Results reading: Half-year Results
The trading update's headline numbers are confirmed. What is new is a first numeric FY27 revenue guide of at least £43 million (below FY26's £47.5 million) and credit approval to renew the RCF for three years. Under the headline, profit quality is thinner than the 26% underlying growth suggests: gross margin fell to 41.9%, adjusted EBITDA slipped, SLE consumables were flat, and about £0.7 million of revenue moved from distribution to SLE compared with the trading update.
What changed against what was known
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New
Management now puts a number on FY27 revenue, at least £43 million, where the September update only said 'slightly ahead of market expectations'. This is below FY26's £47.5 million, which included £9.5 million of one-off exports.
Then · 8 Sep 2026 · Trading update for six months ended 31 July 2026“We enter the second half of the year with confidence, a strong orderbook and pipeline of opportunities and expect to close the financial year slightly ahead of market expectations.” -
New
The split of the unchanged £22.0 million total was restated after the trading update. SLE is now £13.4 million (underlying +35%), against £12.7 million (+38%) in the update. Distribution is £7.0 million (+9%), against £7.6 million (+7%).
Then · 8 Sep 2026 · Trading update for six months ended 31 July 2026“Excluding one-off revenues from the prior year, SLE product revenues increased to £12.7 million which represents an increase of 38% over H1 FY26, demonstrating continued demand for the Group's core neonatal intensive care products and further progress...” -
Worse
SLE consumables, the recurring revenue the strategy depends on, were flat underlying (£2.4 million, 0% growth). The growth came from capital (+53%) and service (+21%). Proprietary consumables only launch in Q4 FY27.
“Consumables | 2,401 | 2,922 | 530 | 2,392 | 0%” -
Worse
Gross margin fell to 41.9% from 46.2%. The causes were the loss of high-margin one-off exports, more low-margin infusion sales (25% of revenue), cheaper international markets and costly pandemic-era components. Adjusted EBITDA was £1.2 million against £1.3 million despite 26% underlying revenue growth.
“Gross margin of 41.9% (H1 FY26: 46.2%), reflecting one-off export orders increased H1 FY26 margin, sales mix and higher component costs” -
New
Credit approval has been received to renew the £5.0 million RCF for three years on existing terms, with an option to extend. At 31 July £4.0 million of it was drawn, plus £1.8 million of the £5.0 million invoice discounting facility. This removes a near-term funding question ahead of the infusion exit.
“The Group has received credit approval for renewal of its £5.0 million revolving credit facility (“RCF”) for a further three-year term, with an option to extend if required.”
1 point only confirm what the company said before
- Operating profit of £0.55 million (H1 FY26: £0.2 million) includes a £0.3 million non-recurring credit. Adjusted operating profit was only £0.26 million (H1 FY26: £0.23 million), so the improvement came mostly from lower admin costs and the credit. “As a result of a significant reduction in administrative expenses, and a one-off non-recurring credit of £0.3 million, the Group has achieved an operating profit in the first half of £0.6 million (H1 FY26: £0.2 million).”
What the notes say – not in the headline numbers
The going concern note says the RCF is £10.0 million, but the financial review says the RCF being renewed is £5.0 million, with £4.0 million drawn. The two figures are not reconciled in the text.
Facility size sets the real headroom, and the renewal is only 'credit approval' so far.
“The Group has access to a revolving credit facility (‘RCF’) of £10.0 million and an invoice finance facility of up to £5.0 million.”Directors modelled 18 months, including the Micrel transfer and a significant revenue downside with mitigating actions, and conclude covenants are met. The covenant levels are not disclosed.
The infusion exit removes lower-margin revenue, so covenant headroom depends on cost cuts and margin that investors cannot see.
“These projections demonstrate that the Group can operate within the facilities available to it and meet the relevant covenant targets for the foreseeable future.”The £292,000 net non-recurring credit is a £372,000 release of Croydon dilapidation provisions less £80,000 of redundancy costs. The final £0.5 million dilapidation payment was made in early August.
