Final Results
Deltex Medical Group PLC
21 March 2006
Deltex Medical Group plc
Preliminary results for the year ended 31 December 2005
21 March 2005 - Deltex Medical Group plc ('Deltex Medical' or 'Company') today
announces its preliminary results for the year ended 31 December 2005.
Financial Highlights
• Turnover increased by 22% to £3,042,000
• Operating loss reduced by £1,274,000 to £1,513,000
• Cash burn rate reduced to lowest in Company's history
• Gross margin improvement continues
• £500,000 additional cash raised through the issue of new equity finance in
2005
• Sufficient cash to see Company to profitability
Operating Highlights
• Probe sales growth accounts for the majority of turnover increase
• Continued strong sales growth (29%) in UK despite issues facing NHS
• New clinical trial data further reinforces Company's value proposition
• Company positioned to exploit emerging trends in global healthcare
delivery
• Evidence of growing interest in minimally invasive haemodynamic monitoring
in USA
• Company configured to reach profitability even in difficult UK market
conditions
Nigel Keen, Chairman of Deltex Medical, said:
'The continued growth in supportive clinical trial data and the experience of
hospitals throughout the world using the CardioQ continues to reinforce the
clinical and economic benefits of haemodynamic optimisation using our products.
The pressures bearing down on healthcare providers, both for better quality care
and reductions in cost, mean that technologies such as the CardioQ that can
deliver both, will win out over those that cannot.
'CardioQ sales in the first quarter of 2006 have been encouraging and we remain
confident in our ability to deliver increasing and sustainable value for our
shareholders by focusing on delivering better, more cost effective care for
patients undergoing major surgery or in intensive care.'
For further information, please contact:-
Deltex Medical Group plc
01243 774 837
Nigel Keen, Chairman
Andy Hill, Chief Executive
Ewan Phillips, Finance Director
Financial Dynamics
David Yates/John Gilbert
0207 831 3113
Notes for Editors
Deltex Medical manufactures and markets the CardioQ monitor, which uses
disposable ultra-sound probes inserted into the oesophagus to determine the
amount of blood being pumped around the body - 'circulating blood volume'.
Reduced circulating blood volume is known as hypovolaemia, which leads to
insufficient oxygen being delivered to the organs. This causes medical
complications including peripheral and major organ failure which can lead to
death. Hypovolaemia, which is akin to severe dehydration, affects virtually
every patient having surgery because of the combined effects of pre-operative
starvation, the impact of the anaesthetic agents and trauma from the surgery
itself. Using fluids and drugs, guided by the CardioQ, to optimise the amount
of circulating blood significantly reduces post-operative complications allowing
patients to make a faster, more complete recovery and return home earlier.
The CardioQ incorporates the Company's proprietary software and a small
diameter, easy-to-use, minimally invasive, disposable oesophageal probe that is
used for transmitting and receiving an ultra-sound signal. By using this
technology, the CardioQ provides clinicians with the ability to haemodynamically
optimise critically ill patients and those undergoing routine moderate and major
risk surgery through the controlled administration of fluid and drugs.
Haemodynamic optimisation has been scientifically proven to improve the speed
and quality of patient recovery and reduce hospital stay.
There are already over 1,250 CardioQs currently in use in hospitals worldwide
and distribution arrangements are in place in over 30 countries. In addition,
there are currently more than 90 clinical publications, including eight
randomised, controlled clinical trials, on the use of the CardioQ which have
repeatedly:-
• validated the results of the Monitor against known standards for measuring
cardiac output, demonstrating that the technology works
• proved that the CardioQ works in a wide range of surgical procedures
• demonstrated that the Company's technology provides significant health and
economic benefits by helping to reduce post-operative complications and
length of hospital stays by an average of 30 to 40 per cent for a wide range
of patients.
