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LiDCO Group Plc (LID)

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Tuesday 26 March, 2019

LiDCO Group Plc

Final Results

RNS Number : 9506T
LiDCO Group Plc
26 March 2019
 

LIDCO GROUP PLC

("LiDCO" or the "Company" or the "Group")

 

Final results

Results to 31 January 2019

 

LiDCO (AIM: LID), the hemodynamic monitoring company, announces its audited Final Results for the year ended 31 January 2019. The Group has delivered good progress for the roll out of its High Usage Programme ('HUP'). Whilst this transition has had a short-term impact on revenues, the Group is now well-positioned for strong growth in the current financial year.

 

Operational highlights

·     Recurring revenues increased to 81% of total LiDCO product revenues (2018: 71%)

·     Global contracted base of HUP monitors increased to 164 (2018: 96) monitors generating total annualised license revenues of £1.40m (2018: £0.73m)   

·     US contracted base of HUP monitors increased to 95 monitors (2018: 58 units); US recurring revenues grew nearly 50% to £1.27m (2018: £0.85m)

·    Three of LiDCO's larger UK customers signed multi-year HUP contracts - representing £0.45m (14%) of LiDCO's 2018/19 recurring revenues in the UK

·     Exclusive UK distribution agreements signed with Maicuff, Antmed and Xavant

·     Submission for new monitoring platform made to Chinese regulatory authorities

·     New exclusive distributors signed in Sweden, Finland, Romania, Taiwan, and Sri Lanka

 

Financial highlights

·     Total revenue of £7.32m (2018: £8.27m). LiDCO product revenue (excluding third-party products) was down 10% to £6.19m (2018: £6.87m), the reduction due to a number of non-recurring factors

·     HUP deferred revenues of £0.77m up 28% (2018: £0.60m)

·     Gross margin (excluding third-party products) of 74.5% (2018: 73%)

·     Adjusted loss before tax* of £1.99m (2018: loss £1.84m)

·     Reported loss before tax of £2.14m (2018: loss £2.22m)

·     Loss per share of 0.80 pence (2018: loss per share 0.86 pence)

·     Net cash outflow before financing of £1.51m (2018: £1.67m), H2 cash outflow £0.32m (2018: £0.76m)

·     Debt free with cash at year-end of £1.72m (2018: £3.23m)

 

* adjusted for share-based payments of £0.1m in both 2018 and 2019 and one-off stock write-down of £0.3m in 2018

 

Post year end

·     Further 48 HUP monitors signed, bringing the global contracted base of HUP monitors to 212, generating total annualised license revenues of £1.82m

·     Appointment of Tim Hall as Chief Financial Officer

·     New master distributor appointed in Latin America

 

Commenting on the results Matthew Sassone, Chief Executive Officer, said: "We continue to make good progress with the transition to the HUP business model and it's pleasing to see a further 48 HUP monitors signed since the year end. Since launching HUP in mid-2017 we have built a recurring revenue base from HUP of over £1.8m. The growing base of HUP monitors and the underlying fundamentals of the business positions the Company for strong growth in the current financial year and beyond."

 

 

 

LiDCO Group Plc

www.lidco.com

Matt Sassone (CEO)

Tel: +44 (0)20 7749 1500

Tim Hall (CFO)

 

 

 

finnCap

Tel: +44 (0)20 7600 1658

Geoff Nash / Hannah Boros (Corporate Finance)

 

Andrew Burdis (ECM)

 

 

 

Walbrook PR Ltd

Tel: 020 7933 8780 or [email protected]

Paul McManus (Media Relations)

Mob: 07980 541 893

Lianne Cawthorne (Media Relations)

Mob: 07584 391 303

 

The Company presentation and 2018/19 Annual Report and Accounts will be available from today on the LiDCO website: www.lidco.com.

