Thursday, September 26, 2013

News: Improved performance for Inditherm

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A period of improved performance for Inditherm has seen the AIM-listed Rotherham company return to revenue growth.

The Manvers firm is a provider of low voltage, cost-effective heating technology that uses a carbon-based, electrically conductive polymer to deliver heat. It is used in industrial applications such as keeping pipes at a set temperature and also in various medical applications.

In its latest financial result for the six months ended June 30 2013, Inditherm reported that revenue increased 23% to just over a £1m compared to £812,000 in 2012. This was on the back of a 22% increase in orders.

The performance led to a small profit before tax for the first half of the year compared to a loss of £73,000 in the same period last year.

Inditherm has shifted its focus to the medical market where its systems are used for patients undergoing operations which carry risk of inadvertent hypothermia and in neonatal wards. The first half of 2013 showed a good growth in the medical division of 32% over the same period in 2012, boosted by orders the company had expected to receive last year.

A healthy increase in orders have been secured from the NHS during difficult market conditions leading to UK Medical order growth year-on-year of over 90% in the period to the end of August 2013. In addition, Inditherm announced that it has over £270,000 of confirmed future service contracts representing a build up of repeat business that will be realised as sales revenue over the next five years.

The National Institute for Health and Clinical Excellence (NICE), the UK government's regulatory authority, issued guidance in 2011 that supports the use of Inditherm patient warming systems for patients undergoing operations which carry risk of inadvertent hypothermia.

Order growth in export markets was more modest, but still showed a 20% improvement year-on-year to the end of August 2013, helped by good orders from China and South Africa. Inditherm said that it would invest further in distributor support after receiving a positive overall outlook from overseas partners.

Mark Abrahams, chairman of Inditherm, said: "Against the backdrop of a break-even result and with underlying order growth restored to 22%, we have established a platform from which the next phase of business development can be achieved.

"The impact of NICE guidance has been a major driver of our UK growth, but there remain significant challenges dealing with the NHS, which results in an uneven order pattern.

"We believe that the business has made considerable progress following the difficult market conditions over the last four years and our strategic shift to being fully focussed as a Medical business. We do not expect the uncertainties associated with the markets in which our Medical business operates to disappear, so we anticipate ongoing uneven order flow. Against this challenging backdrop we expect to continue our revenue growth but, to fuel this, we will be investing in additional targeted resource which will slow the rate of translation into profit."

Inditherm website

Images: Inditherm

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