Chairman's Statement
Group Summary
Deltex Medical's CardioQ(TM) monitor uses disposable ultrasound probes inserted
into the oesophagus through the mouth or nose to determine the amount of blood
being pumped around the body - 'circulating blood volume'. Reduced circulating
blood volume is known as hypovolaemia and occurs as a consequence of blood loss
or dehydration. If blood volume is reduced significantly, the body cannot
deliver sufficient oxygen to the vital organs. This causes medical
complications including peripheral and major organ failure, which can lead to
death. Hypovolaemia affects almost all patients undergoing surgery because of
the combined effects of pre-operative starvation, the impact of anaesthetic
gases and the trauma of surgery itself. Guided by the CardioQ and using fluids
and drugs to optimise the amount of circulating blood and the heart's
performance, doctors can significantly reduce post-operative complications
allowing patients to make a fuller, more complete recovery and return home
earlier. The opportunities the CardioQ offers for improved quality and
efficiency of care through helping patients get better, quicker can be
summarised: the CardioQ saves lives and saves money.
It is Deltex Medical's strategy to make the use of the CardioQ a standard of
care in operating theatres for all patients undergoing moderate and high risk
surgery as well as for its use to be the treatment of choice in Intensive Care
Units for the real-time monitoring of severely ill patients. Adopting the
CardioQ as a standard of care allows hospitals to both improve the quality of
care they give and the efficiency with which they give it. These proven
efficiency benefits allow the hospital to choose to either increase capacity,
reduce costs, or redeploy existing resources to meet local priorities.
Trading Results
Sales 2005 2005 2005 2005
Probes Monitors Probes Monitors
units units £'000 £'000
Direct markets
UK 21,475 37 1,559 251
USA 4,515 12 303 50
Distributor markets
Europe 6,375 50 289 328
Far East & Latin 3,685 14 128 34
America
_____ _____ _____ _____
36,050 113 2,279 663
_____ _____ _____ _____
Trading Results (continued)
Sales 2005 2005 2004 2004
Other Total Probes Monitors
£'000 £'000 units units
Direct markets
UK 88 1,898 18,082 39
USA 5 358 4,520 3
Distributor markets
Europe 6 623 8,627 56
Far East & Latin 1 163 681 11
America
_____ _____ _____ _____
100 3,042 31,910 109
_____ _____ _____ _____
Trading results (continued)
Sales 2004 2004 2004 2004
Probes Monitors Other Total
£'000 £'000 £'000 £'000
Direct markets
UK 1,254 169 53 1,476
USA 273 10 1 284
Distributor markets
Europe 390 277 2 669
Far East & Latin 32 32 1 65
America
_____ _____ _____ _____
1,949 488 57 2,494
_____ _____ _____ _____
Group sales increased by 22% to £3,042,000 in year ended 31 December 2005 (2004:
£2,494,000). In our largest and most developed market, the UK, Deltex Medical
delivered sales growth of 29% compared to 2004 with over 80% of this growth
coming from the recurring revenue streams of probe sales and monitor
maintenance. Across the Group, 78% of group revenues and 68% of the sales
growth came from probe sales and monitor maintenance.
For the first time in the Company's history, probe sales in the UK exceeded
£100,000 in every single month of the year. Furthermore, UK probe sales in each
and every month of 2005 were ahead of the level achieved in the corresponding
month in 2004. This trend has continued into the first quarter of 2006, despite
the well publicised financial difficulties affecting much of the UK National
Health Service (NHS).
In the USA, our other directly supported market, we achieved sales growth of 26%
with increases in all our revenue streams. £40,000 of the £74,000 increase in
sales came from monitor sales, a clear sign that the Company's value proposition
is beginning to resonate in the US market.
