Trading Statement

Deltex Medical Group PLC
16 January 2007





                            Deltex Medical Group plc

              Pre-close update on the year ended 31 December 2006


16 January 2007 Deltex Medical Group plc ('Deltex Medical' or the 'Company'),
the UK's leading haemodynamic monitoring company, today announces an update on
its development and trading performance for the year ended 31 December 2006.

Throughout 2006 the Company made significant progress towards its goal of
establishing the use of its CardioQ system as a standard of care in the
monitoring and management of people undergoing major surgery. As a result, the
directors anticipate that sales for the year will be in excess of £3.5 million.


Clinical trials

In August 2006 the British Journal of Surgery published the results of a major
new randomised controlled clinical trial of the CardioQ during surgery. The
study on bowel surgery patients at the Freeman hospital in Newcastle-Upon-Tyne
was funded by the Royal College of Surgeons and was the seventh published high
quality CardioQ outcome study. It demonstrated that in those patients whose
circulating blood volume was optimised using the CardioQ, serious post-operative
complications, emergency post-operative admissions to critical care units and
emergency readmissions to hospital were entirely or almost entirely eliminated.
The study found that CardioQ patients were also fit to go home three days
earlier than non-CardioQ patients.

Routine use of the CardioQ during surgery is now a core part of the Freeman
hospital's 'enhanced recovery' or 'fast-track' programme for major bowel
surgery: this programme delivers amongst the lowest mortality rates, the lowest
readmission rates and the shortest lengths of stay not just in the UK but in the
whole of the developed world.


Fast track surgery

Fast-track surgery, i.e patient health optimisation before, during and after
surgery, is gathering growing momentum amongst surgeons throughout the UK and
Continental Europe and establishing early acceptance in the USA. Initially
focused on colo-rectal surgery, it is being adopted in other areas including
orthopaedic, vascular, urological and gastro-intestinal surgery. Deltex Medical
is successfully positioning the CardioQ as key to any evidence-based fast-track
approach to surgery.

The growing clinical interest in fast-track surgery coincides with increasing
political and macro-economic pressures on the majority of developed healthcare
systems, including the UK NHS, to reduce lengths of hospital stays, reduce the
amount of care delivered in hospitals and provide it instead as close as
possible to the patient's home.


Meta-analysis

A first independent meta-analysis (systematic scientific review which considers
related evidence as a whole) of the randomised controlled clinical outcome
trials of oesophageal Doppler monitoring ('ODM') was presented in September
2006. It concluded that ODM reduces post-operative complications and lengths of
hospital stay. In practice such a positive meta-analysis means that it is highly
unlikely that any amount of new evidence could change the conclusion. Modern
healthcare systems use meta-analysis as a key tool in making decisions about
funding new medical technologies. In the USA it is used by the Centers for
Medicare and Medicaid Services (CMS) in determining whether doctors should be
reimbursed for using particular technologies: in the UK it is used by both the
National Institute for Health and Clinical Excellence (NICE) and the newly
formed Centre for Evidence Based Purchasing (CEP) to support recommendations
made to the NHS. Meta-analysis is also used to inform clinical standard setting
by professional associations and bodies.

All the favourable outcome studies on ODM used the CardioQ or its predecessors.
Furthermore, the directors are not aware of any study either published or
pending publication which shows any technology other than ODM to have been used
successfully to direct fluid administration during surgery to improve patient
outcomes and reduce hospital lengths of stay. Alternative approaches to
haemodynamic monitoring use derived rather than direct measurements of blood
flow and are unable to report changes in flow either as quickly or as accurately
as ODM.


UK market

In the UK, demand for Deltex Medical's devices continued to grow rapidly as did
the number of clinical settings in which the CardioQ system has been shown to be
both cost effective and clinically beneficial to the patients doctors are
treating. There was a marked increase in the numbers of surgeons lending active
support to anaesthetists in order to prioritise implementation of the CardioQ as
a standard of care for their patients. Consequently in 2006 CardioQ monitor
sales volumes and revenues increased for the first time in three years.

