REG - Deltex Med Grp PLC - Year-end trading update and proposed cancellation

Deltex MedicalAnnouncement

16/01/2025 07:00

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RNS Number : 5059T  Deltex Medical Group PLC  16 January 2025

The information contained within this announcement was deemed by the company
to constitute inside information as stipulated under the UK Market Abuse
Regulations

 

16 January 2025

Deltex Medical Group plc

("Deltex Medical" or the "Group")

Year-end trading update

Proposed cancellation from AIM

Proposed director changes: CEO to step down and current COO to become CEO

 

Trading update

 

Deltex Medical Group plc (AIM: DEMG) provides the following update following
the close of the financial year ended 31 December 2024 ("FY24").

 

The Group made good progress during FY24 as can be seen from, among other
things, the year-on-year increase in revenues. The Group's unaudited revenues
for FY24 were £2.1 million (2023: £1.8 million), representing an increase of
approximately 17%. The Group's cash at hand at 31 December 2024 was £0.24
million (2023: £0.7 million).

 

The new TrueVue monitor was promoted aggressively - both in the UK and
internationally - and revenues from this new product are beginning to grow.

 

In addition, the manufacturing processes associated with the new TrueVue
monitor were optimised after a short period of 'de-bugging'. 56 new monitors
have been manufactured and shipped in FY24, either to distribution partners
for re-sale or direct to customers. Although some orders were placed by
distributors in Latin America during the second half, the Group is still
waiting for further orders from this region to be received.

 

The competitive backdrop for Deltex Medical also appears to be improving as
there is accumulating evidence in academic literature that competitive
pressure-based haemodynamic monitoring systems, as distinct to the Group's
volume and flow-based technology, do not provide clinicians with the critical
data that they need to optimise patients' haemodynamic status.

 

The Group continues to pursue regulatory approval for the new monitor in
various international territories. Regulatory registrations have recently been
obtained for Indonesia, Malaysia and Hong Kong. Distribution partners for
those territories are being established.

 

The Group continues work on developing the new non-invasive Doppler-based
haemodynamic monitoring device.

 

Proposed cancellation from AIM

 

Notwithstanding the increase in annual revenues, the positive steps associated
with the new TrueVue monitor and the improving competitive environment, the
Group's cost base remains too high and the Group has continued to consume cash
during the year despite the increase in revenues.

 

One of the most significant costs that the Group has to bear relates to the
direct and indirect expenses associated with the Group maintaining its
admission to trading on AIM ("Admission"). This includes but is not limited to
fees payable to its professional advisers. These costs are estimated to total
approximately £0.2 million per annum, representing approximately 10% of the
Group's FY24 unaudited revenues. The board of directors of the Group (the
"Board" or the "Directors") believes that these costs are disproportionate to
the limited benefits that Admission provides to the Group and its shareholders
("Shareholders").

 

In addition to these Admission-related costs, the Board considers the
regulatory environment associated with Admission, including the ongoing
disclosure obligations, to be onerous for the Group taking into account its
size and current market capitalisation, as well as impeding its commercial
interests. The Board believes that cancelling its Admission will materially
reduce the Group's recurring administrative and adviser expenses, whilst
allowing the Board to focus on achieving its commercial and strategic goals.
The Board has also considered the value that the current market capitalisation
ascribes to the Company, the liquidity of the Ordinary Shares and the ability
to raise further equity through public markets at an acceptable price should
It be required.

 

Accordingly, the Board intends to seek approval from Shareholders to cancel
the admission of the Group's ordinary shares of 0.01 pence each from trading
on AIM in accordance with Rule 41 of the AIM Rules for Companies (the "AIM
Rules") (together the "Proposed Cancellation"). A circular convening a general
meeting of the Group to approve the Proposed Cancellation and providing
further detail on the next steps will be published in due course and a further
announcement will be made at that time.

 

Proposed director changes

 

Separately, Andy Mears has informed the Board that he wishes to step down as
CEO and as a director of the Company to pursue other opportunities. In
parallel, the Board is pleased with the improvements that the
recently-promoted Natalie Wettler has made to the operations of the Group -
and, in particular, those associated with the production of the new TrueVue
monitor. The Board is delighted that Natalie Wettler has agreed to step up to
the CEO role once the Proposed Cancellation has taken effect and accordingly,
Andy Mears will leave the Company at that time.

 

The Board also intends to take a number of steps to strengthen the management
of the business after the Proposed Cancellation.

- Ends -

 

Contacts:

 Deltex Medical Group plc                                        01243 774 837
 Nigel Keen, Chairman                                            investorinfo@Deltexmedical.com
 Andy Mears, Chief Executive
 Natalie Wettler, Chief Operating Officer

 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/)

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