€1.4m Clearstream trading loss

ENNISCORTHY-BASED medical devices group Clearstream Technologies has reported a trading loss of €1.4 million for the six months to the end of January.

In a statement released with its unaudited accounts, the company blamed a sharp fall-off in co-labelling sales for part of the loss, as revenues from this sector fell to just €400,000, compared to €2.3 million over the previous six-month period.

Clearstream said the substantial decline in co-labelling sales "was disappointing" and attributed the fall-off to problems experienced by one major customer, Cordis.

However, it said this will improve in the second half of the year following US FDA approval for Cordis to distribute two peripheral catheters.

The Aim-listed company said revenues for the six months to January 31st were €3.6 million, down from €4.7 million or by 24.6 per cent compared with the same period the previous year.

Clearstream develops and manufactures medical devices, particularly catheters and stents, and sells both branded and unbranded products.

The period also saw the company take an exceptional cost of €142,000 as part of a cost reduction programme that saw 28 staff leave the company as part of a voluntary, and later enforced, redundancy programme during November and December.

The company currently employs 104 people.

According to Clearstream, this programme will result in annual cost savings of €900,000 a year.

On a positive note, the company said sales of its higher-margin, own-brand products rose to €2.3 million, up from €1.4 million for the previous six-month period, accounting for 64 per cent of total revenue. Of this, 17 per cent was from devices released in the last 12 months. Clearstream said it expected additional product launches in the second-half of the year to accelerate growth in this area.

Managing director Andy Jones told The Irish Timesthat, despite "downward pressure on pricing", he expects the second half of the year to see an improvement in the trading performance.

"We would expect the third and fourth quarter to be break-even or profitable although there will still be an overall loss for the year.

"The frustrating thing about the interims is it is looking back over a period when we did have some difficulties in our co-labelling channel and we have reduced costs and driven growth in our own-branded sales and that trend is continuing in the second-half of the year."