Interim Results

DawMed Systems PLC
22 June 2006



                                                                    22 JUNE 2006





                              DAWMED SYSTEMS PLC


                                INTERIM RESULTS

                   FOR THE SIX MONTH PERIOD TO 31 MARCH 2006


The Board of DawMed Systems plc ('DawMed' or 'the Company'), the AIM listed
medical devices company which designs, manufactures, sells and services
healthcare decontamination equipment used by NHS Trust hospitals, private
hospitals, clinics and Primary Care practitioners, today announces Interim
Results for the six months to 31 March 2006, which again show an improvement
over the same period last year and have exceeded the Board's expectations.

KEY POINTS


   •EBITDA up 21.9% to £156,100 (2005: £128,100);
   •Profit on ordinary activities before tax of £33,700 - an increase of
    £39,300;
   •Increase in shareholders funds;
   •Successful re-alignment of business to concentrate on higher margin
    activities with good future growth potential;
   •Beneficial disposal of SSD intellectual property assets, thus
    eliminating a loss making activity;
   •Margin growth on 'Clinic', Spares, Support Services and Wassenburg
    products; and
   •Product portfolio significantly enhanced with new 'AERclens' system,
    new Wassenburg 'Dry 300' sterile storage/dryer cabinets and new
    'pass-through' Wassenburg equipment.



Commenting on today's announcement, Kevin Gilmore, Executive Chairman of DawMed,
said: 'Your Board is confident that the improvement in the Company's performance
achieved during the first half has created a solid base upon which to further
grow the sales volume of its newly widened and balanced range of products and
services. The Board therefore expects the second half of the year to be at least
in line with the first half performance, with the emphasis continuing to be on
growth and profitability from the higher margin business elements within our
same areas of experience and competence.'



                                    --ENDS--


Enquiries:

DawMed Systems plc                             Tel: [phone]
Kevin Gilmore, Executive Chairman                : 01789 74 0010

Beaumont Cornish Limited                       Tel: [phone]
Roland Cornish

Bishopsgate Communications Limited             Tel: [phone]
Dominic Barretto / Maxine Barnes


For further information please visit DawMed's website at www.dawmed.com





CHAIRMAN'S STATEMENT


I have pleasure in announcing that the results produced by your Company for the
first half of the year 2005-06 again showed an improvement over the same period
last year. These results were achieved during a period of substantial change
within the business and have exceeded the Board's expectations.


Financials

The overall performance of the Company in producing earnings, after finance
charges but before interest, taxation, depreciation and amortisation ('EBITDA'),
of £156,100 representing an increase of 21.9% and a profit on ordinary
activities before tax of £33,700, representing a increase of £39,300, both
compared with the same period last year, has fully justified your Board's
decision to re-align the business in order to concentrate on higher margin
activities with good future growth potential.


The overall performance at the gross profit level showed an improvement of 5.1%
over the same period last year, despite a reduction in turnover of 13% to £2.6
million. The disposal of the SSD intellectual property assets (announced on 30
January 2006) accounted for the majority of that turnover reduction. Lower sales
of Wassenburg products also contributed to the reduction, due to the
unavailability of the pass-through version of the Wassenburg flexible endoscope
washer-disinfectors ('WD').


Conversely, Support Services continued to grow with turnover materially
increased over the same period last year. In addition, the sales performance of
the 'Clinic' bench top washer-disinfector-dryer ('WDD') and sales of spares
continued a noteworthy improvement in comparison with the first half of last
year.


Margins on 'Clinic', Spares and Support Services each showed a substantial
improvement, while there was also a modest margin improvement on the Wassenburg
products. The low margins on the SSD equipment, which is no longer part of our
range of products, fully reflected the downturn in the turnover of that original
element of the business.


Total operating costs, before depreciation, provisions and financing charges,
increased by 2.0% over the same period last year and was reflective of the
increased activity in 'Clinic' manufacturing and Support Services.


The profit after tax of £26,100 compared favourably with a net loss after tax of
£5,600 for the same period last year.


The balance of shareholders' funds at 31 March 2006 was £1,160,000 compared with
£1,101,200 at the same date last year.







