Struggling keyhole surgery tool-maker Surgical Innovations (SUN:AIM) is one of AIM’s largest fallers in early trading on conformation that the effects of the company’s restructuring will not be felt until 2017.
Shares fell 8% to 1.3p despite the Leeds-based outfit’s pre-tax losses narrowing to £1.9 million in the six months to 30 June from £3.2 million a year earlier. Revenues improved to £2.6 million from £1.7 million in 12 months.
Surgical Innovations is working through a restructuring after disappointing sales and write downs led to a huge £9.8 million pre-tax loss in 2014. This saw the chief executive leave the company (30 Sept ’14) with the financial director following him out of the door soon after. Plans to build a new manufacturing site were also shelved.
Surgical Innovations is moving into the 'second phase 'of its restructuring after reducing costs which will see it return to product development.
Earlier this month the company avoided breaking its banking covenants by renegotiating the terms of its £3 million loan with the Yorkshire Building Society. Management no longer expect to hit an earnings before interest, tax, depreciation and amortisation (EBITDA) target of £600,000 for 2015 and have reset the loans covenants to reflect a £100,000 loss.