15th Mar 2007 07:01
Deltex Medical Group PLC15 March 2007 Deltex Medical Group plc Preliminary results for the year ended 31 December 2006 15 March 2007 - Deltex Medical Group plc ("Deltex Medical" or "Company"), theUK's leading haemodynamic monitoring company, today announces its preliminaryresults for the year ended 31 December 2006. Financial Highlights •Turnover increased by 15% to £3,511,000 with 80% of growth from recurring revenue streams •Operating losses increase to £2,102,000 (2005: £1,774,000) after TECO acquisition and restructuring of European distribution network •Cash of £418,000 with a further £465,000 of new equity raised since year end •Company enters 2007 with lowest rate of cash burn and operating loss since first listing Operating Highlights •All regions show sustainable growth driven by recurring probe revenues •Steady stream of evidenced based research supports new monitoring applications •SupraQ adopted by Medway Maritime Hospital for critical care applications; enhanced prototype SupraQ completed in 2007 •Accelerating uptake from a range of reference customers including European teaching hospitals and US military •Medicare proposed reimbursement approval lays ground for accelerated penetration of USA •Company configured for growth in all its key markets Nigel Keen, Chairman of Deltex Medical, said: "2006 has been a year of transformation for Deltex Medical. Since receivingendorsements for our CardioQ product from the Freeman study, we have seenaccelerated deployment of the product in active use - particularly in operatingtheatres. Product deployment is driving probe sales and further endorsement byleading medical institutions, in the UK, Continental Europe and the USA islaying a solid foundation for growth across all our key markets for 2007 andbeyond." For further information, please contact:- Deltex Medical Group plc 01243 774 837Nigel Keen, Chairman [email protected] Hill, Chief Executive [email protected] Phillips, Finance Director [email protected] Gavin Anderson & Company 0207 554 1400Deborah Walter [email protected] Speed [email protected] Charles Stanley Securities 020 7149 6457Philip Davies [email protected] Cook [email protected] Notes for Editors Deltex Medical manufactures and markets the CardioQ monitor, which usesdisposable ultra-sound probes inserted into the oesophagus to determine theamount of blood being pumped around the body - 'circulating blood volume'.Reduced circulating blood volume is known as hypovolaemia, which leads toinsufficient oxygen being delivered to the organs. This causes medicalcomplications including peripheral and major organ failure which can lead todeath. Hypovolaemia, which is akin to severe dehydration, affects virtuallyevery patient having surgery because of the combined effects of pre-operativestarvation, the impact of the anaesthetic agents and trauma from the surgeryitself. Using fluids and drugs, guided by the CardioQ, to optimise the amount ofcirculating blood significantly reduces post-operative complications allowingpatients to make a faster, more complete recovery and return home earlier. The CardioQ incorporates the Company's proprietary software and a smalldiameter, easy-to-use, minimally invasive, disposable oesophageal probe that isused for transmitting and receiving an ultra-sound signal. By using thistechnology, the CardioQ provides clinicians with the ability to haemodynamicallyoptimise critically ill patients and those undergoing routine moderate to majorsurgery through the controlled administration of fluid and drugs. Haemodynamicoptimisation has been scientifically proven to improve the speed and quality ofpatient recovery and reduce hospital stay. There are already over 1,250 CardioQs currently in use in hospitals worldwideand distribution arrangements are in place in over 30 countries. In addition,there are currently more than 90 clinical publications on the use of the CardioQwhich 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 probeheld 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 fortaking snapshots or monitoring over short periods. Chairman's Statement Group Summary Deltex Medical's CardioQ monitor uses disposable ultrasound probes inserted intothe oesophagus through the mouth or nose to determine the amount of blood beingpumped around the body - 'circulating blood volume'. Reduced circulating bloodvolume is known as hypovolaemia and occurs as a consequence of blood loss ordehydration. If blood volume is reduced significantly, the body cannot deliversufficient oxygen to the vital organs. This causes medical