Interim Results

RNS Number : 1819O

Deltex Medical Group PLC

14 September 2011

 



Deltex Medical Group plc

Interim results for the six months ended 30 June 2011

14 September 2011 - Deltex Medical Group plc ("Deltex Medical", "Company" or "Group"), the global leader in oesophageal Doppler monitoring ("ODM"), today announces its results for the six-month period ended 30 June 2011.

Financial Highlights

·      Sales up 2% to £3.0 million overall: 29% increase in UK sales to £2.0 million

·      Operating loss of £0.7 million (2010: £0.6 million)

·      Cash used in operations reduced by 55%

Operating Highlights

·      Gross margin of 75%

·      Major endorsement from NICE recommendation

·      Briefings programme on CardioQ-ODM initiated by NICE in September

·      Accelerated growth rate in UK surgical probe sales

·      Strong position to benefit from UK drive to adopt innovative medical technologies more rapidly

·      New strategic accounts opened in USA

·      Export resources refocused onto developed healthcare market probe revenues

Nigel Keen, Chairman of Deltex Medical, said:

"Deltex Medical made strong progress in the first half of the year and is entering a phase in its development with clear potential for accelerated growth in particular in the UK where growth is already strong. The Company is working to create similar opportunities in a number of other major healthcare markets.

"We are building a solid base from which to create substantial shareholder value. The robust evidence base of both the clinical and cost effectiveness of our products means that we are very well positioned to create and exploit opportunities for accelerated growth as health systems focus increasingly on improving outcomes and reducing costs."

For further information, please contact:-

Deltex Medical Group plc                                    01243 774 837

Nigel Keen, Chairman                                         [e-mail]

Ewan Phillips, Chief Executive                            [e-mail]

Paul Mitchell, Finance Director                           [e-mail]

Nominated Adviser & Broker

Arden Partners plc                                               020 7614 5900

Chris Hardie                                                        [e-mail]

Jamie Cameron                                                  [e-mail]

Kreab Gavin Anderson                                        020 7074 1800

Robert Speed                                                     [e-mail]

Deborah Walter                                                   [e-mail]

Notes for Editors

Deltex Medical manufactures and markets the CardioQ-ODMÔ system. CardioQ-ODM changes the way doctors care for surgical patients allowing them to recover faster and leave hospital sooner and in better health than they otherwise would do. The performance of the system has been validated through independently conducted, randomised controlled clinical trials and is being translated into routine clinical practice in leading hospitals around the world.

CardioQ-ODM comprises a monitor and a single patient disposable probe. The probe is placed into the oesophagus through either the mouth or nose and the tip positioned facing the adjacent descending aorta. A low frequency ultrasound signal, generated by the monitor, is bounced off the blood travelling down the aorta and the Doppler principle is used to determine the velocity of the blood flow, expressed in distance per cardiac cycle - 'Stroke Distance'. The monitor also calculates the amount of time that blood is flowing down the aorta as a proportion of a cardiac cycle - 'Flow Time'.

The monitor uses a validated proprietary nomogram to extrapolate volumetric data (Stroke Volume, Cardiac Output etc) from the directly measured flow velocity. The nomogram utilises the patient's age weight and height, effectively to estimate the size of the aorta in which the velocity of the flow is being measured. Crucially this means that any reported relative change in Stroke Volume is absolutely identical to the relative change in the directly measured flow velocity variable of Stroke Distance. CardioQ-ODM immediately and reliably identifies even very small changes in the blood flow velocity allowing doctors to intevene earlier and on smaller changes than with any other approach.

Intra-operative individualised Doppler guided fluid management entails insertion and focusing of the probe to obtain a baseline reading, giving a small (200 to 250 ml) fluid challenge directly into the vascular system and seeing if Stroke Volume (or Stroke Distance) increases by more than 10%. If the increase is more than 10%, repeat fluid boluses are administered until such time as the increase is less than 10%: after this no further fluid is given unless Stroke Volume falls by more than 10% - the process is designed to achieve and maintain the individual patient's optimal Stroke Volume. CardioQ-ODM is also used during surgery to guide administration of vaso-active agents such as inotropes.

