Lifeline Scientific's recent trading update showed that its technology, which manufactures specialist transfer equipment for kidney transplant patients, is still enjoying the fruits of growth - sales growth for the year is expected at around 10 per cent, a definite improvement on 2010. But the illiquidity of the company's shares and the need to invest more in expansion have weighed heavily on our buy tip, which we're abandoning.
The main problem for Lifeline is gaining enough scale to ensure healthy repeat revenues from its placed machines. The need to invest in more marketing in emerging markets, as well as a new range of machines to handle other types of transplants, has forced costs higher than analysts had been expecting and may have contributed to the downward share price pressure.