The Company's reported sales to our distributors in Europe, the Far East and
Latin America continue to be heavily influenced by the timing of larger stocking
orders, with many of our distributors only placing one or two significant orders
a year. This, combined with planned de-stocking programmes by our distribution
partners in France and Italy, resulted in probe sales to our distributors in
2005 being £5,000 lower than in 2004. However, increasing numbers of our
distributors, are reporting increased demand from hospitals for probes and their
sales to end-users are growing. The enthusiastic uptake of our products in Peru
and Korea accounts for much of the strong growth in sales in the Far East and
Latin America. In addition, distributors in countries such as Brazil, China and
Germany, which are at earlier stages of market development, are reporting
positive developments in the early stages of market penetration.
Monitor sales generated £663,000 for the Group, an increase of £175,000 over the
prior year (2004: £488,000). Included in UK monitor sales are three SupraQs
sold to the Medway Maritime Hospital in Kent (the 'Medway'). The Medway is one
of our largest CardioQ accounts and, as part of the terms of trade agreed with
the hospital, the doctors there will be undertaking a series of trials aimed at
demonstrating the clinical efficacy of the SupraQ.
In the UK Deltex Medical sold 34 CardioQ monitors in 2005, five less than in
2004, although increases in average selling prices meant that CardioQ sales in
2005 contributed £22,000 more revenue than in 2004. The fall in volume is due
to the mounting financial difficulties facing many NHS hospitals over the last
year or two and occurred despite a significant increase in the pipeline for
CardioQs in the UK as clinical demand has continued to grow. In an environment
of severely restricted equipment budgets in NHS hospitals, the CardioQ has to
compete to secure investment more than at any stage of its history. In this
environment, the CardioQ has the significant advantage of both compelling
clinical trial evidence and growing real world experience which demonstrate that
its implementation allows hospitals to reduce their total expenditure by
material amounts.
Early in 2006 Deltex Medical acquired the rights to the TECO oesophageal Doppler
monitor, a device purporting to provide the same functionality as the CardioQ.
We do not plan to continue to market this product and have already embarked on a
programme of converting existing TECO users to the superior CardioQ.
European monitor sales include 20 CardioQs purchased for use in a major
multi-centre randomised controlled trial in France. This trial, which is
expected to take two to three years to complete, is seeking to demonstrate a
reduction in post-operative mortality in 400 patients undergoing surgery for
repair of fractured neck of femur (broken hip).
As it became clear in late 2004 and early 2005 that the NHS financial situation
might delay conversion of large amounts of the Company's CardioQ pipeline, the
Company's key focus throughout 2005 became to reduce the rate of cash absorbed
by the business and, thereby, to accelerate the time at which the Company passes
the break-even point. In addition to pursuing marketing programmes aimed at
increasing both monitor sales and probe consumption, the Company acted to reduce
its expenditure. Key measures included reducing headcount by over 20%, cutting
back overheads, renegotiating terms with suppliers and improved working capital
management.
Cash available at 31 December 2005 was £606,000 including £219,000 drawn down
under the Company's working capital facility. Since the end of the year the
Company has raised a further £200,000 in equity after expenses.
The average monthly cash burn in 2005 was £99,000 compared to £165,000 per month
in 2004 and £226,000 in 2003. The progress made by the Company towards reaching
the break-even point is demonstrated by the fact that the average monthly cash
burn in the second half of 2005 was £64,000, less than half that of £134,000 in
the first six months of the year. The Company therefore entered 2006 with the
lowest rate of monthly cash burn in its history and the Directors are confident
that the Company has adequate cash resources available to see it through to
profitability. In the first quarter of 2006, the Company has continued to
absorb considerably less cash than in the corresponding months in previous
periods; this has been achieved despite a marked slow-down in collections from
the NHS in the UK as hospitals seek to avoid or minimise deficits.
Markets
UK
The UK is our most developed market and UK doctors lead the world in their
understanding and acceptance of the benefits of active haemodynamic management
in patients undergoing major surgery or those in critical care. There are now
very few NHS hospitals in the UK where there is not at least some degree of
active clinical advocacy for more frequent use of the CardioQ system and there
are many hospitals where the clinical support is both broad and deep; the
majority of anaesthetists now recognise that they ought to be monitoring and
haemodynamically optimising at least some of their moderate and major risk
surgical patients.
