21st Mar 2006 07:02
Deltex Medical Group PLC21 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") todayannounces 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 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. "CardioQ sales in the first quarter of 2006 have been encouraging and we remainconfident in our ability to deliver increasing and sustainable value for ourshareholders by focusing on delivering better, more cost effective care forpatients undergoing major surgery or in intensive care." For further information, please contact:- Deltex Medical Group plc01243 774 837Nigel Keen, ChairmanAndy Hill, Chief ExecutiveEwan Phillips, Finance Director Financial DynamicsDavid Yates/John Gilbert0207 831 3113 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 amountof circulating 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 and majorrisk surgery through the controlled administration of fluid and drugs.Haemodynamic optimisation has been scientifically proven to improve the speedand quality of patient 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, including eightrandomised, controlled clinical trials, on the use of the CardioQ which haverepeatedly:- • 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 insertedinto the oesophagus through the mouth or nose to determine the amount of bloodbeing pumped around the body - 'circulating blood volume'. Reduced circulatingblood volume is known as hypovolaemia and occurs as a consequence of blood lossor dehydration. If blood volume is reduced significantly, the body cannotdeliver sufficient oxygen to the vital organs. This causes medicalcomplications including peripheral and major organ failure, which can lead todeath. Hypovolaemia affects almost all patients undergoing surgery because ofthe combined effects of pre-operative starvation, the impact of anaestheticgases and the trauma of surgery itself. Guided by the CardioQ and using fluidsand drugs to optimise the amount of circulating blood and the heart'sperformance, doctors can significantly reduce post-operative complicationsallowing patients to make a fuller, more complete recovery and return homeearlier. The opportunities the CardioQ offers for improved quality andefficiency 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 Sales 2005 2005 2005 2005 Probes Monitors Probes Monitors units units £'000 £'000Direct marketsUK 21,475 37 1,559 251USA 4,515 12 303 50Distributor marketsEurope 6,375 50 289 328Far East & Latin 3,685 14 128 34America _____ _____ _____ _____ 36,050 113 2,279 663 _____ _____ _____ _____ Trading Results (continued) Sales 2005 2005 2004 2004 Other Total Probes Monitors £'000 £'000 units unitsDirect marketsUK 88 1,898 18,082 39USA 5 358 4,520 3Distributor marketsEurope 6 623 8,627 56Far East & Latin 1 163 681 11America _____ _____ _____ _____ 100 3,042 31,910 109 _____ _____ _____ _____ Trading results (continued) Sales 2004 2004 2004 2004 Probes Monitors Other Total £'000 £'000 £'000 £'000Direct marketsUK 1,254 169 53 1,476USA 273 10 1 284Distributor marketsEurope 390 277 2 669Far East & Latin 32 32 1 65America _____ _____ _____ _____ 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 Medicaldelivered sales growth of 29% compared to 2004 with over 80% of this growthcoming from the recurring revenue streams of probe sales and monitormaintenance. Across the Group, 78% of group revenues and 68% of the salesgrowth 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 eachand every month of 2005 were ahead of the level achieved in the correspondingmonth in 2004. This trend has continued into the first quarter of 2006, despitethe well publicised financial difficulties affecting much of the UK NationalHealth 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 insales came from monitor sales, a clear sign that the Company's value propositionis beginning to resonate in the US market. The Company's reported sales to our distributors in Europe, the Far East andLatin America continue to be heavily influenced by the timing of larger stockingorders, with many of our distributors only placing one or two significant ordersa year. This, combined with planned de-stocking programmes by our distributionpartners in France and Italy, resulted in probe sales to our distributors in2005 being £5,000 lower than in 2004. However, increasing numbers of ourdistributors, are reporting increased demand from hospitals for probes and theirsales to end-users are growing. The enthusiastic uptake of our products in Peruand Korea accounts for much of the strong growth in sales in the Far East andLatin America. In addition, distributors in countries such as Brazil, China andGermany, which are at earlier stages of market development, are reportingpositive developments in the early stages of market penetration. Monitor sales generated £663,000 for the Group, an increase of £175,000 over theprior year (2004: £488,000). Included in UK monitor sales are three SupraQssold to the Medway Maritime Hospital in Kent (the 'Medway'). The Medway is oneof our largest CardioQ accounts and, as part of the terms of trade agreed withthe hospital, the doctors there will be undertaking a series of trials aimed atdemonstrating the clinical efficacy of the SupraQ. In the UK Deltex Medical sold 34 CardioQ monitors in 2005, five less than in2004, although increases in average selling prices meant that CardioQ sales in2005 contributed £22,000 more revenue than in 2004. The fall in volume is dueto the mounting financial difficulties facing many NHS hospitals over the lastyear or two and occurred despite a