The basis of
LiDCO is not the largest player in this market but seems reasonably well placed. The feature of the latest results was a 36 per cent jump in higher-margin disposable revenue to £5m, including £1.2m from distributing Japanese catheters. Good sales were also necessary because the number of monitors installed in the year dropped from 524 to 364 – making a total of nearly 2,200 – while US sales fell sharply due to order timing difficulties with the company's US distributor.
However, Lidco still delivered a maiden profit, albeit with the help of a tax credit. Broker finnCap reckons that a combination of NHS demand, better order phasing in the US and new non-invasive products will push 2012-13 sales up to £8.9m and produce adjusted pre-tax profits of £300,000. Net cash balances remain healthy enough even though year-end stock levels rose to acquire extra monitor components.
|ORD PRICE:||17.5p||MARKET VALUE:||£30.5m|
|TOUCH:||17-18p||12-MONTH HIGH:||19p||LOW: 12p|
|DIVIDEND YIELD:||nil||PE RATIO:||na|
|NET ASSET VALUE:||3p||NET CASH:||£819,000|
|Year to 31 Jan||Turnover (£m)||Pre-tax profit (£m)||Earnings per share (p)||Dividend per share (p)|
Aim: Medical equipment
IC view: Lidco shares have risen a third since we rated them good value six months ago (13p, 31 October 2011) and now trade on a prospective PE ratio of 37. At this level, we downgrade to hold.