The credit flatters reported operating profit, and the cash payment falls in H2 net debt.
“This comprised £80,000 of redundancy costs, offset by a £372,000 credit from the release of dilapidation provisions relating to the Group’s former Croydon premises.”Inventory rose to £9.2 million from £8.8 million at 31 January because of delivery phasing. Management expects a material fall in H2 as the remaining large Middle East order ships and infusion stock goes back to Micrel.
The year-end net debt target relies on this inventory release, so any delay to the Middle East order or the Micrel buy-back would show in net debt.
“Inventories increased slightly to £9.2 million at 31 July from £8.8 million at 31 January because of delivery phasing ahead of a summer shutdown at a major supplier.”Capitalised development spend doubled to £2.0 million (H1 FY26: £1.0 million). It includes option fees for a new ventilator technology on which the deal structure is still under discussion.
Rising capitalised costs, including option fees on an unagreed deal, add to the balance sheet value that has to be earned back through future sales.
“Investment in capitalised development expenses amounted to £2.0 million in the period (H1 FY26: £1.0 million) as development of the SLE6000neo progressed and option fees paid for the new ventilator technology that management is assessing.”Promises management made Track record →
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Not addressed
Airon acquisition earnings accretive in second full year of ownership
No comment on Airon acquisition earnings accretion, although Airon revenue grew 40% to £1.6 million.
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Not addressed
Register and launch neonatal products in Canada
Canada registration and launch of neonatal products is not mentioned.
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Partly
Grow consumables and service (recurring) revenue
Service grew 21% underlying, but SLE consumables were flat at £2.4 million; proprietary consumables launch only in Q4 FY27.
“Underlying service revenue increased 21%, with the first proprietary consumables launch planned for Q4 FY27” -
On track
Double Airon revenue within five years
H1 Airon revenue up 40% to £1.6 million (H1 FY26: £1.1 million); FY26 was £2.1 million, so doubling by 2031 looks achievable so far.
“Airon revenue increased by 40% to £1.6 million, supported by the initial order under a three-year purchasing agreement with leading US healthcare provider and initial international distributor sales through SLE network” -
On track
Sales momentum to continue into FY27; company expects to close FY27 slightly ahead of market expectations
Guidance upgraded to at least £43 million, consistent with closing ahead of market expectations.
“As a result, we now expect revenues for FY27 to be at least £43 million and for momentum to continue into FY28 and beyond.” -
Partly
Transfer infusion distribution to Micrel by January 2027 to focus on neonatal; net debt down about 20% in FY27
Transfer is on schedule. Net debt of £5.2 million is not yet falling (£5.1 million at 31 January); a ~20% fall needs about £4.1 million.
“Planned transfer of Infusion Therapies distribution to Micrel effective 31 January 2027 with actions underway to reduce operating costs ahead of the transition” -
Not addressed
Double group sales over the next five years
No mention of doubling group sales; H1 group revenue was £22.0 million, down 8%, and infusion revenue leaves in early 2027.
No longer mentioned
ISO14001 environmental certification and NHS Evergreen Framework submission
Last said · 16 Jun 2026 · Final Results“Achieved ISO14001 Environmental Management System certification and successful submission to the NHS Evergreen Framework”
Not in this report at all – which can mean nothing, or a plan quietly dropped.
Watch at the next report
- Whether net debt falls towards about £4.1 million by January 2027 after the August £0.5 million dilapidation payment and the Micrel inventory buy-back.
- Whether consumables revenue starts to grow after the proprietary range launches in Q4 FY27, and how gross margin holds once infusion leaves.
- Completion of the RCF renewal, the facility size (£5.0 million or £10.0 million) and the covenant terms.
Read 28 Oct 2026 against the last statement, the previous results and the open promises. Quotes are the company's words; the rest is our reading. Not investment advice.