REG - Deltex Med Grp PLC - Results for the year ended 31 December 2023
28/03/2024 07:00
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RNS Number : 5988I Deltex Medical Group PLC 28 March 2024
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
28 March 2024
Deltex Medical Group plc
("Deltex Medical" or the "Group")
Results for the year ended 31 December 2023
Deltex Medical Group plc (AIM: DEMG) today announces its results for the year
ended 31 December 2023.
HIGHLIGHTS
Financial
■ Successfully completed the restructuring of the business and
achieved annualised cost savings of approximately £1.0 million
■ Revenues of £1.8 million (2022: £2.5 million), primarily
reflecting the impact from unexpected delays in releasing the new TrueVue
monitor and difficult market conditions
■ Adjusted EBITDA of £(0.9) million (2022: £(0.6) million)
■ £1.89 million fundraise completed in August 2023 with net proceeds
successfully used to strengthen the balance sheet and implement the Group's
restructuring plan
■ Achieved a 31% reduction in overheads (excluding exceptional costs)
to £2.0 million (2022: £2.9 million). The annualised reduction in overheads
is expected to be c. £1 million
■ Gross cash expenditure on research and product development by the
Group (excluding the effect of grants or capitalisation of product
development) amounted to £0.6 million (2022: £0.8 million). The net amount,
having taken into account grants, was £0.4 million (2022: £0.7 million).
■ Cash in hand at 31 December 2023 of £0.7 million (2022: £0.5
million)
Business / commercial activities
■ Launch of the new TrueVue monitor in the UK and the EU with
encouraging interest levels from existing legacy monitor users and orders now
increasing, suggesting a large potential replacement market
■ Markets in the Middle East, Asia and South America also being
targeted for the new TrueVue monitor where Europe's CE mark is recognised,
with preparatory work also underway for local regulatory approvals
■ Work started on the FDA 510(k) premarket regulatory filing for the
new TrueVue monitor which, when approved, will enable sales into the USA which
are expected to start in 2025
■ Good progress in securing production efficiencies associated with
the manufacture of the new TrueVue monitor
■ Ongoing successful development work on a new non-invasive
Doppler-based haemodynamic monitoring device incorporating Deltex Medical's
core oesophageal doppler monitoring ("ODM") technology with a substantial
addressable market
■ Implementation of new lower cost and more efficient digital
marketing strategies in line with the Group's new "zero-based budgeting"
approach
■ Have met the operational and internal financial targets agreed by
the Board for the first quarter and the outlook is positive
Commenting on the results, Nigel Keen, Chairman of Deltex Medical, said:
"2023 was a difficult year for the Group; however, we have successfully
refinanced the business and reduced our cost base substantially and I am
pleased to be able to report that 2024 has started well."
"We also launched the new TrueVue monitor and see a significant upgrade and
replacement market."
"Good progress is being made on a new, easy-to-use non-invasive device which
sits on the same platform as Deltex Medical's core ODM technology."
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
Allenby Capital Limited - Nominated Adviser & Broker 020 3328 5656
Jeremy Porter / Vivek Bhardwaj (Corporate Finance) 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
Introduction
We are pleased to report that we successfully completed the restructuring of the Group's business as well as achieving annualised cost savings of approximately £1.0 million. We have since met the operational and internal financial targets agreed by the Board for the first quarter of the year and the outlook is positive.
Notwithstanding 2023 initially being a difficult year for Deltex Medical, 2023 saw a number of key milestones achieved by the Group, including the successful turnaround of the business.
Deltex Medical faced three principal challenges which together contributed to the Group needing to carry out a fundraise, details of which were announced by Deltex Medical on 14 July 2023 (the "Fundraise"). These challenges comprised:
§ a continuing slow pick-up in activity levels post the end of the Covid-19 pandemic;
§ extended lead times for certain specific components needed to complete the new TrueVue monitor development, largely related to post Covid-19 supply chain issues. This resulted in the slippage of the launch date for the new TrueVue monitor; and
§ delays in orders and the award of a national tender for haemodynamic monitoring with one of the Group's Latin American distributors which had been expected to have strong short-term prospects for cash generation.