 

Strategic Report

 

Chairman's statement  

 

The Group has continued to make good headway with its differentiated High Usage Programme ("HUP") business model following its launch in July 2017. As the business wins HUP contracts, it transitions towards multi-year licence revenues, giving greater visibility alongside stronger cash generation as customers pay in advance of services being provided, albeit with revenues being spread, typically over 12 months. In 2018/19 the number of monitors under HUP increased over 70% to 164. As at 20 March 2019, the Group had 212 monitors contracted under the HUP worth £1.82m per annum of recurring revenues.

 

Although total revenues for 2018/19 (including third-party products) at £7.32m (2018: £8.27m) were down 11.4%, this fall was due to a number of non-recurring factors:

 

-      the transition to HUP has deferred revenue from the current financial year; 

-      the transition to HUP has also dampened Q4 sales, as some customers have reduced purchases of consumables in anticipation of converting to HUP in their new financial year, which commences in April 2019; 

-      demand for capital monitor purchases was lower than expected in Q4 as customers conserved or diverted cash as part of their Brexit mitigation measures; and

-      sales were reduced by the termination of the low-margin Argon distribution contract, which has been replaced by three higher margin distribution agreements coming on stream in 2019/20. 

 

The Directors expect that growth will resume in 2019/20, underpinned by the growing contracted base of HUP contracts.

 

The Group's cash balances at 31 January 2019 totalled £1.72m and the Group remains debt free. As set out in the Annual Report and Accounts, 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 revenue streams.  

 

On 11 March 2019 we were pleased to welcome Tim Hall to the Board as Chief Financial Officer and Company Secretary. Tim is a Chartered Accountant with extensive finance leadership within the med-tech sector.

 

Chief Executive's report

The Group continued its transition to its differentiated Software as a Service (SaaS) model, the HUP, which has the potential to substantially increase the adoption of hemodynamic monitoring and provide greater forward visibility of revenues and cash flows. Through this transition the Board believes that the Group will be positioned for sustained growth in the medium term.

 

HUP is differentiated from competitors by not having a charge per patient use, which encourages hospitals to use hemodynamic monitoring more widely by removing concerns about budgetary constraints.  Numerous studies have shown that the use of hemodynamic monitoring improves patient outcomes, reduces length of stay and healthcare costs. The Board believes that these benefits provide healthcare providers with a strong justification to adopt the HUP model.

 

LiDCO's differentiated SaaS model is focused on attracting the larger more established users of hemodynamic monitoring to convert to LiDCO technology and for the Group's existing customers to extend the adoption of hemodynamic monitoring to a wider patient base.

 

The initial hospitals that LiDCO converted to HUP in the year ended 31 January 2018 have been reporting their first-year experience after HUP implementation. Under the unlimited programme the number of patients receiving hemodynamic monitoring in these accounts in both the UK & US has significantly increased. In one NHS hospital, after the first 10 months of implementation, the number of patients treated had increased 31% to 5,338 patients compared with 4,065 in the corresponding prior period. Likewise, a major USA customer expanded the numbers of patients being monitored by 30% whilst hemodynamic monitoring expenditure reduced by over 50%. This provides clear, real-world evidence that LiDCO technology is delivering increased value to both healthcare providers and patients.

 

The Group's strategy is to expand geographically from its strong position in its home UK market by gaining market share with its differentiated business model and market leading technology. HUP is a strategic focus for the Group, especially but not exclusively in the key US market.  As of 20 March 2019, the global contracted base of HUP comprised 212 monitors, generating total annualised license revenues of £1.82m.

 

In the UK, the Group enjoys a leading market share, with over 50% of NHS acute care hospitals using its technology.  However, the UK still represents 58% of LiDCO product revenues and the Board has identified a number of key geographies where it believes that the Group can gain a more significant market share.

 

The US is the largest market for hemodynamic monitoring, representing nearly half of the global demand. The Board believes this market offers the Group the greatest opportunity to grow and this has been the main focus of commercial efforts. Whilst highly competitive, early indications are that the market is responding well to LiDCO's differentiated pricing approach.  Since launching the High Usage programme in July 2017, the number of HUP monitors in the US has grown to 132 across 20 accounts as at 20 March 2019 generating contracted annualised recurring revenues in excess of $1.51m (£1.16m). In addition, the US sales team has developed a significant pipeline of potential large users that previously would not have considered changing from their current supplier. This pipeline continues to build with the value of annualised business currently in negotiation or evaluating LiDCO's offering worth approximately $1.5m and $2.1m respectively. The focus is very much on transitioning these to signed contracts, typically with initial terms of two to three years.