complicationsincluding peripheral and major organ failure, which can lead to the patientbeing severely compromised or death. Hypovolaemia affects almost all patientsundergoing surgery because of the combined effects of pre-operative starvation,the impact of anaesthetic gases and the trauma of surgery itself. Guided by theCardioQ and using fluids and drugs to optimise the amount of circulating bloodand the heart's performance, doctors can significantly reduce post-operativecomplications allowing patients to make a fuller, more complete recovery andreturn home earlier. The opportunities the CardioQ offers for improved qualityand efficiency of care through helping patients get better, quicker can besummarised: the CardioQ saves lives and saves money. It is Deltex Medical's strategy to make the use of the CardioQ a standard ofcare in operating theatres for all patients undergoing moderate and high risksurgery as well as for its use to be the treatment of choice in intensive careunits for the real-time monitoring of severely ill patients. Adopting theCardioQ as a standard of care allows hospitals to both improve the quality ofcare they give and the efficiency with which they give it. These provenefficiency benefits allow the hospital to choose to either increase capacity,reduce costs, or redeploy existing resources to meet local priorities. Trading Results UnauditedSales 2006 2006 2006 2006 2006 2006 2005 2005 2005 2005 2005 2005 Probes Monitors Probes Monitors Other Total Probes Monitors Probes Monitors Other Total units units £'000 £'000 £'000 £'000 units units £'000 £'000 £'000 £'000Direct marketsUK CardioQ 24,075 53 1,837 324 124 2,285 21,475 34 1,559 191 88 1,838UK SupraQ - 14 - 280 - 280 - 3 - 60 - 60 ----- ------ ----- ------ ----- ----- ----- ----- ----- ----- ----- -----UK total 24,075 67 1,837 604 124 2,565 21,475 37 1,559 251 88 1,898USA 4,760 11 349 58 5 412 4,515 12 303 50 5 358 DistributormarketsEurope 5,625 6 276 25 11 312 6,375 50 289 328 6 623 Far East & Latin 4,730 15 170 51 1 222 3,685 14 128 34 1 163 America ----- ------ ----- ------ ----- ----- ----- ----- ----- ----- ----- ----- 39,190 99 2,632 738 141 3,511 36,050 113 2,279 663 100 3,042 ----- ------ ----- ------ ----- ----- ----- ----- ----- ----- ----- ----- Sales Group sales increased by 15% to £3,511,000 in year ended 31 December 2006 (2005: £3,042,000). In our largest and most developed market, the UK, Deltex Medicaldelivered sales growth of 35% compared to 2005. Over 75% of UK sales came fromthe recurring revenue streams of probe sales and monitor maintenance. Across theGroup, 78% of group revenues and 80% of the sales growth came from probe salesand monitor maintenance. Monitor sales generated £738,000 for the Group, an increase of £75,000 over2005. Included in this are £280,000 relating to sales of 14 SupraQ monitors, allin the UK; the SupraQ is not yet generally released to the market, rather theCompany has sold monitors to specific customers whose research into applicationsfor the device is expected to create a market for it in the longer term; thepurchase and sale agreements for these monitors include the Company acquiring ona barter basis rights over data generated in defined research projects. Ten monitors were sold for use in a five centre project in Obstetrics, two for use in Accident and Emergency and a further two for use in a major scientific expedition to Everest organised by University College London: in the first two cases the aim is to establish protocols for routine use of the SupraQ to benefit patients, in the third to establish the strengths and weaknesses of the monitor in rugged conditions outside hospitals to enable us to develop a version specifically for use in harsher environments such as ambulances, accident scenes and battlefields. Cash Total cash at 31 December 2006 was £418,000, which included £297,000 drawn downunder the Company's working capital facility. Since the end of the year theCompany has raised a further £465,000 in cash after expenses by the issue of2,843,163 new ordinary shares. Total cash consumption before financing in 2006 was £1,702,000, £425,000 higherthan in 2005 (£1,277,000). This increase reflects a number of non-recurringitems including the purchase and integration of the TECO oesophageal Dopplermonitoring business and the working capital impact of restructuring the Europeandistributor business: without these, cash consumption would have been lower thanin 2005. It also reflects a small number of selected additions to our cost baseto support expansion as well as expenditure on specific projects