Products and Services

The product portfolio of the business has been substantially re-aligned,
following the disposal of the intellectual property rights and stock of the SSD
range of equipment announced in January this year. This significant event,
together with the launch of the new 'AERclens' washer-disinfector system,
designed specifically for the decontamination of small flexible nasendoscopes
used in the Ear, Nose and Throat ('ENT') departments of Secondary Care
hospitals, clinics and consulting rooms, as well as the new Wassenburg
'pass-through' washer-disinfectors and 'Dry 300' sterile storage/dryer cabinets,
is expected to further improve the gross margins earned on all products sold by
the Company. The 'AERclens' system represents the only one of its type in the
world, so far as the Directors are aware.


The improved penetration of the 'Clinic' product in the UK Primary Care market,
and the continuing growth being achieved by Support Services, reinforces the
expectations referred to above. Overall, gross margins have already shown
significant improvements in the first half of the current year, thereby
validating the strategic asset disposal decision made by your Board at the start
of the current financial year.


Enhanced Product Portfolio

Existing products, and new products which were introduced in the period,
include:


• 'Clinic' bench top WDD - providing washing, thermal disinfection and
drying for use in all NHS and private dentists, clinics and other Primary Care
practitioners and also targeting the European and worldwide markets;


• 'AERclens' washer-disinfector system for the decontamination of small
flexible nasendoscopes - a completely new product providing washing and chemical
disinfection for use in all NHS and private Ear, Nose & Throat ('ENT')
Departments, clinics and consulting rooms and also targeting the European and
worldwide markets;


• New Wassenburg 'pass-through' flexible endoscope washer-disinfector
('WD') and the continuation of the original Wassenburg space-saving flexible
endoscope WD, both providing washing and chemical disinfection for use in NHS
and private Endoscopy Departments et al in the UK; and


• New Wassenburg 'Dry 300' - a flexible endoscope storage/drying cabinet
providing a daytime and overnight sterile environment for use in NHS and private
Endoscopy Departments et al in the UK.


Remainder of the Year and Future Prospects

The 'Clinic' bench top washer-disinfector-dryer ('WDD'), having taken longer
than expected to establish itself in the UK primary care market, is now making
good progress in gaining business from both the public and private sectors and
is anticipated to produce increased year-on-year growth which will compare
favourably with the first half of this year. Furthermore, the export potential
for the product is now beginning to emerge and several opportunities could reach
satisfactory conclusions.


The Wassenburg product range will be enhanced in the second half by the addition
of the recently launched 'Dry 300' sterile storage/dryer cabinets and this,
together with the new 'pass-through' flexible endoscope washer-disinfector,
provides further opportunity to grow this already successful element of the
Company's business.


The launch of the new 'AERclens' system for the decontamination of small
flexible nasendoscopes used in ENT departments of Secondary Care NHS and private
hospitals, clinics and consulting rooms has enjoyed an enthusiastic reception
and is anticipated to achieve not insignificant levels of revenue generation,
not least due to your Board's belief that this product is currently the first of
its type in the world and is capable of achieving savings for customers against
the costs of cleaning such instruments by current non-validated manual methods.


Following the completion of the recent strategic rationalisation of the Group,
working capital has been released for marketing and selling the new 'AERclens'
system, the 'Clinic' bench top WDD, the Wassenburg standard and new
'pass-through' WDs, the new Wassenburg 'Dry 300' sterile storage/dryer cabinets,
Spare Parts and the continued expansion of the already highly successful Support
Services organisation.


Your Board is confident that the improvement in the Company's performance
achieved during the first half has created a solid base upon which to further
grow the sales volume of its newly widened and balanced range of products and
services. The Board therefore expects the second half of the year to be at least
in line with the first half performance, with the emphasis continuing to be on
growth and profitability from the higher margin business elements within our
same areas of experience and competence.





Kevin M Gilmore

Executive Chairman

22 June 2006





Dawmed Systems plc                                  Unaudited   Unaudited
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT    6 months to 6 months to
for the half year ended 31 March 2006                31 March    31 March
                                                         2006        2005
                                                        £'000       £'000
TURNOVER                                              2,611.7     3,002.8
Cost of sales                                         1,414.8     1,864.2
                                                     ________   _________
GROSS PROFIT                                          1,196.9     1,138.6
Administrative expenses                               1,149.0     1,123.1
                                                     ________   _________
OPERATING PROFIT                                         47.9        15.5
Interest receivable and similar income                    9.0         5.1
Interest payable and similar charges                     23.2        26.2
                                                     ________   _________
PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE              33.7        (5.6)
TAXATION
Taxation                                                 (7.6)          -
                                                     ________   _________
PROFIT/(LOSS) FOR THE HALF YEAR                          26.1        (5.6)
                                                     ________   _________
BASIC EARNINGS/(LOSS) PER SHARE (see Note 1)            0.13p     (0.03)p
                                                     ________   _________
DILUTED EARNINGS/(LOSS) PER SHARE (see Note 1)          0.13p     (0.03)p
                                                     ________   _________




NOTES TO THE INTERIM STATEMENT


1) The calculation of basic earnings/(loss) per share is based upon the profit
of £26,036 (2005: loss £5,625) and on 20,463,292 shares (2005: 19,353,400
shares), being the weighted average number of shares in issue during the period.


