TIDMDEMG
RNS Number : 2408J
Deltex Medical Group PLC
21 December 2020
21 December, 2020
Deltex Medical Group plc
Update on commercial activities and balance sheet
rationalisation
Subscription to raise GBP293,000
Issue of equity to satisfy outstanding equity-settled
non-executive directors' fees
Retirement of a director
Deltex Medical Group plc (the "Group" or "Deltex Medical") (AIM:
DEMG), the global leader in oesophageal Doppler monitoring, today
announces:
(i) an update on its commercial activities and balance sheet rationalisation;
(ii) subscription for 22,538,462 new Deltex Medical ordinary
shares (the "Subscription Shares") at a price of 1.3 pence per
ordinary share (the "Issue Price") (together the
"Subscription");
(iii) the issue of equity to satisfy deferred non-executive directors' fees; and
(iv) the retirement of a director.
Update on commercial activities
2020 has been a challenging year for Deltex Medical due to the
impact on the Group's business from COVID-19 ("CV-19"). In recent
years , approximately 80% of Deltex Medical's revenues have been
derived from elective surgical procedures, which have been
significantly reduced across the globe since March of this year as
a result of CV-19. Despite these challenges, in 2020 the Group has
made good progress in a number of key areas, including:
-- successful product development in relation to its new
'TrueVue' monitor platform as well as on a number of other new
products which are complementary to its core TrueVue Doppler
technology;
-- growth in revenues from UK intensive care units ("ICUs") treating ventilated CV-19 patients;
-- improvements to business systems, including upgraded
marketing as well as digitally-based clinical training packages,
and financial & management systems;
-- resumption in orders, in the second half of 2020, from its distributor in France; and
-- careful stewardship of the Group's cash resources, including
securing a number of technology-related cash grants from Innovate
UK, and avoiding the need to access any UK government-backed
CV-19-related debt finance schemes.
Cash at hand at 1 December, 2020 was GBP0.6 million. (30 June,
2020: GBP0.6 million.)
Rationalisation and simplification of the Group's balance
sheet
Since the launch of its new strategy in 2018, Deltex Medical has
been simplifying and focussing its core business activities. During
this period, the Group has also addressed a number of long-standing
legacy issues relating to its balance sheet. This rationalisation
process is ongoing and the Board is considering ways of simplifying
its year-end balance sheet.
Outstanding deferred equity-related payments to Deltex Medical
employees
There are currently a number of long-standing legacy payment
arrangements ("Arrangements") still in existence for Deltex Medical
employees which relate to bonus awards from 2012 to 2017. These
Arrangements were structured in a number of different ways;
however, each of them involved the award of options, or other
deferred rights, over Deltex Medical ordinary shares
("Shares").
The Board has now concluded that, as part of simplifying the
Group's balance sheet, these Arrangements are no longer
appropriate, and the associated liability which has been accrued in
the balance sheet should be discharged.
Subscription to finance the discharge of the Arrangements'
liabilities
The Board has concluded that it is now appropriate to settle the
Arrangements' liabilities in cash and to do this without adversely
affecting the Group's operating cashflow. Accordingly, and mindful
of current investor appetite for Shares, Deltex Medical has raised
a total of GBP293,000 (before expenses) by way of a subscription
for 22,538,462 Subscription Shares at a price of 1.3 pence per
Share. This represents a premium of 13% to the closing mid-market
price on 18 December, 2020 of 1.15 pence.
Included among the existing Shareholders who are participating
in the Subscription are a number of Deltex Medical directors
including: (i) Nigel Keen, Chairman; (ii) Andy Mears, Chief
Executive; (iii) Julian Cazalet; and (iv) Mark Wippell, who
together have subscribed 7,307,692 Subscription Shares in
aggregate.
Outstanding equity-settled non-executive directors' fees
Since 1 April 2016 the non-executive Chairman and the
non-executive directors of Deltex Medical ("NEDs"), with the
exception of Chris Jones, elected to defer their directors'
emoluments by way of an equity-settled structure in order to help
the Group maximise its cash resources to focus on new product
development and the expansion of its international market-share.
Since 1 July 2018, Chris Jones has also elected to defer his
director's emoluments in a similar manner. These arrangements have
been set out each year in Deltex Medical's Annual Report and
Accounts, and full provision has been made for the cost of these
fees which until now have not been settled.
The annual fee for each of the NEDs, which are currently
equity-settled, is GBP24,000; and GBP33,000 for the Chairman. These
fees have not changed since 2009. At 31 December, 2019 the total
accrued liability on the balance sheet relating to these deferred
equity-settled fees, which has built up since April 2016, was
GBP448,249.
The Board has now decided to discharge this liability by the
issue of 29,883,257 new Shares (the "Settlement Shares") to the
NEDs and the Chairman calculated on the basis of a price per Share
of 1.5 pence, representing a premium of 30% to the closing
mid-market price on 18 December, 2020.
