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Market:	ASX
Sector:	Pharma & Biotech
Epic:	MLA
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Web Site:	Medical Australia Limited
Other Articles:	08-07-201015-04-201008-04-2010

BMDI Tuta inks key medical products distribution deal with UK-based Unisurge

by Andrew McCrea

Australian-based medical products manufacturer and distributor BMDI TUTA (ASX: BMI) has inked an agreement to enter the key United Kingdom market in a distribution and manufacturing deal with Unisurge International Ltd.

BMDI Tuta manufactures, distributes and sells a range of medical devices used by healthcare facilities and critical care services in global markets.

The company offers a range of safety-engineered medical devices designed to reduce the incidence of needle stick injuries, exposure to blood-borne pathogens, and provide a higher level of healthcare worker and patient safety.

Less well known, the company is a leader in Intravenous (IV) Medication Delivery Systems, Surgical Irrigation, Suction and Oxygen Therapy, Safety Sharps Collection and Reuse Prevention and specialised Diagnostic and Laboratory Equipment.

As well, BMDI Tutal is an "authentic safety medical company" and can boast a 60-year old brand, diversified portfolio and established customer base.

Unisurge has been established in the UK since 1988.  From its Cambridge headquarters, Unisurge manufacturers and supplies practitioner-specified procedure packs, dressing packs, medical disposables and theatre products to the £164 billion annual UK health care market.

Over a period of five years, BMDI Tuta will supply its products for inclusion in Unisurge procedure packs; supply its products for direct distribution and sale to Unisurge's UK public and private hospital distribution base.

Other parts of the agreement provide for BMDI Tuta to source products and contract manufacture other products and components for Unisurge.  As well as, Unisurge providing warehouse and logistics services for BMDI Tuta in the UK.

Gary Lewis, managing director of BMDI Tutal said the agreement with Unisurge is further evidence that BMDI TUTA continues to benefit from the significant investment it has made in its global supply chain.

"Unisurge has recognised that BMDI TUTA has a world-class supply chain and we can deliver quality products to market quickly and efficiently," he said.

BMDI Tuta will gain a new distribution channel in the UK, as Unisurge has a dedicated fleet of delivery vehicles, enuring that pre-sterile packs arrive at their destination on time and in optimum condition.

Transformation & Turnaround

Recently, BMDI Tuta has undergone something of a transformation and a turnaround, with tangible results.

Manufacturing and distribution were transformed, four major supply contracts with state government health departments throughout Australia and important contracts were renewed and the company acquired a leading medical business.

The 100-year old Clements Medical Equipment business was acquired, adding $2 million in revenue and $300,000 in Earnings Before Interest, Taxed, Depreciation and Amortisation (EBITDA).

All manufacturing operations were relocated from Thailand and Australia into a new state-of-the-art facility in China, now with a base to supply to the global healthcare market at low competitive cost.

First quarter sales were $2.1 million for the three months to 30 September 2009. 

As importantly, in September alone, the company achieved sales of over $800,000, 20% above August sales, indicating month-on-month sales momentum is growing.

For the full year to June 30, 2009, BMDI Tuta inked revenues of $7.61 million (+63% gain).  Gross profit was up 63% to $3.0 million (+67% growth).

The company trimmed to a net loss of $193,000, a strong turnaround from the $1.5 million loss reported in FY2008.

With BMDI Tuta's portfolio of leading brands, investments in supply chain, lower cost base and product distribution expansion, the company should be able to generate significant organic revenue and profit growth in FY2010. 

BMDI Tuta is a significantly different company now, than it was 18 months ago. 2010/11 offers promise of a medical device company, trading at a current low market valuation of $9 million, that factors in no uptick in earnings.

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