Keyhole surgery firm reports a strong finish to the year as Covid retreats

Leeds-based SI said annual sales for the UK (excluding original equipment manufacturers) reached 94 per cent of pre-pandemic levels, benefitting from a strong fourth quarter.

David Marsh, chief executive of Surgical Innovations Group, said: “Our performance in 2021 has been credible in the context of the pandemic and related issues and reflects management action to contain the financial effects of reduced activity to a manageable level, whilst reinforcing the commercial and operational capabilities of the business to emerge in a stronger competitive position.

"While we anticipate that first quarter sales may reduce down to 80 per cent of pre-pandemic levels, we do however expect a return to normalised hospital activity in the second quarter and see prospects for improved momentum in the second half.

"Overall, we anticipate that annualised sales by year end 2022 will exceed the level of revenue in 2019 as a pre-pandemic benchmark. This reflects anticipated progress on the adoption of our innovative Resposable technology to reduce waste and cost in elective surgery.”

SI said that global healthcare markets continue to be buffeted by Covid-19 and the emergence of the Omicron variant represents an additional challenge for hospitals trying to manage staff absences as they self-isolate.

"The start of this year has seen a number of NHS Trusts reduce or postpone elective surgery, and consequently we remain cautious as a combination of seasonal flu and Omicron could further slow hospital activity in elective surgery in the coming months," the firm said.

"A similar picture globally is being reported by our international partners. Reflecting these factors and uncertainty regarding the timing and scale of recovery from Omicron, the board considers that formal earnings guidance should continue to be withheld until final results are announced in March."

Sales for the second half of the year were 16 per cent higher than the first half, resulting in revenue for the full year expected to be approximately £9.1m. This compares with full year revenues of £6.3m in 2020 and £10.7m in 2019 as a pre-pandemic comparative.

SI said that underlying gross margin (before net manufacturing costs) remains within the target range and the group expects to report positive adjusted EBITDA with a small adjusted loss before tax, both in line with market expectations.