Tunstall keeps investing after ‘challenging’ year

Paul Stobart, CEO of Tunstall
Paul Stobart, CEO of Tunstall
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TELEHEALTHCARE COMPANY Tunstall today revealed it had faced a “challenging year” in the UK as Government austerity measures led to contract delays.

However, the Yorkshire-based company, which allows patients to monitor their health from the comfort of their homes, plans to grow its manufacturing facilities, after securing more investment from its institutional shareholders. Tunstall also enjoyed success in the French market, where it secured three major managed services contracts, and its staff numbers increased from 2,912 to 2,950 over the financial year. Tunstall’s systems save lives by raising the alarm if a patient’s health deteriorates, It also saves money by reducing the number of hospital visits. The group’s telecare systems allow 24-hour monitoring of patients. They include fall detectors, bed and chair occupancy sensors, panic alarms, property exit sensors and movement detectors.

In the year ended September 30 2014, the group achieved revenues of £215m, compared with £221m the year before. EBITDA (earnings before interest taxation depreciation and amortisation) were £43.0m, which was less than the £52.7m recorded in 2013.

While revenues were up by 6.8 per cent in the Nordics, Southern Europe, Central Europe, and Australasia, the group’s UK and US markets faced more challenging conditions.

Tunstall, which is based in Whitley Bridge, near Selby, reported a “highly competitive UK trading environment”, particularly in the assisted living and service sector. The group’s managed services business area also saw lower volumes than anticipated. In the US, a combination of operational challenges and the loss of a major telehealth contract with Alere, led to an overall reduction in revenue. Alere bought its own telehealth operation in the US, which meant it no longer needed Tunstall’s services.

Paul Stobart, Tunstall’s chief executive, who joined the group in November 2013, said austerity measures had led to delayed contracts and cuts in funding.

He added: “There is no doubt that 2014 has been a challenging year. We have repositioned and reshaped the business this year, with particular emphasis on the UK and the US, to obtain sharper focus, enhanced offerings for customers, and more efficiencies in our business model.

“We expect to see the benefit of these efforts make a positive impact in 2015. We have an ambitious investment agenda in 2015, with capital expenditure increasing by 30 per cent over 2014, targeting new propositions in the IP and mobile segments, as well as in supporting our growing managed services business.”

Tunstall’s Televida operation in Spain continues to strengthen its market leading position as a telecare service provider, the group said. In the UK, a long-term agreement was secured with Hanover Housing Association and the company also secured a telecare contract with Leicestershire County Council.

Tunstall’s UK manufacturing facilities continue to grow, after it “insourced” production of the Swedish Careline range and component parts manufacturing.

In September, Tunstall secured additional investment of £20m from its institutional shareholder group, which is led by Charterhouse Capital Partners, and also includes Bridgepoint.

Tunstall employs 685 staff in the UK, including 380 employees at its headquarters in Whitley Bridge.

Tunstall plans to use the extra investment from the institutional shareholders to “take advantage of the significant growth opportunities presented by the technology-enabled care market”.

The company has invested in an innovation unit to explore the benefits of mobile technology.

Paul Stobart, the CEO, said the company had a low rate of staff attrition because staff were committed to the company’s values.