Sydney-based medical device manufacturer Medical Australia (ASX: MLA) snared a third original equipment manufacturer (OEM) agreement, the latest with global healthcare company Pharmatel Fresenius Kabi AG of Germany, with immediate revenue generation.
PFK, which employs 21,000 people worldwide and employs over 220 people in Australia and New Zealand, was awarded a major contract with the New South Wales Department of Health to supply all IV pumps for the state’s public hospitals.
MLA’s TUTA product is being sourced by PFK for this contract, with first revenue to be booked by MLA in the first quarter of calendar 2011.
This represents the third OEM agreement won by MLA since July 2010.
MLA reported a record 2011 first quarter performance with sales of $2.4 million, ahead of budget. This dis not include a contribution from Medivet which is expected in the second quarter, boosting revenues futher.
Reflecting the quality of the recent earnings growth, MLA recorded an Earning Before Interest Tax, Depreciation and Amortisation (EBITDA) to sales margin of almost 10 per cent for the first quarter. This is an indicator of the progress MLA has made in reducing its cost base and strengthening its global supply chain.
MLA is pursuing a number of additional OEM agreement which would accelerate organic growth in the current financial year.
MLA chief executive officer Mark Donnison said “This OEM partnership represents a major growth platform for MLA. We will start to book revenue immediately through the supply agreement for the New South Wales Department of Health contract, and can comfortably accommodate PFK’s demands without any further capital expenditure."
“PFK was attracted to the strength and dependability of MLA’s global supply chain, as well as the quality of the TUTA product that we are initially supplying through this agreement. This gives us a major organic growth platform for the TUTA brand that we had not previously forecast."
MLA will shortly update shareholders on the company’s first half revenue performance.