11th Mar 2015 09:04
LONDON (Alliance News) - Deltex Medical Group PLC Wednesday posted a widened pretax loss for 2014 in what it called "a difficult year", as revenue was hampered by cash constraints in the UK National Health Service and product delays in some of its overseas markets.
Deltex primarily produces oesophageal Dopple monitoring systems, which are used to measure blood flow during surgery by generating a low-frequency ultrasound signal, and utilising the Doppler effect.
The Doppler effect, discovered by Austrian physicist Christian Doppler, is the change in frequency of a wave for an observer moving relative to its source, such as the way in which the noise of a siren changes when it passes by.
Deltex Medical posted a pretax loss of GBP3.1 million, widened from a pretax loss of GBP2.2 million a year before, as revenue declined to GBP4.6 million from GP5.5 million.
In the UK, sales of surgical probes fell 20%, and revenue from critical care probes fell 10%, which Deltex attributed to de-stocking in the NHS. Deltex also criticised the way in which the NHS had followed through its plans to implement oesophageal Doppler monitoring systems.
Deltex said the implementation came a year late and was "dramatically scaled down in ambition", and the NHS allowed hospitals to adopt other technologies as substitutes. Financial penalties were not enforced, and were abandoned in 2014, Deltex said.
Whilst the UK government is undertaking a new review of technology adoption in the NHS, Deltex said it "considers it highly unlikely that momentum will be restored by central NHS initiatives in the foreseeable future."
It has been restructuring is UK business since January, reducing its planned 2015 cost base by around GBP1.0 million, introducing new products to sell into the UK anaesthesia and critical care markets, and shifting its focus towards clinician led quality improvement programmes to "help restore momentum behind adoption of ODM in the UK over the course of 2015."
In the US surgical probe sales rose 14%. Sales were hampered by the strength of sterling, and increased 20% in local currency. The company has been increasing its presence in the US.
In international markets surgical probe sales were down 29%, as good progress in France, Sweden and Austria was offset by tender process delays in South Africa and Canada, strikes by clinical staff in Peru reducing surgical volumes and the company's decision to terminate a distribution relationship in Spain.
"The company has the financial and other resources required to see through its US market development plans as well as to bring to market a number of exciting and innovative product developments," said Chairman Nigel Keen in a statement.
Shares in Deltex are trading down 9.2% at 4.20 pence Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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