The unmet clinical demand for additional CardioQ monitors has continued to grow
across the UK NHS. To accelerate CardioQ implementation, the Company has
introduced a wider choice of standard commercial packages it offers NHS Trusts.
This includes placing monitors in Trusts while charging a mark-up on probe
prices. .Negotiations to formalise this type of arrangement for 20 installed
CardioQ monitors are ongoing with two major London teaching hospitals where the
CardioQ is being used in the pilot phases of the implementation of fast-track
surgical programmes.

The momentum behind probe sales in the UK has continued. December was the
twenty-seventh consecutive month when probe sales were ahead of those in the
corresponding month the year before. Sales continue to rise in both critical
care and operating theatre applications and it is increasingly clear that, as
expected, the growth curve is steeper for operating theatre usage.

Although the UK government is yet to complete any formal technology assessment
of oesophageal Doppler monitoring and the CardioQ, early in 2006 NICE announced
that it considered the technology to be 'standard clinical practice'.

During 2006 the Company sold a total of fourteen SupraQ monitors all in the UK:
ten to maternity units, two to Accident & Emergency units and two to the Xtreme
Everest expedition, being organised by doctors from University College London.
The monitors will be used in research aimed at demonstrating potential clinical
applications of this entirely non-invasive sister device to the CardioQ.


International markets

Probe sales growth in the USA has been underpinned by sustainable growth in the
small number of hospitals with whom we work most closely. In the final quarter
of the year we installed an initial five CardioQ monitors on a probe mark-up
basis into operating rooms at our largest single account; previously usage had
been restricted to intensive care and emergency room. The hospital has indicated
its desire to add a further five monitors into operating rooms as soon as it
becomes appropriate to do so based on clinical demand

In December the Company sold eight CardioQ monitors to a major Michigan hospital
for use during bowel surgery. The colo-rectal surgery team is led by one of the
USA's leading bowel surgeons who is also one of the key driving forces behind
moves to introduce fast-track surgery into the USA.

Following initial sales to the US Army in 2005, negotiations are underway to
supply a small number of CardioQs for evaluation in active Mobile Army Surgical
Hospitals (MASH).

In the first half of the year the Company restructured its trading relationships
with key distributors in Europe, Latin America and the Far East with the primary
objective of moving them on to regular monthly probe orders. This resulted in
lower probe sales in the first half of the year when compared to the
corresponding period of 2005. Subsequently minimum monthly order levels have
already been increased by both our French and Korean distributors.

In France, a randomised controlled trial using the CardioQ on patients
undergoing emergency surgery for repair of broken hips is under way. This major
study is taking place in 18 hospitals and is generating significant
opportunities for expansion. Despite the promising underlying increase in
activity, the Company's reported sales to France are expected to be £0.2 million
lower than in 2005 due to destocking by the distributor prior to renegotiation
of the distribution agreement.


Financial

Cash consumption in the second half of the year and the underlying rate of cash
burn going into 2007 were in line with the Company's plans. The underlying rate
of cash burn is at the lowest rate in the Company's history, despite increased
spend on marketing and new product development.


Nigel Keen, Deltex Medical's Chairman, commented:

'Deltex Medical continued to make significant progress during 2006 towards
establishing CardioQ as a global standard of care. We have established a track
record of growth in the UK and are now beginning to develop momentum in the US
and other international markets which we believe will give us sustainable sales
growth as the Company heads towards profitability.'


For further information, please contact:-

Deltex Medical Group plc         01243 774 837
Nigel Keen, Chairman             [e-mail]
Andy Hill, Chief Executive       [e-mail]
Ewan Phillips, Finance Director  [e-mail]

Gavin Anderson & Company         020 7554 1400

Deborah Walter                   [e-mail]
Robert Speed                     [e-mail]

Charles Stanley Securities       020 7149 6457
Philip Davies                    [e-mail]


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 to major
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 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.

The SupraQ is 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 in a similar format and is used for
taking snapshots or monitoring over short periods.



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