 

In the rest of the world, the Group continues to make progress in creating the infrastructure needed to deliver the Board's geographical expansion plans. The Group's internal resources are focussed on managing distributors in the territories with the greatest mid to long term market opportunities, and master distribution companies are utilised to manage those distributors which are expected to be better served by a more local presence. As part of this more tailored approach to distribution management, LiDCO has selected markets within Europe, the Middle East and Asia where strong growth opportunities have been identified and the Group is investing with the right partners to achieve the necessary registrations and promotional activities to further market development and widen the adoption of hemodynamic monitoring.

 

Post period end, the Company signed a master distribution agreement for LiDCO products with Elysian Fields Medical covering a number of territories across Latin America. The Brazil based master distributor will cover all the major countries in Latin America, including Brazil, Mexico, Argentina, Chile, Uruguay, Peru, Columbia and Paraguay, actively promoting the LiDCO product range in a market, which LiDCO management estimates represents 10% of current global demand.

 

During the year the Group continued its investment in the commercial activities of the business in order to improve its sales efforts and the way that it promotes the LiDCO technology globally.  Over the last two years investment has been made in additional commercial headcount for the USA, Europe and the UK. Management monitor where these additional resources are allocated to best accelerate future revenue growth and gain greater market share.

 

Financial Review

Revenues

 

Overall, LiDCO product revenues for the year ended 31 January 2019 were £6.19m (2018: £6.87m) and total revenues (including third-party products) were £7.32m (2018: £8.27m). 

 

As of 31 January 2019, LiDCO had £0.77m (2018: £0.60m) of deferred revenues on the balance sheet arising from the HUP, with a global contracted base of 164 (2018: 96) monitors generating total annualised license revenues of £1.40m (2018: £0.73m). 

 

Further comment on revenues by territory is provided in the operational review.

 

Gross profit and margin

Gross profit reduced by 8% to £4.84m (2018: £5.27m) due to lower revenue, partly offset by an increase in gross margin from 64% to 66%. The gross margin achieved on the sale of third-party products remained unchanged at 20%. However, the gross margin achieved on sales of LiDCO products increased to 74.5% (2018: 73%) even though a greater proportion of sales in rest of world were made through master distributors.

 

Overheads

Overheads before share-based payments reduced to £6.83m (2018: £7.38m) with strict control of expenditure and lower commissions payable. During the year the Group was able to realise some efficiencies in its back-office headcount and the average full-time equivalent headcount (excluding non-executive directors) was 48 employees (2018: 49 employees). Share-based payments were a charge of £143,000 (2018: £109,000).

 

Earnings and tax

The Group made an adjusted loss before tax (adjusting for share-based payments) of £1.99m (2018:  £2.11m). After charging for share-based payments and receiving the benefit of £0.19m of research and development tax credits, the Group made an overall loss for the year of £1.94m (2018: £2.09m), equating to a loss per share of 0.80 pence (2018: 0.86 pence).

 

Cash flow, borrowings and cash balances

The Group continued to invest in the US market in line with the strategy of geographical expansion, supporting the sales force with marketing activities and had a net cash outflow in the year before financing activities of £1.51m (2018: £1.67m).  HUP contributed £0.2m of positive cash flow in the year (2018: £0.3m).  The outflow reflects the investments made in commercial resources and some significant non-recurring investments in working capital in H1 as the Group managed various changes in the supply chain of the LiDCOplus consumables, as explained under Inventory below. 

 

The Group's cash outflow in H2 was £0.32m compared with £1.19m in H1 and cash balances at 31 January 2019 totalled £1.72m (31 January 2018: £3.23m).  The Group remains debt free. As set out in the Annual Report and Accounts, the Board believes that LiDCO retains the appropriate strength in its balance sheet to deliver its strategic objectives.  