The Fundraise has enabled the Group to turnaround its business with the result that:
§ the cost base of the Group has been significantly reduced, bringing down the cashflow breakeven point substantially;
§ lower cost and more efficient digital marketing techniques have been adopted which are expected to help drive incremental revenues albeit with smaller salesforces in the UK and USA; and
§ the new TrueVue monitor was completed and launched in the UK and Europe, as well as global markets that recognise the EU's 'CE mark', in November 2023.
Since its launch, a number of existing users of the Group's oesophageal Doppler monitoring technology have shown strong levels of interest in the new TrueVue monitor with orders now increasing. In parallel, good progress has been made by the Group in relation to streamlining the manufacturing processes associated with the new monitor.
Financial results
Group revenues for the year ended 31 December 2023 decreased by 28% to £1.8
million (2022: £2.5 million) primarily reflecting difficult market conditions
and the delayed launch to the new TrueVue monitor. These issues collectively
adversely affected the sales of the Group's single-use disposable ODM probes
which declined to £1.4 million (2022: £1.8 million).
As a proportion of total Group revenues, direct sales into the USA and UK
remained broadly unchanged at 50% (2022: 51%).
Deltex Medical's European customers have been aware of the expected launch of
the new TrueVue monitor and during the year became increasingly reluctant to
purchase the previous generation monitor. As a result, monitor revenues
reduced by 52% to £258,000 (2022: £537,000).
The reduction in activity levels also adversely affected overhead recovery in
the Chichester production facility, resulting in the Group's gross margin
reducing to 63% (2022: 74%).
Overheads, excluding exceptional costs, decreased by 31% to £2.0 million
(2022: £2.9 million).
The exceptionals of £366,000 largely related to restructuring costs, namely
reducing the Group's headcount, including payments in lieu of notice,
redundancy costs and associated legal fees. In addition, £141,000 was
associated with writing off research and development projects not taken
forward.
Adjusted EBITDA (comprising earnings before interest, tax, depreciation and
amortisation, share-based payments and non-executive directors' fees) was a
loss of £(860,000) (2022: £(607,000)). Adjusted EBITDA is reconciled to
operating loss in note 3.2 of the financial statements.
Gross cash expenditure on research and product development by the Group
(excluding the effect of grants or capitalisation of product development)
amounted to £0.6 million (2022: £0.8 million). The net amount, having taken
into account grants, was £0.4 million (2022: £0.7 million). This
year-on-year reduction reflects that the majority of the costs for the
development work on the new TrueVue monitor were incurred before 2023.
Operating loss for the year was £(1.1) million (2022: £(0.9) million). Loss
for the year was £(1.3) million (2022: £(1.1) million).
Cash at hand at 31 December 2023 was £0.7 million (2022: £0.5 million).
Business activities
Deltex Medical sells directly, via its own sales teams, into UK and US
hospitals, and via a network of distributors into approximately 40 other
international territories.
The Group's direct sales teams continue to experience constraints in being
able to access clinicians in UK and US hospitals' operating theatres ("ORs")
and intensive care units ("ICUs"). These constraints were imposed by UK and US
hospitals during the Covid-19 pandemic, and many of these constraints remain
in place notwithstanding the end of the pandemic.
Despite 2023 being a challenging year for the Group, progress was made on a
number of fronts including:
§ the launch of the new monitor;
§ development work on the new, novel non-invasive device;
§ a substantial reduction in costs - leading to a significantly lower
breakeven point; and
§ improved marketing following adoption of new digital techniques.
These items are more fully described in the accompanying Business Review.
The Board remains focussed on the importance of cash generation. Accordingly,
Deltex Medical's business development activities are increasingly focused on
ensuring significant incremental increases in revenues from a small number of
existing and targeted prospective customers.
Employees
On behalf of the Board, I would like to thank all of the Group's employees for
their hard work during what was a challenging and at times stressful year.
I would also like to thank Julian Cazalet, Mark Wippell and Tim Irish who
retired as non-executive directors of the Group on 1 December 2023. Together
they have been a source of invaluable wise counsel and sound advice over a
number of years.
We were separately delighted to welcome Ben Carswell to the Board on 1
December as a non-executive director.
Current trading and prospects
The launch of the new, next generation TrueVue monitor is a key milestone for
the Group, with the first sale of the new TrueVue monitor having taken place
at the end of November 2023.
