Deltex Medical Share Discussion Threads

[bigt20] 19/1/2017 01:14

Just as I side point, I find interesting that 65 out of 152 Trusts (if i remember correctly) had bed blocker / A&E issues.

So 87 trusts were capable of handling the situation.

[bigt20] 19/1/2017 01:10

amt

Debt - they already have convertibles and an invoice discount facility.

As for cashflow - it would be good if they could stabilise the situation with the NHS. The first three months of the calender year (Jan - Mar) is when the NHS feels the financial squeeze most as they approach the end of their financial year.

[amt] 18/1/2017 21:12

Not convinced they will need to raise anymore cash as uk sales stable and US sales probanly 3.5m this year. Perhaps 500k in worst case. Why dont they borrow money as interest rates are low.

[bigt20] 18/1/2017 19:36

Arf Dysg18 Jan '17 - 19:19 - 8555 of 8556 0 0
I seem to have that 2015's turnover was GBP 6.4m, so 6.3m for 2016 is a decrease, not an increase.


---> Are you comparing apples with apples? Have you excluded the barter sales?
In FY 2015 I thought there was £0.2m of barter sales?

[bigt20] 18/1/2017 19:34

Cash outflow has traditionally been bigger in the first half of financial years.
So I look forward to seeing what happens, cashwise during the first half of 2017.

As for the UK invoice facility, I suspect it will only go up if UK sales start to pickup.

I wouldnt be surprised if we have a fundraising in the first half of 2017 (probably after the AGM.) but at least we are moving in the right direction and hopefully we can leave the NHS behind at some point.

[arf dysg] 18/1/2017 19:19

I seem to have that 2015's turnover was GBP 6.4m, so 6.3m for 2016 is a decrease, not an increase.

[zho] 18/1/2017 15:49

Deltex’s overseas sales are booming but its previously dominant NHS revenues are dropping off

[gbenson1] 18/1/2017 13:45

Healthy buying and selling, awaiting RNS of someone's increased holdings, just hope the MMs don't start creative accounting again.

[yump] 18/1/2017 12:58

Its difficult to know whether the probe design was an issue.

I suspect implementation in different environments was the problem, given that the probe doesn't seem to have been an issue anywhere except the UK.

I also suspect that implementation in the NHS is still dependent on the personal preference of the clinician and that does not necessarily change even with a shed load of evidence that it will be a positive improvement overall.

I find that incredible, given that whenever I have been given a piece of equipment during employment that did not involve people's health and wellbeing (I was working in industry), I didn't have a choice of using some other bit of equipment that I fancied more, because the one I was given was a bit tricky to use at times.

I don't think accountability for overall improvement is located anywhere specific in any NHS trust and from what I've heard, just getting a few changes through a team of clinicians is enough to get people banging their heads against the wall.

[gnnmartin] 18/1/2017 12:16

13 months ago I could not see how DEMG could survive. Now at least it looks possible, although the flat revenue is a bit disappointing. I need to put in a lot more study before I understand how the UK can neutralise such strong growth elsewhere. Revenues were only marginally down in the first 6 months, partly due to the timing of a large US stocking order depressing first half probe sales to the US. With that and the strong growth outside the UK, and especially in the US, and the weak pound I had expected decent growth in 2nd half revenues and hence at least some growth in full year revenues. Anyhow, I'm very relieved at the latest 2 US platform hospitals, bringing us up to the target 30.

I heard report on the BBC of attempts to introduce efficient wood burning stoves in India. Most in India cook on open wood fires, which use a lot of wood and tis results in a lot of pollution related disease. Several institutions have attempted to introduce efficient affordable stoves that would use less wood and produce much less pollution in the home, but the stoves were not popular and fell into disuse. The report I listened to described a project which distributed the stoves and then followed up to find out whether the stoves were being used, if not why not and how the design could be modified. There were various reasons why the stoves of various design fell out of use, but by using the feedback to modify the design the project claimed to have reached 95% long term acceptance of the current design of stoves.

