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Rex Bionics – trading update, any improvement from a business you’d want to succeed?

By Steve Moore | Wednesday 16 March 2016

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Following a trading warning that saw shares in Rex Bionics (RXB) fall to around 70p in late 2014, I concluded that this is a type of company you want to succeed but, with it looking to be some way from being able to prove its commerciality and cashburn concerns until it gets there, the shares didn’t look to appeal as an investment – see HERE. With the shares now at 43.5p, the following updates post a trading statement today that the company “is pleased to provide”.

The statement reiterates sales guidance for the second half of the year to 31st March of more than the three units sold in the first half year and notes that research suggests that “the market for robotic exoskeletons for medical applications is poised for significant growth”. The company adds that it has been focusing its R&D resources on upgrades to its quality systems and is now in a position to implement plans designed to secure FDA approval for home use and deliver a variety of product upgrade projects.

This follows half year results which showed a £2.57 million net cash outflow before new financing and cash (net) of £3.70 million at the period end, whilst noting “it is the directors' intention to raise further funds over the course of the next twelve months via the issue of further equity share capital”.

It is added today that “in view of the requirement for capital and time to complete the demanding selling process, Rex Bionics will be focusing its commercial resources on the US market in the short-term”.

The company notes that “further details will be provided with the preliminary results for the year to March 2016 scheduled for release in July”, but all currently suggests that the commerciality and cash challenges I noted previously continue to exist.

Thus, although a type of company you want to succeed, for now I have to maintain my previous stance on the shares.

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