The CardioQ-ODM helps patients by enabling doctors to reduce the complications that arise from a medical condition that is common to almost all patients having surgery and many others in intensive care or arriving in the accident and emergency department. This condition is known as hypovolaemia - a reduction in circulating blood volume - and in surgical patients arises as a direct consequence of the combined effects of pre-operative starvation, the anaesthetic agents and the blood and fluid losses associated with the surgical procedure itself. Hypovolaemia means that the body struggles to get sufficient blood to the tissues and vital organs which are consequently starved of essential oxygen. This can cause medical complications including peripheral and major organ failure, which if not dealt with quickly can lead to severe compromise or even death.

There are already over 2,300 CardioQ-ODMs currently in use in hospitals worldwide and distribution arrangements are in place in over 30 countries. In addition, there are currently more than 250 clinical publications on the use of the CardioQ-ODM which have repeatedly:-

·    Validated the results of CardioQ-ODM against known standards for measuring cardiac output

·    Proved that CardioQ-ODM works in a wide range of surgical procedures

·    Proved that CardioQ-ODM delivers 50% or more reductions in post-operative complications and 25% or more reductions in length of hospital stay: better care at lower cost.

The SupraQÔis an entirely non-invasive device which uses an ultrasound probe held at the base of the patient's neck to track the flow of blood in the aorta; it presents the same data as the CardioQ-ODM in a similar format and is used for taking snapshots or monitoring over short periods.

Chairman's statement

Overview

Deltex Medical made further progress in all key markets during the first half of 2011. Particularly encouraging were revenues in the UK which increased by £442,000 (29%) to £1,966,000. Overall Group revenues in the first half were held back by a fall off in export sales of monitors primarily into the Middle-East where the political unrest has substantially reduced our business. Despite this headwind, total Group revenues in the first half still increased 2% to £3,002,000. Gross margins were stable at 75% and increases in operating costs were kept to under 5%. Overall the operating loss was £99,000 higher than in the first half of 2010 at £696,000 reflecting the investment we have made in our UK operations to maximise the opportunities which are developing in that market.

US sales were flat as we consolidated gains in key accounts made in 2010 and other export sales were down by £345,000 due to lower monitor sales primarily into the Middle-East and non-recurring sales in the first half of 2010 which were made in Spain to set up a major market development project. Underlying growth continues in our major export markets with an increase in the monthly standing order from our French distributor and increased probe sales in a number of other focus markets including Canada, Scandinavia, Austria, Germany and Australia; in the USA we have made good progress in bringing a small number of high quality new accounts into our pipeline.

Net cash used in operations was £452,000, a 55% reduction from the first half of 2010 (£1,005,000). Combined with the second half of 2010 when the Company generated net cash from operations of £215,000, net cash used in operations for the twelve consecutive months ended 30 June 2011 was £237,000: this is significantly lower than at any time in the Company's history, averaging approximately £20,000 a month, as the Company moves to becoming cash positive throughout the year.

During the period the Company increased inventory levels by £263,000 to £836,000 in anticipation of future demand and to enable it to place monitors where appropriate to drive growth in probe revenues. Cash at 30 June 2010 was £1,214,000.

Markets

Our goal is to make oesophageal Doppler monitoring (ODM) a standard of care for patients undergoing major surgery and in intensive care. To achieve this, we believe it essential to have a robust evidence base of both patient benefit and cost effectiveness. The UK is at the forefront of developing health policy aimed at rapid adoption of medical technologies and the emerging process can be summarised: firstly, evidence from clinical trials; secondly, evaluation; thirdly, adoption.

Deltex Medical is one of the first medical technology companies to have completed the investment necessary to build a robust evidence base. It is also one of the very first to have had the evidence independently evaluated: in March 2011 the National Institute for Health and Clinical Excellence ('NICE') recommended that "the CardioQ-ODM should be considered for use in patients undergoing major or high risk surgery". NICE's recommendation confirmed that CardioQ-ODM can deliver both clinical and economic benefits that are material at each of patient, hospital and system level. NICE estimated average savings of £1,100 per patient through reductions in post-operative complications and lengths of hospital stay and that at least 800,000 patients a year in the NHS in England alone should benefit.

