Interim Results

RNS Number : 5754M

Deltex Medical Group PLC

19 September 2012

 



Deltex Medical Group plc

Interim results for the six months ended 30 June 2012

19 September 2012 - 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 2012.

Financial Highlights

·      Sales 7% ahead at £3.2m

·      Surgical probe growth of 19% overall; over 30% in UK

·      Operating loss of £1.2m after £0.6m of non-cash charges

·      Cash of £1.3m

Operating Highlights

·      NHS implementation plan for ODM expected shortly

·      Maintained market leading position and market share in UK

·      CardioQ-ODM+ launched

·      Satisfactory trading since period end, with US returning to growth

·      Premier Healthcare Alliance project under way in USA

·      French clinical guidelines expected before end of year

·      Canadian market potential increased after Interior Health implementation audit

Nigel Keen, Chairman of Deltex Medical, said:

"Deltex Medical made strong progress in the first half of the year. The robust evidence base of both the clinical and cost effectiveness of our products means that we are well positioned to create and exploit opportunities for accelerated growth. The UK market, where the NHS implementation plan will further strengthen our market leadership position, is under active development and there are positive indicators that equivalent market opportunities are accelerating in a growing number of other countries."

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]
Kreab Gavin Anderson	020 7074 1800
Robert Speed	[e-mail]
Deborah Walter	[e-mail]
Madeleine Palmstierna	[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 intervene 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 2,500 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 CardioQ-ODM+ monitoring system adds the continuous cardiac output monitoring functionality of the technique of Pulse Pressure Waveform Analysis ('PPWA') to the proven intervention and monitoring capability of CardioQ-ODM. PPWA technologies derive cardiac output data by analysing waveforms generated from monitoring blood pressure, normally in peripheral arteries whereas ODM measures blood flow velocity in the central circulation. The CardioQ-ODM+ is designed to enable pulse pressure inputs from both invasive arterial pressure lines and non-invasive arterial pressure monitors. PPWA devices have become established in some developed healthcare markets, mostly in Europe, as a cardiac output monitoring technology, especially in stable patients in critical care environments. However, as PPWA devices are unable to cope with certain haemodynamic changes and their output also loses accuracy over elapsed time, they require frequent calibration and recalibration to be clinically effective and have not been shown to be of equivalent clinical value to ODM during surgery. Traditionally, calibration approaches have been time consuming and expensive as well as insufficiently precise to allow the interventions proven with ODM. Calibration and recalibration with ODM overcomes these issues as it takes just a few seconds to get a more precise calibration at significantly lower cost.   Combining ODM flow measurements with PPWA pressure-derived measurements also promises to give clinicians previously unavailable insights into vascular compliance due to the inter-relationships between flow, pressure and compliance.  The CardioQ-ODM+ requires hospitals to use one of Deltex Medical's range of disposable single patient oesophageal probes per patient.

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 progress in all its main markets during the first half of 2012. The key growth indicator for our business is the number of disposable probes we sell: the more patients are treated using our products, the greater value we will create. Our global surgical probe business in the first half grew by 19% (£325,000) to over £2m. UK surgical probe growth was just over 30%, a most encouraging step up from the historic average growth rate of 20% despite slippage in the timing of the launch of an NHS drive to implement fully ODM or similar fluid management technologies. Probe growth exceeded 20% in a number of key export markets including France, Italy, Canada and Scandinavia. In the USA we reversed the decline in probe volumes experienced in the middle two quarters of 2011 to record probe revenues in line with the first half of 2011: the momentum established in the USA continued throughout July and August and as a result year-to-date probe sales in the USA, by the end of August were ahead of 2011 for the first time this year. Surgical probe sales have also been satisfactory since the end of June in both the UK and the overseas distributed markets.