This wide-scale clinical advocacy, supported by a substantial body of clinical
evidence, is driving the continued steady growth in probe sales. However, we
estimate that current clinical desire to use our technology is several times
higher than actual usage rates and that the degree of clinical acceptance has
grown several times more quickly than actual probe sales in the last two years.
Although the NHS has long been recognised as being slow to finance the adoption
of innovative medical technologies, the problem has been exacerbated recently by
greater than normal financial restrictions. Many hospitals have run into
financial deficit or are battling hard to avoid doing so. As a consequence many
have scaled back dramatically already limited budgets both for purchasing
capital items such as CardioQ monitors and revenue items such as our probes.
To succeed in this environment, medical device companies have not only to
demonstrate that the case for investment in its products is sound but that such
an investment ought to be a high priority for each hospital. Deltex Medical is
ideally positioned to do this, and during 2005 has worked with a number of acute
hospital Trusts around the UK to undertake focused evaluations of the CardioQ in
operating theatres to see if they can reproduce the benefits demonstrated by the
real-world experience of the Medway Maritime Hospital NHS Trust, which is
already saving £1 million a year following its investment in the CardioQ. These
exercises are time-consuming and often complicated by the difficulty in
collating management information on a hospital wide basis, however all such
exercises completed to date have shown reduced post-operative complications and
reduced lengths of hospital stays and have therefore been consistent with all
the many randomised controlled clinical trials undertaken with the CardioQ.
Feedback on results from sites undertaking such evaluations has been universally
positive and has led to the submission of business cases for the purchase of our
equipment in Trusts where these audits have been completed.
The financial difficulties facing many NHS Trusts come at a time of far-reaching
and fundamental change in the provision of healthcare in the UK, driven by the
UK government's reform programme. Amongst other initiatives the government has
introduced a set of national tariffs for surgical procedures and has encouraged
private hospital providers to bid for contracts to treat large numbers of NHS
patients undergoing elective surgery. These contracts are forcing the private
providers to change their business models to focus on volume, price and quality.
The CardioQ offers these providers opportunities as higher risk procedures
such as hip and knee replacements start to be covered by the contracts.
Accordingly, during the year, the Company entered into discussions with a number
of the private provider groups and completed an encouraging initial evaluation
in a private hospital in the South of England. This evaluation, based on 20
patients undergoing various types of moderate and major surgery, concluded that
the hospital could reduce its standard patient journeys by one day per patient
through using the CardioQ and that there might be a further unquantified benefit
from reducing the frequency and severity of patients going off pathway due to
avoidable complications.
In June a group of eminent anaesthetists, surgeons and intensivists gathered in
London for the launch of a lobbying pamphlet 'Modernising Care for Patients
Undergoing Major Surgery'. This document, produced by the 'Improving Surgical
Outcomes Group' (ISOG) has at its heart the belief that haemodynamic
optimisation is the key to unlocking much of the resource required to implement
a number of fundamental improvements in surgical patient care in UK hospitals.
We are working with ISOG to support its efforts to promote the benefits of
haemodynamic optimisation to doctors, senior health service managers, the
Department of Health, politicians, patient groups and other stakeholders.
Late in 2004, during a meeting with hospital managers in Scotland to discuss
wide-scale implementation of the CardioQ, concerns were raised as to the status
of CardioQ with respect to the National Institute for Health and Clinical
Excellence's (NICE) Interventional Procedures Programme (IPP). The IPP seeks to
determine whether a medical technique or technology is safe and efficacious. A
technology either falls within the remit of the IPP process and is therefore
subject to stringent reporting requirements each time it is used until it is
deemed to be safe and efficacious, is recognised specifically to fall outside of
the remit (on the grounds that it is established clinical practice with little
uncertainty over safety or efficacy) or its status is unclear. A technology's
status under this programme can have far-reaching commercial consequences for
the manufacturer. Hospitals may choose not to purchase the technology if
determination of its status has not been made and may continue to defer a
purchase decision until it has been declared either outside the IPP remit or
proven to be safe and efficacious within it.