Although the NHS has been traditionally a slow adopter of new medical technologies, it is now focused on more accelerated adoption. Fiscal plans mean the NHS must make efficiency savings of circa £5 billion a year by 2014 and a core focus is on "quality" initiatives that improve outcome and reduce cost. CardioQ-ODM is by far the highest impact technology to have been recommended to date by NICE's Medical Technology Advisory Committee and full adoption of CardioQ-ODM could deliver over 15% of the total national efficiency target. As a result CardioQ-ODM is well-positioned as a high priority technology in the Department of Health's Innovative Technology Adoption Procurement Programme and has to date been selected for adoption by several NHS regions.

The UK Government's plan for growth requires the NHS Chief Executive to report by November on how the NHS can more rapidly adopt proven new medical technologies. New initiatives following this review are expected to accelerate growth of uptake of the CardioQ-ODM. Furthermore, NICE's Implementation Team has recently initiated a programme of briefings to NHS Trust medical directors on its medical technologies guidance which includes that on CardioQ-ODM.

While momentum has been growing behind central initiatives in the UK, NHS hospitals' capital budgets have been constrained. The Company sold 35 monitors in the UK in the first half of the year (2010: 23), however the majority of these were for intensive care or research applications with over half the 33 net increase in operating theatre installed base coming from the placement of monitors on loan or under managed care service contract. There are encouraging signs of acceleration in the growth rate of surgical probes in the UK: in the twelve months ended 30 June 2010 the annualised growth rate based on 12 month moving averages was 18%; this had increased to 27% by 30 June 2011 and sales of surgical probes in July and August indicate continuing momentum.

In the USA, the level of awareness of clinicians of the opportunity to improve care through improvements in management of patients' vascular fluids is some years behind that in the UK. As a result there is not yet the broad clinical support necessary for wide-scale adoption of our products. However, there are clear signs that the necessary clinical interest in haemodynamic management is starting to grow, led by some of the major teaching hospitals. The focus of our work in a small, but growing, number of key US hospitals is to demonstrate ways in which ODM helps deliver the twin goals of improving health outcomes while reducing costs. We expect success stories to start to come out from some of these accounts in the second half of the year and that these will drive sales growth both locally and nationally. Our largest US account recently renewed its contract for not less than 200 probes a month, worth at least $34,000 a month in sales and we have made substantial progress in opening a select group of new accounts.

In Spain, our focus is on creating the environment for system-wide adoption of CardioQ-ODM through working both with key clinicians and the national health technology evaluation agencies. While fiscal conditions have delayed our projects, we are encouraged by developments on both strands of work to date and believe that, in the medium term, we may be able to create an equivalent opportunity to that in the NHS in England with only modest further investment.

In our distributor export markets, monitor sales in 2011 were £243,000 lower than in the first half of 2010 when monitor sales were particularly strong into the Middle-East. Political and economic uncertainties in the Middle-East have led us to partially redeploy resources to focus on more developed and stable healthcare markets and, in particular, to pursue opportunities to build recurring probe revenues in Canada, Scandinavia and Australia. Progress has been encouraging in each of these markets and this progress will allow the Company to replace much of the Middle-Eastern monitor revenues with higher quality probe revenues. Feedback from our French distributor following a major tender win in Paris late in 2011 has been positive and they increased their monthly standing order for probes during the period.

Products

We have begun to accelerate a number of research and development projects to ensure the Company's products maintain their technological and competitive advantages in the next phase of our growth and to expand the clinical applications of Doppler ultrasound blood flow measurement.

Prospects

Deltex Medical made strong progress in the first half of the year and is entering a phase in its development with clear potential for accelerated growth in particular in the UK where growth is already strong. The Company is working to create similar opportunities in a number of other major healthcare markets.