significant increase in the pipeline forCardioQs in the UK as clinical demand has continued to grow. In an environmentof severely restricted equipment budgets in NHS hospitals, the CardioQ has tocompete to secure investment more than at any stage of its history. In thisenvironment, the CardioQ has the significant advantage of both compellingclinical trial evidence and growing real world experience which demonstrate thatits implementation allows hospitals to reduce their total expenditure bymaterial amounts. Early in 2006 Deltex Medical acquired the rights to the TECO oesophageal Dopplermonitor, 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 aprogramme of converting existing TECO users to the superior CardioQ. European monitor sales include 20 CardioQs purchased for use in a majormulti-centre randomised controlled trial in France. This trial, which isexpected to take two to three years to complete, is seeking to demonstrate areduction in post-operative mortality in 400 patients undergoing surgery forrepair of fractured neck of femur (broken hip). As it became clear in late 2004 and early 2005 that the NHS financial situationmight delay conversion of large amounts of the Company's CardioQ pipeline, theCompany's key focus throughout 2005 became to reduce the rate of cash absorbedby the business and, thereby, to accelerate the time at which the Company passesthe break-even point. In addition to pursuing marketing programmes aimed atincreasing both monitor sales and probe consumption, the Company acted to reduceits expenditure. Key measures included reducing headcount by over 20%, cuttingback overheads, renegotiating terms with suppliers and improved working capitalmanagement. Cash available at 31 December 2005 was £606,000 including £219,000 drawn downunder the Company's working capital facility. Since the end of the year theCompany 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 monthin 2004 and £226,000 in 2003. The progress made by the Company towards reachingthe break-even point is demonstrated by the fact that the average monthly cashburn in the second half of 2005 was £64,000, less than half that of £134,000 inthe first six months of the year. The Company therefore entered 2006 with thelowest rate of monthly cash burn in its history and the Directors are confidentthat the Company has adequate cash resources available to see it through toprofitability. In the first quarter of 2006, the Company has continued toabsorb considerably less cash than in the corresponding months in previousperiods; this has been achieved despite a marked slow-down in collections fromthe 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 theirunderstanding and acceptance of the benefits of active haemodynamic managementin patients undergoing major surgery or those in critical care. There are nowvery few NHS hospitals in the UK where there is not at least some degree ofactive clinical advocacy for more frequent use of the CardioQ system and thereare many hospitals where the clinical support is both broad and deep; themajority of anaesthetists now recognise that they ought to be monitoring andhaemodynamically optimising at least some of their moderate and major risksurgical patients. This wide-scale clinical advocacy, supported by a substantial body of clinicalevidence, is driving the continued steady growth in probe sales. However, weestimate that current clinical desire to use our technology is several timeshigher than actual usage rates and that the degree of clinical acceptance hasgrown 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 adoptionof innovative medical technologies, the problem has been exacerbated recently bygreater than normal financial restrictions. Many hospitals have run intofinancial deficit or are battling hard to avoid doing so. As a consequence manyhave scaled back dramatically already limited budgets both for purchasingcapital items such as CardioQ monitors and revenue items such as our probes. To succeed in this environment, medical device companies have not only todemonstrate that the case for investment in its products is sound but that suchan investment ought to be a high priority for each hospital. Deltex Medical isideally positioned to do this, and during 2005 has worked with a number of acutehospital Trusts around the UK to undertake focused evaluations of the CardioQ inoperating theatres to see if they can reproduce the benefits demonstrated by thereal-world experience of the Medway Maritime Hospital NHS Trust, which isalready saving £1 million a year following its investment in the CardioQ. Theseexercises are time-consuming and often complicated by the difficulty incollating management information on a hospital wide basis, however all suchexercises completed to date have shown reduced post-operative complications andreduced lengths of hospital stays and have therefore been consistent with allthe many randomised controlled clinical trials undertaken with the CardioQ.Feedback on results from sites undertaking such evaluations has been universallypositive and has led to the submission of business cases for the purchase of ourequipment in Trusts where these audits have been completed. The financial difficulties facing many NHS Trusts come at a time of far-reachingand fundamental change in the provision of healthcare in the UK, driven by theUK government's reform programme. Amongst other initiatives the government hasintroduced a set of national tariffs for surgical procedures and has encouragedprivate hospital providers to bid for contracts to treat large numbers of NHSpatients