I thought of DEMG when I listened to this. The awkwardness of using the old style probe was certainly known on this BB years ago, but Ewan dismissed it, saying it just needed a little practice. When UK probe sales started to fall (3 years ago IIRC, but I haven't checked) Ewan said it was caused by de-stocking. I asked at the time what the drop out rate was among users, and Ewan said once a surgeon/anaesthetist had used DEMGs device, they would always use it. Over the subsequent years it has become apparent that the fall in UK use was not just de-stocking. I may be being unfair, and maybe Ewan was onto the problem straight away and the problem was just difficult to address. However, I suspect that like the people distributing efficient wood stoves to Indian households, Ewan just knew his product was good and did not pay close enough attention to the customers' problems.

Hopefully those problems are now being ironed out.

[sailing john] 18/1/2017 10:36

My assumption is that new US hospital accounts are breakeven at best for the first 6-12 months because of the cost of a trainer. Presumably this service is removed once enough anesthetists are proficient giving a significant hike in profitability as contracts move to supply and support only.
I think they will need to raise up to £1m this year perhaps in two smaller tranches (to reduce dilution) if they think there is going to be some price progression later this year.

[zho] 18/1/2017 10:29

Equity Development:

FY16 group revenues reached £6.3m in FY16 vs £6.2m (ex-research barter sales of £0.2m) marginally lower than the £6.4m total in FY15. KPI probe sales reached £5.4m (£5.2m) with sustained momentum from US revenues, up 40% to £1.9m in FY16, counterbalancing UK weakness. Looking ahead, with two new platform accounts added post year end, DEMG has reached a milestone of 30 US platform accounts, which could see higher margin US sales outperform other geographies for the first time in 2017.

By contrast, as flagged, UK sales declined 26% vs FY15 to £1.9m as a result of attrition and the lack of advanced haemodynamic management within the NHS. Meanwhile, revenues from international sales grew 20% to £1.7m led by France, Scandinavia, Peru and Korea, illustrating the potential in these most ODM-receptive markets.

The overall picture is of higher margin US sales on track to lead revenues from FY17. This, coupled with cost-cutting initiatives including in-house probe assembly leading to c £30,000 net savings/month, suggest margin expansion towards historical 70% levels is in sight. DEMG‘s end 2016 cash position of £0.6m, net of an £0.5m fund raise in July, provides short term funding. Pressure on sales has led to downgrades and a volatile 12-month share price performance. The current EV sales multiple of 2x implies expectations of further downgrades, although the current run rate in the US suggests DEMG could have reversed the overall financial downward trend. We will reinstate forecasts at the FY16 results due to be reported in the week of 20 March.

[yump] 18/1/2017 10:21

Thanks. Be safer to raise 500K or so I guess - no point in underinvesting when things are turning up.

In theory, if the US is still in what you might call a trial phase, with early adoption still taking place, then if the product has in most hospitals still got to be rolled out, sales should accelerate very significantly. ie. there's increasing sales from earlier hospitals plus increasing number of new hospitals.

Not quite a gravy train yet though !

[sailing john] 18/1/2017 09:57

Yump - yesish
1H burn was £1.8m or £300k/month
2H burn unknown as we don't know about other movements in working cap
I have assumed the invoice discounting facility (note 8 in 1H report) will have increased back to circa £0.8m from £0.5m giving a 2H burn of around £100k/month if other WC balances unchanged
So yes a step change move in the right direction but a further small fundraise likely imo
But everything else appears to be moving in the right direction (even if just a slowing of reduced usage in UK) and I'm impressed with US growth. Roughly one third split between UK, US and RoW.
SJ

[yump] 18/1/2017 09:06

Does this look right ?

Year end 2015: Cash of GBP0.6m: GBP3.0m (after expenses) raised in Q1 2016 to repay GBP1m convertible loan and provide additional working capital

|Interims 2016: Cash available of GBP0.5m (31 December 2015, GBP0.6m) with GBP0.45m additional capital raised in July
So that looks like a burn of about 2.0m for first half ?