We are seeing encouraging levels of interest in this product from the UK and
our international distributors. Work has already started on the FDA 510(k)
premarket regulatory submission to the US Food and Drug Administration (the
"FDA") which, once regulatory approval has been received, will enable us to
sell the new monitor into the US market.
We are continuing to drive forwards the development of our new non-invasive
device. We believe the new device will be used in clinical areas not served
well by our existing products and will therefore allow us to sell into
significantly larger markets.
We continue to focus on optimising the commercial opportunities associated
with a small number of significant tenders, including in Latin America, where
we believe that Deltex Medical's ODM technology has strong opportunities to
take market share.
After a tough 2023, I am pleased to be able to report that 2024 has started
well and we are much encouraged for the future.
Nigel Keen
Chairman
27 March 2024
BUSINESS REVIEW
Overview
Deltex Medical is a world leader in high accuracy oesophageal Doppler
monitoring, via its TrueVue platform, which allows real-time monitoring by
clinicians of a patient's haemodynamic status.
More than twenty peer-reviewed, randomised controlled trials have demonstrated
that an ODM-driven haemodynamic protocol can result in statistically
significant reductions in post-operative complications such as acute kidney
injuries, resulting in lower costs for hospitals due to shorter patient
length-of-stay. The use of the ODM technology is good for patients. It also
increases throughput and capacity for hospitals, which should help reduce the
backlog in elective surgery, which is a particular issue in the United
Kingdom.
Deltex Medical's technology was originally developed in a London ICU to assist
with the treatment of acutely unwell critical care patients. Over time demand
for the Group's high fidelity ODM-based haemodynamic monitoring technology has
migrated from the ICU to the OR, particularly for complex elective surgical
procedures; however, there are now signs of increasing interest from ICUs in
the ODM technology.
Before the Covid-19 pandemic, approximately 80% of the Group's revenues were
associated with elective surgical procedures in ORs. The near-complete
cessation of elective surgery during the pandemic was highly disruptive to
Deltex Medical's commercial activities, particularly in the UK and the USA,
where the Group sells its technology to hospitals directly.
Although, post-pandemic, elective surgery has restarted around the world,
medical device sales teams, including Deltex Medical's, are still experiencing
more restricted levels of access to ORs and ICUs than they enjoyed
pre-pandemic.
Launch of the new TrueVue monitor
After a number of years in development, the Group released its new TrueVue
monitor onto the market in November 2023. The development of the new device
had taken longer than expected as a result of disrupted supply chains during,
and for some time after, the Covid-19 pandemic.
The new monitor has been designed to act as a platform for a range of
complementary technologies, including a new, novel non-invasive device that
the Group is also developing.
Orders for the new TrueVue monitor are increasing which is encouraging. There
is a substantial domestic and international replacement and upgrade market,
which it is anticipated will drive orders in the short to medium term. In
addition, the Group expects to see probe orders increasing based on new
monitor equipment sales.
The new TrueVue monitor has been designed with production engineering input in
order to reduce the prime costs of the equipment as well as enhance its
overall reliability. Good progress has been made with reducing the labour
hours required for each of the sub-assemblies as the Group streamlines its
manufacturing processes. Overall, the gross margin on the new TrueVue monitor
is expected to be higher than the previous unit, although price points vary
significantly between direct sales into the UK (as well as, post launch, the
USA) and overseas sales to distributors.
Work has started on assembling the necessary documents required for the 510(k)
premarket regulatory submission to the US FDA. It is planned that the FDA
filing process should be completed in 2025 and sales of the new monitor into
the US market should follow shortly thereafter.
Non-invasive device
Deltex Medical's current ODM device is principally used on sedated patients:
typically those admitted to ICUs or being operated on within ORs. The
resultant haemodynamic data derived from the ODM technology is extremely
accurate and has been shown in some 24 published randomised controlled trials
to be associated with significantly improved patient outcomes and reduced
costs to hospitals as a result of shorter hospital stays. However, limiting
the use of this technology just to patients in ICUs and ORs self-evidently
reduces the size of the addressable market and constrains the Group's
revenues.