After seeking clarification of the CardioQ's status with regard to the NICE IPP
from officials at the Scottish Executive, the Company itself sought further
clarification from NICE in June 2005.
NICE's decision dated 12 January 2006 was published on its website on 25 January
2006 and states:
'Oesophageal doppler monitoring involves the measurement of blood flow velocity
in the descending thoracic aorta using a flexible ultrasound probe. NICE has
recently become aware of this procedure. NICE has a commitment to consider
whether procedures notified to the Institute fall within the remit of the
interventional procedures programme. The Institute will go on to develop
guidance on the safety and efficacy of all procedures that fall within the
programme's remit. After careful consideration, NICE does not believe that this
procedure falls within its remit. This is because oesophageal doppler monitoring
is considered standard clinical practice with risks and benefits that are
sufficiently well-known. For a more detailed description of the Interventional
Procedures Programme, refer to the interventional procedures process manual,
which is available from the NICE website at http://www.nice.org.uk/
ipprogrammemanual .'
The Company estimates that at least 95% of oesophageal Doppler monitoring in the
NHS is carried out using the CardioQ. The decision from Nice means that NHS
hospitals wishing to purchase the CardioQ can do so without needing further
approval.
Europe
The key goals of our sales activity in Europe in 2005 were to continue to tailor
our core message to the specific circumstances of each of the markets in which
we work, to provide our distributors with the tools required to drive probe
usage by the existing installed monitor base, and to work with our French and
Italian distributors to reduce stocks to the point where we could move them to a
monthly ordering pattern in 2006.
Our primary marketing goal has been to establish a relationship with the opinion
leading surgeons and anaesthetists who are supporting various initiatives to
improve surgical outcomes across Europe. We believe that use of the CardioQ has
a very significant role to play in these initiatives and it is our goal that
haemodynamic optimisation should be routine for all patients undergoing surgery
under these protocols.
In May 2005 we also announced that Radboud University Nijmegen Medical Centre in
the Netherlands had become the first major university teaching hospital in
Europe to adopt the CardioQ as a standard of care. Since this announcement,
doctors at the hospital have continued to use their CardioQ and CardioQP(TM)
monitors at the maximum level authorised by the hospital since their
installation. Doctors championing the use of our products are working with
senior hospital managers and our distributor to obtain additional funding to
expand use into operating theatres and the newly opened intensive care unit.
United States of America
For the past three years we have focused our efforts in the USA on supporting a
small number of internationally recognised key opinion leaders. These doctors
are strong advocates of the use of the CardioQ in a variety of clinical settings
and they are responsible for much of the physician-to-physician training that
happens in the USA. In addition, we are pursuing a number of projects that will
help us develop a scalable business that we can implement with a third-party at
an appropriate point in the future.
Our two biggest users in the US have responded to our sales efforts and recently
begun to migrate usage 'upstream' into the operating room (OR). Even a
relatively modest level of adoption in the OR in either one of these hospitals
would have a significant positive impact on our sales in the USA. Overall,
probe volumes were stable in the USA.
Sales of monitors (12 units in 2005) were the highest recorded in the USA since
we launched the CardioQ in 1999. They included, in September 2005, the sale of
four CardioQ monitors to the William Beaumont Army Medical Center in El Paso,
Texas. The monitors are intended for use in medical and surgical patients in
the intensive care unit and those patients undergoing elective or emergency
surgery in the operating room. Physicians at the hospital are also working to
make the CardioQ an integral part of patient care in a wider range of clinical
applications, including trauma surgery and neurosurgery.
