LONDON (Alliance News) - LiDCO Group PLC on Wednesday said it expects to report a double-ditgit decline in revenue in its recently ended financial year as it transitions its clients to the newly launched HUP business model.
The hemodynamic monitoring company said it continues to make progress with its HUP offering. As of Tuesday, LiDCO said it had a total global contracted base of 191 HUP monitors, up from 96 reported at the end of January 2018. Revenue from annualised HUP contracts totalled GBP1.5 million, more than doubled from GBP730,000 a year prior.
Overall, LiDCO said its product revenue for the year to January 31 was GBP6.2 million, down from GBP6.9 million a year earlier, while total revenue, which includes third party products, was GBP7.3 million, also lower than GBP8.3 million in financial 2018.
In the US, the strong growth of HUP meant that recurring revenue, which includes per patient disposables and service contracts, grew nearly 50% compared with the prior year to GBP1.3 million from GBP850,000.
Meanwhile, in the UK, LiDCO was focused on a conversion of its largest customers to the HUP business model, which had a transitional impact on the company's sales revenue recognition within the financial year. As a result, sales in the final quarter were less than the usual peak and LiDCO product revenue for financial 2019 were GBP3.6 million, down from GBP4.1 million a year ago.
LiDCO revenue outside of the UK and US markets in financial 2019 were GBP1.3 million, down slightly from GBP1.4 million the year before. The company explained that strong revenue growth in Japan and preliminary orders from new distribution channels in Europe were offset by weaker demand from the Middle East region.
Looking ahead, the company said it continues to invest in geographical expansion, applying for several regulatory registrations in key target markets in South East Asia and Latin America.
The company intends to announce its results for the year on March 26.
"Whilst the transition to the HUP business model has a short-term effect of deferring sales, we are encouraged by the progress made having built a recurring revenue base of over GBP1.5 million in just 18 months from launch of the HUP business model," said Chief Executive Matt Sassone.
"With continued focus on LiDCO's HUP model, we are well-placed to grow the business in line with our objectives over the short to medium term," added Sassone.
LiDCO shares were trading 1.2% higher on Wednesday at 4.40 pence each.