 

Property, plant and equipment

There was a small investment in property, plant and equipment in the year of £0.35m (2018: £0.48m).  Investment in medical monitors totalled £0.32m (2018: £0.39m) comprising HUP monitors, medical monitors placed on long-term loan to hospitals in the UK and USA for active use, where the hospital pays for disposables, and monitors for demonstration purposes and clinical trials.

 

Intangible assets

Expenditure on intangible assets in the period was £0.65m (2018: £0.48m) of which £0.59m (2018: £0.42m) was spent on product development with a further £0.06m (2018: £0.06m) on new product registrations predominantly in overseas territories. Expenditure on product development included the continued improvements to the next generation LiDCOunity hardware platform launched mid-2017, improving its Graphical User Interface (GUI) to include guided protocols, case reporting and parameter notifications.

 

Inventory

Inventory increased to £1.88m in the year (2018: £1.35m). During the year, the Group changed supplier for two of its LiDCOplus disposables products and purchased 18 months' supply of product to cover the transition period which resulted in significant non-recurring investments in working capital of £0.3m. The supplier of the Lithium Chloride also increased the manufacturing batch size five-fold resulting in the requirement to purchase larger quantities of product. Traditional rates of inventory turn cannot always be applied to the Group as it relies on a number of single-source key suppliers and strategically maintains high levels of inventory in respect of such suppliers. 

 

Operational Review

 

Revenue performance by product and key geographies 

 

 

12 months to January 2019

12 months to January 2018

 

 

 

 

 

 

 

 

 

 

Monitors

Recurring Revenues

Other

Total

Monitors

Recurring Revenues

Other

Total

 

 

 

 

 

 

 

 

 

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

LiDCO Sales

 

 

 

 

 

 

 

 

UK

378

3,108

73

3,559

686

3,383

73

4,142

US

102

1,267

7

1,376

497

849

11

1,357

Europe

152

304

11

467

222

272

10

504

Rest of World

419

361

8

788

468

389

5

862

 

1,051

5,040

99

6,190

1,873

4,893

99

6,865

 

 

 

 

 

 

 

 

 

3rd party sales

 

 

 

 

 

 

 

 

UK

-

1,134

-

1,134

-

1,402

-

1,402

Total Sales

1,051

6,174

99

7,324

1,873

6,295

99

8,267

 

Recurring revenues include sales of smartcards, sensors, software licenses (including HUP) and service contracts.  Japan revenues are included within Rest of World.

 

LiDCO continues to make progress with its HUP offering. Since its launch in July 2017, as at 20 March 2019 the Group had a total global contracted base of 212 HUP monitors (31 January 2018: 96 units) generating £1.82m (31 January 2018: £0.73m) of annualised HUP contracts with the revenue recognition being spread over the term of the contract. The total value of contracts signed to 20 March 2019 is £6.7m

 

The growth of the HUP business is illustrated in the table below:

 

 

Jul-17

Oct-17

Jan-18

Apr-18

Jul-18

Oct-18

Jan-19`

20-Mar-19

HUP Monitors Placed - No

1

45

96

98

130

135

164

212

Annual Contract Value - £k

10

305

730

832

1,123

1,181

1,403

1,817

 

UK

In the UK, LiDCO is seeking to convert its largest customers to the HUP business model. The Group initially evaluated this approach with its largest UK account in January 2018 and, encouragingly, the customer has been able to treat more patients and has increased its investment in hemodynamic monitoring. Following this success, three more of LiDCO's larger customers have signed multi-year HUP contracts, meaning that a total of £0.45m or 14% of LiDCO's recurring revenues in the UK have now been converted to HUP.

 

This strategy, to actively convert UK customers to the SaaS business model had a transitional impact on revenue recognition within the financial year through the deferral of revenues which would normally have been booked in the year. These deferred revenues will be recognised over the 12 months from signing the HUP agreements. The transition to HUP has also dampened Q4 sales, as some customers have reduced purchases of consumables in anticipation of converting to HUP in their new financial year, which commences in April 2019. Demand for capital monitor purchases has also been lower than expected as customers conserved or diverted cash as part of their Brexit mitigation measures.  As a result, sales in Q4 were less than the usual peak and LiDCO product revenues for the year were £3.56m (2018: £4.14m).

