- Minimally invasive surgery technology company Surgical Innovations Group warned its annual profit would fall as Brexit uncertainty and funding pressures at the NHS weighed on sales.

The company said modest sales growth in the first quarter had not continued into the second, with orders in the UK and EU markets lower than expected.

'The disruption to order patterns by distributors and end users caused by Brexit uncertainties has made visibility of true demand more difficult than normal,' Surgical Innovations said.

'It is anticipated that this volatility is likely to continue until matters are resolved.'

The company added that demand in the UK market more generally continued to be muted by the level of activity in the NHS.

'Whilst a funding crisis was largely avoided last winter, hospitals continue to deliver a reduced level of elective procedures,' it said.

Regulatory approvals were also becoming increasingly challenging to achieve and provided a formidable barrier to prospective new entrants, it added.

'They also place an increasing burden on operational and technical resources, and we continue to build a strong and expert team in this area.'

'Recent redeployment of key personnel to support this activity has inevitably had a short-term impact on the introduction of new products, as well as line extensions of our current range.'

'Delays in the regulatory approval process are symptomatic of the severe contraction in the number of approved regulatory bodies in Europe.'

'In addition, extra resources will be put in place as we move towards medical device regulation.'

'This is likely to affect both the cost and timescale of introduction of new products across the industry.'

Taking all of the pressures into account, the company said growth in revenues in the second half was unlikely to fully counter the relatively weaker second quarter to date.

'Full year expectations for revenue will exceed those of the prior year by a more modest rate of growth than previously anticipated,' Surgical Innovations said.

'Whilst margins are expected to remain in line, overheads will reflect the investment in additional resources devoted to operational and regulatory matters.'

'Accordingly, adjusted profit before tax is expected to be below the level achieved in 2018.'

'The group currently holds net cash and continues to be cash generative.'

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