such asdeveloping better monitoring solutions for awake patients, expanding ourinternational sales presence and promoting the results of the influentialrandomised controlled trial from the Freeman hospital which were published inAugust 2006. Despite the increase in total cash consumption, the Company entered 2007 withits lowest ever rate of underlying cash burn (i.e. the difference betweennormalised run-rates for revenues and costs). Furthermore, each of the Company'ssales operations (UK, USA and international distribution) are now deliveringsustainable growth so that the underlying rate of cash burn is reducing bothevery month and at a faster rate than ever before. The Directors believe that the Company has sufficient cash available to it tosee it through to the point where its cash generation from operations is greaterthan its operating cost base. Operating result Operating losses increased to £2,102,000 (2005: £1,774,000) as a result ofone-off items such as the costs of the TECO acquisition and integration, therestructuring of our European distribution network and activity to promote theresults of a major new clinical study. The total effect of these items wassignificantly greater than the increase in operating loss, reflecting thecontinued underlying progress towards profitability. Clinical Evidence Clinical trials In August 2006 the British Journal of Surgery published the results of a majornew randomised controlled clinical trial of the CardioQ during surgery. Thestudy on bowel surgery patients at the Freeman hospital in Newcastle-Upon-Tynewas funded by the Royal College of Surgeons and was the seventh high qualityCardioQ outcome study to be published in a leading peer reviewed journal. Itdemonstrated that in those patients whose circulating blood volume was optimisedusing the CardioQ, serious post-operative complications, emergencypost-operative admissions to critical care units and emergency readmissions tohospital were almost entirely eliminated. The study found that CardioQ patientswere 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 Freemanhospital's 'enhanced recovery' or 'fast-track' programme for major bowelsurgery: this programme delivers amongst the lowest mortality rates, the lowestreadmission rates and the shortest lengths of stay not just in the UK but in thewhole of the developed world. The Company is aware of two major randomised controlled clinical outcome studiesunderway using the CardioQ. In France, the clinicians conducting a multi-centrestudy looking at death rates after surgery to repair broken hips have treatedtheir first patients. The first patients have also been treated in a new studyat the Freeman hospital looking at the impact of the CardioQ in major urologicalsurgery. There are also a number of less significant clinical trials or auditsunderway or pending using the CardioQ in a variety of settings. Fast track surgery Fast-track surgery, an approach which is based on optimising the patient'shealth before, during and after surgery, is gathering momentum amongst surgeonsthroughout Continental Europe and the UK and establishing early acceptance inthe USA. Initially focused on colo-rectal surgery, fast-track surgery is beingadopted in other surgical areas including orthopaedic, vascular, urological andgastro-intestinal surgery. Deltex Medical is positioning the CardioQ as beingkey to any evidence-based fast-track approach to surgery. The growing clinical interest in fast-track surgery coincides with increasingpolitical and macro-economic pressures on the majority of developed healthcaresystems to reduce lengths of hospital stays, reduce the amount of care deliveredin hospitals and provide it instead as close as possible to the patient's home.The CardioQ's proven clinical and economic benefits clearly and demonstrablyoffer unique value to healthcare providers in dealing with these pressures. US reimbursement authorities In February 2007 the Centers for Medicare & Medicaid Services (CMS) announcedprovisional conclusions following a review of a 1980s decision to excludeoesophageal Doppler monitoring (ODM) from any reimbursement coverage. CMS hasput forward for a mandatory public consultation period its recommendation thatODM be eligible for reimbursement for use in ventilated patients in intensivecare units and surgical patients requiring haemodynamic optimisation. CMS's recommendations are justified by its own findings together with those ofan as yet unpublished health technology assessment from the US government fundedAgency for Healthcare Research and Quality (AHRQ). CMS concluded