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Share Name | Share Symbol | Market | Type |
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Bread Financial Holdings Inc | TG:LID | Tradegate | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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-0.23 | -0.54% | 42.04 | 41.77 | 42.30 | 0.00 | 22:50:14 |
RNS Number:1982J LiDCO Group Plc 26 March 2003 LiDCO GROUP PLC PRELIMINARY RESULTS LiDCO Group Plc ("LiDCO" or "the company"), the UK-based AIM-traded cardiovascular monitoring company, announces its results for the year to 31 December 2002. HIGHLIGHTS * Turnover increased by 81% to #2.04m (2001: #1.13m); * Strong clinical acceptance of the technology demonstrated by sensor usage trebling compared with 2001; * Commercial validation of the business model evidenced by 300 PulseCO and LiDCO Systems sold during 2002 (2001: 128 units); * Lithium chloride injectate approved in principle for use in Europe in January 2003, enabling commercialisation of the LiDCOplus system across Europe in 2003; * LiDCOplus system approved by US Food and Drug Administration in January 2003; and * Discussions have commenced with potential US distribution partners to maximise access to the US market. Enquiries: LiDCO Group Plc 020-7749 1500 Terry O'Brien (CEO) terry@lidco.com Theresa Wallis (Chairman) theresa.wallis@lidco.com Bankside Consultants Limited Charles Ponsonby (PR) charles.ponsonby@bankside.com 020-7444 4166 Chris Munden (IR) chris.munden@bankside.com 020-7444 4150 Notes for Editors LiDCO researches, develops and sells innovative medical devices, primarily for critical care and cardiovascular risk hospital patients who require real-time minimally invasive cardiovascular monitoring. The Group currently has two principal products, both of which are patent protected, the LiDCOplus monitor (a cardiovascular monitor displaying on a PC hardware platform the real-time parameters of: fluid volume status, cardiac output and oxygen delivery) and the LiDCO System (sensor and disposables) which is used for the calibration of the monitor. The Group's principal customers are hospitals. LiDCO was founded in 1991 by Doctors Terry O'Brien (the current CEO), David Band (the current Scientific Director), Robert Linton and Jiri Kratochvil and by King's College, London. LiDCO's head office is in London N1, whilst its sales offices are located in the Granta Science Park, Cambridge and in Dallas, Texas. CHAIRMAN'S STATEMENT This is my first Statement since being appointed non-executive Chairman in December of 2002. In fact, it is only the Company's second set of annual results since its admission to the London Stock Exchange's Alternative Investment Market in July 2001. LiDCO raised funds from the public market in order to commence the commercialisation of its minimally invasive sensor and PC based monitoring technology. I was therefore excited to join the Company at the end of its first full year of sales activity in both the USA and the UK. In reviewing its 2002 performance I am aware that this was a challenging period for the Company. The challenge was to establish a new technology in a market sector that requires change but where standards are necessarily of the highest order. This meant that in parallel to the sales effort the Company had to transition its operations successfully to a fully commercial basis with the capacity to become the supplier of choice for the minimally invasive monitoring of risk surgery and intensive care patients. Specific achievements to this end included clinically validating the technology, increasing revenues while maintaining pricing and gross margins, establishing and assessing the marketing strategy for the USA and the UK, automating and significantly increasing sensor manufacturing capacity and positioning the Company to expand sales in 2003 through registration of the Company's in vivo diagnostic (lithium chloride) in additional major European markets. In light of these achievements I am pleased to report that during 2002 the foundations for the commercial phase of the business were clearly established. As we enter our second full year of sales we are confident that we have both the product and the organisational infrastructure to access the substantial market opportunity outlined in our flotation prospectus. The challenges for 2003 are to roll out sales in Europe and grow and accelerate closures of our sales pipeline in the USA. Towards the end of the year, the Board decided that the best way of maximising access to the US, our largest market, would be through a distribution agreement with a partner and that, given the progress made by the Company during 2002, this could be achieved on commercially attractive terms. To this end the Company has begun early discussions with potential US distribution partners. FINANCIAL REVIEW Turnover increased to #2,042,000. Whilst this was lower than original market expectations, it was 81% above the previous year (2001: #1,130,000), generating a gross profit of #1,263,000 (2001: #832,000) and representing a gross margin of 