TIDMSUN
RNS Number : 6175C
Surgical Innovations Group PLC
22 June 2021
Surgical Innovations Group plc
(the "Company", "SI" or the "Group")
AGM Trading Statement
Positive signs of recovery in key surgery markets
Revenues rebuilding towards pre-Covid levels
Surgical Innovations Group plc (AIM: SUN), the designer,
manufacturer and distributor of innovative technology for minimally
invasive surgery, provides the following update to shareholders
ahead of its Annual General Meeting being held today at 12
noon.
Following a challenging trading period in the previous financial
year as a result of the global pandemic, the Company has
experienced optimistic signs of recovery as a number of key
healthcare markets begin to resume elective surgery at close to
pre-covid levels. It is clear that the pent-up demand for surgery
continues to increase and healthcare providers are under pressure
to find innovative ways of increasing productivity and reducing
waiting times and costs. The NHS is beginning to utilise a
seven-day operating week for surgery as well as continued use of
the private sector to reduce the backlog; similar initiatives are
also being seen in other key markets.
The increased focus around sustainability continues to gain
traction with key stakeholders in the healthcare industry, as they
recognise the importance of reducing clinical waste from single use
plastics. In conjunction with the Royal College of Surgeons and the
Centre for Sustainable Healthcare, Elemental Healthcare (a wholly
owned SI subsidiary) launched the Green Surgery Challenge(1) in
February this year, an initiative aimed at developing surgical
practices that reduce plastic waste in operating theatres.
Additionally, Chantelle Rizan and Prof. Mahmood Bhutta from the
University of Brighton Medical School published a clinical paper,
entitled: "Environmental impact and life cycle financial cost of
hybrid (reusable/ single-use) instruments versus single-use
equivalents in laparoscopic cholecystectomy." This paper validated
the data supporting the green credentials of resposable products
manufactured by SI, concluding; "The carbon footprint of using
hybrid instruments (resposable) for laparoscopic cholecystectomy is
around a quarter of that for single-use equivalents, and the
financial cost around half. Given the global scale of laparoscopic
surgery, adoption of hybrid instruments could play an important
role in meeting carbon reduction targets in healthcare, and saving
money." (2)
Evaluations of SI products that had paused during the second
wave of the pandemic have restarted as elective surgery returns,
and the UK team has consolidated on the gains made during 2020 with
three further key accounts expected to convert to initial orders in
the coming weeks. The US team continues to make progress with a
number of significant general procurement organisations (GPOs) and
healthcare providers, and with operating rooms (ORs) becoming more
accessible for the sales team it is anticipated that the pace of
starting new evaluations in the US will increase during H2
2021.
Trading continues to rebuild towards 2019 levels, with Group
revenues in the first five months of 2021 at least 80% of those
achieved for the comparable period in 2019, over 50% up on the
comparable period in 2020. Substantial levels of restocking orders
during Q1 in Japan and USA have been encouraging and highlight both
increasing activity and confidence in forward demand in those key
markets. The UK market, whilst negatively affected in Q1 2021 by
the second wave, has seen sales remaining higher than those seen
during the first wave and continuing to improve recording monthly
sales in May 2021 at the highest level since September 2019.
Revenues at this level are sufficient to enable the Group to
currently operate at Adjusted EBITDA (3) break even and
operationally cash neutral before movements in working capital. Net
cash (4) at 31 May 2021 amounted to GBP2.41m (31 December 2020:
GBP3.10m), with the reduction attributable substantially to the
planned reflation of net working capital as a result of increased
activity levels.
A continued focus on operational and QA/RA activities have
allowed the Company to align capabilities with the needs of a
strong growth business. The senior management team has been further
strengthened by the appointment of Damien Donnelly as Sales and
Marketing Director (a non-board role), to focus on new products
that will enhance sales in key markets.
The Board considers that prospects for the Group are very
positive in the mid to long term, although it remains necessarily
cautious on short- term forecasting as uncertainties remain over
the possible effects of further waves of Covid-19 across multiple
geographies. The global vaccination programmes have broken the link
between infection and hospitalisation, boosting confidence that the
resumption in elective surgery will continue to increase, as
healthcare providers seek to slow and then reverse the current
growth in waiting lists. Given its innovative and differentiated
product portfolio, the Group is well placed to benefit from the
significant demand for surgery.
Notes
1
https://surgicalmic.nihr.ac.uk/get-involved-2/green-surgery-challenge/
2 medrxiv.org/content/10.1101/2021.03.10.21253268v1.full.pdf
3 Adjusted Earnings Before Interest, Taxation, Depreciation and
Amortisation. Adjustments relate to the exclusion of non-recurring
costs (if any) and share based payment charges
4 Net cash comprises aggregate cash balances less bank
indebtedness, and excludes leasing liabilities under FRS16
For further information please contact:
Surgical Innovations Group plc www sigroupplc com
David Marsh, CEO Tel: 0113 230 7597
Charmaine Day, Co Sec & GFC
N+1 Singer (Nominated Adviser Tel: 020 7496 3000
& Broker)
Aubrey Powell / Rachel Hayes/
Iqra Amin
Walbrook PR (Financial PR & Investor Tel: 020 7933 8780 or si@walbrookpr.com
Relations)
Paul McManus / Alice Woodings Mob: 07980 541 893 / 07407 804
654
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
re-usable, 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.
The Group currently employs approximately 100 people across two
sites in the UK. Product design, engineering and manufacturing are
carried out at the SI site in Yorkshire. Commercial activities
including marketing, UK distribution and international sales and
marketing are based at Elemental Healthcare in Berkshire.
internationally the Group sells into 47 countries with strong
markets In the North American and APAC regions
Further information
Further details of the Group's businesses and products are
available on the following websites:
www sigroupplc com
www surginno com
www elementalhealthcare co.uk
To receive regular updates by email, please contact
si@walbrookpr.com.
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END
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