Year-end 2023 Trading Update

Surgical Innovations Group Plc (AIM: SUN), the designer, manufacturer and distributor of innovative technology for minimally invasive surgery, provides an update on trading for the year ended 31 December 2023, with sales marginally head of market expectations.

Unaudited Financials

Revenues for the year are expected to be approximately £12.0m, an increase of 6% compared with the prior year (2022: £11.3m). Group revenues continued to grow in H2 in line with the Board's expectations, with key markets and OEM sales in particular performing strongly. Sales for the second half of the year were approximately 13% higher than the first half. The Group expects to report a positive adjusted EBITDA1 of £0.2m, in-line with expectations. Operational improvements continue to be implemented in the new financial year and are expected to enhance future profitability.

The closing net cash2 balances of the Group stood at approximately £0.36m at 31 December 2023 (30 June 2023: £0.38m), with available gross cash resources at 31 December 2023 of £2.21m (30 June 2023: £2.41m) including an undrawn invoice discounting facility of £1.0m (30 June 2023: £1.0m).

UK sales remained strong in H2 2023, driven by the resonance of the sustainability messaging for both the NHS and Private Healthcare providers. Growing global acceptance of the need to adopt more sustainable solutions in healthcare is also driving growth in key markets in Europe, APAC and ROW. Despite supply chain challenges in H2 2023, the OEM business produced strong sales and carried a positive order book into 2024.

The recently implemented operating efficiency programme, which includes the re-introduction of a 5-day working week, is on track to deliver further improvements to the gross margin in 2024.

Current trading and outlook

While continued industrial action in the NHS has impacted the volume of elective surgeries and slowed some of the progress with evaluations, it is not anticipated to affect Q1 sales. Across the Company's distribution network, expected sales remain on track to deliver management forecasts. Some of the supply chain issues seen last year have impacted OEM sales, but these are now resolved and are not expected to have a material bearing on Q1 performance.

David Marsh, CEO of Surgical Innovations Group Plc, said: "Despite a challenging 2023, the Company finished the year with record sales and entered 2024 with an encouraging order book. The recent actions taken to improve operational efficiencies, together with continued increasing sales momentum, give the Board confidence that we have put the business onto a sustainable growth trajectory for 2024 and beyond."

Notes

1Adjusted EBITDA is earnings before interest, tax, depreciation and amortization adjusted by deducting non-recurring exceptional costs, impairment of intangible acquisition costs and share based payment costs. Adjusted loss before tax is the loss before tax adjusted by non-recurring exceptional items, impairment of intangible acquisition costs and share based payment costs.

2Net cash equals cash less bank debt and finance lease leases, excluding IFRS16 lease obligations.