 

Following the previously announced termination of the Merit distribution contract for Argon products and subsequent signing of new third-party opportunities, third-party sales were £1.13m (2018: £1.40m). During the year, the Group has sourced alternative distribution opportunities to replace the contribution made by Argon products. In general, the margin on the alternative distribution opportunities will be significantly higher than with the Argon products, although LiDCO will need to invest in inventory to support the sales.  LiDCO is now the exclusive distributor for Maicuff, Antmed and Xavant in the UK.

 

In July 2018, the Group signed a three-year agreement to take full distribution responsibilities for Maicuff's extensive range of Non-Invasive Blood Pressure (NIBP) disposable products in the UK. LiDCO will introduce these products to the UK market. With increased focus on infection control, the UK market is experiencing significant growth in disposable NIBP cuffs as the market moves away from using reusable NIBP cuffs in high risk areas.

 

Antmed disposable pressure transducers are a direct competitor for the previously distributed Argon products. LiDCO introduced these products to the UK market having signed a three-year agreement in October 2018.

 

The Company has recently signed an exclusive UK distribution agreement with Xavant Technology (Pty) Ltd. ("Xavant") to take full distribution responsibilities for Xavant's Advanced Nerve Stimulation and Monitoring Technology in the UK as from 1st February 2019. Xavant is a leading supplier of quantitative neuromuscular monitoring for use during general anaesthesia. 

 

USA

In the US, the strong growth of HUP meant that recurring revenues, which includes per patient disposables and service contracts, grew nearly 50% to £1.27m (2018: £0.85m). LiDCO has gained a further 11 new US HUP customers, with the US contracted base at 31st January 2019 standing at 95 monitors (2018: 58 units) worth £0.83m per annum. These new HUP customers are prestigious reference accounts.  Since 31 January 2019 a further six HUP agreements have been signed in the US, covering 37 monitors and £0.33m per annum contracted revenue.

 

In the US, there remains an encouraging pipeline of prospective customers, many at an advanced stage of contracting, but the timing of finalising these agreements remains difficult to predict. Whilst, at times, progress appears slower than originally anticipated, the Group's management and sales team are learning how to anticipate and overcome identified causes as well as building various relationships to help penetrate the US market, which is the largest in the world for hemodynamic monitoring. The Board believes that its disruptive HUP model will continue to gain traction in the US and anticipates that its US operations will become cash flow break-even during the course of the coming financial year.

 

Continental Europe

Sales in Europe were flat at £0.47m (2018: £0.50m) with total monitor sales of 32 units compared with 52 units last financial year. The Group had a noteworthy tender win in Finland and had further success in Denmark with the HUP model. LiDCO has a strong position in a few selected markets within Europe and continues to work on expanding its presence in some of the larger countries in the region by partnering with the appropriate distributors. During 2018/19 the Group signed an exclusive three year agreement with Spacelabs Healthcare SAS France to distribute LiDCO products in France.

 

Rest of World

Overall revenues outside of the UK, US and continental European markets were £0.79m (2018: £0.86m). Strong revenue growth in Japan and preliminary orders from new distribution channels were offset by weaker demand from the Middle East region primarily driven by no sales to Iran, where the market environment has been the impacted by US sanctions.

 

LiDCO continues to invest in geographical expansion during the year, applying for several regulatory registrations in key target markets in South East Asia and Latin America, which are expected to begin to bring benefits in 2019/20. Importantly, the Company made significant progress towards registering its latest monitor platform in China. All the prerequisite testing and documentation was completed during 2018 with the submission to CFDA being made in January 2019. The normal timescales for the CFDA to review this type of filing is a few months and LiDCO's distributor in China is standing by to launch the new monitor as soon as approval is received.