We are building a solid base from which to create substantial shareholder value. The robust evidence base of both the clinical and cost effectiveness of our products means that we are very well positioned to create and exploit opportunities for accelerated growth as health systems focus increasingly on improving outcomes and reducing costs.

Nigel Keen

Chairman

14 September 2011

Consolidated Statement of Comprehensive Income

for the six month period ended 30 June 2011

		Unaudited	Unaudited	Audited
		Half year to	Half year to	Full year to
		30 June	30 June	31 December
		2011	2010	2010
		£'000	£'000	£'000
Revenue		3,002	2,934	6,279
Cost of sales		(755)	(720)	(1,637)
		-----------	-----------	-----------
Gross profit		2,247	2,214	4,642
Administrative expenses		(932)	(939)	(2,346)
Sales and distribution costs		(1,843)	(1,697)	(3,367)
Research and development costs		(168)	(175)	(282)
		-----------	-----------	-----------
		(2,943)	(2,811)	(5,995)
		-----------	-----------	-----------
Operating loss		(696)	(597)	(1,353)
Analysed as:
Operating loss before exceptional items		(696)	(597)	(1,374)
Exceptional items		-	-	21
		-----------	-----------	-----------
Operating loss		(696)	(597)	(1,353)
Finance income		1	1	1
Finance costs		(60)	(67)	(161)
		-----------	-----------	-----------
Loss before taxation		(755)	(663)	(1,513)
Tax on loss		25	25	45
		-----------	-----------	-----------
Loss for the financial period		(730)	(638)	(1,468)
Exchange differences taken to reserves		30	(36)	(6)
		-----------	-----------	-----------
Other comprehensive loss for the period, net of tax		30	(36)	(6)
		-----------	-----------	-----------
Total comprehensive loss for the period		(700)	(674)	(1,474)
		=========	=========	=========
Loss per share - basic and diluted		(0.5p)	(0.5p)	(1.1p)
		=========	=========	=========

Consolidated Statement of Comprehensive Income

for the six month period ended 30 June 2011

Alternative performance measures (note 2) 

		Unaudited	Unaudited	Audited
		Half year to	Half year to	Full year to
		30 June	30 June	31 December
		2011	2010	2010
		£'000	£'000	£'000
Adjusted operating loss
Operating loss including non-cash items		(696)	(597)	(1,353)
Share based payments		212	224	522
Equity Settled Costs		81	52	116
Net non-cash clinical trial charges/(credits)		(373)	(214)	70
Depreciation and amortisation		76	63	154
Net increase in provision, including receivables		28	(33)	136
Sundry non-cash charges/(credits)		2	18	55
		-----------	-----------	-----------
Adjusted operating loss before non-cash items		(670)	(487)	(300)
		=========	=========	=========

These supplementary disclosures do not form part of the Consolidated Statement of Comprehensive Income           

Consolidated Balance Sheet

at 30 June 2011

		Unaudited	Unaudited	Audited
		30 June	30 June	31 December
		2011	2010	2010
		£'000	£'000	£'000
Assets
Non - current assets
Property, plant and equipment		278	176	239
Intangible assets		523	269	437
Trade and other receivables		326	327	328
		-----------	-----------	-----------
Total non-current assets		1,127	772	1,004
Current assets
Inventories		836	800	573
Trade and other receivables		2,102	2,297	1,996
Current income tax recoverable		75	75	95
Cash and cash equivalents		1,214	573	699
		-----------	-----------	-----------
Total current assets		4,227	3,745	3,363
		-----------	-----------	-----------
Total assets		5,354	4,517	4,367
		-----------	-----------	-----------
Liabilities
Current liabilities
Borrowings		(542)	(519)	(689)
Trade and other payables		(1,598)	(1,281)	(1,226)
		-----------	-----------	-----------
Total current liabilities		(2,140)	(1,800)	(1,915)
Non current liabilities
Borrowings		(1,335)	(1,342)	(1,335)
Provisions for other liabilities and charges		(136)	(39)	(108)
		-----------	-----------	-----------
Total non-current liabilities		(1,471)	(1,381)	(1,443)
		-----------	-----------	-----------
Total liabilities		(3,611)	(3,181)	(3,358)
		-----------	-----------	-----------
Net assets		1,743	1,336	1,009
		-----------	-----------	-----------
Equity
Share capital		1,380	1,303	1,320
Share premium		21,368	20,052	20,116
Capital redemption reserve		17,476	17,476	17,476
Other reserves		3,012	2,498	2,890
Translation reserve		35	(25)	5
Retained deficit		(41,528)	(39,968)	(40,798)
		-----------	-----------	-----------
Total equity		1,743	1,336	1,009
		-----------	-----------	-----------

