The results show Deltex's problem.

lse:demg

#1

Although throughout the year we have seen increased contracts, mainly in the USA the company is still not in profit, although we were told that profit was near a couple of years ago.

Operating loss is still evident but reduced by £0.4m to £2.0m (2016: £2.4m), so loss only reduced by 20%.

Group revenues £0.4m lower at £5.9m (2016: £6.3m) one has to wonder why, if they have more units and probes being used.

Even with gross margins improved to 75% (2016: 68%) the company is still loosing money.

With statements such as ‘Revenues from US managed care contracts down 20% at £0.4m (2016: £0.5m) due to one lost account’ ‘2017 was partially offset by a disappointing second half sales performance’. You have to wonder why they are loosing accounts if the system is as good and cost effective as the company states (I do believe it is as good as we have been told, so there’s the mystery.

I have never seen a product that has so many positive trials and feedback fail so miserably to almost by results contradict the figures from those trials.

As many of us have stated, It can only be down to the companies business model.

Can anyone can give a better explanation. Also does anyone think that by year end, or even by the first quarter of 2019, the company will finally be in profit.

With the separate release re the TrueVueTM System, (which I read first finishing with a positive feeling that was reversed on reading the results) I still feel the SP will either open down, or if upward will as ever drift ever downward again.


#2

Morning Pond,

I do not think the share price will be soaring today but I continue to hold. Invoice discounting has largely disappeared, we now have pre-payment bartering. Is that a reflection of the shift to USA? You ask:

“does anyone think that by year end, or even by the first quarter of 2019, the company will finally be in profit.” My view is yes but there is the dog that did not bark - Last year the first half was good and second disappointing. We have had 4 out of 6 months of year to 2018. There is no mention in forward looking statements. That is not a good sign. It might become clearer in the formal annual report.

Regards,

Seadoc


#3

Who won the account that DEMG lost in the USA ?

and

Why did DEMG lose it ?

After all DEMG only won the contract recently so what was the problem ?

The results are not clear on what went wrong , and with UK sales falling again for 4 years in a row, one can only assume that one more USA lost account will mean the end for DEMG IMO

More cash is going to be needed yet again


#4

“More cash is going to be needed yet again”

I am wondering just how much more cash, and when…


#5

Hi Biswell,

My point exactly. It took Deltex many years (understandably) to gain contracts and to loose one without giving any reason is worrying.

Hi Seadoc,

My view re being in profit by end of first quarter of 2019, is ‘I have no idea’. and as you say with no forward looking statements, points that the company have no idea either.


#6

Pond,

US hospital accounts are I fear a bit like No 24 buses. London buses make up 10% of passing vehicles but even on Victoria Street you can wait half an hour for an every 4-5 min service and then 3 come along one behind the other. But I wonder if this is the barter pre-payment release? Picked up an early account on very favourable terms that they could not afford to renew and the hospital dropped the account?

Trading pattern today is interesting too, 4m traded by lunch would usually be associated with a price move but since 1000 someone has been mopping up any sales at or around the mid-price. I watch with interest, and continue to hold an interest.

Regards,

Seadoc


#7

Hi Seadoc,

You could be right, but surely the CardioQ is supposed to save money, although I appreciate it may be down to the timing regarding end of financial year, another reason why we shareholders deserve to know the reasons why none renewal.

As to no 10 buses, it may be that I should have put my money into a bus company. Would be nice to see 3 contracts come along all at once and be substantial.