycapital.com)
Tony Quirke (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.
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, 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, 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 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, 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 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 more than 30 major hospitals that
appreciate the value of Deltex Medical's evidence-based approach to
haemodynamic management. 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 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.
For further information please go to www.deltexmedical.com
(http://www.deltexmedical.com)
Chairman's statement
Financial results
During the Period, the Group returned to growth for the first time since the
pandemic. Our business, which is largely focussed on generating sales into
operating theatres carrying out elective surgery, was significantly adversely
affected by the pandemic.
Revenues for the six months ended 30 June increased by 8% to £1.2 million
(2021: £1.1 million). This increase reflects a strong performance from our
International division (which excludes the USA), with revenues increasing by
39% to £555,000 (2021: £399,000).
The Group's gross margin increased significantly to 74% (2021: 64%). This
increase was linked to substantially improved manufacturing efficiencies, as
our manufacturing team returned to work full time, as well as a positive
effect on profitability associated with the weakness of sterling and a high
proportion of US dollar-denominated revenues.
Adjusted EBITDA, which comprises the operating loss adjusted for depreciation,
amortisation, equity-settled non-executive directors' fees, share-based
payments and certain other items, was a loss of £(418,000) (2021:
£(242,000)). A substantial proportion of the year-on-year difference relates
to furlough payments received in H1 2021 which totalled £193,000.
The slight increase in overheads to £1.5 million (2021: £1.4 million) is
principally linked to an increase in sales and marketing expenditure focussed
on our International division, as travel routes re-opened and once again we
were able to provide direct support from the UK to our overseas distributors.
Loss before taxation was £662,000 (2021: £(531,000)).
Cash at hand on 30 June 2021 was £0.6 million (2020: £0.6 million).
Commercial activities
In 2022 our business plans had initially anticipated that the UK and US
markets would start to open up rapidly, as Covid-related restrictions were
withdrawn in hospitals. This would have given rise to improved access for our
sales teams and clinical educators to the key decision makers within
hospitals. Whilst such access restrictions have begun to ease, they are still
a long way from the access levels enjoyed by our experts pre-Covid. In some
hospital systems we are also seeing shortages in clinical staff which is
causing delays in elective surgery as well as a lack of availability of
clinicians to meet with our sales teams.
There continues to be a substantial backlog in elective surgical procedures
around the world as a direct consequence of the pandemic. We were expecting to
see increased demand for Deltex Medical's haemodynamic monitoring technologies
to help reduce this backlog, due to the evidence base which demonstrates that
TrueVue Doppler's technology is linked to reduced patient length-of-stay and
improved clinical outcomes. Whilst we have seen such demand emerging in our
International division, and more recently in the US, we have not yet seen this
increase in the UK.
Given these access challenges in our two key direct markets (the UK and US),
earlier this year we decided to modify our commercial plans on the basis that
restricted access to sales teams, and other third parties, has effectively
become the "new normal" in many UK and US hospitals. Accordingly, we have been
working on a number of new initiatives to help drive revenue, notwithstanding
the restricted access to operating theatres carrying out elective surgery in
UK and US hospitals. Such initiatives include:
§ establishing an on-line training programme - the TrueVue Advanced Learning
Academy (the "Academy") - that provides clinicians with a comprehensive
training programme on haemodynamics, including details on the published
evidence base, and how best to use TrueVue Doppler. The Academy provides
detailed information on how to manage a patient's haemodynamic status during
surgery, as well as if deployed in an intensive care unit ("ICU"), based on
data derived from peer-reviewed papers. Longer term we plan to expand this
on-line training programme further to include Continuing Professional
Development (CPD) qualifying points; and
§ starting to promote and sell the TrueVue Doppler into high-value veterinary
applications, working with a number of 'Key Opinion Leader' veterinary
centres. Although this is not expected to be a large addressable market, there
are preliminary indicators that veterinarians are increasingly interested in
monitoring the haemodynamic status of small and exotic animals which we
believe will become a profitable niche. We have started to see traction in the
UK, US and in parts of Europe, including establishing our first dedicated
veterinary distributor.
Although it is too early to pronounce that these, and various other
earlier-stage, initiatives have been successful, there are some encouraging
preliminary signs. Further, the launch of the new, next generation monitor is
planned for later this year. We anticipate that its launch will generate
significant activity levels, including from our overseas distributors where we
are expecting strong order demand in relation to replacing legacy monitors.