Consolidated Statement of Changes in Equity

for the six month period ended 30 June 2011

 

Group	Share capital	Share premium	Capital redemption	Other Reserve	Translation reserve	Retained deficit	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 July 2010	1,303	20,052	17,476	2,498	(25)	(39,968)	1,336
	----------	----------	----------	----------	----------	----------	----------
Comprehensive income
Loss for the period	-	-	-	-	-	(830)	(830)
Other comprehensive income
Shares issued during the period	17	-	-	-	-	-	17
Premium on shares issued during the period	-	64	-	-	-	-	64
Issue expenses	-	-	-	-	-	-	-
Credit in respect of service cost settled by award of options	-	-	-	392	-	-	392
Exchange movements taken to reserves	-	-	-	-	30	-	30
	----------	----------	----------	----------	----------	----------	----------
Total comprehensive income for the six month period	17	64	-	392	30	(830)	(327)
	----------	----------	----------	----------	----------	----------	----------
Balance at 31 December 2010	1,320	20,116	17,476	2,890	5	(40,798)	1,009
	----------	----------	----------	----------	----------	----------	----------
Comprehensive income
Loss for the period	-	-	-	-	-	(730)	(730)
Other comprehensive income
Shares issued during the period	60	-	-	-	-	-	60
Premium on shares issued during the period	-	1,305	-	-	-	-	1,305
Issue expenses	-	(53)	-	-	-	-	(53)
Credit in respect of service cost settled by award of options	-	-	-	122	-	-	122
Exchange movements taken to reserves	-	-	-	-	30	-	30
	----------	----------	----------	----------	----------	----------	----------
Total comprehensive income for the six month period	60	1,252	-	122	30	(730)	734
	----------	----------	----------	----------	----------	----------	----------
Balance at 30 June 2011	1,380	21,368	17,476	3,012	35	(41,528)	1,743
	=========	=========	=========	=========	=========	=========	=========

Consolidated Statement of Cash Flows

for the year six month period ended 30 June 2011

		Unaudited	Unaudited	Audited
		Half year to	Half year to	Full year to
		30 June 2011	30 June 2010	31 December 2010
	Note	£'000	£'000	£'000
		-----------	-----------	-----------
Cash flows from operating activities
Net cash used in operations	6	(443)	(1,047)	(791)
Interest paid		(54)	(56)	(97)
Income taxes received		45	98	98
		-----------	-----------	-----------
Net cash used in operations		(452)	(1,005)	(790)
		-----------	-----------	-----------
Analysed as:
Net cash used in operating activities before exceptional items		(452)	(915)	(679)
Exceptional items		-	(90)	(111)
		-----------	-----------	-----------
Net cash used in operations		(452)	(1,005)	(790)
		-----------	-----------	-----------
Cash flows from investing activities
Purchase of property, plant and equipment		(97)	(6)	(143)
Capitalised development expenditure		(106)	(25)	(213)
Interest received		1	1	1
		-----------	-----------	-----------
Net cash used in investing activities		(202)	(30)	(355)
		-----------	-----------	-----------
Cash flows from financing activities
Issue of ordinary share capital		1,365	112	193
Expenses in connection with share issue		(53)	-	-
Proceeds from (decrease)/increase in borrowings		(145)	7	187
Effect of exchange rate fluctuations on borrowings		(2)	17	8
Expenses in connection with new borrowing		-	-	(16)
Repayment of obligations under finance leases		(4)	(4)	(7)
		-----------	-----------	-----------
Net cash generated from financing activities		1,161	132	365
		-----------	-----------	-----------
Net increase/(decrease) in cash and cash equivalents		507	(903)	(780)
Cash and cash equivalents at beginning of the year		699	1,480	1,480
Exchange gain/(losses) on cash and cash equivalents		8	(4)	(1)
		-----------	-----------	-----------
Cash and cash equivalents at end of the period		1,214	573	699
		-----------	-----------	-----------