undergoing elective surgery. These contracts are forcing the privateproviders to change their business models to focus on volume, price and quality. The CardioQ offers these providers opportunities as higher risk proceduressuch as hip and knee replacements start to be covered by the contracts.Accordingly, during the year, the Company entered into discussions with a numberof the private provider groups and completed an encouraging initial evaluationin a private hospital in the South of England. This evaluation, based on 20patients undergoing various types of moderate and major surgery, concluded thatthe hospital could reduce its standard patient journeys by one day per patientthrough using the CardioQ and that there might be a further unquantified benefitfrom reducing the frequency and severity of patients going off pathway due toavoidable complications. In June a group of eminent anaesthetists, surgeons and intensivists gathered inLondon for the launch of a lobbying pamphlet 'Modernising Care for PatientsUndergoing Major Surgery'. This document, produced by the 'Improving SurgicalOutcomes Group' (ISOG) has at its heart the belief that haemodynamicoptimisation is the key to unlocking much of the resource required to implementa number of fundamental improvements in surgical patient care in UK hospitals. We are working with ISOG to support its efforts to promote the benefits ofhaemodynamic optimisation to doctors, senior health service managers, theDepartment of Health, politicians, patient groups and other stakeholders. Late in 2004, during a meeting with hospital managers in Scotland to discusswide-scale implementation of the CardioQ, concerns were raised as to the statusof CardioQ with respect to the National Institute for Health and ClinicalExcellence's (NICE) Interventional Procedures Programme (IPP). The IPP seeks todetermine whether a medical technique or technology is safe and efficacious. Atechnology either falls within the remit of the IPP process and is thereforesubject to stringent reporting requirements each time it is used until it isdeemed to be safe and efficacious, is recognised specifically to fall outside ofthe remit (on the grounds that it is established clinical practice with littleuncertainty over safety or efficacy) or its status is unclear. A technology'sstatus under this programme can have far-reaching commercial consequences forthe manufacturer. Hospitals may choose not to purchase the technology ifdetermination of its status has not been made and may continue to defer apurchase decision until it has been declared either outside the IPP remit orproven to be safe and efficacious within it. After seeking clarification of the CardioQ's status with regard to the NICE IPPfrom officials at the Scottish Executive, the Company itself sought furtherclarification from NICE in June 2005. NICE's decision dated 12 January 2006 was published on its website on 25 January2006 and states: "Oesophageal doppler monitoring involves the measurement of blood flow velocityin the descending thoracic aorta using a flexible ultrasound probe. NICE hasrecently become aware of this procedure. NICE has a commitment to considerwhether procedures notified to the Institute fall within the remit of theinterventional procedures programme. The Institute will go on to developguidance on the safety and efficacy of all procedures that fall within theprogramme's remit. After careful consideration, NICE does not believe that thisprocedure falls within its remit. This is because oesophageal doppler monitoringis considered standard clinical practice with risks and benefits that aresufficiently well-known. For a more detailed description of the InterventionalProcedures 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 theNHS is carried out using the CardioQ. The decision from Nice means that NHShospitals wishing to purchase the CardioQ can do so without needing furtherapproval. Europe The key goals of our sales activity in Europe in 2005 were to continue to tailorour core message to the specific circumstances of each of the markets in whichwe work, to provide our distributors with the tools required to drive probeusage by the existing installed monitor base, and to work with our French andItalian distributors to reduce stocks to the point where we could move them to amonthly ordering pattern in 2006. Our primary marketing goal has been to establish a relationship with the opinionleading surgeons and anaesthetists who are supporting various initiatives toimprove surgical outcomes across Europe. We believe that use of the CardioQ hasa very significant role to play in these initiatives and it is our goal thathaemodynamic optimisation should be routine for all patients undergoing surgeryunder these protocols. In May 2005 we also announced that Radboud University Nijmegen Medical Centre inthe Netherlands had become the first major university teaching hospital inEurope 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 theirinstallation. Doctors championing the use of our products are working withsenior hospital managers and our distributor to obtain additional funding toexpand 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 asmall number of internationally recognised key opinion leaders. These doctorsare strong advocates of the use of the CardioQ in a variety of clinical settingsand they are responsible for much of the physician-to-physician training thathappens in the USA. In addition, we are pursuing a number of projects that willhelp us develop a scalable business that we can implement with a third-party