62% (2001: 74%), in line with the Company's expectations. As 2002 was the first full year of sales, administration expenses rose to reflect higher sales and marketing costs. Administration expenses were in line with expectations at #7,038,000 (2001: #3,999,000). The pre and post tax loss was #5,496,000 (2001: #2,803,000) and the basic loss per share is calculated at 7.72p (2001: 5.70p). At the year end, net assets amounted to #8.0m, including net current assets of #6.9m. The year end net cash balance was #4.0m (2001: #11.4m). The Group's programme of investment in working capital and production facilities is now complete, so that the cash burn in 2003 is expected to fall significantly. TRADING REVIEW Overall Unit sales of monitors doubled whilst those of single use sensors trebled. 74% of turnover related to monitors and 19% to sensors, with 7% relating to licence fee income. 83% of the monitors (2001: 98%) were sold on a capital sale basis. The average monthly usage rate of sensors per monitor was 6 which is very encouraging. Monitor sales consisted of 211 PulseCO units and 89 LiDCO units. In 2003, all sales are expected to be of the improved LiDCOplus unit, which combines the software of the two previous monitors into a single, easy-to-use unit based on the PulseCO monitor. US AND UK SALES ACTIVITY PIPELINE 2001 2002 2003 Cumulative (2m to 28 February) Meetings/demonstrations 149 224 21 394 Field trials requested 149 224 21 394 Field trials commenced 82 184 16 282 Field trials completed 48 143 27 218 Sales proposals* 47 176 53 276 Sales closures 23 54 8 85 * Sales proposals in 2002 exceeded field trials completed as some hospitals have re-ordered monitors During 2002 the European sales pipeline grew significantly with 224 product demonstrations made, all of which resulted in a request for a field trial. 184 field trials were initiated and 143 were completed. Of the 176 sales proposals made 54 resulted in sales closures in the year, 8 sales proposals did not proceed due to lack of hospital budget funding and 114 sales proposals are still in progress. USA During 2002 sales to US customers were made through our direct sales force of 12 people. Turnover increased to #1,009,000 (2001: #632,000), with 92% monitors sold on a capital basis. By the end of 2002, 40 hospitals had purchased the technology. Included in these customers are a number of influential regional referral centers including: MD Anderson (Houston), Beaumont (Detroit), Crawford Long (Atlanta), University of Chicago and Northwestern Memorial (Chicago). In order to expand their use of our minimally invasive monitoring six US customers have already reordered monitors during 2002. Of particular note is Sarasota Hospital (Tampa, Florida) which has fully equipped its cardiovascular theatres and intensive care department through the purchase of 19 monitors. Overall clinical acceptance of the technology has been excellent as evidenced by the high percentage of requests for sales proposals resulting from hospitals' clinical evaluation of the products. While progress to the clinical sign off stage has been rapid, closure of sales has proved to be significantly slower than expected, due mainly to cost containment by the hospital administration and consequent lengthening of the capital cycle, an industry-wide phenomenon. This has been the predominant reason why sales have not met analysts' expectations in 2002. It is, however, encouraging that follow-on purchases of monitors have experienced a shorter capital cycle time at 7 months. Despite this tough commercial environment, prices for both the monitor and sensor products have been very robust and according to the Company's expectations. The US is the most important market and represents approximately 60% of our potential worldwide sales. Experience of our first full year of direct sales in this market shows that the desire to change to our minimally invasive monitoring technology is substantially as expected. However, the most challenging aspects regarding access to this market are the hospital capital cycle and the physical size of the opportunity, with around 14,000 potential customers within 3,500 hospitals. In the last quarter of 2002, following a review of US sales strategy, the Company decided that the high level of interest in the product and the margins being achieved in early sales meant that seeking a major US corporate sales partner had now become a commercially attractive route to accessing the market and announced its intention to start seeking a suitable partner. UK As with the USA we have just concluded our first full year of direct sales co-ordinated from our Granta Park (Cambridge) office. Given the severe shortage of funds available for capital expenditure in the UK NHS the sales strategy was to mostly provide monitors without charge and sell the sensors and associated disposables mainly by means of a compensatory up charge. Turnover increased to #300,000 (2001: #113,000) - with 35% of monitors placed on a capital basis. Use of disposables has been very encouraging at 11 per monitor. By the end of 2002, 25 