The new non-invasive Doppler-based haemodynamic monitoring device that the
Group is developing is designed to use the same underlying oesophageal Doppler
haemodynamic monitoring technology which is supported by a large body of
published literature. However, a different, novel design will enable the
technology to be used non-invasively and thus on a much larger patient
population.
Although this new non-invasive device is still in the development phase, the
Group is working on the basis that it should ultimately end up representing a
form of digital haemodynamic stethoscope. This will give healthcare workers,
from doctors to nurses across a range of departments, immediate access to high
quality, real time haemodynamic data for patients. In turn, these data are
anticipated to give rise to improved and more rapid treatment of patients
throughout a hospital or other clinical care-giving facility such as the
emergency services or a primary care doctor's office.
Deltex Medical believes that this new, non-invasive device, with a
substantially larger addressable market, represents a significant opportunity
for the Group to drive substantial profitable growth.
In parallel with working on the technical development aspects of this new,
novel non-invasive technology, Deltex Medical is carrying out structured
'voice of the customer' discussions with prospective hospital-based users to
determine how best to launch, and charge for, this new non-invasive ODM
technology. Discussions with a number of the Group's international
distributors suggest that there could be significant overseas market demand
when this new device is launched.
Three principal divisions: UK, USA and International
Deltex Medical's commercial activities are structured across three divisions:
the UK; the USA and International.
The Group has faced difficulties in driving its commercial activities back to
those levels seen pre the Covid-19 pandemic in its two direct sales
territories of the UK and the USA. Many hospitals have imposed significant
restrictions on salespersons or clinical educators accessing ORs or ICUs. Once
any hospital stops using Deltex Medical's ODM technology, it can take time and
significant resources to re-instigate the use of the technology as the
clinical staff change rapidly and new staff need to be trained on the use of
ODM.
Deltex Medical has also been restricting expenditure on sales and marketing
activities in the UK and USA in advance of the launch of the new monitor.
One way in which the Group has been seeking to mitigate the impact of its
reduced sales and marketing spend, as well as the impact of greater
restrictions on sales teams meeting hospital-based decision-makers in person,
is by increasing the use of digital marketing materials. The Group is adopting
a number of digital marketing techniques as well as training via the launch of
its online Deltex Medical Academy.
The Group monitors closely per user probe revenues. Internal analyses
demonstrate that only small increases in per (hospital) account probe
purchases, or the successful adoption of the ODM technology by a small number
of new, high-volume users, should drive the Group to positive cashflow.
There remains a substantial, and increasing, backlog in elective surgery as a
result of the Covid-19 pandemic. In the UK the adverse effects of this backlog
on patients have been exacerbated by a number of strikes by NHS healthcare
workers. This backlog represents both an opportunity and a challenge for the
Group. For example, there are powerful arguments, supported by the published
evidence base, that the use of Deltex Medical's TrueVue technology increases
patient throughput in a hospital and improves patient outcomes, thereby
helping to reduce the size (and associated cost) of the backlog. Conversely,
there is some anecdotal evidence that certain NHS hospitals, under pressure to
reduce the backlog, are reluctant to promote the adoption of new and/or
different technologies.
Following the launch of the new TrueVue monitor, Deltex Medical has now
notified all UK hospitals that the previous legacy version (CardioQ-ODM+) is
now obsolete. The Group has a regulatory requirement to provide service
support to maintain these devices for ten years. Many NHS hospitals with the
previous monitor are expected to apply for funding from capital replacement
programmes to purchase the new monitor.
As it will take some time to complete the submissions required to receive FDA
approval for the new TrueVue monitor, the Group's US operation has been tasked
with supporting as many existing customers as possible in order to drive up
probe sales, whilst cultivating these existing relationships in advance of the
launch of the new TrueVue monitor into the US market, which is expected to be
next year.
The International division, with its team of some 40 overseas distributors,
continues to represent an important route to market for the Group's products.
International sales represent approximately half of the Group's revenues.
In the first quarter of 2024, the new TrueVue monitor has been demonstrated at
three large international medical exhibitions. Deltex Medical attended Arab
Health in January 2024, which is now one of the largest medical device
exhibitions worldwide, where it also met with a number of its distributors.
