LONDON (Alliance News) - Surgical Innovations Group PLC Tuesday posted a significantly widened pretax loss for 2014 due to heavy exceptional costs, and called the performance "extremely disappointing".
However the medical devices company said it is satisfied with the progress it has made since its refinancing last November.
The company posted a pretax loss of GBP9.8 million for 2014, widened from a pretax loss of GBP44,000 in 2013, as revenue fell to GBP4.0 million from GBP7.5 million and it posted exceptional costs of GBP8.4 million.
Surgical Innovations' figures were restated following a review of its revenue recognition policies.
It attributed the fall in revenue to lower sales of its branded products due to global de-stocking of customer inventory levels and reduced demand in its original equipment manufacturers segment. It booked exceptional costs, including GBP7.8 million in impairment charges against its capitalised development costs, costs associated with the now-terminated Regional Growth Fund project, and restructuring costs.
The company opted to reduce global inventory levels held by its distributors, and whilst this hit sales in 2014, Surgical Innovations said it was now seeing "the benefit of a more normalised business with relatively stable monthly sales".
Surgical Innovations raised GBP1.5 million via a share subscription and the issue of loan notes with its biggest shareholders Getz Brothers Co Ltd and Managing Director Chris Rea last November. In March, it received an additional GBP500,000 of loan note funding.
The company has made progress in addressing its cost base so that it is more proportionate to its level of ongoing revenue. Notwithstanding this progress over the last six months, Surgical Innovations said, trading profitability remains challenging as driving down its own inventory levels has a direct, negative hit on its manufacturing productivity.
"Following a turbulent 2014, the group now has a stronger platform to support the business over the medium term. The board remains committed to cash generation, and the directors are satisfied with the progress made since the refinancing was announced in November 2014," said Non-Executive Chairman Doug Liversidge in a statement.
Shares in Surgical Innovations are trading down 4.1% at 1.75 pence Tuesday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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Surgical Innovations (SUN)