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Obesity proves healthy at Surgical
DEMAND for Surgical Innovations' products continues to grow, the group said, driven by increasing rates of obesity surgery.
The Leeds-based group, which makes devices used in keyhole surgery, said trading continued to be in line with expectations after a strong first quarter's growth.
Surgical, which has launched a novel "resposable" system, where parts of the device are disposable and others are reusable, said it has had a positive response to the new range.
"It's a great idea because once you have got the instrument it gives you some customer loyalty," said non-executive chairman Doug Liversidge.
"Hospital budgets are stretched but that's good news for us because the resposable concept is the most cost-effective way of approaching this type of surgery. We are getting a lot of interest from all over the world."
Mr Liversidge said the group is intensifying its efforts to improve distribution into the United States, in particular for its resposable YelloPort system. The group sells into 44 countries around the world.
YelloPort is used in obesity operations where surgeons need to access the abdomen for keyhole surgery, acting as a sealed tube through which surgical instruments can pass.
"The group remains confident in succeeding in this marketplace having secured effective distribution channels for selected products," Mr Liversidge told shareholders at the group's annual shareholder meeting in Leeds yesterday.
Surgical's latest product for obesity surgery, its LogiFlex device, helps surgeons to deploy gastric bands – used to reduce stomach capacity and therefore appetite.
The device has been launched into Europe and the group has received interest from both obesity surgeon and manufacturers of gastric bands.
"The number of people who have the operation is growing exponentially," said Mr Liversidge. "It's a very successful operation and people use it to extend the length of their life. In the US it's a very popular operation.
"It's a growing part of our business and we see it increasing quite strongly over the next few years."
The company added it continued to build relationships with original equipment manufacturers, which provide it with a steady revenue stream by making devices under licence.
Surgical has gone through more than a year of upheaval in moving its headquarters to a 32,000 sq ft building which tripled the size of its base. Its aim was to revert to in-house manufacturing, and in line with that, the group has given the green light to a new class 100,000 cleanroom. The cleanroom will be used to assemble products free from contaminants, at a cost of about 300,000.
"This will enable us to bring the production and assembly of further products in-house and the board expects significant cost reductions when it is installed and operational," said Mr Liversidge.
Last month Surgical reported a record order book as it showed revenue of 4.3m for the year to the end of 2008, down from 4.8m the year before; pre-tax profits increased by 12 per cent, to 820,000.
BRAZIL-BOUND FOR MAJOR EVENT
Keyhole surgery specialist Surgical Innovations is to exhibit at the largest healthcare event in Latin America.
The firm will showcase its laparoscopic product range at Hospitalar 2009, in Brazil.
Surgical Innovations will give potential customers a chance to learn about its laparoscopic instrument systems, which are made up of re-usable and disposable elements.
It hopes to use the event to access the Latin American market, and make contact with international distributors.
Its products are designed to give patients an improved quality of life.
Graham Bowland, finance director, said: "We are looking forward to meeting surgeons in Brazil and seeing how our in-house design and manufacturing facilities in Britain can help drive international healthcare sectors forward.
"It's an exciting opportunity and hopefully the start of some business opportunities."
Surgical Innovations will be in the British Pavilion in the Green Hall during the exhibition, which takes place in Sao Paulo and runs from June 2-5.
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Thursday 24 May 2012
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