LiDCO drops as lumpy US market keeps revenues flat

(Sharecast News) - LiDCO shares dropped on Monday after reporting that annual revenues will be "similar to the last financial year" as the drug monitoring company has been affected by longer US sales cycles and a big tweak to its UK business model.The hemodynamic monitor designer reported that third-party sales would likely reach £1m for the full year, down from £1.4m the year before, after the cancellation of its distribution contract with Argon.The AIM-listed company said that in the US, where there remains an "encouraging pipeline of prospective customers", timelines for finalising deals remain unpredictable and none will have a material impact on current year revenues."Whilst, at times, progress appears slower than originally anticipated, the group's management and sales team are learning how to anticipate and overcome identified causes as well as building various relationships to help penetrate the US market, which is the largest in the world for hemodynamic monitoring," said a statement from LiDCO.Meanwhile, in the UK LiDCO is converting large customers to its High Usage Programme (HUP) business model, a software-as-a-service model, which has resulted in the deferring of revenues which would normally have been booked this year.HUP revenues increased to £1.3m for the year to the end of November, up from £0.3m across the same period last year.Matt Sassone, chief executive of LiDCO, said: "I am convinced that we will continue to grow a strong foundation of contracted HUP recurring revenues. We will continue to keep costs and cash flows under control as we transform the business to a software as a service model which will be a much more predictable business."LiDCO's shares were down 8.60% at 4.25p at 1013 GMT.