MIDAS SHARE TIPS: Help save babies at risk – and increase profits – by investing in AIM-listed company Inspiration Healthcare
The coronavirus is in turmoil. Hospital beds are getting full. Lockdowns are getting tighter across the country. It’s all an unwelcome reminder of Covid19’s first round, in March.
Then the NHS was desperate for fans to help the critically ill and Ventilator Challenge UK was launched to help resolve the crisis. Companies from different sectors joined forces to produce what was needed. Many were big names, such as RollsRoyce, Ford and McLaren.
Inspiration Healthcare was also on the list. Inspiration, a small AIM-traded company, was hired by the Cabinet Office as an expert advisor to the consortium, providing 24/7 first-line support to doctors and nurses in case they encountered problems with the kit.
Lifeline: Inspiration Healthcare fans help premature babies
Along the way, the group insured 500 fans from abroad and used the network of contacts to import gold-standard, reasonably priced equipment from Germany, Israel and the US. Inspiration’s contract with the government is still in effect, but its involvement in the Challenge underscores how far the group has come since it was founded in 2003 by CEO Neil Campbell and three close colleagues.
From the outset, the focus has been on neonatal care, particularly equipment and devices, such as ventilators, that would help premature babies survive. Initially, based in Crawley, Sussex, the company was distributing equipment from other companies and by 2014 Campbell and his team had built a significant private business. But they wanted to move on. In 2015, she floated on AIM and moved to selling proprietary brands, creating and designing their own products for customers, while continuing to distribute third-party goods.
Today, the company is at the forefront of its field, with a global reputation for neonatal care and customers in 75 countries, including America, China, Japan and several Gulf countries. Inspiration is also an established player in the UK – virtually every hospital in the country uses at least one of its products.
In July Inspiration acquired SLE, a Croydon-based family business. The deal should be transformative. Both companies are highly regarded at home and abroad and both companies have an ultramodern kit.
For example, SLE makes advanced respiratory equipment that automatically adjusts oxygen levels to a baby’s changing needs. Older models rely on nurses to adjust these levels, but automating the process reduces the risk of human error and increases accuracy.
Inspiration is also behind a resuscitation device, LifeStart, that allows babies to be kept at their mother’s bedside if there is a risk of suffocation at birth. Other kits help babies breathe easier, stay warm, and stay safe. The group even produces a baby cooler that is used to reduce the risk of brain damage when newborns have cerebral palsy.
Looking ahead, Campbell is ambitious. Earlier this month, he announced an initial 0.2p interim dividend as the group announced rising sales and profits. Figures for the full year to January 2021 are expected to show revenues doubling to around £ 35m, profit of £ 1.4m and total dividend of around 0.6p.
Over the next five to seven years, Campbell aims to triple sales to at least £ 100 million, boost profits and increase dividends. He is also resolutely focused on patient care and is committed to improving the lives of newborn babies and their families.
The company is exploring new products and expects sales to grow rapidly after the acquisition of SLE. Efficiency must also be improved through economies of scale.
Midas verdict: Campbell has a simple philosophy: that good companies should grow, be profitable and generate cash. They must then reward the shareholders who have taken the risk of investing in them. Inspiration ticks all these boxes. It also helps some of the world’s most vulnerable children and has played a key role in the fight against Covid-19. At 66p, the stock is a buy.
Traded on: AIM Ticker: IHC Contact: inspiration-healthcare.com or 01455 840555