atan appropriate point in the future. Our two biggest users in the US have responded to our sales efforts and recentlybegun to migrate usage 'upstream' into the operating room (OR). Even arelatively modest level of adoption in the OR in either one of these hospitalswould 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 sincewe launched the CardioQ in 1999. They included, in September 2005, the sale offour CardioQ monitors to the William Beaumont Army Medical Center in El Paso,Texas. The monitors are intended for use in medical and surgical patients inthe intensive care unit and those patients undergoing elective or emergencysurgery in the operating room. Physicians at the hospital are also working tomake the CardioQ an integral part of patient care in a wider range of clinicalapplications, including trauma surgery and neurosurgery. The William Beaumont Army Medical Center treats active service personnel andtheir dependants and also provides field-based hospital facilities in areas ofconflict 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 personnelthat can support the CardioQ in the field and the Company provides high-qualitytechnical support at a low cost via telephone and over the internet. Sales to these markets remain occasional and of varying value, however in 2005sales were significantly ahead of 2004 (£163,000 against £65,000), mainly due toa larger order from our Peruvian distributor. We understand this order to havebeen underpinned by growing clinical demand and expect to see a similar largeorder 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 Americanterritories has been reduced over the last two years, the quality of thebusiness generated has improved considerably in terms of value and paymentprofiles. We remain cautious in our approach and do not foresee any substantial change inour strategy in these markets in the short-term. We are however, able to reportcontinued signs of growth and the emergence of future opportunities forinvestment as our distributors complete the first phase of gaining a footholdfor our products in their respective markets. Research and Development The primary goal for our research and development (R&D) efforts is thedevelopment of a range of monitoring solutions for patients who are conscious.This will enable doctors to provide the benefits of haemodynamic optimisation topatients who are undergoing surgery without the use of a general anaesthetic,for example in many hip replacement procedures, or who are conscious in thecritical care setting. In both of these examples, vulnerable patients miss outon the rapid and effective intervention that unconscious patients benefit fromthrough use of the CardioQ. While we do have a probe variant designed for use in un-sedated patients, thereare still a small but important number of patients who could benefit from eitheran improved version of this probe or a wholly non-invasive monitor such as theSupraQ(TM). During 2005 we were able to conclude some important developmental tasks relatedto understanding the effects of patient anatomy on signal acquisition. Goingforward into 2006, we expect to continue to sell a limited number of one ofthese variants to further our knowledge and help us refine the technology. Aswell as providing conscious patients with essential monitoring, the Medwayhospital in Gillingham is carrying out some of this work for us using the threeSupraQ devices they purchased from us at the end of 2005. We see continued development of solutions for the conscious patient as acritical part of our R&D efforts as the potential clinical applications for theSupraQ go far beyond those conscious patients having surgery or in criticalcare. Clinical Trial Developments During 2005 the British Journal of Anaesthesia published the results of agovernment funded, randomised controlled clinical trial into the use of theCardioQ in patients undergoing major bowel surgery. The trial, undertaken by consultant anaesthetist Dr Howard Wakeling inconjunction with his surgical colleagues at Worthing Hospital, demonstrated thatusing the CardioQ to optimise circulating blood volume led to a reduction inhospital stay of one and a half days when compared to fluid management basedaround pressure measurements alone and without the benefit of the informationprovided by the CardioQ. In May we announced the presentation of initial results from a double-blindedprospective randomised controlled clinical trial that used the CardioQ inpatients undergoing major bowel surgery. The trial was undertaken by surgeonsand anaesthetists at the Freeman Hospital in Newcastle-upon-Tyne and the firstresults to come from the study were presented at The American Society of Colonand Rectal Surgeons meeting in Philadelphia. The statistically significant results of the study included a reduction in majorpost surgical complications in the CardioQ group with only 1% of patientssuffering such a complication compared to 13.7% in the control group. Theaverage (median) hospital stay was seven days for CardioQ patients compared tonine days in the control group. The trial concluded that fluid optimisationusing the CardioQ leads to shorter hospital stays and a decrease in majormorbidity with consequent major implications for the management of patients infast-track regimens. Doctors from the Royal Free hospital were awarded two first prizes for work theyhad undertaken using the SupraQ device to manage the complicated haemodynamicsof patients undergoing elective caesarean section. In this trial the monitorwas used to determine the relative effectiveness of two drugs in maintainingblood pressure during the procedure. The results were presented and awarded first prize at the Society of ObstetricAnesthesia and Perinatology meeting held in Palm Desert, California, USA and atthe Obstetric Anaesthetists' Association meeting held in London in May 2005. Looking forward, Dr Bernard Cholley, an anaesthetist and intensive carespecialist based in Paris, will lead the first multi-centre, randomised,controlled trial investigating the impact of the use of CardioQ on death ratesfollowing emergency hip fracture repair. This trial, partially funded by theFrench government, will involve more than 15 hospitals across France and willenrol 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 thathaemodynamic optimisation in this very high-risk surgery saves lives. 