The William Beaumont Army Medical Center treats active service personnel and
their dependants and also provides field-based hospital facilities in areas of
conflict around the world as required by the US military.
Far East and Latin America
Each of our distributors in the Far East and Latin America has trained personnel
that can support the CardioQ in the field and the Company provides high-quality
technical support at a low cost via telephone and over the internet.
Sales to these markets remain occasional and of varying value, however in 2005
sales were significantly ahead of 2004 (£163,000 against £65,000), mainly due to
a larger order from our Peruvian distributor. We understand this order to have
been underpinned by growing clinical demand and expect to see a similar large
order in 2006, Peru is now established as our fourth largest distributed market,
behind France and Korea and on a par with Italy.
While our field-based investment into the Far East and Latin American
territories has been reduced over the last two years, the quality of the
business generated has improved considerably in terms of value and payment
profiles.
We remain cautious in our approach and do not foresee any substantial change in
our strategy in these markets in the short-term. We are however, able to report
continued signs of growth and the emergence of future opportunities for
investment as our distributors complete the first phase of gaining a foothold
for our products in their respective markets.
Research and Development
The primary goal for our research and development (R&D) efforts is the
development of a range of monitoring solutions for patients who are conscious.
This will enable doctors to provide the benefits of haemodynamic optimisation to
patients who are undergoing surgery without the use of a general anaesthetic,
for example in many hip replacement procedures, or who are conscious in the
critical care setting. In both of these examples, vulnerable patients miss out
on the rapid and effective intervention that unconscious patients benefit from
through use of the CardioQ.
While we do have a probe variant designed for use in un-sedated patients, there
are still a small but important number of patients who could benefit from either
an improved version of this probe or a wholly non-invasive monitor such as the
SupraQ(TM).
During 2005 we were able to conclude some important developmental tasks related
to understanding the effects of patient anatomy on signal acquisition. Going
forward into 2006, we expect to continue to sell a limited number of one of
these variants to further our knowledge and help us refine the technology. As
well as providing conscious patients with essential monitoring, the Medway
hospital in Gillingham is carrying out some of this work for us using the three
SupraQ devices they purchased from us at the end of 2005.
We see continued development of solutions for the conscious patient as a
critical part of our R&D efforts as the potential clinical applications for the
SupraQ go far beyond those conscious patients having surgery or in critical
care.
Clinical Trial Developments
During 2005 the British Journal of Anaesthesia published the results of a
government funded, randomised controlled clinical trial into the use of the
CardioQ in patients undergoing major bowel surgery.
The trial, undertaken by consultant anaesthetist Dr Howard Wakeling in
conjunction with his surgical colleagues at Worthing Hospital, demonstrated that
using the CardioQ to optimise circulating blood volume led to a reduction in
hospital stay of one and a half days when compared to fluid management based
around pressure measurements alone and without the benefit of the information
provided by the CardioQ.
In May we announced the presentation of initial results from a double-blinded
prospective randomised controlled clinical trial that used the CardioQ in
patients undergoing major bowel surgery. The trial was undertaken by surgeons
and anaesthetists at the Freeman Hospital in Newcastle-upon-Tyne and the first
results to come from the study were presented at The American Society of Colon
and Rectal Surgeons meeting in Philadelphia.
The statistically significant results of the study included a reduction in major
post surgical complications in the CardioQ group with only 1% of patients
suffering such a complication compared to 13.7% in the control group. The
average (median) hospital stay was seven days for CardioQ patients compared to
nine days in the control group. The trial concluded that fluid optimisation
using the CardioQ leads to shorter hospital stays and a decrease in major
morbidity with consequent major implications for the management of patients in
fast-track regimens.
Doctors from the Royal Free hospital were awarded two first prizes for work they
had undertaken using the SupraQ device to manage the complicated haemodynamics
of patients undergoing elective caesarean section. In this trial the monitor
was used to determine the relative effectiveness of two drugs in maintaining
blood pressure during the procedure.