Deltex Medical also attended the Korea International Medical & Hospital
Equipment Show (KIMES) in Seoul, as historically the legacy monitor sold well
in South Korea.
Earlier this month, the Group exhibited at the World Congress of Anaesthesia
(WCA) in Singapore which is held every four years. The advantages of using
Deltex Medical's technology were presented at the WCA by a clinician who
presented data that demonstrated that the ODM technology should be used on
young fit patients; and not just sick elderly patients.
Although the Latin American contract that the Group was awarded last year has
not developed as rapidly as was first expected, there are encouraging signs
that over the next couple of years this contract will be an important source
of revenues to Deltex Medical. In this respect, it is encouraging that some
hospitals in that market have already started to purchase probes that are
linked to this contract.
Product development and innovation
During 2023, the research and development team were focussed on completing the
development of the new TrueVue monitor. This included the completion of
complex and onerous regulatory testing, including electromagnetic
compatibility (EMC) testing.
Notwithstanding that the successful development of the new monitor was the
Group's priority, research work also continued on the development of the new,
novel non-invasive haemodynamic monitoring technology, including the
integration of the recommendations of the National Physical Laboratory arising
from Deltex Medical's collaborative research work with them.
In addition to the development work on the new non-invasive device, work
continues in relation to supporting the launch of the new TrueVue monitor.
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. The post-Brexit regulatory
regime in the UK, as well as for UK companies selling into Europe, is still
evolving and the Group keeps actual or prospective changes in applicable
regulations under close scrutiny.
In Europe the transition from the Medical Device Directive to the European
Medical Device Regulation ("MDR") has been deferred until 2028. Although this
reduces some regulatory-associated complexity in the short term, there is
still considerable uncertainty as to what steps will be required, and by when,
for a Class II medical device manufacturer to comply with MDR in the future.
Investment in the Group's regulatory activities remains an important part of
the business and is critical for its future success.
Conclusion
Completion of the new TrueVue monitor has greatly enhanced Deltex Medical's
technological offering to the market as well as opening up the possibility to
use this instrument as a platform for further product line extensions. We are
particularly interested in the commercial potential, and significantly larger
addressable market, associated with the easier-to-use non-invasive
haemodynamic monitoring technology which we are developing.
Initial market feedback and demand for the new monitor has been encouraging,
both from existing and prospective customers. We see its launch as a critical
building block in driving up probe revenues across all three of the Group's
divisions.
Our key challenge is to commercialise the Group's new technologies
successfully from our significantly lower cost base by maximising the use of
digital marketing. As we start to generate cash, we will be able to initiate
further sales initiatives to drive up revenues.
We are pleased with the progress that we have made to date in 2024.
Andy Mears
Chief Executive
27 March 2024
Consolidated statement of comprehensive income
For the year ended 31 December 2023
2023 2022
£'000 £'000
Revenue 1,776 2,482
Cost of sales (651) (643)
Gross profit 1,125 1,839
Administrative expenses (1,081) (1,560)
Sales and distribution expenses (685) (1,027)
Research and Development, Quality and Regulatory (217) (231)
Impairment loss on trade receivables - (39)
(366)
Exceptional costs -
Total costs (2,349) (2,857)
Other gain 172 71
Operating loss (1,052) (947)
Finance costs (230) (199)
Loss before taxation (1,282) (1,146)
Tax credit on loss - 1
Loss for the year (1,282) (1,145)
Other comprehensive expense
Items that may be reclassified to profit or loss:
Net translation differences on overseas subsidiaries 5 35
Other comprehensive expense for the year, net of tax 5 35
Total comprehensive loss for the year (1,277) (1,110)
Total comprehensive loss for the year attributable to:
Owners of the Parent (1,252) (1,114)
Non-controlling interests (25) 4
(1,277) (1,110)
Loss per share - basic and diluted (0.11p) (0.17p)
Consolidated balance sheet
As at 31 December 2023
Company Number 03902895
2023 2022
(restated)*
£'000 £'000
Assets
Non-current assets
Property, plant and equipment 198 269
Intangible assets 3,965 3,769
Total non-current assets 4,163 4,038
Current assets
Inventories 716 821
