The Compumedics Limited (ASX: CMP) share price will be one to watch this morning following the release of the medical device company's half year results.
How did Compumedics perform in the first half?
During the six months ended December 31, Compumedics posted revenue of $18.3 million. This represents a 2% decline on the prior corresponding period and was due to some key US sales not being booked by the end of the half.
This offset growth in the company's key Asian markets and in Europe via its Germany-based business, DWL.
Compumedics continued to invest heavily in new products for the core business during the first half. Combined with its narrower gross margins due to a skew towards lower margin distributor sales, this led to the company reporting a 20% decline in EBITDA to $1.2 million.
On the bottom line, the company posted a profit after tax of $0.2 million, which was down 75% on the prior corresponding period.
FY 2020 guidance.
Whilst the company has identified key growth opportunities to deliver an increase in revenues and earnings in the current financial year, its performance looks set to be impacted by the coronavirus outbreak.
Management explained: "In recent weeks the Company has been in discussion with its key distributors in China regarding the impact of the Coronavirus. From these discussions it is understood that there has been a diversion of resources in the health/hospital sector to combat the spread of Coronavirus, and as a result, purchasing and funding has been reallocated temporarily."
In light of this, management expects its sales to China to slow in the second half of FY 2020, which has led to a downgrade to its guidance.
The company now expects full year sales of $40 million to $42 million, down from its previous guidance of $42 million to $44 million. Its EBITDA guidance has been downgraded by $1 million to the range of $5.5 million to $6.5 million.
Surprisingly, its net profit after tax guidance remains in line with its previous guidance at $4 million to $5 million.
