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LONDON (Alliance News) - Surgical Innovations Group PLC said Tuesday that it looks at the second half of its financial year with confidence, despite revealing a reduction in profit for the first half.
Shares in the firm were trading down 8.5% at 3.11 pence each.
For the six months to June 30, the manufacturer of technology for minimally invasive surgery reported pretax profit of GBP94,000, down from GBP301,000 a year ago, as the firm incurred GBP224,000 in amortisation of intangible acquisition costs and GBP60,000 in share-based payments.
Meanwhile revenue increased 52% year-on-year to GBP5.3 million from GBP3.5 million, mainly due to the acquisition of Elemental Healthcare, completed in August 2017.
Revenue from Surgical Innovations' branded products grew by 13% to GBP2.8 million, including the incremental revenue from direct sales previously handled through distribution by Elemental in the UK.
"Market conditions in the UK were challenging. In the first quarter of the year, NHS hospitals carried out a substantially reduced number of elective surgical procedures following the winter capacity crisis and ongoing spending constraints," the company explained.
"This pressure eased somewhat in the second quarter, although activity has only recently returned to a more normalised level."
In the US, revenue reduced by 25% to GBP790,000, with the company expecting a "return to growth for the full year".
"The group has continued to broaden its product base by investing in product innovation, and by entering into both new and extended distribution agreements," Surgical Innovations said.
It added: "It is anticipated that trading conditions will continue to improve, and recent positive developments will enable the group to deliver an enhanced growth rate in the second half of the year."
With regards to Brexit, Surgical Innovations said it has made contingency plans to cover for the event that the UK leaves the EU without an "appropriate withdrawal agreement".
"In April 2018, we transitioned all relevant European distributors to price lists denominated in euros, and this provides a natural hedge against cash outflows on components purchased in the EU," the company explained.