- Growing med-tech company registered revenue growth of 15%; EBITDA rose 29%
- Added VIOMEDEX to the stable last September, its first-ever acquisition
- Targeting other “small to medium-size businesses” to augment organic growth
- Continuing to advance of Project Wave, its unique respiratory support device
The company at a glance
Inspiration Healthcare PLC (LON:IHC) is a supplier of medical technology for critical care, operating theatres and home healthcare applications. Its product range includes respiratory management, thermoregulation and patient warming for newborns and adults in intensive care and the operating theatre. It also supplies equipment used in specialised surgical procedures and infusion therapies.
Last September it paid £4mln for VIOMEDEX, which designs, manufactures and supplies single use respiratory products and sterile medical consumables, principally for the respiratory care market. The business performed in line with financial expectations for the four months from acquisition, Inspiration said.
How’s Inspiration performing?
The company said its work sourcing ventilators for the NHS and health services elsewhere around the world is offsetting any business disruption from the coronavirus (COVID-19) pandemic. The AIM-listed group usually focuses on neo-and perinatal equipment but has switched during the coronavirus crisis to meet the need for additional ventilators. Inspiration is part of the UK government’s ventilator challenge consortium and received a £4mln order in March from the NHS.
The comments came as the firm posted results for the year to end-January which came in ahead of expectations, helped by the acquisition of manufacturing business Viomedix. Revenues rose by 15% to £17.8mln, while underlying profits were up 29% to £2.1mln. As at the period-end it had £4.5mln in the bank.
Successful year, says CEO
Neil Campbell, Inspiration’s chief executive said it was a very successful year with progress on all three of the major elements of its strategy: Double-digit revenue growth, the advancement of Project Wave (a new respiratory support technology), and completion of the acquisition of VIOMEDEX.
In its core business, Inspiration said that as most of its branded products are sold to neonatal intensive care units around the world, their use is not something that can be reduced by election or choice. As a result, it said demand for the group’s own branded products should continue during the period of the COVID-19 virus outbreak and beyond.
What the broker says…
“We expect Inspiration Healthcare to deliver strong revenue growth, with a focus on its own-brand products supporting margin improvement,” said ‘house broker’ Cenkos. “Ongoing internal investments in disruptive technologies and regulatory support functions provide a solid foundation for future growth and further business development including selective acquisitions.”
It added that even with the general virus uncertainty, it is comfortable with its forecasts for the current year (£2.8mln underlying profits).
“While there are obvious current risks which could have negative short-term operational impacts, recent significant NHS contract awards and pandemic-related activities are expected to at least offset any negative impact,” added Cenkos.
It is worth noting that based on Cenkos’ analysis, Inspiration is significantly undervalued trading on a forward enterprise multiple (EV/EBITDA) of 6.8-times compared with a sector average of 25.9-times.
Published at Tue, 21 Apr 2020 13:48:00 +0000-Inspiration Healthcare makes progress on three strategic fronts