Surgical Innovations – 4p

14 March 2017 – final results

The medical instruments group has announced its results for the year to 31 December, which have shown a significant improvement over the previous year.  The last year has been a year of transformation for the group with these results coming in ahead of market expectations.  Revenues at the group have increased by 11% to £6.09m (2015: £5.47m) whilst the group moved into profitability, reporting pre-tax profits of £0.28m (2015: loss of £2.13m).  Earnings per share were 0.15p (2015: loss 0f 0.42p) and no dividend was proposed.  Strong cash generation at the group meant that at the year end the group had net cash of £0.72m (2015: net debt of £2.26m).  These results provide a solid platform on which the group can build and trading in the first two months of the current year has been good with revenues and profits ahead of last year.  The group operates in a growing market and recent regulatory changes have increased barriers to entry.  Although on fundamental grounds the shares look expensive, there is scope for significant growth over the medium to long-term and so we rate the shares a BUY.

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