REG - Inspiration Health - Trading update

Inspiration HealthcareAnnouncement

18/02/2025 07:15

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RNS Number : 4127X  Inspiration Healthcare Group PLC  18 February 2025

Inspiration Healthcare Group plc

("Inspiration Healthcare", the "Company" or the "Group")

 

Full year trading update

Strong second half with momentum carried into the current year

 

Highlights

·    Strong H2 revenue of £21.3 million (H1: £17.0 million) and full
year revenue of £38.3 million

·    Annualised cost reductions of £1.25 million implemented in the
period

·    Return to profit with EBITDA positive for the year

·    Strong sales momentum in Q4 2025 expected to continue into H1 FY26

·    FY26 growth underpinned by recent $6 million contract win and $4.3
million Middle Eastern contract awarded in FY25 with revenues expected to be
recognised in FY26

·    New CEO, Raffi Stepanian, in place from January 2025

 

Inspiration Healthcare Group plc (AIM: IHC), the global medical technology
company pioneering best-in-class, specialist neonatal intensive care medical
devices, provides a trading update for year ended 31 January 2025.

 

Revenues for the year were £38.3 million (FY24 £37.6 million) following a
strong second half across the Group. EBITDA is expected to be positive (FY24:
£2.0 million), with H2 gross margin benefitting from an improved sales mix of
higher margin neonatal products, and the initial effects of cost savings.

 

No revenue was recognised from the $4.3 million Middle Eastern SLE6000
ventilator contract during the FY25 period despite the first part of this
order having been shipped prior to the year end as this initial shipment was
held awaiting customs clearance. The revenue from this initial shipment of
circa $2 million is expected to be recognised in early FY26 on receipt of the
goods by the customer, with the second and final shipment expected to be made
in FY26, following receipt of the final letter of credit.

 

Despite this, sales for the fourth quarter were strong, with January
delivering the highest sales of the period, and management expect this
momentum to continue into FY26. Business performance continues to improve,
with management focusing on driving core activities as part of the Company's
'Back to Basics' strategy. Encouragingly, prior to the year end, the Company
secured its largest single contract to date, at $6 million for SLE6000 and
SLE1500 ventilators plus associated accessories and consumables, with a
trusted global humanitarian aid organisation focusing on child and infant
welfare. Delivery of this contract is anticipated to be in the first half of
this financial year.

 

A cost reduction programme was implemented during the second half of last year
delivering annualised savings of £1.25 million which, alongside expected
growth in revenue underpinned by the contract win noted above and the
recognition of the Middle Eastern order is expected to contribute to increased
profitability in the current year.

 

At 31 January 2025, the Group's net debt (excluding IFRS16 lease liabilities)
was £8.3 million (31 January 2024: £6.0 million). This was a result of
working capital remaining high at the year end following strong Q4 trading. We
anticipate strong operating cash flow in the first half of this year as our
inventory continues to reduce and our higher year end debtor balances convert
to cash. As a result of the strong trading performance, all covenants on the
Group's debt facilities are expected to be met.

 

Commenting, Roy Davis, Non Executive Chair of Inspiration Healthcare, said: "I
am pleased to report a strong second half performance despite not being able
to recognise the partial Middle Eastern contract shipment made in the period.
 While revenues were therefore slightly behind market expectations we have
delivered a positive EBITDA for the full year.

 

"While frustrated with the delays to the Middle Eastern contract, this has
been outside of our control and having secured the first shipment it is now
expected to be fully executed in FY26. We are also delighted to have secured
in H2 our largest single contract to date for $6 million with an international
trusted Non-Governmental humanitarian aid organisation, for delivery in the
first half of FY26.  Combined, these contracts provide a strong platform to
the first half of FY26.

 

"Overall, we have had a very busy year implementing our 'Back to Basics'
strategy, delivering savings through restructuring and recently welcomed a new
CEO, Raffi Stepanian, who joined us in January. Our goal is to build on the
momentum from the second half of last year to deliver sustained growth in
revenue, profit and cash generation."

 

 

For further information, please contact:

 

 Inspiration Healthcare Group plc                                                  Tel: +44 (0)330
                                                   175 0000
 Roy Davis, Non-Executive Chair

 Raffi Stepanian, Chief Executive Officer

 Alan Olby, Chief Financial Officer

 Panmure Liberum (Nominated Adviser & Broker)                                      Tel: +44 (0)20
                                                   3100 2000
 Richard Lindley

 Will Goode

 Emma Earl

 Will King

 Walbrook PR Ltd (Media & IR)                      Tel: +44 (0)20 7933 8780 or inspirationhealthcare@walbrookpr.com
 Anna Dunphy                                       Mob: +44 (0) 7876 741 001
 Louis Ashe-Jepson                                 Mob: +44 (0) 7747 515 393

 

About Inspiration Healthcare

 

Inspiration Healthcare (AIM: IHC) designs, manufactures and markets
pioneering medical technology. Based in the UK, the Company specialises in
neonatal intensive care medical devices, which are addressing a critical need
to help to save the lives and improve the outcomes of patients, starting with
the very first breaths of life.

 

The Company has a broad portfolio of its own products and complementary
distributed products, for use in neonatal intensive care designed to support
even the most premature babies throughout their hospital stay. Its own branded
products range from highly sophisticated capital equipment such as ventilators
for life support through to single-use disposables.

 

The Company sells its products directly to hospitals and healthcare providers
in the UK and Ireland, where it also distributes a range of advanced medical
technologies for infusion therapy.  In the rest of the world the Company has
an established network of distribution partners around the world giving access
to more than 75 countries.

 

The Company operates in the UK from its world-class Manufacturing and
Technology Centre in Croydon, South London and in the USA from its facility in
Melbourne, Florida.

 

Further information on Inspiration Healthcare can be found
at www.inspirationhealthcaregroup.com
(http://www.inspirationhealthcaregroup.com)

 

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