28 May 2020 – trading update
The company has announced a trading update revealing that due to Covid-19, group revenues in the first quarter of 2020 were down 25% compared with last year, although in April the decline in revenues had increased to 70%. This level of decline is likely to continue for the second quarter as a whole as elective surgery using the group’s equipment is either cancelled or postponed. The group has taken action to reduce costs with 85% of the staff furloughed by 1 May at which time the group had cash balances of £1.65m (1 January 2020: £1.28m). All unnecessary expenditure has been suspended and senior staff have taken pay cuts of up to 50%. The company has also reorganised its credit facilities providing enough liquidity to take the company through the current crisis. Before the pandemic hit, the group was making gains in market share and as and when the market gets back to some sort of normality it hopes these will continue. In the short term there is little to go for in the shares but we believe that at the current level they are a SPECULATIVE BUY.