Group sales were £3,206,000, £204,000 (7%) ahead overall of the first half of 2011 with surgical probe growth masked by a £83,000 decline in UK monitor revenues following our decision to reduce significantly the price of CardioQ-ODM monitors in anticipation of both the NHS implementation drive and the launch of our new premium CardioQ-ODM+ monitor. Gross margins were stable at 75%.

To build on the increasing uptake of ODM, as planned, we have stepped up significantly our investment in R&D resulting in an increase in research and development charges of £104,000 (62%). In March we launched the CardioQ-ODM+ and we are making good progress with a major upgrade of this new product later in the year. As a result of the positive reception from clinicians to the CardioQ-ODM+, we have refocused our clinical trial strategy to support the establishment of the new monitor in critical and peri-operative care. Therefore we have temporarily suspended projects aimed at increasing the range of applications of Doppler ultrasound blood flow monitoring and plan to restart these programmes once we have our next generation monitor platform available to base them on. As a result we have written off £417,000 of prepaid non-cash clinical trial costs in the six months, meaning charges for net non-cash items were £585,000 compared to £26,000 in the first half of 2011. These charges, together with an additional investment of approximately £200,000 to upgrade our clinical marketing materials to coincide with increased uptake of the CardioQ-ODM technologies, resulted in an increased first half loss for the period of £1,234,000 (2011: £730,000).

Cash at 30 June 2012 was £1,319,000. Net cash used in operating activities was £602,000 (2011: £452,000) as a result of the investments we have made to be able to support the anticipated impact of the NHS drive to implement ODM. In addition to upgrading our marketing materials we have invested in increased inventory to support the expected rollout. Inventory amounted to £1,137,000 at 30 June 2012, £301,000 higher than a year earlier and £225,000 higher than at the start of the year.

Markets

Our goal is to make ODM a standard of care for patients undergoing major surgery and in intensive care. The UK aims to lead the world in developing health policy targeted at rapid adoption of proven medical technologies and ODM is one of the very first technologies suited to widescale adoption which is being brought into systemic adoption in the UK. The emerging process can be summarised: firstly, evidence from clinical trials; secondly, evaluation of health and economic impact; thirdly, systematic adoption.

Deltex Medical has built a broad and robust evidence base for use of CardioQ-ODM during surgery showing substantial reductions in both post-operative complications and lengths of hospital stay. In March 2011 the National Institute for Health and Clinical Excellence ('NICE') concluded that "the case for adopting the CardioQ-ODM in the NHS is supported by the evidence" and recommended that "the CardioQ-ODM should be considered for use in patients undergoing major or high risk surgery". NICE estimated average savings of £1,100 per patient through the use of CadioQ-ODM and that at least 800,000 patients a year in the NHS in England should benefit. In December 2011 the NHS announced in its Chief Executive's report 'Innovation Health & Wealth' that ODM had been selected as one of six high impact innovations to be adopted by the NHS at pace and at scale: "we will launch a national drive to get full implementation of ODM, or similar fluid management monitoring technology, into practice across the NHS".

The NHS has been traditionally a very slow adopter of new medical technologies. Deltex Medical has built a substantial market leadership position in intra-operative fluid management since launching products aimed at this market in 2004. The compound annual growth rate between 2004 and 2011 of circa 20% means that the CardioQ-ODM has been amongst the very fastest growing broad application new medical technologies even before the NICE recommendation and the decision to implement ODM fully. Thus the step up in the year-on-year UK surgical probe growth rate since December 2011 to circa 30% is encouraging and the Company attributes this to the combined impacts of growing clinical consensus, the growing popularity of modern "enhanced recovery" approaches to major surgery and the material financial savings highlighted by NICE. The Board believes that the NHS implementation plan will underpin further substantial growth.

