Some of this in this BB like myself, seadoc, susan lah, fokisi and pond1 have been here many times before with such RNS announcements that have not been followed up by increased sales. The last financial report:
"Deltex Medical Group expects losses for the year ended 31 Dec to be higher than market forecasts.
The group said US revenues rose by 5% to £2.0m but overall revenues fell to £5.9m from £6.3m with a UK revenues down £0.4m at £1.9m and International revenues 5% lower at £1.9m.
Chairman Nigel Keen said: 'Procurement process headwinds held sales back to disappointing levels in 2017. However, Deltex enters 2018 positioned to benefit from momentum in the USA and other focus export markets.
'The UK continues to be a difficult market due to NHS funding constraints.
'We have substantially reduced our rate of operating cash consumption in order to meet our key goal of getting past the operating cash breakeven point.
'In the final quarter of 2017 we put in place a number of changes to our cost base with effect from the start of 2018 and, in view of the actual level of 2017 sales, we are reducing our costs further to match our operating cash costs with current levels of sales.
'These actions should allow us to fund future organic growth out of operating cash flows.
'We have completed a large part of the investment necessary to move the Company from a single technology to a multiple technology business and are moving our marketing focus forward accordingly.
'We expect to see the impact on sales growth of these developments starting to come through during 2018 to supplement our established position in major export markets as a significant provider of haemodynamic monitoring solutions.'"
was preceded by such announcements. So if some of us are disbelievers then maybe that explains it. Why should it be any different this time?
Of course such announcements are welcome giving rise to hope only to be dashed by falling sales. The focus on operating costs is because DEMG can no longer serially issue confetti shares.
Can't argue that this new contract is anything but good.
It all now depends on how Deltex follow this up. They should be shouting such contracts from the roof tops, but I fear that the current management will sit on this quietly and after an initial lift in the sp, it will do it's usual slide back down again.
I am not knocking anything in the RNS, but it is again my exasperation at what could be that breaks through every time.
So come on EP use this result as the selling tool it should be.
...but not for the shareholders...
Product sells, it is qualfied.
I even believe it is one of the better products in the maket place.
Handicapped (?hijacked) by the management team.
One has to ask if a £5m t/o public company can support close to £500k exec bill.
To quote: "Included in accruals at 31 December 2016, is an amount
of £144,200 owed to Ewan Phillips relating to contractual
bonuses that had been*** earned*** in the three years ended
31 December 2014. "
..it will sell, the vultures are waiting to pick the bones clean.
Knowing how good the Deltex management team are, any tunnel would probably be circle shaped ending up where it started, leaving the potential escapees going round and round in circles, just like the company.
Thank goodness EP wasn't in charge of the 'Great Escape' if he had been Steve McQueen would never have got near that motor bike.
Probably just finishing off the escape tunnel...after all those 'jam tomorrow' announcements...well positioned, roll out with scale and pace, platforms for growth etc etc etc month after month and year after year...what a waste..
Market has really gone to town on the latest update. The words carnage and bloodbath springs to mind and it's difficult to imagine this company pulling out of this latest nosedive. Time to pray and brace brace brace.....
Monolithic public sector end customers - avoid companies dependent on them.
The NHS is extremely difficult to crack. Budget problems, multiple road blocks.
Avoid like the plague.
I had experience of a monolithic large private end customer that was a real struggle and they are a walk in the park compared to the NHS.
A diverse customer base is less risky - not necessarily segment diversity but purchasing decision and budget control diversity. Lots of small private operators as targets can be much less risky than the NHS's yes/no (what looks attractive on the surface) honey pot.
"So much of this company is good - tech, intention, product.
It's a great shame they have such an uphill struggle"
There must be many, very useful lessons for us investors to learn from the Deltex story
I am trying to think what they are
I welcome hearing what investors consider are those lessons
Here are some of mine:
1. Leadership is (almost) everything
With Deltex, sales growth was vital
I believe there was a power struggle for role of CEO at a critical time. Unfortunately it went to the candidate with a background in corporate finance, and not the candidate with a track record of sales expertise. EP did wonders developing a share bonus scheme and filled plenty of pages of dull reading in the Financial Statements. His success in delivering sales not so good
2. Choose execs who target their sales strategy correctly
I believe unsuccessful CEO candidate proposed a sales strategy of US. EP eventually did, but too little too late
3. Avoid CEO's who are serial issuer of shares
EP loved to use his corporate finance abilities to ensure new investors subscribed to further share issues
4. Follow the Finance Director
When the FD chooses to take up a role in another company, or spend more time with his family, likely best to withdraw your investment
5. Choose a company which can replace its exec team if it does not perform
Rats leaving the sinking ship but where are Keen and EP? Surely they are not part of any nefarious scheme. As to the 0.75p sale it could be EP's freebees but don't e.g. directors have to declare such a share sale?
EP is noticeable by his absence. If the Chairman really was "keen" he'd have got rid of EP years ago. DEMG is an object lesson of how not to commercialise good technology.
One wonders what is going on with DEMG share trading. Large bouts of selling are followed by large bouts of buying. One really wonders if there is not some form of long-term manipulation going on here.
The FCA is investigating Carillion for apparently misleading announcments prior to its share price collapse. DEMG reporting history appears to be little better with continuously massaged, optimistic outlooks. One wonders what management's ploys are given so many share awards to EP whose failure gets continually rewarded.
Cheers, P.S. Where is seadoc?
P.P.S. The only upside is that my losses on DEMG can be offset against greater gains on Glencore and boohoo so using CGT allowance and avoiding tax.
Overall revenues of £5.9m (2016 £6.3m)
International revenues down by 5%
UK revenues reduced by 18%
December sales were down with c.£0.3m of bulk orders not repeated from 2016
Loss for 2017 expected to be higher than market expectations
Cash at 31 December of £0.2m (2016: £0.6m).
The rest means nothing, because they said almost the same, word for word at the same time last year................And it changed nothing..............................
Discussions on the future funding of the Group are in progress and the Company expects to be able to make a further announcement in the near future(again).
However, Deltex enters 2018 positioned to benefit from momentum in the USA and other focus export markets. The UK continues to be a difficult market due to NHS funding constraints (change enters 2018 for 2017 and its same again).
We have substantially reduced our rate of operating cash consumption (again)
The Company is currently in the implementation phase of achieving this goal in a number of territories worldwide, operating directly in the UK, USA, Spain and Canada and through distribution arrangements in a further 30 countries. (again, bla bla bla)
I would not be surprised if the sp by end of year (if the company is still quoted) as being a true 1p share, or lower).
Absolutely pathetic..........Albert Einstein said,
Insanity is doing the same thing over and over again and expecting different result.
EW Please take note.
Many of us have said for years that Deltex should either have taken a partner or sold out to a company with the power and contacts to sell their product, but as that has not happened, I can now see either a de-listing as you say, or a take over at a very low price.
I wonder just how low the sp has to go before either of these options happen.
Of could whichever way it goes, you can bet EP won't come out of it loosing at a fraction percentage of what many investors do.
Meetings must surely be taking place, to address the inevitable?
I wonder what group or consortium might be pitching in with an offer. At no uplift to current price, we can be sure...
EP Show carries on in some form?
A swift delisting, & we'll hear no more, I suppose
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