Surgical Innovations Group updated the market on its current trading and its outlook for the current year on Friday, reporting that it was experiencing delays in the supply of products for its UK distribution business, Elemental Healthcare, sourced from Meccellis Biotech.
The AIM-traded firm said that since 2015, Elemental had been the exclusive UK distributor of a range of biological matrices under the brand 'Cellis', which were used in complex abdominal wall and breast reconstruction procedures.

During 2017, Meccellis began to undertake a transition to a new notified body for European regulatory approval, including the recertification of its existing products, and the certification of new products.

Surgical Innovations said that transition had encountered delays which were not anticipated until very late in the process, and despite mitigating actions taken by both Meccellis and Elemental to ensure continuity of supply, it was apparent that product availability would have a continuing impact on its revenues in the current financial year.

The Surgical Innovations board said it had determined that it would be prudent to exclude revenues from Cellis products from current year expectations until such time as there was certainty regarding the availability of current and new products in the range, following regulatory approval.

"This has the effect of reducing revenue expectations for the current financial year by approximately 10%, or £1.25m, on the cautious assumption that sales do not resume in the current year," the Surgical Innovations board said.

"Revenues from other segments of group activities, comprising the worldwide sale of SI brand products manufactured in the UK and the design and manufacture of OEM products, are unaffected.

"With the assumption of reduced revenues, the Board anticipates that profit before tax will show modest growth over that reported for the financial year ended 31 December 2017."

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