Health: Somnomed spins fairytale of a sleep cure in half-year results
Health & Biotech
Health & Biotech
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Sleep apnoea mouthguard maker Somnomed (ASX:SOM) has posted a half-year profit and a big upswing in revenue as US sales continued to be the bedrock of the company’s success.
A 26 per cent increase in revenue from the US came from better sales and marketing.
Australia led the Asia Pacific region in terms of growth, an area where sleep apnoea — a condition where a person’s throat is partly or completely blocked while they are asleep — is not or only partially reimbursed by public and private health insurance.
At its most mild it results in snoring, but at its worst a person can stop breathing for anywhere between a few and 90 seconds before they wake up.
The company says Europe saw sales growth of 10 per cent and it expects this to continue as continuous open airway therapy gains greater acceptance over CPAP breathing machines and is also reimbursed by health insurance.
Total revenue grew by 15 per cent to $4.4m.
Operating profit was up 29 per cent to $1.3m, while net profit rose from a $13m loss in the same period last year to a $766,430 profit.
The jump here was that last year Somnomed was still accounting for the closure of its Renew Sleep Solutions in the US, a direct-to-customer division that was shut down at the end of 2018.
Increases in out-of-pocket deductibles — the amount people have to pay for a service before their insurance kicks in — hurt the business at the point when it was expected to start returning cash.
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