Belluscura secures Medicare codes for DISCOV-R, projects 430% revenue growth
One of the most frustrating things for both management and shareholders is not being able to satisfy 'off the charts' demand where customers are literally banging down the door to buy your patented, high-margin products.
With a bulging pipeline and growing orderbook, this is the unfortunate situation that () presently finds itself in.
Indeed, in today's trading update, this developer of best-in-class portable oxygen concentrators used to treat respiratory conditions like COPD, said Q4'24 revenues would be between $1.0m-$1.5m, compared to $4.0m expected - albeit still delivering a more than 430% jump in FY'24 sales of $4.3m-$4.8m vs $0.8m LY.
What's more, these temporary issues have either been fixed or will be shortly.
Firstly, after an approx. one-month delay, the Medicare reimbursement (PDAC) codes for its next-generation DISCOV-R medical device have just been granted, opening the door to a $800bn US federal health insurance program that provides coverage for most Americans aged over 65, and for many with qualifying conditions under the age of 65. In fact, it is estimated 1.5m Americans already receive supplemental oxygen through Medicare for a variety of respiratory disorders to improve their quality of life and prolong survival.
Next, the previously flagged top-up fundraise to meet future working capital requirements is also at an "advanced stage" with exact details - involving perhaps a mix of debt, invoice discounting, credit insurance and/or equity - set to be announced imminently.
As at 25 Oct'24, had cash reserves of $0.3m and $1.1m of receivables, excluding $9.6m of convertible loan notes.
CEO Bob Rauker commenting: "Notwithstanding the funding challenges, the Board continues to have a real sense of confidence that in 2025 Belluscura will build on the revenue growth achieved in 2024 to date", adding there is "strong demand for the DISCOV-R from 3 nationwide distributors and numerous regional suppliers who collectively serve several million respiratory customers."
Finally, in terms of the numbers, house broker Dowgate Capital has a 35p/share target price vs 12p currently (mrkcap £20.2m), based on turnover climbing from $4.5m in 2024 to $20.0m next year and generating FY25 EBITDA of $0.8m.
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