The results were presented and awarded first prize at the Society of Obstetric
Anesthesia and Perinatology meeting held in Palm Desert, California, USA and at
the Obstetric Anaesthetists' Association meeting held in London in May 2005.
Looking forward, Dr Bernard Cholley, an anaesthetist and intensive care
specialist based in Paris, will lead the first multi-centre, randomised,
controlled trial investigating the impact of the use of CardioQ on death rates
following emergency hip fracture repair. This trial, partially funded by the
French government, will involve more than 15 hospitals across France and will
enrol its first patient in 2006. It is likely to take three years to complete.
The expectation is that the trial will confirm the anecdotal evidence that
haemodynamic optimisation in this very high-risk surgery saves lives.
Prospects
The continued growth in supportive clinical trial data and the experience of
hospitals throughout the world using the CardioQ continues to reinforce the
clinical and economic benefits of haemodynamic optimisation using our products.
The pressures bearing down on healthcare providers both for better quality care
and reductions in cost mean that technologies such as the CardioQ that can
deliver both will win out over those that cannot.
CardioQ sales in the first quarter of 2006 have been encouraging and we remain
confident in our ability to deliver increasing and sustainable value for our
shareholders by focusing on delivering better, more cost effective care for
patients undergoing major surgery or in intensive care.
Nigel Keen
Chairman
21 March 2005
Consolidated profit and loss account for the year ended 31 December 2005
2005 2004
Note £'000 £'000
Unaudited Audited
Turnover 2 3,042 2,494
Cost of sales (1,076) (907)
---- ----
Gross profit 1,966 1,587
---- ----
Net operating expenses (3,479) (4,374)
---- ----
Operating loss (1,513) (2,787)
Net interest 3 14
---- ----
Loss on ordinary activities before taxation (1,510) (2,773)
Tax on loss on ordinary activities 22 19
---- ----
Loss for the financial year (1,488) (2,754)
========= =========
Loss per share - basic and diluted (2.1p) (4.3p)
========= =========
The above results all relate to continuing operations. The loss on ordinary
activities before taxation and the loss for the financial year have been
computed on the historical cost basis.
Statement of Group total recognised gains and losses for the year ended 31
December 2005
2005 2004
£'000 £'000
Unaudited Audited
Loss for the financial year (1,488) (2,754)
Currency translation differences in foreign currency net 9 (5)
investment
---- ----
(1,479) (2,759)
========= =========
Consolidated balance sheet
At 31 December 2005
2005 2004
£'000 £'000
Unaudited Audited
Fixed assets
Tangible assets 85 136
---- ----
Current assets
Stocks 443 758
Debtors:
amounts falling due within one year 967 783
amounts falling due after more than one year 99 72
Cash at bank and in hand 606 1,207
---- ----
2,115 2,820
Creditors:
amounts falling due within one year (1,089) (925)
---- ----
Net current assets 1,026 1,895
---- ----
Total assets less current liabilities 1,111 2,031
Creditors:
amounts falling due after more than one year (1) (7)
Provision for liabilities and charges (34) (30)
---- ----
Net assets 1,076 1,994
========= =========
Capital and reserves
Called up share capital 726 695
Share premium account 12,712 12,182
Capital redemption reserve 17,476 17,476
Profit and loss account (29,838) (28,359)
---- ----
Equity shareholders' funds 1,076 1,994
========= =========
Consolidated cash flow statement
for the year ended 31 December 2005
2005 2004
Note £'000 £'000
Unaudited Audited
Net cash outflow from operating activities 3 (1,263) (1,988)
---- ----
Returns on investments and servicing of finance
Interest received 9 15
Finance lease interest (3) (1)
Finance interest (3)
---- ----
Net cash inflow from returns on investments and 3 14
servicing of finance
---- ----
Taxation - 102
---- ----
Capital expenditure
Purchase of tangible fixed assets (17) (9)
---- ----
Net cash outflow from capital expenditure (17) (9)
---- ----
Net cash outflow before financing (1,277) (1,881)