1   Nature of the financial information

Deltex Medical Group plc (the Company) is a company incorporated in England and Wales. The condensed Group half-year financial statements consolidate those of the Company and its subsidiaries (together referred to as the Group). They have been prepared in accordance with International Financial Reporting Standard (IFRS) IAS 34 Interim Financial Reporting. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2010. New standards, amendments to standards or interpretations which were effective in the financial year beginning 1 January 2011 have not had a material effect on the Group's financial statements.

The half-year results are unaudited. The financial information in this interim report does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The summary of results for the year ended 31 December 2010 is an extract from the published consolidated financial statements of the Group for that period which have been reported on by the Group's auditors and delivered to the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statement for 2010 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

The half year financial information has been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 December 2010.

2   Alternative financial measures

The Group uses a number of alternative (non-Generally Accepted Accounting Practice (non-GAAP)) financial measures, which are not defined by IFRS. The Directors use these measures in order to assess the underlying operational performance of the Group and as such these measures are important and should be considered alongside the IFRS measures. The following non-GAAP measures are referred to in this Preliminary Results Statement.

a)  Adjusted operating loss beneath the Consolidated Statement of Comprehensive Income

This is defined as operating loss before non - cash charges to the Consolidated Statement of Comprehensive Income.  A reconciliation of the operating loss to the adjusted operating loss is shown beneath the Consolidated Statement of Comprehensive Income. 

b) Adjusted operating cashflow before movement in working capital

This is defined as the operating cashflow before movement in working capital which relates to cash transactions only. Therefore any non-cash working capital elements have been removed. A reconciliation of the adjusted operating cashflow before movement in working capital to the operating cashflow before movement in working capital is shown beneath the Notes to the Cashflow Statement (note 4).

3   Revenue

Sales	2011	2011	2011	2011	2011	2011	2010	2010	2010	2010	2010	2010
	Probes	Monitors	Probes	Monitors	Other	Total	Probes	Monitors	Probes	Monitors	Other	Total
	units	units	£'000	£'000	£'000	£'000	units	units	£'000	£'000	£'000	£'000
Direct markets
UK	16,815	35	1,362	513	91	1,966	14,770	23	1,200	237	87	1,524
USA	3,380	-	365	-	2	367	3,350	-	394	-	2	396
Spain	185	1	19	20	-	39	760	5	91	57	-	148
Distributor markets
Europe	5,155	15	303	165	3	470	5,605	19	316	166	4	486
Rest of world	2,130	13	103	51	5	160	2,325	66	119	256	5	380
	27,665	64	2,152	749	101	3,002	26,810	113	2,120	716	98	2,934

4   Results by geography

Segment information is presented in the consolidated interim financial statements in respect of the Group's geographical segments, which are the primary basis of segment reporting. The geographical segment reporting reflects the Group's management structure.

Segment results include items directly attributable to a segment as well as those, which can be allocated on a reasonable basis.

