Inspiration Healthcare Share Discussion Threads

[troutisout] 19/6/2020 09:17

It's due to the low discount, the dilution is small 'GOOD', Open Offer entitlement low at 1 for 50, 'Not so good'.
I was not able to add earlier due to NT and now they want full ask...

[geovest] 19/6/2020 09:11

Seems like a good acquisition at a reasonable price. Really disappointed at the low level of the open offer though.

[troutisout] 19/6/2020 09:09

Inspiration Healthcare were featured on the @bbcsoutheast explaining the exciting developments in Project WAVE

[lammylover] 19/6/2020 08:59

RNS. IHC conditionally agree to buy SLE Ltd for £18m on a cash free, debt free basis. SLE are a leader in design and manufacture of ventillators for neo natal intensive care. IHC have raised £16.5m from institutional investors at 65p / share and offer PIs the opportunity to purchase shares at 65p on the basis of 1 new share to 50 already held. SLE Ltd purchase is expected to be earnings enhancing in the short to medium term and also raises profile of IHC. Good news, particularly that they have raised capital at almost the current share price with just 1.5% discount! Rich

[hastings] 19/6/2020 08:54

Excellent news and puts IHC in a very good spot going forward.

[rivaldo] 19/6/2020 08:48

Agreed - excellent news. Earnings-enhancing, complementary products, cross-selling opportunities, manufacturing capability.....and a very good placing price at 65p.

Good to see the Open Offer for existing shareholders, just a shame it wasn't larger:

[techno20] 19/6/2020 08:39

Looks like a great fit at a decent price and with a tiny discount. Market seems to like it!

[hastings] 15/6/2020 08:19

Yes, good news. I feel an upgrade really shouldn't be too long away.

[rivaldo] 15/6/2020 07:09

Good news this morning....the ventilator supply news is encouraging, but I particularly like the closing comment about the "strong growth" in the core business:

"Even before the winning of the NHS contract in March, the Company has enjoyed strong growth in the underlying business and now with a much greater degree of certainty in fulfilling these NHS contracts we anticipate that the effect of Covid-19 will have a positive impact on our outlook. Our logistics team are working tirelessly with our suppliers and we will make further announcements when we have additional deliveries."

[rivaldo] 11/6/2020 15:16

Great article hastings, thanks. An excellent, balanced summary.

[itsnotmeitsy0u] 11/6/2020 13:07

being offered 66.5p for 30k but cant buy any!

[hastings] 11/6/2020 09:30

Good to enjoy your company as always Rivaldo!

Not sure if this will be of interest or not, but I penned this piece on IHC for the Mike Walters board early May.
It may touch on a few things that haven't been mentioned elsehwere.

No share, or very rarely, ticks all the boxes, but when a number of factors come together positively it is usually worth delving deeper and considering its investment merits.

The first thing to note with IHC is that it operates in a market that is in many ways somewhat insulated from the effects of any impending recession or the inevitable downturn.
That is because the company is a supplier of life saving medical devices in areas of neonatal intensive care and patient warming, which by their nature are pretty much non negotiable, perhaps even more so in these strange times.

More on that in a while, but in addition to operating in what can be seen as a constant market place, IHC is firstly profitable, holds net cash of £4.5m, stands on a PEG of 0.42 and in its most recent results delivered impressive organic growth of 12%.
There are a few potential negatives if you use the likes of Stockopedia or other platforms, but as I always like to add, it is worth remembering that such tools are largely lagging, working on historic numbers/data and often do not take into account the most recent events or data related to a company's prospects.

Admittedly though, at the current price of 62p the shares trading on a forward PER of 14 probably look priced about right at present, particularly in such uncertain times.

However, IHC appears to have some really excellent growth prospects and it is interesting to note that it has, over the last few years cemented a very strong relationship with the NHS as demonstrated by recent news which is now assisting the company in further delivering on its business plan.

Regarding the recent news here, having announced on the 16th March that it was to supply ventilators to the NHS for the fight against Covid19 which was a positive in itself, it subsequently went on to announce additional orders for other medical equipment and further ventilators to the value of £4m.
Then, last Friday, confirming that a first batch of ventilators had arrived in the UK the company added that it had extended its 24 hour helpline facility to clinical staff at all UK hospitals in relation to access to qualified personnel employed directly by IHC relating specifically to the ventilators.

Broker Cenkos described the news as a hugely significant announcement for the company and highlights the close relationship the team has developed with both the NHS and its commercial partners.

Further positive news was also forthcoming last month too concerning a collaboration with Genedrive regarding its anibiotic induced hearing loss test across the UK and Ireland.

The companies also expect to expand the scope of the contract over time to engage Inspiration Healthcare's network of more than 50 neonatal-focused sub-distributors around the world.
The Genedrive MT-RNR1 AIHL test is the world's first point-of-care genetic test designed for use in a neonatal intensive care setting. The test screens newborns for a genetic mutation called mt-RNR1 that can cause lifelong and irreversible deafness to a child upon administration of certain antibiotics.
“Our agreement with Inspiration Healthcare combines genedrive's innovative first-to-market AIHL product, with a thought-leading healthcare company with a specialist emphasis on neonatal care,” David Budd, Genedrive's chief executive officer said in a statement.
“Inspiration Healthcare has a strong track record in the introduction of new technologies and over many years they have developed an extensive network of key opinion leaders that will be very beneficial as we bring the Genedrive AIHL test to market together,” he added.
Neil Campbell, the CEO of Inspiration Healthcare, said the company was “delighted to be able to work with genedrive”.
“Our focus has always been products that can have a profound effect on the patient outcome and we look forward to working with genedrive to make this test the standard of care in the UK and the wider neonatal community around the world,” he added.

