Medical equipment supplier Lidco saw product revenues grow just 2% in its recently ended trading year as the benefits of a strong UK performance were erased by product registration issues out East that helped swing the group to a loss.
In a trading update on Thursday, Lidco said it expected product revenues to grow by 2% to £6.87m, as total revenues moved ahead 1% to £8.27m.
However, Lidco, which recorded no sales in China during the twelve months leading to 31 January due to it lacking regulatory approval for a "fundamental accessory", would've reported a product revenue growth of 9% to £6.87m if excluding the Asian business.
In the UK, Lidco had another strong performance, with product revenues expected to be up 9% to £4.14m.
Following the expansion of its sales team in the US, Lidco's revenue for the year was expected to expand around 15% to £1.36m after it won a second significant multi-year high usage programme (HUP) customer, bringing the number of HUP monitors in North America to 58.
But, overall revenues outside the UK and US markets were expected to have declined by 23% to £1.37m, largely due to not being able to sell products to its Chinese distributor.
As expected, after a year of investment for Lidco while it expanded its commercial presence, £1.67m of cash was invested and the board expects to report a loss for the year when posting its full-year results on 10 April.
Matt Sassone, Lidco's chief executive officer of Lidco, said, "Behind the headline numbers I am encouraged by the way our expansion plan is developing. Excluding China, Lidco sales grew 9% and we start the new financial year with £0.7m of HUP revenues contracted. We have a strong and growing pipeline of opportunities to further drive growth in our key target markets."
"As the business continues to win HUP contracts, it will transition towards multi-year license revenues, giving good visibility alongside strong cash generation. I expect this to greatly enhance the quality of the Company's earnings although accounting for such contracts will have a short-term impact on revenue recognition as the income will typically be spread over the term of the contract as opposed to monitor revenues being recognised up front," he added.
As of 0840 GMT, shares
had fallen back 5.08% to 7.00p.