REG - Surgical Innovations - AGM Statement

Surgical InnovationsAnnouncement

27/06/2023 07:15

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RNS Number : 9452D  Surgical Innovations Group PLC  27 June 2023

 

Surgical Innovations Group plc

("Surgical Innovations", the "Company" or the "Group")

 

AGM Statement

 

Surgical Innovations Group plc (AIM: SUN), the designer, manufacturer and
distributor of innovative medical technology for minimally invasive surgery
("MIS"), provides the following update to shareholders ahead of its Annual
General Meeting being held at 11am today.

 

In short, the forward-looking orderbook is extremely positive, providing
confidence in management forecasts for 2023 and the Board reiterates its
optimism for the longer-term growth trajectory for the Group. Notwithstanding
some ongoing headwinds and variability in performance across different
geographical markets, the Board's conviction is a function of multiple drivers
supporting demand for the Group's innovative, differentiated product offering.

 

The strong UK demand in 2022 has continued into 2023, despite industrial
action in the NHS and initiatives to reduce the backlog of surgery causing the
pace of evaluations to slow. The strength of the sustainability messaging
continues to drive new account wins and the investment in the "environmental
and financial calculator" enables the hospitals to quantify key metrics as the
NHS drives to meet Net Zero commitments. Key international markets, Japan and
Europe, have continued to perform above the comparative period in 2022 however
India and USA have been slower to gain momentum, in part due to local sales
training delays in India and some supply chain issues for key product in the
USA. The Company is confident that further investment in sales and marketing
support will help drive activity in these key markets during H2 2023. The
orderbook for Surgical Innovations' OEM business is strong although supply
chain challenges have impacted sales during H1.

 

The Company continues to make excellent progress towards Medical Device
Regulation ("MDR") transition with two of the three product groups
certificated and the third group going through its final stage. Whilst it had
been anticipated to have completed the MDR transition by the close of H1 the
recent change in deadline, granted by the EU in February, has reduced the
pressure on the competent authorities allowing focus to be shifted to other
pressing issues. The Compliance team continues to successfully manage a
programme of regulatory audits throughout the year, the latest being Medical
Device Single Audit Programme ("MDSAP") recertification which was received in
May. The Company also successfully navigated the transition to UK Conformity
Assessed status, enabling business continuation in the key UK market. There is
a significant cost burden associated with the evolving regulatory requirements
which, whilst challenging, represents an increasing barrier to entry and some
competitors may not be able to attain the new standards.

 

Whilst the labour shortages seen last year have receded, helped by the
measures management implemented during 2022, there remain persistent ongoing
supply chain challenges that have impacted manufacturing productivity and are
resulting in increased lead times for some key product lines. The Company has
continued to mitigate this by maintaining inventory at higher levels than
normal and anticipate that this will begin to reduce from H2 2023.

 

The Group had a net available cash(1) balance of £0.60m as at 31 May 2023
compared to £0.99m as at 31 December 2022, reflecting the higher inventory
holding and continued investment. The Group had £2.62m in available cash
resources at the end of May, including a £1.0m undrawn invoice discounting
facility, which gives it access to sufficient capital for its expected growth
in the second half of the year and beyond.

 

The Company anticipates release of interims towards the end of September.

Notes

(1) Net cash equals cash less bank debt only

 

 

 

For further information please contact:

 

 Surgical Innovations Group plc                           www sigroupplc com (http://www.sigroupplc.com/)
 David Marsh, CEO                                         Tel: 0113 230 7597
 Charmaine Day, CFO

 Singer Capital Markets (Nominated Adviser & Broker)      Tel: 020 7496 3000
 Aubrey Powell / Oliver Platts

 Walbrook PR (Financial PR & Investor Relations)          Tel: 020 7933 8780 or si@walbrookpr.com
 Paul McManus / Lianne Applegarth                         Mob: 07980 541 893 / 07584 391 303

 

About Surgical Innovations Group plc Strategy

The Group specialises in the design, manufacture, sale and distribution of
innovative, high quality medical products, primarily for use in minimally
invasive surgery. Our product and business development is guided and supported
by a key group of nationally and internationally renowned surgeons across the
spectrum of minimally invasive surgical activity.

 

We design and manufacture and source our branded port access systems, surgical
instruments and retraction devices which are sold directly in the UK home
market through our subsidiary, Elemental Healthcare, and exported widely
through a global network of trusted distribution partners. Many of our
products in this field are based on a "resposable" concept, in which the
products are part reusable, part disposable, offering a high quality and
environmentally responsible solution at a cost that is competitive against
fully disposable alternatives.

 

Elemental also has exclusive UK distribution for a select group of specialist
products employed in laparoscopy, bariatric and metabolic surgery, hernia
repair and breast reconstruction.

 

In addition, we design and develop medical devices for carefully selected OEM
partners and have also collaborated with a major UK industrial partner to
provide precision engineering solutions to complex problems outside the
medical arena.

 

We aim for our brands to be recognised and respected by healthcare
professionals in all major geographical markets in which we operate and
provide by development, partnership or acquisition a broad portfolio of cost
effective, procedure specific surgical instruments and implantable devices
that offer reliable solutions to genuine clinical needs,the Company's
Reposable portfolio enables healthcare providers to reduce both plastic waste
and their CO2 footprint as they strive for net zero.

 

Further information

Further details of the Group's businesses and products are available on the
following websites: www.sigroupplc.com (http://www.sigroupplc.com/)

www.surginno.com (http://www.surginno.com/)

www.elementalhealthcare.co.uk (http://www.elementalhealthcare.co.uk)

 

To receive regular updates by email, please contact si@walbrookpr.com

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