Having also released its full year results last month, revenue for full year 2020 came out at £17.8m which saw the critical care market provide for £11.4m of sales which enjoyed a 7% increase where its AlphaCore5 warming system for patients in neonatal intensive care units was a key driver.

Sales for Operating Theatres came out at £1.7m whilst Home Healthcare revenues jumped by 50% year on year which now sees the company distributing Micrel parenteral feeding products.

With a decent mix of its own brands complementing others, both of which are focused on disruptive innovative technologies the company looks well set to continue on a growth trajectory which is likely to boost impressive organic growth by timely made acquisitions.

To this end, it made its first purchase last year in the form of Viomedix for £4m (placing) and given the prevailing climate, this looks to be an excellent acquisition as the acquired business provides innovative solutions to resolving patient problems in the respiratory care market.
What's more, it is very much specialised in the designing and supplying of disposable respiratory products and sterile medical consumables including
breathing circuits, perforators and surgical markers.

Returning to the neonatal area where the company is very much focused it is worth noting that according to various industry reports, particularly that of Grand View Research Inc, the fetal and neonatal care equipment market is expected to be worth some $10.6b by 2026 based on an expanding compounded annual growth rate of 6.9%.

Although IHC is already making sound progress in this sector it isn't resting on its laurels and has, within its pipeline of novel products/devices a very recently US (recently patent granted) project named Project Wave.

The company entered into a licence agreement in 2019 with a major US West Coast University to develop what is described as a new ground breaking device that will target apnea of prematurity which is defined as the cessation of breathing by a premature infant that lasts for more than 20 seconds and is accompanied by often very serious complications.

Treatments that have been used for almost three decades have raised concerns of long term negative effects, so IHC looks to have identified a positive health and commercial opening with what is described as a ground breaking respiratory device that is now expected to move quickly to trials this summer.
Research at the university involved has found that the device could help to normalise an infant’s breathing rate and reduce apnoea associated with prematurity.
Inspiration Healthcare have indicated that over 1.5 million babies suffer from apnoea of prematurity (or require respiratory support) each year, indicating a potential market size for Project Wave of over $60m per year.

A significant feature of Inspiration Healthcare’s business strategy is, according to broker Cenkos its focus on the neonatal intensive care market. This is an essential, non-elective market where – premature and unwell newborns in western markets will be treated regardless of economic pressures.

The company, which was once a pure distributor of medical equipment has now grown into a fully integrated medtech technology company within the neonatal intensive care setting which doesn't appear to be reflected in its market valuation where many still seem to perceive it as pure distribution play.
In that context, the current market cap of £24m looks pretty modest, particularly in light of an increasing proportion of Inspiration’s revenues (46%) and profits being generated from the sale of equipment under its own brand.
This provides the company with greater product control and the generation of improved margins.
With an already established footprint across the UK and Ireland the company will look to expand that further whilst it is also actively looking to increase its presence across international markets which at present only accounts for circa 12% of revenue.

Looking ahead to the financial year in play, Cenkos is expecting revenue of £20.4m, Ebitda £2.83m and adjusted pre-tax profits of £1.88m providing for EPS of 4.2p aND net cash is expected to improve to £4.7m.

The 52 week range of the shares is a low of 55p against a high of 90p, which suggests that if future progress is maintained as expected, alongside another timely acquisition, then investors eyeing the medium-longer term could be suitably rewarded.

Obviously there are some big name players also operating in the space but given the number of active smaller players gives it something of a fragmented look suggesting a ripe environment for consolidation.

IHC has clearly made solid progress in recent years and the management appear sound with a conservative approach as revenues largely organic driven have improved from £9.5m in 2015 (listing year, via reverse into (Inditherm) up to the recently reported £17.8m.

Pre-tax profits have also in the last three years begun to build momentum and the board has already stated an intention to commence a progressive dividend policy

[rivaldo] 11/6/2020 07:20

News of a nice grant to support Project Wave, with the trials expected to commence this year:

[rivaldo] 10/6/2020 15:18

Good to see the price move up again on low volumes - I assume stock is still scarce.

[geovest] 09/6/2020 16:09

It’s getting more and more difficult finding decent lines of stock to buy here

[hastings] 09/6/2020 15:05

Hopefully so rivaldo. Wouldn't be surprised to see a positive update to accompany VLG's statement this morning.

[rivaldo] 09/6/2020 14:34

Nice 7.6k buy at 66p - a full 1p above the 65p published offer price. A good sign.

[itsnotmeitsy0u] 09/6/2020 12:38

why are ppl still selling at this level?! easy 50% gaon imho

[troutisout] 09/6/2020 10:55

I think COVID19 will force through new practices all over the World and in all walks of life, the lockdown measures and general fear in the population will act as a blank canvas, as we are told we cannot go back to things as they were before. Hopefully there will be lots of good come out of the crisis in terms of environment, health and social care, innovation and technology, less commuting and more flexible working patterns. However there will be a downside with loss of life to the disease and unemployment and reccession to follow.
I like IHC as an investment as their products are all ones that are needed COVID or not, but they have shown themselves to be able to help with the COVID crisis and made some great contacts and partners in Government and within industry (and have delivered for them), that for a small company is a massive opportunity.

[cockerhoop] 09/6/2020 10:04

Troutisout,

As a shareholder in Inditherm I well remember the 2008 NICE guidelines mandating the cost saving advantages of heated mattresses over 'Bearhugger' forced air - largely ignored sadly. Perhaps Covid will succeed where cost saving advice failed.