These initiatives have been specifically designed to help support our existing
user-base and develop new customers whilst our traditional methods of selling
into hospitals in the UK and USA are severely constrained.
Our modified plans also anticipate that the NHS is going to continue to face a
number of major challenges in the short to medium term and we therefore
reduced our UK sales resources in the first half.
Our International division enjoyed strong sales growth of 39% in the first
half of the year. This growth stemmed primarily from territories that enjoyed
unrestricted access to operating theatre staff and anaesthetists during the
pandemic. In many cases our experts were also able to assist the in-country
distributors with appropriate training. Being able to access these
territories, in conjunction with the distributors, during the past two years
has ensured that we have created a pipeline of orders that are now being
converted into revenues.
We are expecting our International division to continue to perform robustly in
the second half of 2022. We are also working on a small number of substantial
orders, including the potential expansion of an order from a distributor in
Latin America that was previously announced on 26 January, 2022.
Product development: new, next generation monitor
Our technical teams have been working hard to finish the new, next generation
monitor which is important to our future growth. This new device is needed to
help drive activity levels for our minimally invasive technology and our new,
novel non-invasive Doppler-based single-use probe sales.
We have continued to experience difficulties with extended and/or
unpredictable supply chains, including obsolescence of components as well as
long lead times and inflationary price increases. We have partially mitigated
these challenges by buying key components early.
The hardware engineering for the new monitor is substantially complete and we
are now focusing on finalising the software as well as working on a number of
regulatory compliance points.
We have also been developing the new non-invasive Doppler-based haemodynamic
monitoring device that is complementary to our existing product range which we
believe will form an important part of our future growth and long-term
strategy. This non-invasive device will also benefit from the substantial body
of published evidence that demonstrates that the appropriate use of TrueVue
Doppler gives rise to improved clinical outcomes and reduced patient
length-of-stay. Improved clinical outcomes and reduced patient length-of-stay
are going to remain critically important for hospitals in the foreseeable
future.
Current trading and prospects
The Group has returned to growth and the gross margin has returned to levels
that we were achieving before the Covid pandemic.
Weak sterling is also helping our gross margin to increase and we believe that
this phenomenon is likely to continue in the short to medium term.
Our International division is growing strongly, in large part due to a more
benign environment in terms of unrestricted access to hospitals, and we
believe that there is further growth to come.
Before the pandemic started, we had built up a stock of monitors in
anticipation of receipt of orders from a number of hospitals around the world
that we had been working with for some time. Since the beginning of the second
half of the year, we have begun to see encouraging, albeit preliminary, signs
of demand recovering in the USA for Deltex Medical's TrueVue Doppler
technology, including orders from US hospital systems that had previously been
put on hold when Covid-19 started. As we ship the monitors to fulfil these US
orders, we are not only benefiting from converting inventory into cash, but
are also converting US dollars into sterling at an advantageous foreign
exchange rate.
The launch of the new monitor is an important element of the future plans of
the Group. Good progress was made in the first half of 2022 and we are
planning on launching the new monitor later this year. We anticipate that its
launch will generate significant activity levels, including from our overseas
distributors where we are expecting strong order demand in relation to
replacing legacy monitors.