Today's update: Cash at bank of GBP0.6m (1 July 2016: GBP0.95m including the fundraise announced in July 2016)
Burn of about 350K ? which is a drastic reduction.

If so, with accelerating probe sales and reducing NHS drops, perhaps this actually is now at a watershed or tipping point or whatever it should be called.

[sailing john] 18/1/2017 09:04

Has remained on watch since I sold out many years back
There appears to have been a step change reduction in cash burn in 2H
I expect a further fundraise this year but might even be profitable in 2018!?
GL - SJ

[february 30th] 18/1/2017 07:09

Last 24 US Accounts:

Monthly

012015|X
022015|
032015|X
042015|X
052015|X
062015|X
072015|
082015|
092015|X
102015|
112015|XXX
122015|XX
012016|X
022016|
032016|
042016|XX
052016|XX
062016|XX
072016|
082016|
092016|XXX
102016|
112016|X
122016|
012017|XX

Cumulative:

012015|X
022015|X
032015|XX
042015|XXX
052015|XXXX
062015|XXXXX
072015|XXXXX
082015|XXXXX
092015|XXXXXX
102015|XXXXXX
112015|XXXXXXXXX
122015|XXXXXXXXXXX
012016|XXXXXXXXXXXX
022016|XXXXXXXXXXXX
032016|XXXXXXXXXXXX
042016|XXXXXXXXXXXXXX
052016|XXXXXXXXXXXXXXXX
062016|XXXXXXXXXXXXXXXXXX
072016|XXXXXXXXXXXXXXXXXX
082016|XXXXXXXXXXXXXXXXXX
092016|XXXXXXXXXXXXXXXXXXXXX
102016|XXXXXXXXXXXXXXXXXXXXX
112016|XXXXXXXXXXXXXXXXXXXXXX
122016|XXXXXXXXXXXXXXXXXXXXXX
012017|XXXXXXXXXXXXXXXXXXXXXXXX

[february 30th] 13/1/2017 18:16

There'll be a trading update some time this month.

[gbenson1] 13/1/2017 10:35

Someone's building a stake with 150-100k buys, trying to keep under the radar, should we expect RNS shortly??

[bigt20] 12/1/2017 22:57

I wonder if bed blocking is an issue in Trusts that use ODM?

If you increase throughput in beds that are not bedblocked then bed availability may be less of an issue in those Trusts and thus people can be moved out of A&E and into wards quicker??

[arf dysg] 12/1/2017 10:04

The Americans have indeed decided to take the P out of "sulphur". I would never take the P, oh no. This may open a whole new can of worms, sick of parrot, breakfast of dog, ear of pig, etc.


Just don't get me started on the "spelling" of Microsoft products.

"traveling" instead of "travelling", "specialty" instead of "speciality"... the list goes on.

[supernumerary] 10/1/2017 21:10

She was probably concerned about its miscegenated origins - bureau from the French and -ocracy from the Greek?

Hard to understand such lexicographical pedantry when we have our own dear royal family to show us the benefits of diversity ;¬)

[doglover2003] 10/1/2017 19:28

--- > Yump

Your last post relating to bureaucracy reminds me of on incident when I was at college in 1963.

I had to write an essay on the British Political parties and I found it appropriate to use the word "bureaucracy" in relation to party organisation.

For some reason the use of this word seemed to reduce my tutor to what seemed like a state of apoplexy causing her to daub my essay in bold large red scribble ......
"THERE'S NO SUCH WORD".

What better can you expect from the loony LEFT?

I am still, today, scratching my head about it.

[troutisout] 10/1/2017 14:00

'medieval textbooks' showing your age there yump!

[yump] 10/1/2017 13:52

I've now gone to the naughty corner for repeated misspeeling bureaucracy, normally careful about speelings, so quite depressed.

Particulary as I was horrified recently by a UK chemistry school textbook spelling Sulphur as Sulfur. Although I think Sulfur might be old English, if you could do the funny old 'f' out of the medieval textbooks, which would give it some credibility.