Can anyone tell us abit more about the placement thats mentioned in the latestMEDICAL MONITORS LIMITED 2002-04-29 ASX-SIGNAL-G
HOMEX - Perth
+++++++++++++++++++++++++ Pursuant to Listing Rule 3.1, Medical Monitors Limited ("Medical Monitors") advises that the following information has been provided to Terrain Capital and Terrain Securities (jointly "Terrain") in connection with Terrain's assistance to the Medical Monitors with regard to a proposed 'private placement' for fully paid ordinary shares in the company. Information that has not previously been disclosed to the ASX includes sales forecasts and recent company operations update.
KEY POINTS
* Cash flow positive Qtr 3 2002 * US operations poised for sales Qtr 2 2002 * A Strategic joint venture alliances formed in UK and Europe
COMPANY UPDATE
* A Manufacturing contracts have been finalised with Bosch + Sohn and the first production run 4,000 BPfones have been completed. An additional 5,000 BPfones are being prepared for manufacture.
* Prize winner in the UK National Health Scheme (NHS) sponsored prestigious 2002 Healthcare IT Effectiveness Awards for Best Use of IT in Primary Care. The award recognises excellence in healthcare information management.
* Primary Care Group Ltd, the UK joint venture partner, has contracted with the Watford Primary Care Trust and AstraZeneca Pharmaceuticals, to provide the BPfone blood pressure monitoring system as a model for National Medicines Management Program. if successful, this model may be the basis for the management of blood pressure throughout the UK.
OVERVIEW
Medical Monitors' products and services have been developed over the past five years, and have now received worldwide acceptance in the health care market. In particular, the technology allows for patients, who may have a cardiovascular problem, to use Medical Monitors portable recording devices in an 'out of clinic' setting and transmit recorded ECG or blood pressure data over the telephone for analysis and report.
In Australia, the company has sales revenue generated from the WELLness blood pressure monitoring service and the BPfone blood pressure monitors, in addition to the HEARTLINE monitoring service using the Portable ECG Recorder (PER) to monitor elusive heart rhythm (ECG).
In the USA, Wellness Monitoring Inc, a wholly owned subsidiary of Medical Monitors, has established a service facility in California. Elsewhere, a number of trial blood pressure monitoring services have been established in Asia, Europe and the UK and will form the basis of new joint venture business opportunities in those regions.
SERVICE COMMERCIALISATION - AUSTRALIA
At present, sales effort is being focused in the pharmaceutical market where the BPfone TM is provided to GPs to assist in the management of their patients' blood pressure problems. It Is expected that 4,500 units will be sold in Australia in 2002. Each unit of sale includes at least one year's service. Initial supplies to the retail market are expected In 2003 via pharmacy outlets. Revenue from Australia is forecast to be $1.4m in 2002.
Having successfully commercialised these services in Australia, Medical Monitors is now seeking to implement joint venture and distribution strategies to achieve significant penetration of the cardiac monitoring diagnostic market internationally, with emphasis on blood pressure monitoring.
INTERNATIONAL BUSINESS
USA
Medical Monitors operates in three major market Sectors:
RETAIL MARKET:
In 2002 Medical Monitors plans to sell blood pressure units to the public through a home shopping channel, QVC, and major retail pharmacy chains. The Company views as conservative the projected sales volume of 5,625 units for 2002. Beyond the current year units will also be marketed through national retail chains.
MANAGED CARE MARKET:
This market involves the sales of unit-, to home health care management operators to monitor patients under their care, In 2002 IVIDM expects to sell 550 units, with significant growth anticipated from this sector in 2003.
PHARMACEUTICAL COMPANIES:
The pharmaceutical companies distribute the units as promotional products to doctors whose patients are testing the company's drugs. The expected sales to this market for 2002 are 5,000 units. It is expected that the United States will be a strong generator of revenue in the near future.
UNITED KINGDOM
Medical Monitors has signed an MOU with the Primary Care Group, Plc, (PCG) and is finalising a 50-50 joint venture in the UK. The joint venture will provide the Wellness Monitoring Service (for blood pressure) with a number of monitoring program opportunities within the UK health system, as well as the pharmaceutical industry.
PCG provides IT-based services in medical management to local health authority primary care trusts (PCTs), within the National Health system. The company has developed a number of management programs, aimed at improving health cost outcomes for the local PCTs in meeting their National Health Schemes budgetary targets, particularly in cardiovascular disease. Medical Monitors technology can provide the out-of-hospital monitoring interface for these programs.
In 2002 MDM forecasts sales of 10,000 units to the joint venture at a transfer price, which provides a gross profit of $500,000. The joint venture markets and sells the units to customers, and provides the ongoing reporting service and technical support.
Total profit contribution from UK in 2002 is forecast to be A$2.3m.
EUROPE
Medical Monitors has finalised a manufacturing agreement with Bosch + Sohn, the leading European manufacturer of blood pressure Instrumentation in Germany, to manufacture the BPfone product worldwide. Medical Monitors is also finalising an MOU with Bosch + Sohn for a joint venture to undertake the distribution and marketing of the Wellness Monitoring Service into Europe. Bosch + Sohn has specialised in quality blood pressure instrumentation, over the past 35 years, and is the leading blood pressure monitoring product distributor in Europe.
It is anticipated that sales will commence in the third quarter 2002. Sales revenue from Europe has not been factored into the accounts for 2002 and 2003 as marketing plans and projects are not finalised.
FINANCIALS
Revenue forecasts are based on sales of 24,375 BPfone monitors and service in 2002 and 56,400 in 2003. The estimated revenue and profit forecast for 2002 and 2003 are as follows:
YEAR ENDING 31 DECEMBER (A$M) 2002 2003
Revenue USA 2.4 10.8 Australia 1.4 3.3 UK Contribution 2.3 3.4 Total Revenue 6.1 17.5
Product & Service Costs Manufacturing 1.4 4.2 Australia 1.0 2.0 USA 1.5 2.6 Total Costs 3.9 8.8
Operating Profit 2.2 8.7
Administration expenses 1.2 2.7 EBITDA 1.0 6.0
Depreciation and Amortisation expense 1.1 1.2 EBIT -0.1 4.8
Interest expense - - Profit Before Tax -0.1 4.8
Income Tax Expense (1) - -0.7 Profit After Tax -0.2 4.1
(1) Tax losses - A$2.5 million of tax losses were carried forward into 2002 financial year ("FY")
Sensitivity Analysis - 10% increase in sales units will result in an increase in EDITDA for 2003 to approximately $7.3m, while 10% decrease in sales units will result in a reduction in EBITDA for 2003 to approximately $4.7m.
Dividend Policy - The Company is geared towards growth until the targets of market penetration are well advanced. The Directors intend to distribute dividends to shareholders when the financial performance of the Company is able to support the payment of dividends. However, the Directors do not guarantee any dividend payments.
FUTURE GROWTH
Total unit sales worldwide are expected to grow to 56,400 in 2003 based on conservative projections for USA, UK and Australia. Based on this forecast pre-tax profit should increase to about $6.0m.
Forecast cash flows for 2002 do not include revenues from proposed joint venture opportunities from Europe and Asia. Marketing plans and the joint venture partners are preparing cash flow projections. In particular, the business opportunity generated through the European joint venture Bosch + Sohn should prove to be sizeable given this company's market share.
Beyond the current year 2002 considerable scope exists to expand into Europe and Asian markets in 2003.
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MDM Price at posting:
0.0¢ Sentiment: None Disclosure: Held