26 February 2016

Ellex Financial Report for Half-Year ended 31 December 2015

Highlights:

  • Revenues up by 13% on pcp to $34.8m
  • Profit before tax up by 36% on pcp to $1.8m
  • Fourth consecutive increase in first half profits and margins
  • Growth expected to continue in second half and beyond

Adelaide, Australia, 26 February 2016 – Ellex Medical Lasers Limited (ASX:ELX), a world leader in medical technologies for the diagnosis and treatment of eye disease, today released its financial results for the half year ended 31 December 2015. Ellex reported a profit before tax of $1.8m compared with $1.3m in the prior corresponding period. The result was struck on revenue of $34.8m which was 13% higher ($4.1m) than the prior corresponding period.

The revenue increase has 3 separate components:

  • Positive impact of organic growth in sales of Ellex-branded product in USA, Europe and Japan of 11% (A$3.4m)
  • Positive impact of lower Australian dollar against US$, Euro and YEN 13% (A$4.1m)
  • Discontinuation of contract manufacturing and lower margin third party product sales along with reduction in other third party product sales that has reduced revenue by 11% (A$3.4m)

Commenting on the improved sales CEO Mr Tom Spurling said “It is very pleasing that our growth has been driven by contributions from our in-house developed Ellex branded products not just the lowering of the value of the Australian dollar.”

Profit before tax
The increase of 36% in profit before tax has been driven by the increased brand equity of the latest generation of Ellex-branded products. The profit before tax of A$1.8m has been negatively impacted by the following new operating expenses, which will benefit the second half of FY16 and beyond:

  • Investment in iTrack growth initiatives and start-up of a dedicated sales force in USA (approximately A$0.3m)
  • Investment in additional regulatory resources to support the rollout of Integre Pro ScanTM in the USA (FDA approval achieved August 2015) and Japan (Japan FDA approval achieved December 2015) and to renew registrations for certain products in China (approximately A$0.3m)

Mr Spurling added “This is the fourth consecutive increase in first half profits and margins. We are achieving this in 3 ways; geographical expansion, producing new products with features that allow doctors to upgrade with our products and developing new customers and markets with innovative products that treat disease and conditions hitherto untreated with devices.”

Outlook for FY16
Finally, commenting on the outlook for the remainder of the 2016 fiscal year Mr Spurling stated, “Revenue and earnings have grown nicely in the first half of FY16 and, subject to FX rates and global economic conditions, we expect that the growth achieved will be sustained through to the end of FY16 after allowing for prudent investment in sales and marketing for FY17 growth opportunities, particularly of iTrack in the USA.”

ABOUT ELLEX

Ellex designs, develops, manufactures and sells innovative products that help eye surgeons around the world to effectively and efficiently treat eye disease. Ellex is a world leader in this field. Headquartered in Adelaide, Australia, Ellex has ophthalmic lasers and devices that treat glaucoma, retinal disease primarily caused by diabetes, secondary cataract and vitreous opacities, as well as age-related macular degeneration. Manufacturing is carried out in Adelaide, Australia and Fremont, California. Sales and service directly to eye surgeons is conducted via subsidiary offices in Minneapolis, Lyon, Berlin and Tokyo. A network of more than 50 distribution partners around the world services other markets.

For additional information about Ellex and its products, please visit www.ellex.com

For further information on Ellex please contact:

Tom Spurling, CEO
Ellex Medical Lasers Limited
82 Gilbert Street, Adelaide, SA, 5000
W +61 8 8104 5293 | M +61 417 818 658
tspurling@ellex.com

Maria Maieli, CFO & Company Secretary
Ellex Medical Lasers Limited
82 Gilbert Street, Adelaide, SA, 5000
W +61 8 8104 5200
mmaieli@ellex.com

Andrew Angus
Investor Relations
Overland Advisors
M +61 402 823 757
andrewangus@overlandadvisers.com.au