drive devilbiss healthcare head office

With turnover and gross profit remaining steady, a jump in exceptional costs has contributed to Drive DeVilbiss Healthcare’s £5.3m operating loss for the year ended 31 December 2019.

One of the largest multinational players in the market, Drive DeVilbiss Healthcare manufactures and distributes a vast range of products, including mobility scooters, wheelchairs, walking aids, beds, moving and handling equipment, aids for daily living and more.

It was formed in July 2015 when Drive Medical acquired DeVilbiss Healthcare, its largest and final acquisition after a rapid string of eight acquisitions over 12 months, purchasing companies including HurryWorks, Columbia Medical, Park House Healthcare, and Specialised Orthotic Services.

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Almost a year later, the Group was purchased by private equity firm Clayton, Dubilier & Rice (CD&R) for an alleged $800m.

According to Drive DeVilbiss Healthcare’s annual report for the year ended Decmeber 2019, turnover at £105.5m and gross profit at £33.6m remained largely unchanged against the previous year’s £105m and £33.6m respectively.

Despite both remaining in line with the previous year, the company experienced a fall in operating profits of £5.3m, resulting in an operating loss of £5.8m compared to 2018’s £518k.

The substantial increase was attributed to a rise in exceptional costs and an impairment charge totalling £3.8m. In 2018, exceptional costs amounted to £820k.

It comes following Drive DeVilbiss Healthcare’s reported ‘liquidity crunch’ in September 2019 which led to talks with senior lenders to restructure its $600m of debt.

Later that same month, an agreement was reached by the company’s lenders and owner CD&R, securing $35m in new capital, alongside a reduction in cash debt service obligations.

According to Drive DeVilbiss Healthcare’s annual report, restructuring costs for 2019 accounted for £819k of its £1.8m in exceptional costs.

Examining the reduction in debt obligations, the report stated that the Group’s parent company, Medical Depot Inc, forgave £69m of intercompany debt in December 2019, taking its outstanding debt to £28.4m.

Notably, the £69m debt reduction was a recapitalising of Drive DeVilbiss Healthcare by CD&R in order to restructure the balance sheet and put the business into what it describes as a strong position for moving forward into 2020 and future years.

The exceptional write-off primarily related to the write off of legacy intangible assets and the forgiveness of an intergroup loan to Drive DeVilbiss Healthcare’s Australia subsidiary.

The report emphasised that Drive DeVilbiss Healthcare will require no further funding from Medical Depot to meet its cashflow and working capital needs, confirming that “overall the business remains very strong with extremely good operating cashflow generation.”

For the year ended 31 December 2019, the group made a loss after taxation of £10.97m, an increase of just under £5m against 2018’s £6m loss.

Discussing the impact of COVID-19 on its trading this year, Drive DeVilbiss Healthcare’s strategic report stated that certain segments in its wide portfolio of products and services, such as mobility aids, “have been adversely impacted but this has been more than outweighed by the increased activity to support the crucial works the group’s NHS customer base has been involved with during the outbreak.”

Last week, THIIS reported that Drive DeVilbiss Sidhil, a subsidiary of Drive DeVilbiss Healthcare purchased in 2017, saw turnover increase to £26.1m in 2019, however, saw profits dip.

https://i1.wp.com/thiis.co.uk/wp-content/uploads/2019/11/drive-devilbiss-healthcare-head-office-featured.jpg?fit=725%2C389&ssl=1https://i1.wp.com/thiis.co.uk/wp-content/uploads/2019/11/drive-devilbiss-healthcare-head-office-featured.jpg?resize=150%2C150&ssl=1Calvin BarnettNewsroomSupplier NewsTrade Newsannual report,cash flow,CD&R,Clayton Dubilier & Rice,Columbia Medical,coronavirus,COVID-19,Drive DeVilbiss healthcare,Drive DeVilbiss Sidhil,HurryWorks,liquidy,Medical Depot,operating profit,Park House Healthcare,Specialised Orthotic ServicesWith turnover and gross profit remaining steady, a jump in exceptional costs has contributed to Drive DeVilbiss Healthcare's £5.3m operating loss for the year ended 31 December 2019.One of the largest multinational players in the market, Drive DeVilbiss Healthcare manufactures and distributes a vast range of products, including mobility...News, views & products for mobility, access and independent living professionals