The NHS implementation plan for ODM, stemming from Innovation Health and Wealth was originally scheduled for early March however it is now expected to be published in the next few months. We expect this to promote the clinical and financial benefits of intra-operative fluid management, highlight the clinical evidence base which favours strongly ODM, link to national initiatives to adopt enhanced recovery programmes. It is anticipated that it will initially mandate adoption in a select number of surgical procedure types. NHS organisations failing to comply with mandated adoption are expected to face severe financial penalties. Information from the UK Department of Health confirms both that CardioQ-ODM is the market leader in intra-operative fluid management and that we have maintained market share in the nine months since the publication of 'Innovation Health & Wealth'. We expect to increase our competitive advantage further as new clinical trials are published showing that other fluid management monitoring technologies are neither able to replicate the clinical information derived from the use of CardioQ-ODM nor deliver equivalent clinical benefits.

NHS capital budgets remain constrained. In the first half we increased the UK surgical installed base by 51 to 570 units. 31 of these new monitors were purchased by the NHS generating revenues of £122,000. In addition we generated £308,000 of sales of monitors into critical care, including 24 first generation CardioQ-ODM+ monitors.

US probe sales were flat compared to the first half of 2011 at £366,000 after a difficult last three quarters in 2011. Compared with the previous year, a small fall in the first quarter of 2012 was recovered in the second quarter before a return to double digit growth in July and August. As a result by the end of August, year-to-date sales were 6% ahead of 2011. We are focused on a small number of accounts and have made progress in almost all of these. The degree of recognition of the importance of fluid management amongst US clinicians remains some years behind that in Europe, however, there are clear signs of this starting to change and we have a number of initiatives to accelerate this, based around our ability to demonstrate improved outcomes and consequential cost savings. The first phase of a joint project with Premier Healthcare Alliance to analyse the effectiveness of ODM within an enhanced recovery programme is underway and expected to generate initial results later this year; Premier is a major national US medical purchasing organisation and its member hospitals account for 30% of US hospital admissions. Future phases of this project may substantially accelerate market penetration across the USA.

Most of our probe sales to distributors in Europe are made monthly and revenues grew by 32% from £303,000 to £401,000 with an additional £12,000 of growth from Spain where we sell direct to hospitals. Probe growth has exceeded 20% in most major European markets including France, Italy and Scandinavia. We believe that new clinical guidelines for French anaesthetists may be published shortly as drafts have been in circulation for over a year. Probe sales outside Europe are less regular with most distributors placing only one or two orders each year: sales of probes to these markets were £64,000 lower than in 2011 at £39,000, however our distributors report underlying growth in a number of markets. Market penetration in Canada is at early stages, however the successful initial implementation of CardioQ-ODM in the Interior Health system is acting as a potential catalyst for systematic and accelerated growth both locally and across the wider Canadian healthcare system. Monitor sales to our export markets outside the USA, which are primarily served by distributors, were flat compared to the first half of 2011.

Products

In March we launched the CardioQ-ODM+, which uniquely combines ODM and Pulse Pressure Waveform Analysis ("PPWA") technologies for measuring and monitoring cardiac output and we plan to launch a second generation with significant additional functionality later this year. PPWA technologies derive cardiac output data by analysing waveforms generated from monitoring blood pressure, normally in peripheral arteries whereas ODM measures blood flow velocity in the central circulation. Our objective is to establish this monitor as the best in class PPWA monitor in the way that CardioQ-ODM is established as the best in class monitor of central blood flows. PPWA devices are unable to cope with certain haemodynamic changes and require frequent calibration and recalibration to be clinically effective in many settings: previously calibration approaches have been time consuming and expensive as well as insufficiently precise to allow the interventions proven with ODM. Calibration and recalibration with ODM overcomes these issues as it takes just a few seconds to get a more precise calibration at significantly lower cost.

Prospects

Deltex Medical made strong progress in the first half of the year. The robust evidence base of both the clinical and cost effectiveness of our products means that we are well positioned to create and exploit opportunities for accelerated growth. The UK market, where the NHS implementation plan will further strengthen our market leadership position, is under active development and there are positive indicators that equivalent market opportunities are accelerating in a growing number of other countries.