with referenceto the published outcome studies: "In summary, we believe that the published literature demonstrates sufficientevidence that hemodynamic monitoring with esophageal Doppler does result inimproved health outcomes for Medicare beneficiaries." Technology differentiation All the favourable outcome studies on ODM considered by CMS and AHRQ used theCardioQ or predecessor Deltex Medical ODM systems. Furthermore, the Directorsare not aware of any study either published or pending publication which showsany comparable technology other than ODM to have been used successfully todirect fluid administration during surgery to improve patient outcomes andreduce hospital lengths of stay. Alternative approaches to haemodynamicmonitoring use derived rather than direct measurements of blood flow and areunable to report changes in flow either as quickly or as accurately as ODM.There is therefore currently no clinically credible competition to the CardioQin the operating theatre market, which is several times the size of theintensive care market. Markets United Kingdom UK probe growth UK probe sales in each and every month of 2006 were ahead of the level achievedin the corresponding month in 2005, continuing the trend established throughout2005. This trend has continued into the first quarter of 2007 and February wasthe twenty-eighth consecutive month where UK probe sales were ahead of thecorresponding month in the prior year. Continued steady growth of probe sales into UK intensive care units wassupplemented by the faster rate of growth of sales into UK operating theatres. UK monitor growth Despite the continuing adverse financial condition of the NHS sales of CardioQmonitors in the UK recovered to 53 units in 2006 after falling in both 2004 (39units) and 2005 (34 units). UK market positioning The UK is the most developed market for our products and UK doctors have led theworld in their understanding and acceptance of the benefits of activehaemodynamic management of patients undergoing major surgery or those incritical care. There is some degree of active clinical advocacy for morefrequent use of the CardioQ system in virtually all NHS hospitals and in manyhospitals this clinical support is both broad and deep; the majority ofanaesthetists have for some time recognised that they ought to be monitoring andhaemodynamically optimising at least some of their moderate and major risksurgical patients. During the year demand from clinicians for Deltex Medical's devices continued togrow rapidly in the UK as did the number of clinical settings in which theCardioQ system has been shown to be both cost effective and clinicallybeneficial to the patients doctors are treating. There was a marked increase inthe numbers of surgeons lending active support to anaesthetists in order toprioritise implementation of the CardioQ as a standard of care for theirpatients: both intra-operative and peri-operative fluid management areincreasingly high up the agendas at clinical meetings for surgeons and atmulti-disciplinary meetings focused on care pathways for patients undergoingmajor surgery. This broadening support has contributed to the increases reportedin both monitor and probe sales in the UK although the rate of conversion ofclinical interest to commitment by the hospital's administrators remains slow. United States of America In the USA, our other key directly supported market, we achieved probe salesgrowth of 15%. This growth has continued into 2007 and January was the Company'sbest ever month for probe sales in the USA. Over the last two years, our smallUS sales and training team have consistently reported increasing levels ofinterest in haemodynamic management from both surgeons and anaesthetists andthis has started to feed through into sales. Probe sales in the USA in everyquarter of 2006 were higher than the corresponding quarter in 2005 and the firstquarter of 2007 will be the sixth consecutive one where US probe sales haveexceeded those in the corresponding quarter of the previous year. We sold 11 CardioQs in the USA, including eight monitors to one of the country'sleading colo-rectal surgical units. Shortly after the year-end we sold fivemonitors to the US Army in Iraq for evaluation in mobile military hospitals:early feedback from Iraq has been encouraging. Our goal in the USA remains to build a value proposition and sustainablebusiness model that can be tailored to each of the key healthcare providermodels in the USA and then seek an appropriate strategic partner to supportrolling this model out across the whole of the market. The