Surgical Innovations adds progress in US to strong UK H1

Keyhole surgery equipment specialist Surgical Innovations sold more of its own branded products in the first half, leading to a strong rise in profits. The AIM-listed company, which flagged up these results in a pre-close statement, revealed its efforts to push into the US had resulted in an expanded distribution network and its largest ever Stateside order in the second half. Chairman Doug Liversidge said: "The increased adoption of our cost effective Resposable products in the UK is particularly encouraging and our access to the US market had been greatly improved through the establishment of additional distribution relationships."US sales were up 17.8% to £1.1m during the period, with a new President of US Sales and Operations Rick Barnett developing the SI Brand throughout the US with three new distributors since he was appointed to cover 16 US states and 1,700 hospitals. The company believes its cost-effective 'resposable' products, combining reusable and disposable elements, presents a powerful proposition as US healthcare organisations look aggressively cut costs.The group said it expected further agreements during 2013, and with its largest ever order generated by distributor Adler Instruments for SI branded products, the current pace of US expansion is "exceeding management expectations". A strong focus abroad has not seen any deterioration at home, with 25 hospitals converted to Resposable products this year to increase UK SI Branded revenues 144%. Across the whole group, revenues grew 28.4% to £3.9m and pre-tax profits 19.4% to £0.57m in the first half of the year. Liversidge added that Surgical Innovations continued to develop innovative new products that will contribute to future revenue growth.Analyst Dr Mike Mitchell at broker Panmure Gordon said a new hip surgery product with a potential product launch within 12-18 months and a proposed new facility remain "an opportunity for the business to raise its game in terms of production capacity, manufacturing efficiencies and training facilities". He added his outlook for the business remained positive and was improved by the early traction of the US strategy and raised his target price from 6.6p to 7.6p.By 09:40 on Tuesday morning, shares in Surgical Innovations were up 5.4% at 6.74p.