The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014 as amended by the Market Abuse (Amendment) (EU Exit) Regulations 2019. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.
Inspiration Healthcare Group plc
("Inspiration Healthcare", the "Company" or the "Group")
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 the six months ended 31 July 2023.
Revenues for the period were £20.4 million, broadly in line with the £20.5 million reported for the same period last year. Within this, revenues for Neonatal products including service grew by 4% to £16.1 million, driven by sales of the Group's flagship product, the SLE6000 ventilator. This growth is despite unexpected delays to regulatory approval for certain new distributed products. These products were anticipated to replace products withdrawn from the market that contributed £1.0m to revenue in the prior period. On a like-for-like basis, Neonatal revenues grew by 11% in the period.
Growth was also hindered by the Infusion products where revenues declined by 14% to £4.3 million as a result of de-stocking by a leading customer. Infusion revenues, excluding this customer, grew by 18% as underlying customer demand remained strong.
Gross margin improved in the period and is expected to be over 48%, representing a significant increase on the 44% delivered for the financial year ended 31 January 2023. This improvement has been driven by a focus on core growth neonatal products which yield higher margins.
Net debt (excluding IFRS16 lease liabilities) improved to £2.1 million as at 31 July, a £1.7 million reduction from the position at 31 January 2023. This was achieved as a result of strong operating cash generation of £2.9 million for the period.
As we continue to navigate our way through the transition to the new Medical Device Regulations in Europe, we are seeing some changes in our product mix, and we are using this opportunity to focus on the products with higher margins and the best long-term growth opportunities. Despite challenging market conditions, we continue to expect to deliver revenue growth for the year as a whole with gross margins at around the level achieved in the first half. This is expected to result in EBITDA margins showing a significant year on year improvement. Operating cash generation is also forecast to remain strong for the second half.
Neil Campbell, CEO of Inspiration Healthcare, commented: "Whilst disappointed in first half revenues, we are reporting margins returning towards our expected levels and improved cash generation, which have combined to reduce net debt and put the Group in a stronger financial position. We are focussed on reshaping the business and are confident in returning to growth in the second half."
The Group will be announcing interim results for the six months ended 31 July 2023 on Tuesday, 3 October 2023.
Inspiration Healthcare Group plc
Tel: +44 (0)330 175 0000
Neil Campbell, Chief Executive Officer
Alan Olby, Chief Financial Officer
Liberum (Nominated Adviser & Broker)
Tel: +44 (0)20 3100 2000
Walbrook PR Ltd (Media and Investor Relations)
Tel: +44 (0)20 7933 8780 or [email protected]
Mob: +44 (0) 7876 741 001
Mob: +44 (0) 7796 794 663
Mob: +44 (0) 7747 515 393
About Inspiration Healthcare
Inspiration Healthcare (AIM: IHC) is a global provider of medical technology for use in neonatal intensive care & operating theatres. The Company provides high quality innovative products to patients around the world which help to improve patient outcomes and it actively invests in innovative product opportunities and disruptive technologies.
The Company has key own brand products that can be used within the first days of life to help premature and sick babies; helping resuscitation and stabilisation in the first moments of life through to preventing brain damage and both invasive and non-invasive respiratory support in terms of capital equipment and disposable medical devices. Additionally, the Company has its own range of products for maintaining normothermia pre, during and post-surgery.
Since September 2019, the Company has acquired Vio Holdings a designer, manufacturer and supplier of single use respiratory products and sterile medical consumables and S.L.E., a leading designer, manufacturer and global provider of neonatal ventilation products. The Group generates approximately 58% of its revenues from export markets and more than half of its revenues come from its own-branded products.
With product availability actively promoted to over 80 countries through a distribution network, Inspiration Healthcare's success has been built on continuous innovation, excellent customer service and an inherent commitment to improving patient outcomes, working in close collaboration with key opinion leaders across the globe.
In the UK and Ireland, the Group has direct sales teams selling Group Branded and complementary products from third parties, with an additional range of home healthcare products. This is supported by Technical Support for planned preventative maintenance and emergency assistance.
The Group operates from various sites in the UK for R&D, Marketing and operations with manufacturing based in Croydon (south London) and Hailsham (East Sussex). The Group's Head Office is located in Crawley, a short distance from London's Gatwick Airport.
Further information on Inspiration Healthcare can be found at www.inspirationhealthcaregroup.com