final reimbursementdecision announcement by CMS is scheduled for publication on or before 3 June2007; CMS's conclusions are likely to influence the timeframe and scope forworking with potential partners, as well as the range of likely candidates. Achieving an adequate level of reimbursement is essential for wide scaleadoption of a new medical technology in the USA and a recommendation forcoverage is the critical first step in that process. Distributed markets In the first half of the year the Company restructured its trading relationshipswith key distributors in Europe to reduce the working capital associated withhalf-yearly or yearly ordering by encouraging them to reduce stock holding andmove to regular monthly orders. This process was designed both to help theCompany with production planning and manufacturing efficiency and to ensuregreater visibility of the effectiveness of the marketing programmes undertakenby both the Company and its distributors. This restructuring resulted in lower probe sales in the first half of the yearthan in the corresponding period of 2005 as distributors adjusted their probeinventory levels. However, probe sales to our European distributors recoveredstrongly in the second half of the year to £175,000, over 80% ahead of thesecond half of 2005 (£96,000) and over 70% ahead of the first half of the year(£101,000). Every month since May 2006, when we introduced the monthly standing orderprogramme, our probe sales under it have either matched or exceeded thepreceding month. The distributor in Peru, our most successful market outside Europe, continued toorder on an annual basis while our second largest market, Korea, together withsome of the less developed markets, moved to monthly standing orders for probes.Probe sales to distributors in these territories increased by £42,000 (32%) overthe year. Sales of monitors to our distributors in Europe were significantly lower than in2005 at £25,000 compared to £328,000 (including £138,000 of barter sales connected with a multi-centre trial of the CardioQ in France). This reflects the Company's focus on establishing regular probe sales to establish a strong platform for sustainable future growth as well as our strategy of reducing stock levels at distributors so that our trading results going forward more rapidly reflect the growing underlying uptake of our products in a number of international markets. Monitor sales to the Far East and Latin America showed a modest increase over 2005. Research and Development During 2006 we made significant progress towards better haemodynamic monitoringsolutions for awake patients. Our key R&D priorities for 2007 are to prepare thenext generation of CardioQ monitor and the new pulse-wave SupraQ with singlepatient disposable probe for launch in 2008. We have also started projectslooking at improving our probe manufacturing processes both to improve capacityas volumes grow and to reduce our unit costs of production through automationand redesign of components, packaging and production flows. We are in late-stage trials of a new design of a probe for use in patients asthey wake up following surgery that will allow post-operative monitoring tocontinue for a prolonged period as dictated by clinical necessity. Board membership Peter Smedvig, a director of Deltex Medical since 1996, has decided not to standfor re-election at the Company's Annual General Meeting to be held in May2007. On behalf of the Board, I would like to thank Peter for his valuablecontribution to the Board over the years and wish him well with all his futureendeavours. Prospects The continued growth in supportive clinical trial data and the experience ofhospitals throughout the world using the CardioQ continues to reinforce theclinical and economic benefits of haemodynamic optimisation using our products.The pressures bearing down on healthcare providers both for better quality careand reductions in cost mean that technologies such as the CardioQ that candeliver both will win out over those that cannot. The clinical evidence needed to make the CardioQ a standard of care is in place.The recently published draft recommendation by the US authorities that use ofoesophageal Doppler is 'reasonable and necessary' and therefore should bereimbursed across a wide range of patients undergoing surgery and in intensivecare indicates that the clinical evidence may shortly begin to be implementedinto widescale practice. Sales of both CardioQs and probes in the first quarter of 2007 to date have beenencouraging and we are seeing growth in both underlying usage