Nigel Keen
Chairman
20 September 2022
Condensed Consolidated Statement of Comprehensive Income
For the period ended 30 June 2022
Unaudited Audited
Note Six months ended Six months Year
30 June
ended
ended
2022
30 June
31 December 2021
2021
£'000
£'000
£'000
Revenue 4 1,158 1,072 2,259
Cost of sales (306) (381) (684)
Gross profit 852 691 1,575
Administrative expenses (779) (777) (1,585)
Sales and distribution expenses (554) (466) (957)
Research and Development, Quality and Regulatory (120) (117) (207)
Total costs (1,453) (1,360) (2,749)
Other operating income 6 - 193 312
Other gain 8 30 25 57
Operating loss (571) (451) (805)
Finance costs (91) (80) (173)
Loss before taxation (662) (531) (978)
Tax credit on loss 8 - 7 12
Loss for the period/year (662) (524) (966)
Other comprehensive income/(expense)
Items that may be reclassified to profit or loss:
Net translation differences on overseas subsidiaries 15 1 (2)
Other comprehensive income/(expense) for the period/year, net of tax 15 1 (2)
Total comprehensive loss for the period/year (647) (523) (968)
Total comprehensive loss for the period/year attributable to:
Owners of the Parent (651) (524) (969)
Non-controlling interests 4 1 1
(647) (523) (968)
Loss per share - basic and diluted 9 (0.10)p (0.09)p (0.17p)
Condensed Consolidated Balance Sheet
As at 30 June 2022
Unaudited Audited
Note 30 June 30 June 31 December 2021
2022
2021
£'000
£'000 £'000
Assets
Non-current assets
Property, plant and equipment 274 271 264
Intangible assets 3,419 2,756 3,135
Financial assets at amortised cost 171 157 157
Total non-current assets 3,864 3,184 3,556
Current assets
Inventories 10 835 812 796
Trade receivables 540 392 455
Financial assets at amortised cost 15 15 15
Other current assets 92 103 91
Current income tax recoverable 99 94 69
Cash and cash equivalents 11 611 553 413
Total current assets 2,192 1,969 1,839
Total assets 6,056 5,153 5,395
Liabilities
Current liabilities
Borrowings 12 (700) (163) (702)
Trade and other payables 13 (1,419) (1,527) (1,478)
Total current liabilities (2,119) (1,690) (2,180)
Non-current liabilities
Borrowings 12,14 (1,048) (1,010) (1,028)
Trade and other payables 13 (203) (252) (228)
Provisions (60) (51) (57)
Total non-current liabilities (1,311) (1,313) (1,313)
Total liabilities (3,430) (3,003) (3,493)
Net assets 2,626 2,150 1,902
Equity
Share capital 15 6,991 5,773 5,849
Share premium 33,672 33,444 33,502
Capital redemption reserve 17,476 17,476 17,476
Other reserve 632 537 573
Translation reserve 148 136 133
Convertible loan note reserve 82 82 82
Accumulated losses (56,254) (55,173) (55,588)
Equity attributable to owners of the Parent 2,747 2,275 2,027
Non-controlling interests (121) (125) (125)
Total equity 2,626 2,150 1,902
Condensed Consolidated Statement of Changes in Equity for the six months ended 30 June 2022 (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 5,849 33,502 17,476 573 82 133 (55,588) 2,027 (125) 1,902
1 January 2022
Comprehensive income
Loss for the period - - - - - - (666) (666) 4 (662)
Other comprehensive income for the period - - - - - 15 - 15 -
15
Total comprehensive income for the six-month period - - - - - 15 (666) (651) 4 (647)
Transactions with owners of the Group
Shares issued during the year 1,142 285 - - - - - 1,427 - 1,427
Issue expenses - (115) - - - - - (115) - (115)
Equity-settled share-based payment - - - 59 - - - 59 - 59
Balance at 6,991 33,672 17,476 632 82 148 (56,254) 2,747 (121) 2,626
30 June 2022
Condensed Consolidated Statement of Changes in Equity for the six months ended 30 June 2021 (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 5,773 33,444 17,476 505 82 135 (54,648) 2,767 (126) 2,641
1 January 2021
Comprehensive income
Loss for the period - - - - - - (525) (525) 1 (524)
Other comprehensive income for the period - - - - - 1 - 1 -
1
Total comprehensive income for the six-month period - - - - - 1 (525) (524) 1 (523)
Transactions with owners of the Group
Equity-settled share-based payment - - - 32 - - - 32 - 32
Balance at 5,773 33,444 17,476 537 82 136 (55,173) 2,275 (125) 2,150
30 June 2021
Condensed Consolidated Statement of Changes in Equity for the year ended 31 December 2021 (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 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 5,849 33,502 17,476 573 82 133 (55,588) 2,027 (125) 1,902
31 December 2021
Condensed Consolidated Statement of Cash Flows
For the period ended 30 June 2022
Unaudited Audited
Six months Six months Year
ended
ended
ended 31
30 June
30 June
December 2021
2022
2021
£'000
£'000
£'000
Cash flows from operating activities
Loss before taxation (662) (531) (978)
Adjustments for:
Net finance costs 91 80 173
Depreciation of property, plant and equipment 36 35 74
Amortisation of intangible assets 20 26 40
Share-based payment expense 59 32 95
Other tax income (30) (25) (57)
Effect of exchange rate fluctuations 15 1 (2)
(471) (382) (655)
(Increase)/decrease in inventories (39) 83 89
(Increase)/decrease in trade and other receivables (100) 199 148
Increase in trade and other payables 24 109 191
Increase in provisions 3 - 6
Net cash (used in)/from operations (583) 9 (221)
Interest paid (69) (63) (131)
Income taxes received - - 61
Net cash used in operating activities (652) (54) (291)
Cash flows from investing activities
Purchase of property, plant and equipment (46) (1) (23)
Capitalised development expenditure (net of grants) (304) (228) (621)
Net cash used in investing activities (350) (229) (644)
Cash flows from/(used in) financing activities
Issue of ordinary share capital 1,341 - -
Expenses in connection with share issue (115) - -
Net movement in invoice discounting facility (2) 4 43
Standby loan facility drawdown - - 500
Principal lease payments (22) (20) (41)
Net cash generated from/(used in) financing activities 1,202 (16) 502
Net increase/(decrease) in cash and cash equivalents 200 (299) (433)
Cash and cash equivalents at beginning of the period 413 853 853
Exchange loss on cash and cash equivalents (2) (1) (7)
Cash and cash equivalents at the end of the period 611 553 413
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 AIM 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 2022.
