Surgical Innovations set for hit as elective surgery is suspended

The Leeds-based group said it has been assured of support from a number of key customers to maintain activity during this downturn.

The firm said it has taken decisive action to protect the welfare of employees, whilst continuing to meet the needs of customers in the UK and overseas.

Production activity has been condensed to match visible demand, and appropriate measures have been taken to reduce operating costs and manage immediate cash flows.

The firm said: "We will continue to take all steps possible in these challenging circumstances, and ensure that all support mechanisms available to our company from outside agencies are accessed, in order to preserve value and capability, and ameliorate the impact on the business, its workforce and our customers and partners.

"Our bankers have moved extremely quickly in providing short-term relief from capital repayments and covenant compliance, and stand willing to support our immediate liquidity. In addition, we have received expressions of support from selected institutional shareholders."

The news came as the firm announced annual results for the year to December 31.

Revenues in the second half of the year rose 10 per cent compared with the first half, and gross margins, adjusted pre-tax profits and cash conversion were within target range.

Surgical Innovations' chairman Nigel Rogers, said: “Our product ranges are becoming increasingly recognised as a key part of a sustainable approach to surgery, and this offers significant medium term growth potential.

"Our business has net cash and is operationally sound. We have strong partnerships with the NHS, our major distributors, OEM customers and key vendors, based on mutual co-operation and shared success.

“Accordingly, the board remain confident that, following an inevitable period of serious disruption requiring careful navigation, there continues to be strong recovery and growth drivers within our market, indicating that the medium to long term outlook is positive.”

Analyst Chris Glasper at N+1 Singer said: "Revenue growth of 10 per cent in the second half brought full year results in line and the company was looking well set for strong progress.

"However, Covid-19 presents a significant short term challenge, given SUN’s focus on elective surgeries. The board has moved quickly to enact cash preserving and cost saving measures, whilst continuing to supply essential products.

"Cash on the balance sheet and support from the group’s bankers provides short term liquidity and other indications of financial support are being actively considered."