Intelligent Ultrasound FY19 Results Reflect Operational and Financial Progress
(AIM: MED ), preliminary FY19 results to 31 December illustrate another excellent year of operation progress, revenue growth and gross margin expansion.
However, EBITDA has been held back by significant investment in the pre-revenue Clinical Artificial intelligence (“AI”) division, which investors should note has now signed its first non-exclusive AI software and development agreement with one of the world's leading ultrasound OEMs during the period.
Financial highlights:
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Revenue from simulation sales grew 11% to £5.9m (2018: £5.3m)
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Gross profit up 22% to £3.5m (2018: £2.8m)
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R&D expenditure increased to £2.7m (2018: £1.9m)
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Year-end cash and equiv. of £7.3m (2018: cash of £5.6m) and no debt
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Post placing and open offer that raised £5.8m after expenses in August 2019
Operational highlights:
Simulation
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Strong contribution from North America with revenue up 53% to £2.6m (2018: £1.7m)
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Signed marketing partnership with Fujifilm SonoSite, Inc. in North America for ultrasound training and services
Clinical AI
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Signed first long-term AI software licence and co-development agreement with one of the world's leading ultrasound OEMs
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Commenced alliance with Mediscan Systems to use AI and simulation to improve patient care in India and enhance the Group's ultrasound scan image library to over 4 million images (2018: 1 million images)
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Commenced regulatory approval process and commercial discussions for ScanNav AnatomyGuide's Peripheral Nerve Block AI software
Post year end:
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Received ISO13485:2016 medical device accreditation
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Simulation division launched COVID-19 simulation training system to put it on the front-line of defence from COVID-19
Outlook
The Group has already implemented a number of cost-saving measures that will enable it to maintain EBITDA guidance for FY2020.
The outlook for the medium-long-term remains unchanged with the Group expected to have sufficient funds to continue its simulation and AI business development activities for the next twelve months, when it expects initial revenues from its first AI software licence agreement are also expected to be generated. The AI Clinical division is continuing to progress all internal milestones for its ScanNav range of AI products and accelerating proof of concept models for new AI product variants. This will give the Group the potential to bring additional AI products to market from 2021.
The Simulation division is currently prioritising its resources on developing additional variants of its COVID-19 lung ultrasound training module, to place the Company on the frontline against the pandemic.
Over the past 12 months the shares have trended from a low of 5.5p at the beginning of the year to 8.5p as of early morning trade.
Commenting on the results, Riccardo Pigliucci, Chairman of Intelligent Ultrasound said: "2019 has been another year of excellent progress by the Group and I would like to thank both our staff and our shareholders for enabling this to happen. The Clinical AI Division has performed particularly well, signing its first licensing agreement for ScanNav with a major OEM and progressing commercial discussions for its second AI software product. The reception for our products in development at trade shows is particularly encouraging.
However, it would be wrong to ignore the recent spread of the COVID-19 virus that is currently impacting all regions in which the Group operates, and we have therefore implemented a number of cost-saving measures that will enable the Group's EBITDA for FY2020 to remain in line with expectations.
The outlook for the medium and long term remains unchanged, with the Group expected to have sufficient funds to continue its simulation and AI business activities for the next twelve months, when the revenues from its first AI software licence agreement are expected to be generated.”
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