LONDON (Alliance News) - LiDCO Group PLC said Monday that whilst it still expects to show growth in profitability and revenue in its current financial year compared to the previous year, growth will be below previous expectations due to weak sales in its second quarter.
The biotechnology company said its revenues are expected to drop to GBP3.7 million from GBP4.2 million in the half year to end-July.
It said that after a "solid" first quarter, it has experienced a level of de-stocking in the UK, and a lack of sales to its distributor in Japan. LiDCO said the UK market has seen a noticeable shift from sales to placement, or leasing, of monitors, and a level of overstocking of disposable products in the previous year.
Whilst its installed customer base grew by 33 surgery monitors in the first half, these market factors have hit results in the first half. UK revenues are expected to be GBP2.6 million in the half, compared to GBP3.1 million a year before.
This will offset a more than 40% growth in the revenue in the US, where the company has benefited from its shift to a direct sales model. LiDCO also said it expects to recommence sales to its Japanese distributor in the second half.
LiDCO said the fall in revenues has been partly offset by improved pricing of its disposable products and tight control of its overheads. It is still on track to be debt free by the year end.
"Whilst we are disappointed with the lack of growth in UK surgical disposables and the shift from capital sales of monitors to placements, the fact that we have increased the installed user base by 33 units bodes well for the return to growth of our higher-margin disposable product," said Chief Executive Terry O'Brien in a statement.
LiDCO will announce its interim results in mid September, it said.
Shares in LiDCO were trading down 19% at 14.00 pence Monday morning, representing a new 52-week low for the stock.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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