For the six months to 31 March 2006 the diluted earnings per share is based upon
the profit of £26,036 and on 20,469,100 shares. The 160,000 options issued on 8
February 2006 are dilutive since the exercise price is below the average fair
price for the period. The remaining 2,236,676 options have exercise prices above
the average fair price for the period and are therefore not dilutive.


For the six months to 31 March 2005 the exercise price of the 2,236,676 share
options was above the average fair price for the period, therefore the diluted
loss per share was equivalent to the basic loss per share.


2) Earnings before interest tax depreciation and amortisation ('EBITDA') consist
of the Operating Profit of £47.9k (2005: £15.5k) plus depreciation and
amortisation charges of £108.2k (2005: £112.6k).


3) The accounting information presented does not constitute statutory accounts
and has not been audited.


4) Copies of the interim report will be available in 30 days at the offices of
Beaumont Cornish Limited, 5th Floor, 10-12 Copthall Avenue, London, EC2R 7DE.



Dawmed Systems plc                             Unaudited   Unaudited
UNAUDITED CONSOLIDATED BALANCE SHEET            31 March    31 March
as at 31 March 2006                                 2006        2005
                                                   £'000       £'000

FIXED ASSETS                                       462.9       631.5

CURRENT ASSETS
Stocks                                             352.0       682.7
Debtors                                          1,651.8     1,367.7
Cash at bank and in hand                           608.3       233.8
                                                ________   _________
                                                 2,612.1     2,284.2

CREDITORS: Amounts falling due within one year   1,861.8     1,690.4
                                                ________   _________
NET CURRENT ASSETS                                 750.3       593.8
                                                ________   _________
TOTAL ASSETS LESS CURRENT LIABILITIES            1,213.2     1,225.3
                                                ________   _________
CREDITORS: Amounts falling due after more than      53.2       124.1
one year
                                                ________   _________
NET ASSETS                                       1,160.0     1,101.2
                                                ________   _________
Called up share capital                          1,023.2     1,023.2
Share premium account                            1,872.2     1,872.2
Merger reserve                                    (350.5)     (350.5)
Profit and loss account                         (1,384.9)   (1,443.7)
                                                ________   _________
SHAREHOLDERS' FUNDS                              1,160.0     1,101.2
                                                ________   _________


Dawmed Systems plc                             Unaudited   Unaudited
UNAUDITED CONSOLIDATED CASHFLOW STATEMENT    6 months to 6 months to
for the half year ended 31 March 2006           31 March    31 March
                                                    2006        2005
                                                   £'000       £'000

Net cash inflow from operating activities          162.4       364.6
                                                ________   _________
Returns on investments and servicing of
finance

Interest received                                    9.0         5.1
Interest paid                                      (23.2)      (26.2)
                                                ________   _________
                                                   (14.2)      (21.1)
                                                ________   _________
Capital expenditure and financial investment

Purchase of fixed assets                           (54.7)      (25.1)
Disposal of fixed assets                            34.8           -
                                                ________   _________
                                                   (19.9)      (25.1)
                                                ________   _________
Financing

Issue of ordinary shares                               -       262.5
Factoring and stock advances                      (126.3)     (663.9)
Finance leases                                       5.2       (10.4)
                                                ________   _________
                                                  (121.1)     (411.8)
                                                ________   _________
Increase/(decrease) in cash                          7.2       (93.4)
                                                ________   _________
Reconciliation of operating profit to net cash
inflow from operating activities

Operating profit                                    47.9        15.5
Depreciation and amortisation charges              108.2       112.6
Movement in stocks                                 154.1      (168.7)
Movement in debtors                               (264.1)       57.0
Movement in creditors                              116.3       348.2
                                                ________   _________
Net cash inflow from operating activities          162.4       364.6
                                                ________   _________




                      This information is provided by RNS
            The company news service from the London Stock Exchange