hospitals had adopted our technology. Our sales force numbering six people is considered by the Company to be appropriate to penetrate this market fully. Continental Europe In anticipation of final approvals of lithium chloride, distributors were appointed in Holland, Italy, Spain, Belgium and the Czech Republic. Sales therefore predominantly reflected stocking orders and subsequent clinical trials in major reference centres. Turnover increased to #441,000 (2001: #114,000). Discussions are currently underway to establish a distributor for Germany and Austria. Far East and Japan Sales in the Far East and Japan totalled #292,000 (2001: #271,000). Approval of the PulseCO system for sale in Japan is expected towards the end of 2003. Sales throughout the Far East and Japan are made through distributors appointed by the Company. CLINICAL VALIDATION The Company continues to support an active program of clinical validation of the accuracy of its products in cardiac / major surgery, intensive care, trauma and heart failure markets (see the company website:www.lidco.com for full publication details.) 2002 was another successful year with studies concluding positively at: Duke University (N.Carolina) - intensive care, University of Chicago (Illinois) - surgical study, Hammamatsu University (Japan) - efficacy in pathological lung oedema, Southampton University Hospital - heart failure and 'off-pump' cardiac surgery. PRODUCT APPLICATIONS The Company actively assists customers to conduct trials of novel applications of its technology. Applications currently undergoing trials or further development include peri-operative optimisation, congestive heart failure and paediatrics, all large or expanding markets. REGULATORY AFFAIRS In 2003, regulatory approval for the LiDCO System lithium chloride in vivo diagnostic has been received in principle in the following EU territories: Austria, Belgium, Germany, Italy, the Netherlands and Spain. This brings the number of territories in which the Company has approval to sell its products to 12. In addition, approval applications are in progress for: Iran, Korea and Taiwan and further applications will be made during 2003. NEW PRODUCTS On 9 January 2003, approval was received from the FDA (Food and Drug Administration of the USA) for the sale of the LiDCOplus Hemodynamic Monitor in the USA. The LiDCOplus Monitor combines the measurement and monitoring features of the Company's existing products: the LiDCO (lithium dilution cardiac output measurement) and PulseCO Systems (real time cardiovascular monitor), thus saving premium space around the patient's bed and significantly enhancing ease of use. RESEARCH AND DEVELOPMENT The Company is actively developing additional features and applications for its products. There are currently two principal areas of development: Monitoring of Patient Fluid Status This is one of the key unfulfilled measurements required in critical care patients. The commercial implication of improving the performance of the LiDCOplus in this arena is that we could greatly increase the numbers of patients for whom the technology is suitable. The Company's ambition is to have a LiDCOplus at the bedside for all acute care patients with arterial monitoring who require fluid management. The customer requires a more visual way of detecting occult low blood volume status and the amount of fluid required to restore the patient. We are currently recording 'fluid loading' episodes in patients undergoing optimisation for high risk surgery. This data will be used to model the user interface and assess clinician and nursing response to the novel interfaces. Capillary Venous Pressure Measurement This is a software algorithm which uses the arterial pressure waveform to indicate the average pressure at the venous end of the tissue capillary. This would have potential application in fluid volume management (see above). The patent for this measurement has been filed and is progressing to the worldwide PCT application stage. The accuracy to which the measurement can be made and the utility of the measurement is under investigation. MANUFACTURING In 2002, a major expansion of the Company's London manufacturing facility was completed at a cost of #0.8m, including a second clean room, high volume semi automated sensor production and enhanced monitor production capacity. BOARD CHANGES Two resignations from the Board occurred in 2002: in November Pascal Levensohn, a non-executive Director since 1998, and in December 2002 Bill Alexander, a Director from 1995 to 2001 and Executive Chairman since the Company's admission to AIM. Pascal and Bill, both of whom are resident in the USA, supported the Company through its private funding rounds and subsequent flotation. As Bill's successor I was appointed non-executive Chairman on 20 December 2002 and would like to thank Bill and Pascal for their years of service to the Company. PROSPECTS The foundations to support continued growth were put in place during 2002. 