The segment results for the six months ended 30 June 2011 are as follows:

		UK £'000	USA £'000	International £'000	Spain £'000	Unallocated £'000	Total £'000
Total segment revenue Inter segment revenue		2,045 (79)	367 -	630 -	39 -	- -	3,081 (79)
Group revenue		1,966	367	630	39	-	3,002
Segment/operating result		572	(272)	89	(72)	(1,013)	(696)
Finance income							1
Finance costs							(60)
Loss before taxation							(755)
Tax on loss							25
Loss for the financial period							(730)

The segment results for the six months ended 30 June 2010 are as follows:

		UK £'000	USA £'000	International £'000	Spain £'000	Unallocated £'000	Total £'000
Total segment revenue Inter segment revenue		1,695 (171)	396 -	866 -	148 -	- -	3,105 (171)
Group revenue		1,524	396	866	148	-	2,934
Segment/operating result		433	(258)	254	(8)	(1,018)	(597)
Finance income							1
Finance costs							(67)
Loss before taxation							(663)
Tax on loss							25
Loss for the financial period							(638)

The segment results for the year ended 31 December 2010 are as follows:

		UK £'000	USA £'000	International £'000	Spain £'000	Unallocated £'000	Total £'000
Total segment revenue Inter segment revenue		3,562 (272)	864 -	1,937 -	188 -	- -	6,551 (272)
Group revenue		3,290	864	1,937	188	-	6,279
Segment/operating result		996	(509)	568	(48)	(2,360)	(1,353)
Finance income							1
Finance costs							(161)
Loss before taxation							(1,513)
Tax on loss							45
Loss for the financial period							(1,468)

Unallocated costs include those costs that cannot be split between segments, including expenditure on research and development and clinical trials.

Inter-segment transfers or transactions are entered into under the normal commercial terms and conditions that would also be available to unrelated third parties.

5   Dividends

The Directors do not recommend payment of a dividend (2010: nil).

6   Notes to the Consolidated Statement of Cash Flows

		Unaudited	Unaudited	Audited
		Half year to	Half year to	Full year to
		30 June 2011	30 June 2010	31 December 2010
		£'000	£'000	£'000
		-----------	-----------	-----------
Operating loss		(696)	(597)	(1,353)
Adjustments for:
Depreciation of property, plant and equipment		56	44	114
Amortisation of intangible assets		20	19	39
Exchange loss/(gain) on fixed assets		2	(12)	(5)
Loss on disposal of fixed assets		-	30	27
Share based payments		122	99	491
		-----------	-----------	-----------
Operating cashflows before movement in working capital		(496)	(417)	(687)
Increase in inventories		(81)	(277)	(59)
Increase in trade and other receivables		(84)	(293)	(6)
Increase/(decrease)/ in trade and other payables		190	(21)	(60)
Increase/(decrease) in provisions		28	(39)	21
		-----------	-----------	-----------
Net cash used in operations		(443)	(1,047)	(791)
		-----------	-----------	-----------

Operating cashflows before movement in working capital

Alternative performance measures (note 2) 

		Unaudited	Unaudited	Audited
		Half year to	Half year to	Full year to
		30 June 2011	30 June 2010	31 December 2010
		£'000	£'000	£'000
		-----------	-----------	-----------
Adjusted operating cashflow before movement in working capital
Operating cashflow before movement in working capital		(496)	(417)	(687)
Equity settled costs		171	117	147
Net increase in provisions, including receivables		28	(33)	136
Net non-cash clinical trial charges/(credits)		(373)	(214)	70
Sundry non-cash charges		-	-	34
		-----------	-----------	-----------
Adjusted operating cashflow before movement in working capital		(670)	(547)	(790)
		-----------	-----------	-----------

These supplementary disclosures do not form part of the note to the Consolidated Statement of Cash Flows

7   Loss per share

Basic loss per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares issued during the year. The Group had no dilutive potential ordinary shares in either year, which would serve to increase the loss per ordinary share. Therefore, there is no difference between the loss per ordinary share and the diluted loss per ordinary share.

The loss per share calculation for six months to 30 June 2011 is based on the loss of £730,000 and weighted average number of shares in issue of 134,777,054. The loss per share calculation for the six months to 30 June 2010 is based on the loss for the period of £638,000 and weighted number of shares in issue of 128,463,934.

8   Distribution of the announcement

Copies of this announcement are sent to shareholders on request and will be available for collection free of charge from the Company's registered office at Terminus Road, Chichester, West Sussex PO19 8TX. This announcement is available from the Company's website free of charge at www.deltexmedical.com.

 

 

END

 

 

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