Nigel Keen

Chairman

19 September 2012

Consolidated Statement of Comprehensive Income

for the six month period ended 30 June 2012

		Unaudited	Unaudited	Audited
		Half year to	Half year to	Full year to
		30 June	30 June	31 December
		2012	2011	2011
		£'000	£'000	£'000
Revenue		3,206	3,002	6,303
Cost of sales		(805)	(755)	(1,765)
		----	----	----
Gross profit		2,401	2,247	4,538
Administrative expenses		(1,192)	(932)	(2,012)
Sales and distribution costs		(2,151)	(1,843)	(3,532)
Research and development costs		(272)	(168)	(396)
		----	----	----
		(3,615)	(2,943)	(5,940)
		----	----	----
Operating loss		(1,214)	(696)	(1,402)
Finance income		-	1	1
Finance costs		(59)	(60)	(123)
		----	----	----
Loss before taxation		(1,273)	(755)	(1,524)
Tax credit on loss		39	25	103
		----	----	----
Loss for the financial period		(1,234)	(730)	(1,421)
Other comprehensive income
Exchange differences taken to reserves		(9)	30	(14)
		----	----	----
Other comprehensive loss for the period, net of tax		(9)	30	(14)
		----	----	----
Total comprehensive loss for the period		(1,243)	(700)	(1,435)
		=========	=========	=========
Loss per share - basic and diluted		(0.8p)	(0.5p)	(1.0p)
		=========	=========	=========

Consolidated Statement of Comprehensive Income

for the six month period ended 30 June 2012

Alternative performance measures (note 2) 

		Unaudited	Unaudited	Audited
		Half year to	Half year to	Full year to
		30 June	30 June	31 December
		2012	2011	2011
		£'000	£'000	£'000
Adjusted operating loss
Operating loss including non-cash items		(1,214)	(696)	(1,402)
Non - cash items		585	26	670
		----	----	----
Adjusted operating loss before non-cash items		(629)	(670)	(732)
		=========	=========	=========
Non-cash items comprise:
Share-based payments		251	212	386
Equity Settled Costs		186	81	182
Net non-cash clinical trial (credits)		(44)	(373)	(387)
Depreciation and amortisation		122	76	191
Net increase in provision, including receivables		57	28	305
Sundry non-cash charges/(credits)		13	2	(7)
		----	----	----
		585	26	670
		=========	=========	=========

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

Consolidated Balance Sheet

at 30 June 2012

		Unaudited	Unaudited	Audited
		30 June	30 June	31 December
		2012	2011	2011
		£'000	£'000	£'000
Assets
Non - current assets
Property, plant and equipment		321	278	309
Intangible assets		872	523	724
Trade and other receivables		2	326	8
		----	----	----
Total non-current assets		1,195	1,127	1,041
Current assets
Inventories		1,137	836	912
Trade and other receivables		2,415	2,102	2,818
Current income tax recoverable		51	75	102
Cash and cash equivalents		1,319	1,214	752
		----	----	----
Total current assets		4,922	4,227	4,584
		----	----	----
Total assets		6,117	5,354	5,625
		----	----	----
Liabilities
Current liabilities
Borrowings		(529)	(542)	(743)
Trade and other payables		(1,563)	(1,598)	(1,500)
		----	----	----
Total current liabilities		(2,092)	(2,140)	(2,243)
Non current liabilities
Borrowings		(1,365)	(1,335)	(1,359)
Provisions for other liabilities		(177)	(136)	(167)
		----	----	----
Total non-current liabilities		(1,542)	(1,471)	(1,526)
		----	----	----
Total liabilities		(3,634)	(3,611)	(3,769)
		----	----	----
Net assets		2,483	1,743	1,856
		----	----	----
Equity
Share capital		1,500	1,380	1,421
Share premium		23,508	21,368	21,901
Capital redemption reserve		17,476	17,476	17,476
Other reserves		3,470	3,012	3,286
Translation reserve		(18)	35	(9)
Retained deficit		(43,453)	(41,528)	(42,219)
		----	----	----
Total equity		2,483	1,743	1,856
		----	----	----