of our productsand our actual sales in each of the UK, USA and our international distributormarkets. We remain confident in our ability to deliver increasing andsustainable value for our shareholders by making the CardioQ and its relateddevices standards of care in the major world healthcare markets by focusing ondelivering better, more cost effective care for patients undergoing majorsurgery or in intensive care. Nigel KeenChairman15 March 2007 Consolidated profit and loss account for the year ended 31 December 2006 Unaudited Unaudited 2006 2005 As restated Note £'000 £'000 Turnover 2 3,511 3,042Cost of sales (1,182) (1,076) ---- ----Gross profit 2,329 1,966 ---- ----Net operating expenses (4,431) (3,740) ---- ----Operating loss (2,102) (1,774)Net interest (3) 3 ---- ----Loss on ordinary activities before taxation (2,105) (1,771)Tax on loss on ordinary activities 23 22 ---- ----Loss for the financial year (2,082) (1,749) ========= =========Loss per share - basic and diluted 5 (2.7p) (2.5p) ========= ========= The above results all relate to continuing operations. The loss on ordinaryactivities before taxation and the loss for the financial year have beencomputed on the historical cost basis. Statement of Group total recognised gains and losses for the year ended 31 December 2006 Unaudited Unaudited 2006 2005 As restated £'000 £'000 Loss for the financial year (2,082) (1,749)Currency translation differences in foreigncurrency net investment (9) 9 --- ---Total gains and losses relating to the year (2,091) (1, 740)Prior year adjustment - FRS 20 6 (768) - ---- ----Total recognised gains and losses recognised sincethe last annual report (2,859) (1,740) ========= ========= Consolidated balance sheetAt 31 December 2006 Unaudited Unaudited 2006 2005 As restated £'000 £'000Fixed assetsTangible assets 47 85 ---- ----Current assetsStocks 383 443Debtors:amounts falling due within one year 1,286 967amounts falling due after more than one year 52 99Cash at bank and in hand 418 606 ---- ---- 2,139 2,115Creditors:amounts falling due within one year (1,457) (1,089) ---- ----Net current assets 682 1,026 ---- ----Total assets less current liabilities 729 1,111 Creditors:amounts falling due after more than one year - (1)Provision for liabilities and charges (50) (34) ---- ----Net assets 679 1,076 ========= =========Capital and reservesCalled up share capital 800 726Share premium account 14,086 12,712Capital redemption reserve 17,476 17,476Other reserves 1,014 768Profit and loss account (32,697) (30,606) ---- ----Equity shareholders' funds 679 1,076 ========= ========= The prior year amounts have been restated to reflect the adoption of FRS20"Share - based payment" as set out in note 6. Consolidated cash flow statementfor the year ended 31 December 2006 Unaudited 2006 2005 Note £'000 £'000 Net cash outflow from operating activities 3 (1,656) (1,263) ---- ----Returns on investments and servicing offinanceInterest received 7 9Finance lease interest (1) (3)Finance interest (10) (3) ---- ----Net cash (outflow)/ inflow from returnsoninvestments and servicing of finance (4) 3 ---- ---- Taxation 32 - ---- ---- Capital expenditurePurchase of tangible fixed assets (12) (17) ---- ----Net cash outflow from capital expenditure (12) (17) ---- ---- Acquisitions and disposalsAcquisition of trade (62) - ---- ----Net cash outflow acquisition and disposals (62) - ---- ---- Net cash outflow before financing (1,702) (1,277) ---- ----FinancingOther borrowings 78 114Capital element of finance lease rentals (6) (7)Issue of ordinary share capital 1,491 571Expenses of share issue (43) (10) ---- ----Net cash inflow from financing 1,520 668 ---- ----Decrease in net cash in the year (182) (609) ========= ========= 1 Nature of the financial information The financial statements for Deltex Medical Group plc have yet to be approvedfor the year ended 31 December 2006. The financial information set out in thisannouncement does not constitute the Company's statutory accounts for the yearended 31 December 2006 or 31 December 2005. The financial information for theyear ended 31 December 2005 is derived from the statutory accounts for that yearwhich have been delivered to the Registrar of Companies except for therestatement of comparatives for the first time adoption of FRS20 "Share-basedpayment". The auditors reported on those accounts; their report was unqualifiedand 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 December2006 are expected to be finalised on the basis of the financial informationpresented by the directors in this preliminary announcement and will