Pressure on hospital budgets keeps keyhole firm on track

The Leeds-based group said it has continued to invest in its manufacturing facilities as well as investing in its research and development capacity.

The company is in the process of establishing new markets in New Zealand and Saudi Arabia and has signed up a new distributor in South Africa with one of the largest health insurers in the region.

Chairman Doug Liversidge said the company’s flagship YelloPort+plus keyhole surgery system continues to do well in the US and Europe, while a number of new products are also being developed.

Many of the company’s devices, including YelloPort+plus are “resposable”, which means they include disposable and re-usable elements.

The group sees its relationships with big US medical companies as key to delivering better profits and sales.

It is increasingly coming onto the radar of groups such as Telflex and Olympus. Surgical makes devices under these groups’ brands, but retains the intellectual property over the technology, helping it earn higher margins.

The company, listed on the Alternative Investment Market, is considering acquisitions to help maintain this momentum.

Surgical believes its growth is being helped by pressure on healthcare providers to cut costs.

“We’ve welcomed the cost pressures around the world that are coming into play,” said chief executive Graham Bowland. “As hospital budgets get tighter in the US where reimbursement levels are dropping, we come into our own.

“We’ve got a real reputation in the market place for being a world-leader in minimally invasive. We’ve got a lot of people visiting the factory.”

Sales of its own brand products in 2010 increased 30 per cent to £3.9m, driven by these devices.

Sales to big medical device original equipment manufacturers (OEMs) soared 71 per cent to £2.5m.

Surgical was also boosted by a £616,000 industrial order.

“We’ve created a blend of quality and cost-effectiveness that fits very well with the economic pressures on hospitals around the world, ” said Mr Liversidge.

The group’s pre-tax profits increased 55 per cent to £7m in 2010.