 

Outlook

The Board continues to assess its investments in its commercial operations, ensuring that the Group has the right resources to expand its product sales into the many countries where adoption of advanced hemodynamic monitoring is now occurring. LiDCO remains focused on exploiting the large number of opportunities identified by the introduction of its differentiated HUP model.

 

As the business continues to win HUP contracts, it will transition towards more multi-year license contracts, providing good visibility of revenues alongside strong cash generation. The Board expects this to greatly enhance the quality of the Group's earnings although accounting for such contracts will continue to have a short-term impact on revenue recognition as the income will typically be spread over the term of the contract as opposed to monitor and consumables revenues being recognised when invoiced.

 

In the USA, the Board expects the contracted base of monitors to continue to grow and the business will benefit from the full year impact of HUP contracts won in 2018/19. In the UK the transition to HUP will make comparisons with prior years difficult as some customers will reduce purchases of consumables in anticipation of converting to HUP and HUP revenues are spread into the subsequent financial year, unlike capital sales of monitors which are, typically, recorded as sales as delivered.

 

The Group expects the three newly signed distribution agreements in the UK, which generate higher gross margins, to start to have an impact and go some way to close the contribution gap created by the loss of the Argon Medical products UK distribution contract.

 

The Board anticipates significant revenue growth in 2019/20 as the current annualised base of HUP contracts carries forward, partially offset by lower third-party sales as the business transitions to the new third-party distribution agreements.  Gross margins are expected to improve further due to a favourable LiDCO product mix and higher margins on the new third-party sales, whilst operating expenses are expected to remain broadly stable.

 

How LiDCO creates value: the Group's business model

LiDCO is a UK-based manufacturer and supplier of monitoring equipment. LiDCO monitors are 'platform' in design. This means they can be easily and cost-effectively upgraded to add new software features and parameters by the addition of USB-connected modules. LiDCO technology, coupled with its low-cost manufacturing and product sourcing skills, combine to produce a highly differentiated, patent-protected monitor with a recurring income stream either from the sale of dedicated high margin single patient use disposables and/or usage licenses.

 

LiDCO monitors continuously display a number of crucial physiological parameters including arterial blood pressure, the effects of anaesthesia on the level of consciousness of the brain, the requirement for intravenous fluids and the amount of blood and oxygen supplied to the body's tissues and organs. This crucial data is provided via an easy-to-interpret monitor user interface which helps clinicians and nurses ensure that vital organs are adequately perfused and that patients are not over-anesthetised or sedated.

 

Historically, hemodynamic monitoring was invasive in nature, requiring the insertion of invasive central catheters. For this reason, it was only available to a restricted number of the high-risk patients that could potentially benefit. Although that option is available with LiDCOplus, LiDCO's other technology does not require the insertion of central catheters and can be used completely non-invasively and in both ventilated and non-ventilated patients.

 

LiDCO's customers are acute care physicians and nurses working in major hospitals caring for emergency and high-risk patients. Hospitals are migrating away from invasive technologies towards the use of less invasive monitoring, which has been shown to be cost effective and improve outcomes. Use of LiDCO monitors in high-risk patients in both intensive care and surgical settings has been shown to reduce mortality, complications, length of hospital stay and improve quality of life.

 

The key features of LiDCO's business model:

LiDCO has developed a new generation of hemodynamic monitoring products designed to address a developing disposable market opportunity - internally estimated to be potentially $2 billion per

annum.

·     The Group generates revenues principally through the sale of high margin single-use disposables and/or the sale of software licenses into a growing contracted base of LiDCO-enabled monitors.

·     The Group protects its recurring revenue income stream through having patented products with high levels of proprietary intellectual property which are subject to on-going development.

·     Sales of LiDCO's products are supported by over 200 clinical studies and an ever-growing body of evidence to satisfy purchaser requirements for clinical and cost effectiveness.

·     LiDCO provides first-class training and education to its customers. This helps entrench our technology and reduce hospitals costs, with a focus on providing LiDCO with a sustainable recurring income.

