Strategy USA: it's showtime!
​Deltex markets minimally invasive and real time Doppler (ultrasound) cardiac function monitoring systems used for both surgery and critical care in hospitals worldwide.
FY2015 results highlighted satisfactory progress through a year affected by divergent market trends. The UK haemodynamic monitoring market declined again, with little turnaround prospects in sight; significantly, the US and International markets demonstrated good growth and a strong future potential.
Most encouragingly, US revenues increased 41% to £1.5m in FY2015. The growth trajectory continued to improve, with probe revenues hitting £1.3m, +33% (+23% local currency). Currently, DEMG has 24 platform accounts, adding 7 so far in 2016. ODM adoption rates in the US continue to out-perform other markets.
Although UK business prospects remain uncertain, aggressive efforts to reduce costs starting to pay off. Cash costs were reduced £100k per month from Q1, helping support US expansion plans.
On valuation, EV/Sales ratios and our DCF analysis support a fair value in excess of 8 pence/share.
Deltex Medical Group is engaged in the manufacture and marketing of oesophageal Doppler haemodynamic monitoring systems used in surgery and intensive care. Through its subsidiaries, Co. is engaged in the manufacture and marketing of medical devices in the United States, Spain and Germany; and the provision of employee services. Co.'s product, CardioQ-ODM enables doctors to fine-tune a patient's cardiac performance during surgery using a technique known as Doppler-guided fluid management. The CardioQ-ODM directly measures central blood flows, the indicator of potentially harmful changes in haemodynamic status that are common to all patients having surgery.
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