Trade receivables 177 456
Financial assets at amortised cost - 15
Other current assets 87 140
Current income tax recoverable 84 72
Cash and cash equivalents 705 471
Total current assets 1,769 1,975
Total assets 5,932 6,013
Liabilities
Current liabilities
Borrowings (79) (935)
Trade and other payables (855) (1,540)
Total current liabilities (934) (2,475)
Non-current liabilities
Borrowings (1,665) (1,069)
Trade and other payables (119) (177)
Provisions (71) (64)
Total non-current liabilities (1,855) (1,310)
Total liabilities (2,789) (3,785)
Net assets 3,143 2,228
Equity
Share capital 7,204 6,990
Share premium 35,650 33,672
Capital redemption reserve 17,476 17,476
Other reserve 473 527
Translation reserve 173 168
Convertible loan note reserve 82 82
Accumulated losses (57,769) (56,566)
Equity attributable to owners of the Parent 3,289 2,349
Non-controlling interests (146) (121)
Total equity 3,143 2,228
*Prior year restatement relates to an offset of a debtor and creditor balance
Consolidated statement of changes in equity for the year ended 31 December
2023
Capital redemption Convertible loan note reserve Non- controlling
Share capital Share premium reserve Other reserve Translation Accumulated Total interest Total equity
reserve losses
£'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
loss
Loss for the period - - - - - - (1,257) (1,257) (25) (1,282)
Other comprehensive income for the period - - - - - 5 - 5 - 5
Total comprehensive - - - - - 5 (1,257) (1,252) (25) (1,277)
loss for year
Transactions with
owners of the Group
Shares issued during 214 2,171 - - - - - 2,385 - 2,385
the year
Issue expenses - (193) - - - - - (193) - (193)
Transfers - - - (54) - - 54 - - -
Balance at 7,204 35,650 17,476 473 82 173 (57,769) 3,289 (146) 3,143
31 December 2023
Consolidated statement of changes in equity for the year ended 31 December
2022
Capital redemption Convertible loan note reserve Non- controlling
Share capital Share premium reserve Other reserve Translation Accumulated Total interest Total equity
reserve losses
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January
2022 5,849 33,502 17,476 573 82 133 (55,588) 2,027 (125) 1,902
Comprehensive
loss
Loss for the period - - - - - - (1,149) (1,149) 4 (1,145)
Other comprehensive - - - - - 35 - 35
35
income for the period
Total comprehensive - - - - - 35 (1,149) (1,114) 4 (1,110)
loss for year
Transactions with
owners of the Group
Shares issued during 1,141 285 - - - - - 1,426 - 1,426
the year
Issue expenses (115) (115)
(115)
Equity-settled share- - - - 125 - - - 125 - 125
based payment
Transfers - - - (171) - - 171 - - -
Balance at 6,990 33,672 17,476 527 82 168 (56,566) 2,349 (121) 2,228
31 December 2022
Consolidated statement of cash flows
for the year ended 31 December 2023
2023 2022
£'000 £'000
Cash flows from operating activities
Loss before taxation (1,282) (1,146)
Adjustments for:
Finance costs 230 199
Depreciation of property, plant and equipment 110 88
Amortisation of intangible assets 23 40
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) -
Non-Executive Director fees 91 -
Share-based payment expense - 125
Other gain (83) (71)
Effect of exchange rate fluctuations 5 35
(843) (730)
Decrease/(Increase) in inventories 105 (48)
Decrease/(Increase) in trade and other receivables 332 (57)
(Decrease)Increase in trade and other payables (691) 306
Decrease in staff advances 15 -
Increase in provisions 7 7
Net cash used in operations (1,075) (522)
Interest paid (191) (153)
RDEC taxes received 71 69
Net cash used in operating activities (1,195) (606)
Cash flows from investing activities
Purchase of property, plant and equipment (9) (70)
Capitalised development expenditure (net of grants) (361) (674)
Net cash used in investing activities (370) (744)
Cash flows from / (used in) financing activities
Issue of ordinary share capital 1,887 1,340
Expenses in connection with share issue (193) (115)
Net movement in invoice discount facility (106) (17)
Standby loan facility repayment - (500)
Standby loan facility drawdown 250 750
Principal lease payments (52) (45)
Net cash generated from financing activities 1,786 1,413
Net increase/(decrease) in cash and cash equivalents 221 63
Cash and cash equivalents at beginning of the period 471 413
Exchange loss on cash and cash equivalents 13 (5)
Cash and cash equivalents at end of the period 705 471
1. Nature of the financial information
This Results Summary containing condensed financial information for the year
ended 31 December 2023 should be read in conjunction with the Deltex Medical
Group Plc's Annual Report & Accounts 2023 which were prepared 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 2022 have been
filed with the Registrar of Companies and those for the year ended 31 December
2023 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 2022 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.