Consolidated Statement of Changes in Equity

for the six month period ended 30 June 2012

 

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 2011	1,380	21,368	17,476	3,012	35	(41,528)	1,743
	---	---	---	---	---	---	---
Comprehensive income
Loss for the period	-	-	-	-	-	(691)	(691)
Other comprehensive income
Exchange movements taken to reserves	-	-	-	-	(44)	-	(44)
	---	---	---	---	---	---	---
Total comprehensive income for the six month period	-	-	-	-	(44)	(691)	(735)
	---	---	---	---	---	---	---
Shares issued during the period	41	-	-	-	-	-	41
Premium on shares issued during the period	-	586	-	-	-	-	586
Issue expenses	-	(53)	-	-	-	-	(53)
Credit in respect of service cost settled by award of options	-	-	-	274	-	-	274
	---	---	---	---	---	---	---
Balance at 31 December 2011	1,421	21,901	17,476	3,286	(9)	(42,219)	1,856
	---	---	---	---	---	---	---
Comprehensive income
Loss for the period	-	-	-	-	-	(1,234)	(1,234)
Other comprehensive income
Exchange movements taken to reserves	-	-	-	-	(9)	-	(9)
	---	---	---	---	---	---	---
Total comprehensive income for the six month period	-	-	-	-	(9)	(1,234)	(1,243)
	---	---	---	---	---	---	---
Shares issued during the period	79	-	-	-	-	-	79
Premium on shares issued during the period	-	1,681	-	-	-	-	1,681
Issue expenses	-	(74)	-	-	-	-	(74)
Credit in respect of service cost settled by award of options	-	-	-	184	-	-	184
	---	---	---	---	---	---	---
Balance at 30 June 2012	1,500	23,508	17,476	3,470	(18)	(43,453)	2,483
	=========	=========	=========	=========	=========	=========	=========

Consolidated Statement of Cash Flows

for the year six month period ended 30 June 2012

		Unaudited	Unaudited	Audited
		Half year to	Half year to	Full year to
		30 June 2012	30 June 2011	31 December 2011
	Note	£'000	£'000	£'000
		----	----	----
Cash flows from operating activities
Net cash used in operations	6	(643)	(443)	(1,337)
Interest paid		(49)	(54)	(112)
Income taxes received		90	45	97
		----	----	----
Net cash used in operating activities		(602)	(452)	(1,352)
		----	----	----
Cash flows from investing activities
Purchase of property, plant and equipment		(88)	(97)	(194)
Capitalised development expenditure		(207)	(106)	(346)
Interest received		-	1	1
		----	----	----
Net cash used in investing activities		(295)	(202)	(539)
		----	----	----
Cash flows from financing activities
Issue of ordinary share capital		1,760	1,365	1,939
Expenses in connection with share issue		(74)	(53)	(53)
Proceeds from (decrease)/increase in borrowings		(206)	(145)	70
Effect of exchange rate fluctuations on borrowings		(11)	(2)	(4)
Repayment of obligations under finance leases		-	(4)	(4)
		----	----	----
Net cash generated from financing activities		1,469	1,161	1,948
		----	----	----
Net increase in cash and cash equivalents		572	507	57
Cash and cash equivalents at beginning of the year		752	699	699
Exchange (loss)/gain on cash and cash equivalents		(5)	8	(4)
		----	----	----
Cash and cash equivalents at end of the period		1,319	1,214	752
		----	----	----

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 2011. New standards, amendments to standards or interpretations which were effective in the financial year beginning 1 January 2012 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 2011 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 2011 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 2011.

2   Alternative performance 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 cash flow before movement in working capital

This is defined as the operating cash flow 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 cash flow before movement in working capital to the operating cash flow before movement in working capital is shown beneath the Notes to the Consolidated Statement of Cash Flows (note 6).

