Trading update & Notice of results
LiDCO Group Plc
("LiDCO" or the "Company")
Trading update & Notice of results
LiDCO (AIM: LID), the hemodynamic monitoring company, provides the following trading update for the six months ended 31 July 2019.
LiDCO product revenues in the half year were up 10% compared with H1 last year to £3.33m (2018: £3.02m), slightly above the Board's expectations. The strong year on year sales growth in H1 was notwithstanding the continuing transition of more of the largest UK customers to the Group's Software as a Service ("SaaS") High Usage Programme ("HUP") business model, which has the effect of deferring revenue recognition.
HUP revenues in H1 grew 119% to £0.80m (2018: £0.37m) contributing to the overall performance of the business in the period. To date the Company now has 243 HUP monitors (31 January 2019: 164) placed in the market that will generate annualised revenues of £2.1m.
US revenues were up 47% (42% on a constant currency basis) to £0.90m (2018: £0.61m), with the growth being driven by the continued success of the HUP offering enabling the Company to take share in this large and growing market by targeting high volume users of advanced hemodynamic monitoring.
In the UK, LiDCO product revenues declined by 8% to £1.61m (2018: £1.76m) due to the timing of certain large orders and the Company's decision to transition another four of its largest customers to the HUP business model. The impact of these two factors is estimated to have reduced H1 revenue by £0.2m. The strategy, to actively convert UK customers to the SaaS business model, has a transitional impact on revenues as these customers typically de-stock inventory ahead of transitioning to HUP. Overall the Company believes that it is maintaining its leading share of the UK hemodynamic monitoring market.
Outside of the Group's two direct markets, sales to distributors grew by 27% to £0.83m (2018: £0.65m). The recently announced regulatory approvals of the latest hemodynamic LiDCOrapidv3 monitor in both China and South Korea, and the appointment of a master distributor in Latin America, are expected to contribute to further growth in the second half of the year.
Total revenues (including third party products) were down 4% to £3.51m (2018: £3.64m) as a result of the previously announced termination of the Argon Critical Care distribution contract which contributed £0.63m in H1 2018 but just £0.16m in H1 2019. Adjusting for all third party revenue, including the effect of this terminated contract, gives the underlying growth of 10% for LiDCO products as stated above.
Net cash outflow in H1 was down 57% to £0.53m (2018: £1.22m). This figure is before the receipt of an expected R&D tax credit of £0.19m (2018: £0.13m), normally received in H1 but deferred into H2 this year. The Company had £1.19m of cash as at 31 July 2019 and remains debt free. As set out in the Annual Report and Accounts for 2018/19, the Board believes that LiDCO retains the appropriate strength in its balance sheet to deliver its strategic objective of creating a profitable business with good forward visibility from cash-generative, recurring SaaS revenue streams.
The Company intends to announce its interim results on 15 October 2019.
Commenting, Matt Sassone, Chief Executive Officer of LiDCO, said: "It's been a good start to the year that has enabled us to transition more UK customers to HUP. In the US we are continuing to gain success from a comparatively small sales presence, which demonstrates the potential of the HUP business model. With HUP gathering more momentum, we are focussed on achieving a strong second half performance as the business moves progressively towards breakeven."
For further information, please contact:
LiDCO Group Plc
Matt Sassone (CEO)
Tel: +44 (0)20 7749 1500
Tim Hall (CFO)
Tel: +44 (0)20 7600 1658
Geoff Nash / Hannah Boros (Corporate Finance)
Andrew Burdis (Corporate Broking)
Walbrook PR Ltd
Tel: 020 7933 8780 or [email protected]
Mob: 07980 541 893
Mob: 07584 391 303
About LiDCO Group Plc (www.lidco.com)
LiDCO is a supplier of non-invasive and minimally invasive hemodynamic equipment to hospitals used to monitor the amount of blood flowing around the body and ensure that vital organs are adequately oxygenated. LiDCO's products facilitate the application of hemodynamic optimisation protocols for high risk patients in both critical care units and in the operating theatre.
Increasingly clinical studies are showing that the optimisation of patients' hemodynamic status in high risk patients produces better outcomes and reduced hospital stay. LiDCO's computer-based technology, developed at St Thomas' Hospital in London, has been shown to significantly reduce morbidity and complications, length of stay and overall costs associated with major surgery.
LiDCOunity: a hemodynamic monitor that combines the full suite of LiDCO technology (non-invasive, minimally invasive and calibrated technologies) into one platform. Designed to have the flexibility to adapt to a patient's changing acuity, the product enables clinicians to seamlessly transition between non-invasive, minimally invasive and calibrated hemodynamic monitoring.
LiDCOplus: a computer-based platform monitor used in the Intensive Care Unit for real-time continuous display of hemodynamic parameters including cardiac output, oxygen delivery and fluid-volume responsiveness (PPV% and SVV%).
LiDCOrapid: a cardiac output monitor designed specifically for use in the operating theatre for fluid and drug management. The monitor enables anaesthetists to receive accurate and immediate feedback on the patient's fluid and hemodynamic status - a key measure of overall well-being before, during and after surgery. The LiDCOrapid provides:
· early and rapid warning of hemodynamic change to aid choice of therapeutic route: fluid or drug
· quantification of hemodynamic response guidance on effective delivery of fluids to ensure the right amount at the right time
The software incorporated into LiDCOrapid allows the LiDCOrapid monitor to co-display Medtronic's level of consciousness parameter ('BISTM')* and add the convenience of CNSystem's continuous non-invasive blood pressure monitoring ('CNAP')**. This addresses a growing requirement for non-invasive monitoring solutions that are more comprehensive and can effectively replace multiple single parameter monitors.
LiDCOview: an easy-to-use graphical display of historical LiDCOplus and LiDCOrapid hemodynamic data.
*BISTM and Bispectral Index are trademarks of Medtronic registered in the US and foreign countries.
**CNAPTM is a trademark of CNSystems Medizintechnik AG.
LiDCO monitors use single-patient disposables (sensors or smartcards) which provide an ongoing revenue stream.
LiDCO Distribution Network:
LiDCO sells directly to hospitals in the UK and USA and through a network of specialty critical care and anaesthesia distributors in the rest of the world.
LiDCO's headquarters are in London and its shares are traded on AIM.
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