Following the issue of the Settlement Shares to settle these
outstanding equity-settled fees, each of the NEDs and the Chairman
will pay, as appropriate, national insurance contributions and
income tax on the monetary value received. Details of the
Settlement Shares to be issued to each of the Deltex Medical
directors and their participation in the Subscription are set out
in the table below.
In the future, Deltex Medical intends to satisfy the Chairman's
and the NEDs' emoluments by the issue of Shares at the prevailing
mid-market price on a semi-annual basis.
Director / Current Pre- Settlement Subscription Post Post
PDMR Shares transaction Shares Shares transaction transaction
held Shareholding holding %
Nigel Keen 64,740,491 12.33% 9,483,257 3,461,538 77,685,286 13.46%
---------- ------------- ---------- ------------ ------------ ------------
Julian Cazalet 9,397,927 1.79% 6,000,000 384,615 15,782,542 2.73%
---------- ------------- ---------- ------------ ------------ ------------
Sir Duncan
Nichol 2,754,136 0.52% 6,000,000 0 8,754,136 1.52%
---------- ------------- ---------- ------------ ------------ ------------
Mark Wippell 2,481,831 0.47% 6,000,000 384,615 8,866,446 1.54%
---------- ------------- ---------- ------------ ------------ ------------
Andy Mears 2,781,808 0.53% 0 3,076,923 5,858,731 1.01%
---------- ------------- ---------- ------------ ------------ ------------
Chris Jones 525,862 0.10% 2,400,000 0 2,925,862 0.51%
---------- ------------- ---------- ------------ ------------ ------------
Retirement of Sir Duncan Nichol
Sir Duncan Nichol, has informed the Board that he wishes to
retire as a director on 31 December, 2020.
Sir Duncan was appointed to the Board in 2004 following nearly
30 years working in a number of senior management roles in the NHS,
including as Chief Executive of the NHS from 1989 to 1994. He has
been invaluable in helping Deltex Medical successfully navigate the
myriad of complex pathways within the NHS.
Admission
Application has been made to the London Stock Exchange for the
Subscription Shares and the Settlement shares (together, the "New
Ordinary Shares") to be admitted to trading on AIM. It is expected
that admission will take place and dealings in the New Ordinary
Shares will commence on AIM on or around 8.00 a.m. on 24 December,
2020.
Total voting rights
Immediately following admission, the Company's issued share
capital will be 577,290,545 Shares of 1 pence each, with each
carrying the right to one vote. Deltex Medical does not hold any
Shares in treasury. The total voting rights figure immediately
following admission of the New Ordinary Shares, of 577,290,545, may
be used by shareholders (and others with notification obligations)
as the denominator for the calculations by which they will
determine whether they are required to notify their interest in, or
a change to their interest in, Deltex Medical under the DTRs.
********************
Commenting on this announcement, Nigel Keen, Chairman of Deltex
Medical, said:
"As part of our new strategy which we put in place in 2018, we
have been seeking to simplify and rationalise the Group and its
operations. We have made good progress on focussing our commercial
activities, despite the 'headwinds' relating to COVID-19. As part
of this ongoing emphasis on rationalisation and focus, I welcome
this opportunity to remove a number of these longstanding
liabilities from the Group's balance sheet."
"On behalf of the Board, I would like to thank Sir Duncan Nichol
for his wise counsel over many years and wish him every happiness
in his retirement."
"Like many companies, we are looking forward to the end of
2020... ...but, equally, we are looking forward to the
opportunities that we see arising in 2021 as the pandemic subsides
and robust action is taken to catch-up on cancelled elective
surgery and the driving-down of waiting-lists."
An updated Deltex Medical investor presentation is now available
on the Group's website.
For further information, please contact:
Deltex Medical Group plc 01243 774 837
Nigel Keen, Chairman investorinfo@Deltexmedical.com
Andy Mears, Chief Executive
David Moorhouse, Group Finance Director
Arden Partners plc 020 7614 5900
Ben Cryer info@arden-partners.com
Dan Gee-Summons
Joint Broker
Turner Pope Investments (TPI) Ltd 0203 657 0050
Andy Thacker info@turnerpope.com
Zoe Alexander
Notification and public disclosure of transactions by persons
discharging managerial responsibilities and persons closely
associated with them.