 

Delivering the Board's objectives: strategy

The Board's strategy is to build shareholder value through the commercialisation of LiDCO monitoring systems and associated high margin recurring revenues. Excellence in product design, manufacturing and sales and marketing are at the core of the Group's values. LiDCO's main products are patent protected and supported by a growing body of data showing their clinical and cost-effectiveness. The Group's technology is not only usable in traditional locations such as the intensive care and surgery departments, but also in any area of the hospital where high-risk patients require such monitoring. Hospitals acquiring our hemodynamic platform monitors can transition from traditional invasive catheter-based monitoring to LiDCO's minimally or non-invasive monitoring in high-risk patients, thereby reducing complications and lowering costs and length of stay.

 

Geographical expansion is key to LiDCO's capacity to address the worldwide opportunity for sales of our technology. The Group's sales and distribution model has three elements:

 

·     Direct sales into hospitals in the UK and USA.

·     Outside of the Group's two direct markets, sales are via distribution partners. The depth of margin on disposable sales allows LiDCO to attract quality specialist distribution partners on an exclusive and non-exclusive basis.  In addition, where appropriate, the Group sometimes work through regional master distribution organisations to manage distributors on its behalf.

·     LiDCO's core technologies are patented and the Board sees licensing the Group's technology as another way to access the market. The LiDCO algorithm has been licensed on a non-exclusive basis to a major corporate partner in the USA in return for future royalty payments.

 

Measuring the Group's performance: KPIs

 

The following KPIs are some of the indicators used by management to measure performance during the year:

 

Key Performance Indicators

 

 

 

 

 

 

Year to January 2019

Year to January 2018

Revenue growth of LiDCO products

-10%

2%

Gross profit margin on LiDCO products

74.5%

73%

LiDCO product revenue per FTE sales employee

£0.44m

£0.51m

% LiDCO product overseas revenue

43%

40%

% of recurring revenue

81%

71%

Monitors sold/placed in the year

236

315

Contracted base of HUP monitors

164

96

Annualised value of HUP contracts

£1.40m

£0.73m

 

 

The KPIs are linked to the Group's strategic initiative of commercial expansion and measuring the success of its differentiated HUP pricing model. LiDCO product revenues were lower due to the transition to HUP, as some customers have reduced purchases in anticipation of converting to HUP and demand for capital monitor purchases was lower than expected in the UK. LiDCO gross margin percentage improved due to a favourable mix of product and geographical sales. The success of HUP in the US has positively influenced the regional revenue split and the specific HUP KPIs.

 

 

 

 

 

 

CONSOLIDATED comprehensive INCOME STATEMENT

For the year ended 31 January 2019

 

 

 

Note

Year ended

Year ended

 

 

31 January

31 January

 

 

2019

2018

 

 

£'000

£'000

Revenue

 

7,324

8,267

Cost of sales

 

(2,489)

(2,999)

Gross profit

 

4,835

5,268

Administrative expenses

 

(6,830)

(7,380)

  Operating loss before share-based payments

 

(1,995)

(2,112)

  Share-based payments charge

 

(143)

(109)

  Operating loss

 

(2,138)

(2,221)

 

 

 

 

Finance income

 

1

3

Loss before tax        

 

(2,137)

 (2,218)

Income tax

 

196

125

Loss and total comprehensive expense for the year attributable to equity holders of the parent

 

 

(1,941)

 

(2,093)

Loss per share (basic and diluted) (pence)

2

(0.80)

(0.86)

 

 

CONSOLIDATED Balance Sheet

At 31 January 2019

 

 

2019

£'000

2018

£'000

Non-current assets

 

 

Property, plant and equipment

949

912

2,083

1,950

Current assets

 

 

Inventory

1,880

1,354

Trade and other receivables

1,928

3,246

Current tax

188

127

1,717

3,227

Current liabilities

 

 

Trade and other payables

(1,374)

(1,816)

(837)

(668)

 

 

 

 

 

 

Equity attributable to equity holders of the parent

 

 

Share capital

1,221

1,221

Share premium

30,342

30,342

Merger reserve

8,513

8,513

(33,542)