2. Accounting policies
The Group's principal accounting policies can be found in the Group's Annual
Report & Accounts 2023.
Going concern
The Group meets its day-to-day working capital requirements through a
combination of operational cash flows, an invoice discounting facility and, if
required, the raising of additional finance.
The Directors have reviewed detailed budgets and forecasts until 30 June 2025
that were prepared by the Group. This review indicates that the Group is
expected to continue trading as a going concern based on projected net cash
flows derived from revenue generated by the Group. As a result of the Group's
restructuring which took place in 2023, the Group's cost base has been reduced
to a level appropriate for the current revenues of the Group.
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 and EBITDA
For the year ended 31 December 2023
Direct market Indirect markets Probes Monitors
Probes Monitors Other 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 4 111
691 139 85 732 119 11 1,776
For the year ended 31 December 2022
Direct
markets
Indirect markets
Probes Monitors Other Probes Monitors Other Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
UK 461 106 75 - - - 642
USA 463 122 51 - - - 636
France - - - 464 15 8 487
Latin America - - - 90 212 2 304
South Korea - - - 132 - - 132
Hong Kong - - - 13 32 3 48
Austria - - - 44 - 2 46
Cayman Islands - - - 24 18 1 43
Other countries 19 30 - 90 2 3 144
943 258 126 857 279 19 2,482
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.
2023 2022
£'000 £'000
Sale of goods 1,732 2,430
Maintenance income 44 52
1,776 2,482
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:
2023 2022
£'000 £'000
Adjusted EBITDA (860) (607)
Non-cash items:
Depreciation of property, plant and equipment (110) (88)
Amortisation of development costs (23) (40)
Impairment loss on trade receivables - (39)
Non-executive directors' fees and employer's NIC (91) (136)
Gain on convertible loan note 89 -
Write off of research and development projects not taken forward (141) -
Share-based payment expenses - (125)
Change in accumulated absence cost liability Cash item: 1 17
Other tax income 83 71
(192) (340)
Operating loss (1,052) (947)
Finance costs (230) (199)
Loss before tax (1,282) (1,146)
Tax credit on loss - 1
Loss for the year (1,282) (1,145)
The following table provides information about trade receivables and contract
liabilities from contracts with customers. There were no contract assets at
either 31 December 2023 or 31 December 2022.
31 December 31 December
2023 2022
£'000 £'000
Trade receivables which are in 'Trade and other receivables' 177 456
Contract liabilities (Note 17.3) (44) (39)
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 2023:
2024 2025 2026 2027 Total
£'000 £'000 £'000 £'000 £'000
Revenue expected to be recognised 31 4 2 7 44
Revenue recognised in 2023 which was included in contract liabilities at 31
December 2022 amounted to
£24,000. Revenue recognised in 2022 included in contract liabilities at 31
December 2021 amounted to £30,000.
4. Dividends
The directors cannot recommend payment of a dividend (2022: nil).
5. Basic and diluted loss per share
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. For 2022, the
loss per share calculation is based on the loss of £1,149,000 and the
weighted average number of shares in issue of 685,490,974. While the Group is
loss-making, the diluted loss per share and the loss per share are the same.
Distribution of Annual Report and Accounts
The Group will shortly be posting a copy of the Annual Report and Accounts for
the year ended 31 December 2023 to shareholders, together with a Notice of
Annual General Meeting to be held at 11.00 am on 8 May 2024 at the offices of
DAC Beachcroft LLP, 25 Walbrook, London, EC4N 8AF.
A copy of the Annual Report and Accounts and the Notice of Annual General
Meeting will also shortly be available from the Group's website at
www.deltexmedical.com/investor-relations/
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