3   Revenue

Sales	2012	2012	2012	2012	2012	2012	2011	2011	2011	2011	2011	2011
	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*	19,920	56	1,589	430	99	2,118	16,815	35	1,362	513	91	1,966
USA	3,275	-	366	-	2	368	3,380	-	365	-	2	367
Spain	252	2	31	23	-	54	185	1	19	20	-	39
Distributor markets
Europe	7,225	6	401	76	5	482	5,155	15	303	165	3	471
Rest of world	780	45	39	142	3	184	2,130	13	103	51	5	159
	31,452	109	2,426	671	109	3,206	27,665	64	2,152	749	101	3,002

*UK probe sales are split:

	2012 Units	2012 £'000	2011 Units	2011 £'000
Surgical	16,235	1,184	12,665	906
ICU	3,685	405	4,150	456
	19,920	1,589	16,815	1,362

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 2012 are as follows:

		UK £'000	USA £'000	International £'000	Spain £'000	Unallocated £'000	Total £'000
Total segment revenue Inter segment revenue		2,523 (405)	368 -	666 -	54 -	- -	3,611 (405)
Group revenue		2,118	368	666	54	-	3,206
Segment/operating result		579	(274)	25	(50)	(1,494)	(1,214)
Finance income							-
Finance costs							(59)
Loss before taxation							(1,273)
Tax on loss							39
Loss for the financial period							(1,234)

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 year ended 31 December 2011 are as follows:

		UK £'000	USA £'000	International £'000	Spain £'000	Unallocated £'000	Total £'000
Total segment revenue Inter segment revenue		3,910 (177)	710 -	1,795 -	65 -	- -	6,480 (177)
Group revenue		3,733	710	1,795	65	-	6,303
Segment/operating result		1,143	(556)	309	(153)	(2,145)	(1,402)
Finance income							1
Finance costs							(123)
Loss before taxation							(1,524)
Tax on loss							103
Loss for the financial period							(1,421)

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 (2011: nil).

6   Notes to the Consolidated Statement of Cash Flows

		Unaudited	Unaudited	Audited
		Half year to	Half year to	Full year to
		30 June 2012	30 June 2011	31 December 2011
		£'000	£'000	£'000
		----	----	----
Operating loss		(1,214)	(696)	(1,402)
Adjustments for:
Depreciation of property, plant and equipment		63	56	131
Amortisation of intangible assets		59	20	60
Exchange (gain)/loss on fixed assets		(2)	2	-
Loss/(gain) on disposal of fixed assets		15	-	(7)
Share based payments		184	122	396
		----	----	----
Operating cashflows before movement in working capital		(895)	(496)	(822)
Increase in inventories		(225)	(81)	(339)
Decrease/(Increase) in trade and other receivables		409	(84)	(509)
Increase in trade and other payables		58	190	274
Increase in provisions		10	28	59
		----	----	----
Net cash used in operations		(643)	(443)	(1,337)
		----	----	----

Operating cash flows before movement in working capital

Alternative performance measures (note 2) 

		Unaudited	Unaudited	Audited
		Half year to	Half year to	Full year to
		30 June 2012	30 June 2011	31 December 2011
		£'000	£'000	£'000
		----	----	----
Adjusted operating cash flow before movement in working capital
Operating cash flow before movement in working capital		(895)	(496)	(822)
Equity settled costs		253	171	172
Net increase in provisions, including receivables		54	28	297
Net non-cash clinical trial charges/(credits)		(44)	(373)	(387)
Sundry non-cash charges		3	-	8
		----	----	----
Adjusted operating cash flow before movement in working capital		(629)	(670)	(732)
		----	----	----

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 2012 is based on the loss of £1,234,000 and weighted average number of shares in issue of 145,974,406. The loss per share calculation for the six months to 30 June 2011 is based on the loss for the period of £730,000 and weighted number of shares in issue of 134,777,054.

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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