REG - Surgical Innovations - AGM Trading Statement

Surgical InnovationsAnnouncement

27/06/2022 07:00

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RNS Number : 2029Q  Surgical Innovations Group PLC  27 June 2022

 

Surgical Innovations Group plc

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

 

AGM Trading 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 10am today.

 

Following the strong final quarter of 2021, trading to date in the first half
of the year has continued with the same momentum. Revenues are showing
significant growth and for the six months to 30 June 2022 are expected to be
in excess of 22% above the comparable period last year. Early indications are
that this impetus is continuing into the second half of the year and, as such,
the Board remains confident of delivering results for FY2022 in line with
current expectations.

 

Demand in the UK market continues to be strong and is trending above
pre-pandemic levels of 2019. This is primarily due to underlying business wins
driven by the demonstrable sustainability advantages of our Resposable(TM)
product ranges. With the continued backlog of patients on waiting lists and
the NHS's fulfilment of 'Net Zero' obligations on sustainability, this range
is well positioned for further recovery and growth.

 

The international business is trading slightly ahead of performance for the
first half of the corresponding period in 2021. The appointment of two
international heads early in the year and the additional investment into the
marketing team will continue to strengthen commercial initiatives in key
markets and allow further bandwidth to open new markets.

 

The regulatory pathway continues to be challenging as the Company navigates
through the complexities of the EU Medical Device Regulation (MDR), however,
the Company remains on track to achieve certification in March 2023. In April,
the Company received Medical Device Single Audit Programme (MDSAP)
recertification, maintaining access to the key strategic markets of Canada,
USA, Japan and Australia for a further three years. 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.

 

The labour market has become increasingly challenging, and this is exacerbated
by inflationary pressures. The Group has invested further to retain and
attract employees through various initiatives, one of which is to join the
trial for the UK pilot programme for a four-day working week. This will be
carefully managed to ensure five-day continuity of service and support.

 

The shortage of skilled labour and challenges in supply chain logistics have
extended sales order lead times and impacted manufacturing productivity. This
has been mitigated to a degree by increased inventory holdings and close
cooperation with customers and dealers. However, there remains an increase in
back orders which will continue to be addressed in the second half of the
year.

 

The Group had a net available cash(1) balance of £1.79m as at 31 May 2022
compared to £1.76m as at 31 December 2021. The Group completed a refinancing
exercise at the end of March 2022, as a result of which borrowing facilities
comprise a £1.5m Coronavirus Business Interruption Loan Scheme (CBILS) loan
repayable by May 2026, and an invoice discounting arrangement of £1.0m which
remains unused.

 

Overall, the Group remains well funded for its current needs and, with recent
improvements in trading and the recognition of SI's differentiated Resposable
product range through new contract wins, the Board remains confident in the
prospects for growth in the remainder of the year and in the longer term.

( )

(1) Net cash equals cash less bank debt excluding IFRS16 lease obligations

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 / Rachel Hayes

 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

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 in the operating
theatre environment.

 

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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