GCIIntelligent Ultrasound posts resilient H1 results, Clinical AI unit sale to GE HealthCare advances
() , an ultrasound AI software and simulation company, announced its unaudited half-year results for the 6 months to June 30, 2024 (H1 2024). recently announced the sale of its Clinical AI business to GE HealthCare for £40.5m in cash. As the announcement was made post-period, the half-year results refer to the Clinical AI business as a 'discontinued operation' and the remaining Simulation business as 'continuing operations'.
Note that 'continuing operations' includes NeedleTrainer, which was not sold to GE HealthCare and was instead folded into the Simulation division.
saw reseller sales increase by 37% during the half to £1.6m from £1.1m in H1 2023. NeedleTrainer revenues doubled to £1.0m from £0.5m a year ago while administrative costs reduced by £0.1m to £4.0m, resulting from a number of cost savings initiatives. Cash burn reduced significantly to £2.0m from £3.8m in H1 2023, leaving cash on June 30, 2024 of £1.0m.
Revenue from continuing operations in H1 declined by 22% to £4.5m as a result of lower sales in the UK and North America. The decline in UK sales was expected, due NHS budget pressure, reducing sales by 58% to £0.8m. Sales in North America declined by 23% to £2.2m as nearly £0.7m of expected sales were held in delivery backlog or purchase order delays at period-end.
Group loss after tax for the half was £2.0m, of which £1.3m related to continuing operations and £0.7m related to discontinued operations.
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Intelligent Ultrasound reports its first half-year results following the announced sale of its Clinical AI business to GE HealthCare for £40.5m in cash. The consideration represented a 71% premium to 's pre-announcement share price and valued Clinical AI at 33.8x its FY23 revenues, prompting a strong reaction from markets. shares are up 37% since the announcement.
The disposal excluded 's NeedleTrainer/Trainer Plus product, which was retained within the remaining Simulation business. expects to make a significant return of capital following a review of the growth potential and cash requirements of its post-transaction business - an announcement detailing the proposed use of funds and direction of that business is expected in October 2024.
The remaining Simulation business registered a revenue decline in H1 2023, however this was due to external factors, namely NHS budgeting constraints in the UK and a delivery backlog and purchase order delays in the US. Sales should normalise in the medium term, especially as proceeds from the disposal of Clinical AI are harnessed for further growth. Simulation will also be boosted by the inclusion of NeedleTrainer.
The decision to dispose of Clinical AI at a great ROI materially improved 's chances of reaching profitability on its existing cash runway. reduced cash burn significantly in H1 2024 to £2.0m, down from £3.8m in H1 2023, leaving cash on June 30, 2024 of £1.0m. After the transaction is finalised, expects to have c. £39.5m of cash net of transaction-related fees.
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