Fife medical retinal imaging company Optos is “excited” about its prospects after delivering a strong increase in full-year profits.
Preliminary results for the year to September 30 show the Dunfermline-headquartered firm produced a pre-tax return before exceptional items of $18.5 million, more than double the 2013 figure of $9.2m, as revenues rose by 7% to $170m.
However, the overall pre-tax profit figure was dragged back to $12.2m after the firm was hit by a $3.3m foreign currency exchange loss on inter-company loans and paid out $2.1m in relation to restructuring costs.
The company’s streamlining plan saw it consolidate its US manufacturing facilities to a single base in Massachusetts and bringing its European customer service operation together in Fife.
While the restructuring saw the average number of staff employed in the group fall from 435 to 391 during the year, the headcount in Dunfermline actually grew to around 160.
The firm said that its improved performance was largely due to increased traction in the marketplace of its flagship Daytona imager and a reduction in overall production costs for the unit.
Total new product installations reached 1,536 in the year considerably above the 1,271 of 2013 as the firm’s overall installed customer base climbed 24% to 7,376.
Chief executive Roy Davis said Optos had made significant progress during the year.
He said he was particularly pleased the firm had been able to cut net debt from $39.4m to $12.2m, a massive 69% reduction on the year.
Mr Davis said a surge in clinical evidence supporting early eye disease diagnostics and the fact that Optos has two new products on the horizon California and the still-to-be-revealed Lotte machine meant it was an exciting time for the company.
“In future years, we anticipate further incremental improvements in gross and operating margins as we benefit from the new product platforms, as well as continued customer growth and continued renewal opportunities,” Mr Davis said.
“As with previous years, revenue is to be heavily weighted to the second half of the year, with a consequential impact on profit and cash.
“With strong sales of Daytona, our new products progressing well, the increasing body of clinical evidence and a broadened geographical reach, the board is confident that Optos is well placed to drive customer growth, continued improvements in profitability and sustainable cash generation in FY (financial year) 15.”
Of the total revenues in the year, $6.8m was achieved in the UK, and the firm’s rest of world business delivered $47.9m.
In both cases, the figure was below that achieved in the previous year.
However, the firm’s largest single market by a significant margin the Americas saw growth in the year from $99.4m in 2013 to $115.9m this year.
Chairman Dr Peter Fellner said the company’s cash flow improved significantly in the 12-month period, and he had secured new financial backing through a $30m revolving credit facility with the Bank of Scotland and new vendor financing amounting to $48m.
“I look forward to next year, with Daytona expected to remain the key driver of revenue growth underpinned by strong clinical data. The launch of the California device will help to further increase penetration in the ophthalmology segment, and we also expect to unveil Lotte.”
Dr Paul Cuddon of analyst Peel Hunt raised his valuation on Optos, saying the firm had made “strong progress” this year having launched a new instrument for “higher end capital sale customers” while maintaining disciplined control over its cost base.
Shares in Optos closed the day up 2.33% at 220p.