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 2022
and have been prepared in accordance with IAS 34, 'Interim Financial
Reporting'. They do not include all of 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 2021 (Annual Report &
Accounts 2021).
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 2021 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 Auditors' Report on the Annual Report &
Accounts for 2021 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
2021 and are expected to be applied in the preparation of the financial
statements for the year ending 31 December 2022. There are no accounting
pronouncements which have become effective from 1 January 2022 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 on 20 September 2022.
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 2021.
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 2022 (Unaudited)
Direct markets Indirect markets
Probes Monitors Other Probes Monitors Other Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
UK 222 59 42 - - - 323
USA 241 15 24 - - - 280
France - - - 235 6 2 243
Latin America - - - 34 49 2 85
South Korea - - - 78 - - 78
Other countries 17 26 - 84 18 4 149
480 100 66 431 73 8 1,158
For the six months ended 30 June 2021 (Unaudited)
Direct markets Indirect markets
Probes Monitors Other Probes Monitors Other Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
UK 268 15 28 - - - 311
USA 302 36 24 - - - 362
France - - - 181 20 4 205
Scandinavia - - - 63 - 1 64
South Korea - - - 67 - - 67
Other countries 7 - - 35 21 - 63
577 51 52 346 41 5 1,072
For the year ended 31 December 2021 (Audited)
Direct markets Indirect markets
Probes Monitors Other Probes Monitors Other Total
£'000 £'000 £'000 £'000 £'000 £'000 £'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
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.
Period ended Year ended
30 June 2022 30 June 2021 31 December 2021
£'000 £'000 £'000
Sale of goods 1,131 1,056 2,192
Maintenance income 27 16 67
1,158 1,072 2,259
The following table provides information about trade receivables and contract
liabilities from contracts with customers. There were no contract assets at
either 30 June 2022 or 1 January 2022.
30 June 1 January
2022
2022
£'000 £'000
Trade receivables which are in 'Trade and other receivables' 540 455
Contract liabilities (52) (57)
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 2022:
2022 2023 2024 2025 Total
£'000 £'000 £'000 £'000 £'000
Revenue expected to be recognised 15 23 3 11 52
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 2022
are:
Probes(1) Monitors Other Unallocated Total
£'000 £'000 £'000 £'000 £'000
Revenues 912 173 73 - 1,158
Adjusted gross profit(2) 675 128 52 - 855
Sales and marketing costs - - - - (554)
Administration costs - - - - (618)
R&D costs - - - - (2)
Quality and regulation costs - - - - (99)
Adjusted EBITDA - - - - (418)
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
The unaudited operating segment results for the six months ended 30 June 2021
were:
Probes(1) Monitors Other Unallocated Total
£'000 £'000 £'000 £'000 £'000
Revenues 923 92 57 - 1,072
Adjusted gross profit(2 3) 701 74 26 - 801
Sales and marketing costs(3) - - - - (399)
Administration costs(3) - - - - (572)
R&D costs(3) - - - - (3)
Quality and regulation costs(3) - - - - (69)
Adjusted EBITDA - - - - (242)
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
3. Other operating income is allocated within the corresponding
expense categories
The audited operating segment results for the year ended 31 December 2021
were:
Probes(1) Monitors Other Unallocated Total
£'000 £'000 £'000 £'000 £'000
Revenues 1,911 202 146 - 2,259
Adjusted gross profit(2 3) 1,448 171 102 - 1,721
Sales and marketing costs(3) - - - (889) (889)
Administration costs(3) - - - (1,180) (1,180)
R&D costs(3) - - - (8) (8)
Quality and regulation costs(3) - - - (148) (148)
Adjusted EBITDA - - - - (504)
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
3. Other operating income is allocated within the corresponding
expense categories
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
2022
2021
2021
£'000
£'000
£'000
Adjusted EBITDA (418) (242) (504)
Non-cash items:
Depreciation of property, plant and equipment (36) (35) (74)
Amortisation of development costs (20) (26) (40)
Non-executive directors' fees and employer's social security costs (68) (68) (138)
Share-based payment expense (59) (32) (95)
Change in accumulated absence cost liability - (73) (11)
Cash item: Other tax income 30 25 57
(153) (209) (301)
Operating loss (571) (451) (805)
Finance costs (91) (80) (173)
Loss before tax (662) (531) (978)
Tax credit on loss - 7 12
Loss for the period/year (662) (524) (966)
6. Other operating income
Other operating income comprised:
Unaudited Audited
30 June 30 June 31 December
2022
2021
2021
£'000 £'000 £'000
UK Job Retention Scheme - 148 206
US Payment Protection Plan - 45 106
- 193 312
7. Dividends
The Directors cannot recommend the payment of a dividend for 2022 (2021: nil).
