How much do you hate it when someone bugs you while you’re sleeping? Now imagine that if instead of some “one”, it was a chronic health issue that kept you up and disturbed your sleep.
1 in 5 Australians suffer from a major sleep disorder. Restless legs syndrome, sleep apnea, heart conditions—everything comes to the fore once people turn in. Some companies have taken it upon themselves to study sleep and come up with the root of the issues.
Medical device company Compumedics (ASX: CMP) is one such company. Having launched decades ago as a “fully computerised sleep clinic”, it develops and sells diagnostic technologies for monitoring sleep, brain activity, and blood flow.
In FY23, sales orders, excluding MEG (its brain function imaging system), reached a record $43 million, representing a 4% increase compared to the $41.5 million in new sales orders booked in FY22. Unaudited revenues for FY23 are approximately $41 million, marking an 11% increase from FY22. The expected EBITDA for FY23 is in line with the previously provided guidance of up to $2 million on an underlying basis, excluding MEG write-downs of $6.9 million booked on December 31, 2022.
As of June 30, 2023, the Company had approximately $3.6 million in cash and $7 million in debt, resulting in a net debt of approximately $3.4 million, subject to audit.
The growth in sales orders and revenues was driven by strong performance in most business areas and geographic regions, except for the sleep and neuro business in the USA, which fell short of expectations, and the DWL (Doppler ultrasound) business, which faced timing issues in Asia.
Compumedics is making progress on its second sale of MEG technology to Tianjin Normal University (TJNU) in China, which is home to the Psychology and Behavior Research Centre. Additionally, Somfit—the self-adhesive wearable device worn on one’s forehead—developed by Compumedics, has entered its commercialisation phase, and further announcements regarding commercialisation are expected in the coming months.
In terms of financing, the Company anticipates positive operating cash flow for the first half of FY24 and currently holds approximately $5 million in cash and unused banking facilities. This, along with ongoing positive operating cash flows, is expected to be sufficient to meet the current and future financing needs of the Company.
Aussies pay big time for losing sleep. A report revealed that sleep disorders in Australia incur both direct and indirect costs that amount to 1 percent of the country’s GDP. Globally, the projected value of sleeping aids, encompassing medications and medical devices for monitoring, diagnosing, and treating sleep problems, is expected to soar to $168.89 billion within the next decade. Finally, between 2019 and 2020, the total health system costs associated with sleep disorders in Australia were $0.9 billion, primarily caused by sleep apnea, insomnia and restless leg syndrome.
With a sleep disorder, not only do you pay through your wallet but also well-being. This has boosted the market for sleeping aids, like those by Compumedics, in Australia. And seeing the boom in its new sales orders, it is safe to ascertain that people are counting on its tech to help improve the quality of their lives.
Alinda is a Business Reporter for The Sentiment
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