bedelivered to the Registrar of Companies following the Company's Annual Generalmeeting. The preliminary results have been prepared in accordance with applicableaccounting standards. The particular accounting policies adopted are the same asthose adopted in the financial statements for the year ended 31 December 2005,with the exception of the treatment of share option costs where FRS 20 has nowbeen adopted. The financial information does not constitute statutory accountsas defined in Section 240 of the Companies Act 1985. The Group awards directors, employees and certain of the Company's distributorsequity-settled share-based payments, from time to time, on a discretionarybasis. In accordance with FRS 20 "Share-based payment", equity settledshare-based payments are measured at fair value at the time of grant. Fair valueis measured by use of Black Scholes based model. The fair value determined atthe grant date of the equity-settled share-based payments is expensed on astraight-line basis over the vesting period, based on the Group's estimate ofthe number of shares that will eventually vest. The options are subject tovesting conditions of up to six years, and their fair value is recognised as anexpense with a corresponding increase in "other reserves" equity over thevesting period. The proceeds received net of any directly attributabletransaction costs are credited to share capital (nominal value) and sharepremium when the options are exercised. Further information regarding theadoption of FRS 20 is given in note 6 to the preliminary announcement. 2 Turnover and segmental analysis The Group's activities consist solely of the manufacture, maintenance andmarketing of medical devices. By origin, all sales are United Kingdom salesexcept for £412,000 of sales from our U.S. subsidiary (2005: £358,000). Unaudited 2006 2006 2006 2006 2005 2005 2005 2005 Probes Monitors Other Total Probes Monitors Other Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000Analysis of turnover bydestination Direct markets United Kingdom 1,837 604 124 2,565 1,559 251 88 1,898United States of America 349 58 5 412 303 50 5 358 Distributor markets Rest of Europe 276 25 11 312 289 328 6 623Rest of the World 170 51 1 222 128 34 1 163 --- ---- ---- ---- --- ---- ---- ---- 2,632 738 141 3,511 2,279 663 100 3,042 ======= ======== ======== ======== ======= ======== ======== ======== 3 Reconciliation of operating loss to net cash outflow from operatingactivities Unaudited Unaudited 2006 2005 As restated £'000 £'000 Operating loss (2,102) (1,774)Depreciation on tangible fixed assets 49 66Impairment of trade acquisition 62 -Decrease in stocks 73 178Increase in debtors (282) (189)Increase in creditors 307 193Credit in respect of service costs settled by award ofshare options 246 261Foreign exchange differences (25) (2)Increase in provisions 16 4 --- ---Net cash outflow from operating activities (1,656) (1,263) ======= ======= 4 Dividends The directors do not recommend payment of a dividend (2005: nil). 5 Loss per share The loss per share calculation for 2006 is based on the loss of £2,082,000 andweighted average number of shares in issue of 76,537,400. For 2005 the loss pershare calculation was based upon the restated loss of £1,749,000 and weightedaverage number of shares in issue of 70,366,000.The Group had no dilutive potential ordinary shares in either year, which wouldserve to increase the loss per ordinary share. Therefore, there is no differencebetween the loss per ordinary share and the diluted loss per ordinary share. 6 Prior year adjustment Following the adoption of FRS20, "Share-based payment" the Group's reserves havebeen restated. The fair value of the share-based payments debited to the profitand loss reserve and credited to "other reserves" were £507,000 in respect ofperiods ending on or before 31 December 2004. The profit and loss account forthe year ended 31 December 2005 was debited with a charge of £261,000. Theprofit and loss account for the year ended 31 December 2006 includes a charge of£246,000 in respect of share based payments. Under the previous accountingpolicy, UITF 17, £130,000 would have been charged in 2006 (2005: £Nil). 7 Distribution of announcement Copies of this announcement are being sent to all shareholders and will beavailable for collection free of charge from the Company's registered office atTerminus Road, Chichester, West Sussex PO19 8TX. Copies of the Report andAccounts for the year ended 31 December 2006 will be sent to shareholders in duecourse. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Deltex Medical