8. Tax credit on loss
Unaudited Audited
30 June 30 June 31 December
2022
2021
2021
£'000 £'000 £'000
Research and development tax credit - (7) (12)
Total tax credit on loss - (7) (12)
The other gain amount for six months to 30 June 2022 of £30,000 (six months
to 30 June 2021: £25,000) comprises tax income arising from the Research and
Development Expenditure Credit scheme which is accounted for as a government
grant.
9. 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 2022 is based on the
of £666,000 and the weighted average number of shares in issue of
672,175,129.
For the six months to 30 June 2021, the loss per share calculation is based on
the loss of £525,000 and the weighted average number of shares in issue of
577,290,545.
For the year ended 31 December 2021, the loss per share calculation is based
on the loss of £967,000 and the weighted average number of shares in issue of
580,712,339.
While the Group is loss-making, the diluted loss per share and the loss per
share are the same.
10. Inventories
Inventories at 30 June 2022 include the following finished Goods: 14,894
probes (30 June 2021: 12,887) and 176 monitors (30 June: 217).
11. Cash at bank
Unaudited Audited
30 June 30 June 31 December
2022
2021
2021
£'000 £'000 £'000
Cash at bank 611 553 413
12. Borrowings
Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
Current Non-current Current Non-current Current Non-current
£'000 £'000 £'000 £'000 £'000 £'000
Invoice discount facility 200 - 163 - 202 -
Standby loan facility 500 - - - 500 -
Convertible loan note - 1,048 - 1,010 - 1,028
700 1,048 163 1,010 702 1,028
The Standby loan facility is repayable in full on or before 31 December 2023.
13. Trade and other payables
Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
Current Non-current Current Non-current Current Non-current
£'000 £'000 £'000 £'000 £'000 £'000
Trade payables 338 - 223 - 298 -
Other payables 280 - 315 - 259 -
Social security and other taxes 120 - 139 - 169 -
Lease obligations 49 203 43 252 46 228
Contract liabilities 52 - 77 - 57 -
Employee short-term benefits 41 - 103 - 41 -
Accrued expenses 540 - 627 - 608 -
1,419 203 1,527 252 1,478 228
14. 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 2022 1,028 82 1,110
Interest expense 63 - 63
Interest paid (43) - (43)
Carrying amount at 30 June 2022 1,048 82 1,130
The convertible loan note falls due for repayment in February 2024. 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.
15. Share capital
In February 2022, the Company raised £1,396,000, before expenses, through
subscription for 111,720,000 new ordinary shares at a price of 1.25 pence per
share. Additionally, in January 2022, 2,400,000 new ordinary shares were
issued in connection with the termination agreement of a former employee.
There were no share options exercised during the six months ended 30 June 2022
or the six months ended 30 June 2021.
16. 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.
17. 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 2022 30 June 2021 31 December 2021
Average Closing Average Closing Average Closing rate
rate
rate
rate
rate
rate
Sterling/US dollar 1.30 1.22 1.39 1.38 1.38 1.35
Sterling/Euro 1.19 1.16 1.15 1.17 1.16 1.19
Sterling/Canadian dollar 1.65 1.57 1.73 1.71 1.72 1.71
18. 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 Company's website at www.deltexmedical.com
(http://www.deltexmedical.com)
19. 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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