(31,744)

 

 

consolidated Cash flow Statement

For the year ended 31 January 2019

 

 

Year ended

Year ended

 

31 January 2019

31 January 2018

 

£'000

£'000

Loss before tax

(2,137)

(2,218)

Finance income

(1)

(3)

Depreciation and amortisation charges

832

862

Share-based payments

143

109

(Increase)/decrease in inventories

(526)

113

Decrease/(increase) in receivables              

1,318

(562)

(Decrease)/increase in payables

(442)

312

Increase in deferred income

169

576

Income tax credit received

135

91

Net cash outflow from operating activities

(509)

(720)

Cash flows from investing activities

 

 

Purchase of property, plant & equipment

(351)

(480)

Purchase of intangible assets

(651)

(477)

Finance income

1

3

Net cash used in investing activities

(1,001)

(954)

Net cash outflow before and after financing

(1,510)

(1,674)

Net decrease in cash and cash equivalents

(1,510)

(1,674)

Opening cash and cash equivalents

3,227

4,901

Closing cash and cash equivalents

1,717

3,227

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

For the year ended 31 January 2019

 

 

 

Share

capital

£'000

 

Share

premium

£'000

 

Merger

reserve

£'000

 

 

Retained

earnings

£'000

 

Total

equity

£'000

At 1 February 2017

1,221

30,342

8,513

(29,760)

10,316

Share-based payment expense

-

-

-

109

109

Transactions with owners

-

-

-

109

109

Loss and total comprehensive expense for the year

 

-

 

-

 

-

 

(2,093)

 

(2,093)

At 31 January 2018

1,221

30,342

8,513

(31,744)

8,332

Share-based payment expense

-

-

-

143

143

Transactions with owners

-

-

-

143

143

Loss and total comprehensive expense for the year

 

-

 

-

 

-

 

(1,941)

 

(1,941)

At 31 January 2019

1,221

30,342

8,513

(33,542)

6,534

 

 

 

 

 

NOTES TO THE FINANCIAL STATEMENTS

 

 

1.  NATURE OF THE FINANCIAL INFORMATION

 

These financial statements have been prepared in accordance with the principle accounting policies adopted by the Group, International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations (IFRIC) as adopted by the EU and those parts of the Companies Act 2006 applicable to companies reporting under IFRS and were approved by the Board on 25 March 2019.  They are presented in sterling, which is the functional currency of the parent company and the Group.  The preparation of financial statements in accordance with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Although these estimates are based on management's best knowledge of current events and actions, actual results may ultimately differ from those estimates. 

 

These results are audited, however the financial information does not constitute statutory accounts as defined under section 434 of the Companies Act 2006. The financial information for the year ended 31 January 2019 has been derived from the Group's statutory accounts for that year.  The auditors' report on the statutory accounts for the year ended 31 January 2019 was unqualified and did not contain statements under section 498 of the Companies Act 2006.

 

The accounting policies used in completing this financial information have been consistently applied in all periods shown.  These accounting policies are detailed in the Group's financial statements for the year ended 31 January 2019 which can be found on the Group's website. 

 

2.  EARNINGS PER SHARE

 

The earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year. The basic earnings per share for the year is based on a loss after tax of £1,941,000 (2018: loss £2,093,000) and weighted average number of shares in issue of 244,174,908 (2018: 244,174,908).  The diluted earnings per share is based on the above calculation adjusted to allow for the issue of shares on the assumed conversion of all dilutive options. Share options are regarded as dilutive when, and only when, their conversion would decrease earnings or increase the loss per share. The diluted earnings per share is based upon a weighted average number of shares of 244,174,908.

 

3.  DISTRIBUTION

Copies of this statement will be available for collection free of charge from the Company's registered office at 16 Orsman Road, London N1 5QJ. An electronic version of this announcement and the Annual report and accounts will be available today on the Company's website, www.lidco.com. Copies of the Annual report and accounts will be posted to shareholders who have requested a hard copy later this month together with the notice of the Annual General Meeting.

 

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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