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LiDCO Group Plc (LID)

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Monday 20 August, 2018

LiDCO Group Plc

Trading update & Notice of results

RNS Number : 2232Y
LiDCO Group Plc
20 August 2018
 

                                                                                        LiDCO Group Plc

("LiDCO" or the "Company")

 

Trading update & Notice of results

 

Three new US High Usage Programme customers

Stronger second half expected driven by further HUP wins

 

LiDCO (AIM: LID), the hemodynamic monitoring company, announces that it has had further success in the USA, contracting three additional customers to its recently launched differentiated High Usage Programme (HUP) business model. HUP continues to build momentum after its launch in July 2017, and to date the Company now has seven US customers for HUP with the 85 HUP monitors in the US generating annualised recurring revenues of $0.97m.

 

As LiDCO continues to transition its business to a Software as a Service (SaaS) operating model, LiDCO recurring revenues in the half year to 31 July 2018 are up 11% to £2.52m (H1 2017: £2.26m) and total revenues (including third party products) are down 8% to £3.64m (H1 2017: £3.94m), as reduced capital sales impacted short-term revenue recognition. Comparisons with the prior year are difficult as the Company transitions its business model towards SaaS.

 

In the USA, recurring revenues were up 61% to £0.58m (H1 2017: £0.36m), with the growth being driven by customer wins involving the High Use Programme (HUP) business model as detailed above. The Company is aiming to take share in this large and growing market by targeting the highest users of advanced hemodynamic monitoring. Although it is taking longer than anticipated to sign new agreements for HUP in the USA, there remains an encouraging pipeline of prospects and multi-year contract signings since last disclosed have been as follows:

 

·     A 950+ bed academic hospital in North Carolina. This tertiary centre has 51 operating rooms and is ranked in the top 20 of USA hospitals.

·     Another top 20 ranked institution located in the heart of Manhattan, New York. 

·     Major teaching hospital in Brooklyn, New York.

 

In the UK, where the Company is the market leader and enjoys over 50% market share, total revenues were down 9% to £2.38m (H1 2017: £2.64m). LiDCO product recurring revenues were approximately the same as the comparative period last year at £1.57m (H1 2017: £1.55m) but a number of capital purchases are now expected in H2. There was an expected decline in third party sales as the Company comes to the end of its contract with Merit Medical, impacting total sales. Capital sales are traditionally uneven and the Company expects strong second half capital sales. In July, the Company won a significant new account, a 1,000 bed NHS hospital with over 100 critical care beds. This customer has taken 14 systems on placement and this will have a modest impact on full year revenues.

 

As previously announced, the Company has entered into an exclusive UK distribution agreement with Maicuff Technology Ltd ("Maicuff") to take full distribution responsibilities for Maicuff's extensive range of Non Invasive Blood Pressure disposable products in the UK.  The Company is in contract negotiations with a number of third parties and expects to announce further distribution agreements in the forthcoming months.  Generally these are likely to be higher margin than the Merit Medical sales and, in the next two years are expected to replace the contribution which the Company has historically earned on third party product sales.

 

In Continental Europe, sales were up 20% to £0.24m (H1 2017: £0.20m). In the first half the Company, working through its third-party partners, had a noteworthy tender win in Finland and had further success in Denmark with the HUP model.

 

In the Rest of World, sales grew by 36% to £0.42m (H1 2017: £0.31m). Sales to Japan continue to grow as the Company benefits from having a focused distribution partner in Merit Medical Japan in this large established hemodynamic market. Elsewhere, LiDCO continues to expand its reach with new distributor sales to South Korea and Vietnam. The Company continues to make progress with the registration of its new monitor in China, and, having completed a number of critical steps, the project is nearing the final submission with the prospect that, subject to regulatory approval, the new monitor could be launched by the end of the fiscal year.

 

Net cash outflow during the period was £1.22m with cash at the period end of £2.01m (31 January 2018: £3.23m), the outflow reflects the 2017 investments made in commercial resources and some significant non-recurring investments in working capital as the Company managed various changes in the supply chain of the LiDCO Plus consumables.

 

Whilst it has been a slow first half, the Company expects a much stronger second half as more customers sign up to the HUP programme, especially in the USA. As a result, the Board still expects the year to 31 January 2019 to be a year of further growth of LiDCO sales. In addition, the Company's cash position is expected to benefit in H2 2019 from the further growth in HUP contracts, as customers pay in advance of services being provided.

 

The Company intends to announce its interim results for the half year to 31 July 2018 on 9 October 2018. 

 

Commenting, Matt Sassone, Chief Executive Officer of LiDCO, said: "We are continuing to make progress with growing recurring revenues, and have a significant pipeline of opportunities  for our unique high usage programme, especially in the USA. In the second half of the year we expect to benefit from this pipeline developing in the USA, a higher level of capital sales in the UK and contributions from signing new third party distribution agreements."

 

 

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

 

 

 

For further information, please contact:

 

LiDCO Group Plc

www.lidco.com

Matt Sassone (CEO)

Tel: +44 (0)20 7749 1500

Jill McGregor (CFO)




finnCap

Tel: +44 (0)20 7600 1658

Geoff Nash / Emily Watts (Corporate Finance)


Andrew Burdis (Corporate Broking)




Walbrook PR Ltd

Tel: 020 7933 8780 or [email protected]

Paul McManus

Mob: 07980 541 893

Lianne Cawthorne

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.

 

Key Products:

 

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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