2003 will see an increasing focus by the Company on sales in its expanded group of territories. Sales in the US are expected to continue to be subject to a slow capital cycle. In order to access the full market potential of the product in the US and accelerate the closure of pipeline accounts the Company is in early discussions with potential US distribution partners. Given the progress made during 2002 and the fact that the Company has succeeded in establishing a high level of interest in a high margin product that is supported by a low cost manufacturing base we believe that it is in a strong position to attract a suitable distribution partner. We hope to be able to announce on these matters further during the year. Investment will continue in the core technology to develop further enhancements to our sensor technology, physiological waveform monitoring software and user interfaces. We remain confident of our prospects. Theresa Wallis Chairman 25 March 2003 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the year ended 31 December 2002 2002 2002 2001 2001 Note #'000 #'000 #'000 #'000 TURNOVER 2,042 1,130 Cost of sales (779) (298) Gross profit 1,263 832 Administration expenses - other 2 (7,038) (3,897) Administration expenses - exceptional items 3 - (102) (7,038) (3,999) OPERATING LOSS (5,775) (3,167) Interest receivable and similar income 279 364 LOSS ON ORDINARY ACTIVITIES BEFORE TAX (5,496) (2,803) Tax on loss on ordinary activities - - LOSS ON ORDINARY ACTIVITIES AFTER TAX (5,496) (2,803) Loss per share (basic) (p) 7.72 5.70 Loss per share (diluted) (p) 7.27 5.54 All amounts derive from continuing operations. There are no recognised gains or losses for the current or preceding years other than as stated above. CONSOLIDATED BALANCE SHEET As at 31 December 2002 2002 2001 #'000 #'000 FIXED ASSETS Intangible fixed assets 565 567 Tangible fixed assets 1,234 183 Investments 42 258 1,841 1,008 CURRENT ASSETS Stocks 2,292 1,973 Debtors 1,367 1,196 Cash at bank and in hand 3,974 11,365 7,633 14,534 CREDITORS: amounts falling due within one year (741) (1,194) NET CURRENT ASSETS 6,892 13,340 TOTAL ASSETS LESS CURRENT LIABILITIES 8,733 14,348 CREDITORS: amounts falling due after more than one year (333) (525) NET ASSETS 8,400 13,823 CAPITAL AND RESERVES Called up share capital 356 354 Share premium 12,430 12,359 Merger reserve 8,513 8,513 Profit and loss account (12,899) (7,403) EQUITY SHAREHOLDERS' FUNDS 8,400 13,823 Signed on behalf of the Board of Directors Richard Mills Director 25 March 2003 CONSOLIDATED CASH FLOW STATEMENT For the year ended 31 December 2002 2002 2001 #'000 #'000 Net cash outflow from operating activities (6,356) (4,935) Returns on investment and servicing of finance 279 364 Capital expenditure and financial investment (1,387) (925) Cash outflow before financing (7,464) (5,496) Financing 73 12,493 (Decrease)/increase in cash in the year (7,391) 6,997 Reconciliation of net cash flow to movement in net funds 2002 2001 #'000 #'000 Movement in cash in the period (7,391) 6,997 Net funds at 1 January 11,365 4,368 Net funds at 31 December 3,974 11,365 RECONCILIATION OF MOVEMENT IN CONSOLIDATED SHAREHOLDERS' FUNDS For the year ended 31 December 2002 2002 2001 #'000 #'000 Loss for the financial year (5,496) (2,803) Issue of shares 73 12,492 Net (reduction)/addition to shareholders' funds (5,423) 9,689 Opening shareholders' funds 13,823 4,134 Closing shareholders' funds 8,400 13,823 NOTES TO THE PRELIMINARY RESULTS For the year ended 31 December 2002 1. NATURE OF THE FINANCIAL INFORMATION The financial information set out in the announcement does not constitute the Group's statutory accounts for the years ended 31 December 2002 or 2001. The financial information for the year ended 31 December 2001 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under s237(2) or (3) Companies Act 1985. The statutory accounts for the year ended 31 December 2002 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the company's annual general meeting. The preliminary results have been prepared in accordance with applicable accounting standards. The particular accounting policies adopted are the same as those adopted in the financial statements for the year ended 31 December 2001. 2. ADMINISTRATION EXPENSES Administrative expenses include a loss of #223,000 (2001 - #108,000) on shares held by the Group's Employee Share Ownership Trust. The shares were acquired by the Trust on the flotation of the Group at #1.40. The market value of the shares at 31 December 2002 was 14p per share (2001 - 98.5p per share). 3. EXCEPTIONAL ITEMS Professional fees of #nil (2001 - #102,000) in respect of work performed by advisers on the restructuring of the Group prior to the flotation have been expensed. Direct costs of the flotation were debited against the share premium account. 4. DIVIDENDS It remains the Group's policy that no dividends will be paid until future operations have provided appropriate levels of distributable profits. 5. 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. This information is provided by RNS The company news service from the London Stock Exchange END FR PUUGWWUPWGMA
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