LID.L Regulatory News (LID)

LiDCO Group Plc

("LiDCO" or the "Company")

Trading update and notice of results

LiDCO Group Plc (AIM: LID), the hemodynamic monitoring company, provides the following trading update for the full year ended 31 January 2018.

LiDCO product revenues for the year are expected to be up 2% to £6.87m (2017: £6.76m) with total revenues (including third party products) expected to be up by 1% to £8.27m (2017: £8.21m). Excluding China, where as previously announced no sales were recorded in the year as regulatory approval is sought for a fundamental accessory, LiDCO product revenues were up 9% to £6.87m (2017: £6:27m).

During the year the Company launched its latest monitor, LiDCOunity v2, with the new highly differentiated High Usage Programme (HUP) business model. HUP is building momentum after its launch in July 2017, achieving a global installed base of 96 monitors with total annualised revenue of £0.73m. As of 31 January 2018, LiDCO had £0.60m of deferred revenues on the balance sheet arising from the HUP. Overall the new LiDCOunity v2 contributed to the strong demand for monitors with 315 units being sold or placed in the year (2017: 227 units).

In the UK, LiDCO had another strong performance, building on its market leading position. LiDCO product revenues are expected to be up 9% to £4.14m (2017: £3.79m). The growth was driven by strong monitor sales, with expected capital revenues of £0.72m (2017: £0.36m), up 100% compared to the prior year, with the launch of the Company's new monitor LiDCOunity v2 achieving a higher selling price. As announced separately today, LiDCO has converted its largest UK customer to its High Use Programme (HUP) business model. Sales of 3rd party products in the UK declined 3% to £1.40m (2017: £1.45m) as a result of the current pricing pressure climate of the NHS.

Following the expansion of its sales team in the US, LiDCO's revenues for the year are expected to be up 15% to £1.36m (2017: £1.18m). The Company is pleased to have announced that it has won a second significant multi-year HUP customer bringing the number of HUP monitors in the USA to 58. When annualised these HUP recurring revenues now represent in excess of $0.6m. Although the selling cycle remains quite long, the Board continues to be encouraged by market feedback to its differentiated offering as it looks to take share in this large and growing market by targeting the highest users of advanced hemodynamic monitoring.

Overall revenues outside of the UK and US markets are expected to have declined by 23% to £1.37m (2017: £1.79m) largely due to not being able to sell products to its Chinese distributor whilst the Company re-registers its product, as previously announced. The key highlights in its distributor business were Japan and the Middle East where the Company experienced strong revenue growth. The Board expects that the appointment of Merit Medical on 17 January 2018 as the Company's distributor in Japan will boost sales in this important market in 2018/19.

As expected, the year ended 31 January 2018 was a year of investment for the Company as LiDCO expands its commercial presence. As a consequence £1.67m of cash was invested and the Board expects to report a loss for the year before tax and share based payments. The Company remains debt free and year-end cash balances were £3.23m (2017: £4.90m).

The Company intends to announce its final results to 31 January 2018 on 10 April 2018.

Commenting, Matt Sassone, Chief Executive Officer of LiDCO, said: "Behind the headline numbers I am encouraged by the way our expansion plan is developing. Excluding China, LiDCO sales grew 9% and we start the new financial year with £0.7m of HUP revenues contracted. We have a strong and growing pipeline of opportunities to further drive growth in our key target markets.

"As the business continues to win HUP contracts, it will transition towards multi-year license revenues, giving good visibility alongside strong cash generation. I expect this to greatly enhance the quality of the Company's earnings although accounting for such contracts will have a short term impact on revenue recognition as the income will typically be spread over the term of the contract as opposed to monitor revenues being recognised up front."

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 ("MAR").

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About LiDCO Group Plc (www.lidco.com)

LiDCO is a supplier of non-invasive and minimally invasive hemodynamic equipment to hospitals used to monitor the amount of blood flowing around the body and ensure that vital organs are adequately oxygenated. LiDCO's products facilitate the application of hemodynamic optimisation protocols for high risk patients in both critical care units and in the operating theatre. 

Increasingly clinical studies are showing that the optimisation of patients' hemodynamic status in high risk patients produces better outcomes and reduced hospital stay. LiDCO's computer-based technology, originally developed at St Thomas' Hospital in London, has been shown to significantly reduce morbidity and complications, length of stay and overall costs associated with major surgery.

Key Products:

LiDCOunity: a hemodynamic monitor that combines the full suite of LiDCO technology (non-invasive, minimally invasive and calibrated technologies) into one platform. Designed to have the flexibility to adapt to a patient's changing acuity, the product enables clinicians to seamlessly transition between non-invasive, minimally invasive and calibrated hemodynamic monitoring. Version 2 of this software is only available on a new slim widescreen monitor and includes the optional high usage program software in selected markets.

LiDCOplus: a computer-based platform monitor used in the Intensive Care Unit for real-time continuous display of hemodynamic parameters including cardiac output, oxygen delivery and fluid-volume responsiveness.

LiDCOrapid: a cardiac output monitor designed specifically for use in the operating theatre for fluid and drug management. The monitor enables anaesthetists to receive accurate and immediate feedback on the patient's fluid and hemodynamic status - a key measure of overall well-being before, during and after surgery. The LiDCOrapid provides:

· early and rapid warning of hemodynamic change to aid choice of therapeutic route: fluid or drug

· quantification of hemodynamic response guidance on effective delivery of fluids to ensure the right amount at the right time

The software incorporated into LiDCOrapid allows the LiDCOrapid monitor to co-display Medtronic's level of consciousness parameter ('BISTM')* and add the convenience of CNSystem's continuous non-invasive blood pressure monitoring ('CNAP')**. This addresses a growing requirement for non-invasive monitoring solutions that are more comprehensive and can effectively replace multiple single parameter monitors. 

LiDCOview: an easy-to-use graphical display of historical LiDCOplus and LiDCOrapid hemodynamic data.

*BISTM and Bispectral Index are trademarks of Medtronic registered in the US and foreign countries.

**CNAPTM is a trademark of CNSystems Medizintechnik AG.

LiDCO monitors use single-patient disposables (sensors or smartcards) which provide an ongoing revenue stream.

LiDCO Distribution Network:

LiDCO sells directly to hospitals in the UK and USA and through a network of specialty critical care and anaesthesia distributors in the rest of the world.

LiDCO's headquarters are in London and its shares are traded on AIM.