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Medical Australia boosts FY2012 revenue by A$1.5m with new supply agreements

Medical Australia (ASX: MLA) has secured a number of new product supply contracts worth $1.5 million in annualised revenue for the 2012 financial year.

Chief executive officer Mark Donnison said Medical Australia’s reputation in the domestic healthcare market continues to strengthen.

“Building our domestic supply contracts is an important growth driver for Medical Australia and these new agreements reflect the strong organic revenue growth we are experiencing across the business,” he said. 

“Medical Australia’s reputation in the domestic healthcare market continues to strengthen and our reputation as a trusted product supply partner is growing.”

The new contracts include:

- A new product supply agreement with one of Australia’s largest private hospital operators, Healthscope, initially for period of one year (in addition to a contract announced in April 2011);
- A contract to supply intravenous consumables and surgical irrigation products to Epworth Private Hospital on a rolling basis;
- A supply agreement with Vic Ambulance to provide lifesaving intravenous consumables;
- A contract to supply new innovative burette technology to Concord Repatriation and General Hospital; and
- Product supply arrangements with Melbourne Health (17 hospitals), Austin and Repatriation Hospitals (2 hospitals), Eastern Health (3 hospitals), Saint Vincent’s and Mercy Private Group (3 hospitals), and Cabrini Health Group Network (6 hospitals).

Medical Australia has also secured smaller supply agreements with Mater South Brisbane, Princess Margaret Hospital in Western Australia, Mater North Sydney, Macquarie University Teaching Hospital, North Middlesex NHS Trust in the UK, and NSW Ambulance.

The company has also recently shipped a $120,000 second order of specially designed needle cutters to UNICEF.

“We are very encouraged by our relationship with UNICEF and the brand recognition this will create for Medical Australia,” Donnison said. “Internationally, UNICEF is currently utilising our needle cutter product and the feedback has been very positive.”

Growth Prospects

Donnison said Medical Australia has significant organic growth prospects through new product developments, supply agreements, international expansion, and new and original equipment manufacturer agreements.

“The organic growth prospects place MLA on a solid growth footing for FY2012 and beyond.”

Cash Position

At the end of the September quarter Medical Australia had $1.29 million cash.

Record Revenue

Last month the company reported record revenue of $3 million for the first quarter of the 2012 financial year, which included $250,000 worth of sales booked to Medical Australia’s MediVet distributor in the United Kingdom.

The improved first quarter performance was driven by revenue contributions from original equipment manufacturing agreements secured in the previous financial year, and new domestic supply agreements with large public and private healthcare groups in Australia.

Donnison said it has been an encouraging start to the 2012 financial year. “This has been a pleasing start to the year. Sales continue to grow and we are witnessing improved margin performance on our supply contracts in the domestic market.”