1 Details of the person discharging managerial responsibilities
/ person closely associated
a) Name a) Julian Cazalet, Non-Executive Director
b) Chris Jones, Non-Executive Director
c) Nigel Keen, Chairman
d) Sir Duncan Nichol, Non-Executive Director
e) Mark Wippell, Non-Executive Director
--------------------------- -------------------------------------------------------
2 Reason for the notification
------------------------------------------------------------------------------------
a) Position/status See 1 a) above
--------------------------- -------------------------------------------------------
b) Initial notification Initial notification
/Amendment
--------------------------- -------------------------------------------------------
3 Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
------------------------------------------------------------------------------------
a) Name Deltex Medical Group plc
--------------------------- -------------------------------------------------------
b) LEI 213800XN34P6LI8J6M39
--------------------------- -------------------------------------------------------
4 Details of the transaction(s): section to be repeated for
(i) each type of instrument; (ii) each type of transaction;
(iii) each date; and (iv) each place where transactions have
been conducted
------------------------------------------------------------------------------------
a) Description of Ordinary Shares of 1 p each Identification
the financial instrument, code (ISIN) for Deltex Medical Group
type of instrument plc ordinary shares: GB0059337583
Identification
code
--------------------------- -------------------------------------------------------
b) Nature of the transaction Settlement of outstanding Non-Executive
Director's fees by way of ordinary shares
of 1p each in Deltex Medical Group plc
--------------------------- -------------------------------------------------------
c) Price(s) and volume(s) 1.5 pence
a) 6,000,000
b) 2,400,000
c) 9,483,257
d) 6,000,000
e) 6,000,000
--------------------------- -------------------------------------------------------
d) Aggregated information See 4 c) above
- Aggregated volume
- Price
--------------------------- -------------------------------------------------------
e) Date of the transaction 2 1 December 2020
--------------------------- -------------------------------------------------------
f) Place of the transaction London Stock Exchange, AIM
--------------------------- -------------------------------------------------------
1 Details of the person discharging managerial responsibilities
/ person closely associated
a) Name a) Nigel Keen, Chairman
b) Andy Mears, Chief Executive Officer
c) Mark Wippell, Non-Executive Director
d) Julian Cazalet, Non-Executive Director
--------------------------- ------------------------------------------------------------
2 Reason for the notification
-----------------------------------------------------------------------------------------
a) Position/status See 1 a) above
--------------------------- ------------------------------------------------------------
b) Initial notification Initial notification
/Amendment
--------------------------- ------------------------------------------------------------
3 Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
-----------------------------------------------------------------------------------------
a) Name Deltex Medical Group plc
--------------------------- ------------------------------------------------------------
b) LEI 213800XN34P6LI8J6M39
--------------------------- ------------------------------------------------------------
4 Details of the transaction(s): section to be repeated for
(i) each type of instrument; (ii) each type of transaction;
(iii) each date; and (iv) each place where transactions have
been conducted
-----------------------------------------------------------------------------------------
a) Description of Subscription for Ordinary Shares of 1p
the financial instrument, each
type of instrument Identification code (ISIN) for Deltex
Medical Group plc ordinary shares: GB0059337583
Identification
code
--------------------------- ------------------------------------------------------------
b) Nature of the transaction Subscription for Ordinary Shares of 1p
each
--------------------------- ------------------------------------------------------------
c) Price(s) and volume(s) Subscription for Ordinary Shares of
1p each
a) 3,461,538
b) 3,076,923
c) 384,615
d) 384,615
--------------------------- ------------------------------------------------------------
d) Aggregated information See 4 c) above
- Aggregated volume
- Price
--------------------------- ------------------------------------------------------------
e) Date of the transaction 2 1 December 2020
--------------------------- ------------------------------------------------------------
f) Place of the transaction London Stock Exchange, AIM
--------------------------- ------------------------------------------------------------
Notes for Editors
Deltex Medical manufactures and markets haemodynamic monitoring
technologies which are primarily used in critical care and general
surgical procedures. Deltex Medical's proprietary oesophageal
Doppler monitoring ("ODM") (TrueVue Doppler) measures blood flow
velocity in the central circulation in real time. Minimally
invasive, easy to set-up and quick to focus, the technology
generates a low-frequency ultrasound signal which is highly
sensitive to changes in blood flow and measures such changes in
'real time'. Deltex Medical is the only company in the enhanced
haemodynamic space to have built a robust and credible evidence
base demonstrating both the clinical and economic benefits of its
core technology: TrueVue Doppler. This technology has been proven
in a wide range of clinical trials to reduce complications suffered
by patients after surgery and consequently can save hospitals
money.
Deltex Medical's TrueVue System on the CardioQ-ODM+ monitor
platform now provides clinicians with two further advanced
haemodynamic monitoring technologies. TrueVue Impedance is an
entirely non-invasive monitoring technology which transmits low
magnitude, high frequency electrical signals through the thorax and
measures the changes to this signal when the heart pumps blood.
TrueVue PressureWave uses the peripheral blood pressure signal
analysis to give doctors information on changes in the circulation
and is particularly suited to monitoring lower risk or
haemodynamically stable patients.
Group goal
Haemodynamic management is now becoming widely accepted as a
vital part of the anaesthesia protocols for surgical patients, as
well as treating ventilated intensive care patients, including
ventilated COVID-19 patients. Consequently, the Group's focus is on
maximising value from the opportunities presented, as enhanced
haemodynamic management is adopted into routine clinical practice
around the world. The Group aims to provide clinicians with a
single platform - a 'haemodynamic workstation' - which offers them
a range of technologies from simple to sophisticated to be deployed
according to the patient's clinical condition as well as the skill
and expertise of the user. Doing this will enable the Group to
partner with healthcare providers to support modern haemodynamic
management across the whole hospital.
The Group is currently in the implementation phase of achieving
this goal in a number of territories worldwide, operating directly
in the UK and the USA, and via agreements with approximately 40
distributors overseas
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