The basis of LiDCO’s growth story is that its minimal-invasive blood pressure and flow monitors can reduce the time a person is in hospital (notably the elderly) from between two and 12 days. Not surprisingly the cash-strapped NHS is keen on such systems. A report last December estimated there are 800,000 UK patients a year who would benefit from this advanced monitoring but less than 10 per cent were actually receiving it. It was also claimed that monitoring could save the NHS up to £400m a year.
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.
LiDCO (LID) | ||||
---|---|---|---|---|
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) |
---|---|---|---|---|
2008 | 4.00 | -2.00 | -1.50 | nil |
2009 | 4.53 | -1.77 | -1.20 | nil |
2010 | 5.37 | -1.55 | -0.87 | nil |
2011 | 6.24 | -0.49 | -0.22 | nil |
2012 | 7.12 | -0.05 | 0.01 | nil |
% change | +14 | - | - | - |
Aim: Medical equipment |