---- ----
Financing
New finance leases - 15
Other borrowings 114 105
Capital element of finance lease rentals (7) (2)
Issue of ordinary share capital 571 1,964
Expenses of share issue (10) (85)
---- ----
Net cash inflow from financing 668 1,997
---- ----
(Decrease)/increase in net cash in the year (609) 116
========= =========
Notes to the preliminary results for the year ended 31 December 2005
1. Nature of the financial information
The financial statements for Deltex Medical Group plc have yet to be approved
for the year ended 31 December 2005. The financial information set out in this
announcement does not constitute the Company's statutory accounts for the year
ended 31 December 2005 or 31 December 2004. The financial information for the
year ended 31 December 2004 is derived from the statutory accounts for that year
which have been delivered to the Registrar of Companies. The auditors reported
on those accounts; their report was unqualified and did not contain a statement
under either Section 237 (2) or Section 237 (3) of the Companies Act 1985. The
statutory accounts for the year ended 31 December 2005 will be finalised on the
basis of the financial information presented by the directors in this
preliminary announcement and will be delivered to the Registrar of Companies
following the Company's Annual General meeting.
The preliminary results have been prepared in accordance with applicable
accounting standards. The particular accounting policies adopted are the same
as those adopted in the financial statements for the year ended 31 December
2005.
2. Turnover
The Group's activities consist solely of the manufacture, maintenance and
marketing of medical devices. By origin, all sales are United Kingdom sales
except for £358,000 of sales from the Company's U.S. subsidiary (2004:
£284,000).
2005 2005 2005 2005
Probes Monitors Other Total
£'000 £'000 £'000 £'000
Analysis of turnover by
destination
Direct markets
United Kingdom 1,559 251 88 1,898
United States of America 303 50 5 358
Distributor markets
Rest of Europe 289 328 6 623
Rest of the World 128 34 1 163
--- ---- ---- ----
2,279 663 100 3,042
======= ======== ======== ========
Continued from table above
2004 2004 2004 2004
Probes Monitors Other Total
£'000 £'000 £'000 £'000
Analysis of turnover by
destination
Direct markets
United Kingdom 1,254 169 53 1,476
United States of America 273 10 1 284
Distributor markets
Rest of Europe 390 277 2 669
Rest of the World 32 32 1 65
--- ---- ---- ----
1,949 488 57 2,494
======= ======== ======== ========
3. Reconciliation of operating loss to net cash outflow from operating
activities
2005 2004
£'000 £'000
Unaudited Audited
Operating loss (1,513) (2,787)
Depreciation on tangible fixed assets 66 79
Decrease/(increase) in stocks 178 (186)
(Increase)/decrease in debtors (189) 1,015
Increase/(decrease) in creditors 193 (237)
Costs associated with share option schemes - 124
Foreign exchange differences (2) (26)
Increase in provisions 4 30
--- ---
Net cash outflow from operating activities (1,263) (1,988)
======= =======
4. Dividends
The directors do not recommend payment of a dividend (2004: nil).
5. Loss per share
The loss per share calculation for 2005 is based on the loss of £1,488,000 and
weighted average number of shares in issue of 70.4 million. For 2004 the loss
per share calculation was based upon the loss of £2,754,000 and weighted average
number of shares in issue of 63.4 million.
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.
6. Provision for liabilities and charges
In 2004, an amount of £5,000 relating to National Insurance payable on options
exercised, has been reclassified from provisions for liabilities and charges to
accruals in order to be consistent with the current year's presentation.
7. Distribution of announcement
Copies of this announcement are being sent to all shareholders and will be
available for collection free of charge from the Company's registered office at
Terminus Road, Chichester, West Sussex PO19 8TX.
This information is provided by RNS
The company news service from the London Stock Exchange
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