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. CardioQ sales in the first quarter of 2006 have been encouraging and we remainconfident in our ability to deliver increasing and sustainable value for ourshareholders by focusing on delivering better, more cost effective care forpatients undergoing major surgery or in intensive care. Nigel KeenChairman21 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 2,494Cost 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 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 31December 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 sheetAt 31 December 2005 2005 2004 £'000 £'000 Unaudited AuditedFixed assetsTangible assets 85 136 ---- ----Current assetsStocks 443 758Debtors:amounts falling due within one year 967 783amounts falling due after more than one year 99 72Cash at bank and in hand 606 1,207 ---- ---- 2,115 2,820Creditors: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 reservesCalled up share capital 726 695Share premium account 12,712 12,182Capital redemption reserve 17,476 17,476Profit and loss account (29,838) (28,359) ---- ----Equity shareholders' funds 1,076 1,994 ========= ========= Consolidated cash flow statementfor the year ended 31 December 2005 2005 2004 Note £'000 £'000 Unaudited AuditedNet cash outflow from operating activities 3 (1,263) (1,988) ---- ----Returns on investments and servicing of financeInterest received 9 15Finance lease interest (3) (1)Finance interest (3) ---- ----Net cash inflow from returns on investments and 3 14servicing of finance ---- ----Taxation - 102 ---- ----Capital expenditurePurchase of tangible fixed assets (17) (9) ---- ----Net cash outflow from capital expenditure (17) (9) ---- ----Net cash outflow before financing (1,277) (1,881) ---- ----FinancingNew finance leases - 15Other borrowings 114 105Capital element of finance lease rentals (7) (2)Issue of ordinary share capital 571 1,964Expenses 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 approvedfor the year ended 31 December 2005. The financial information set out in thisannouncement does not constitute the Company's statutory accounts for the yearended 31 December 2005 or 31 December 2004. The financial information for theyear ended 31 December 2004 is derived from the statutory accounts for that yearwhich have been delivered to the Registrar of Companies. The auditors reportedon those accounts; their report was unqualified and did not contain a statementunder either Section 237 (2) or Section 237 (3) of the Companies Act 1985. Thestatutory accounts for the year ended 31 December 2005 will be finalised on thebasis of the financial information presented by the directors in thispreliminary announcement and will be delivered to the Registrar of Companiesfollowing the Company's Annual General meeting. The preliminary results have been prepared in accordance with applicableaccounting standards. The particular accounting policies adopted are the sameas those adopted in the financial statements for the year ended 31 December2005. 2. Turnover The Group's activities consist solely of the manufacture, maintenance andmarketing of medical devices. By origin, all sales are United Kingdom salesexcept 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 £'000Analysis of turnover bydestinationDirect marketsUnited Kingdom 1,559 251 88 1,898United States of America 303 50 5 358Distributor marketsRest of Europe 289 328 6 623Rest 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 £'000Analysis of turnover bydestinationDirect marketsUnited Kingdom 1,254 169 53 1,476United States of America 273 10 1 284Distributor marketsRest of Europe 390 277 2 669Rest of the World 32 32 1 65 --- ---- ---- ---- 1,949 488 57 2,494 ======= ======== ======== ======== 3. Reconciliation of operating loss to net cash outflow from operatingactivities 2005 2004 £'000 £'000 Unaudited Audited Operating loss (1,513) (2,787)Depreciation on tangible fixed assets 66 79Decrease/(increase) in stocks 178 (186)(Increase)/decrease in debtors (189) 1,015Increase/(decrease) in creditors 193 (237)Costs associated with share option schemes - 124Foreign 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 andweighted average number of shares in issue of 70.4 million. For 2004 the lossper share calculation was based upon the loss of £2,754,000 and weighted averagenumber of shares in issue of 63.4 million. 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. Provision for liabilities and charges In 2004, an amount of £5,000 relating to National Insurance payable on optionsexercised, has been reclassified from provisions for liabilities and charges toaccruals 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 beavailable for collection free of charge from the Company's registered office atTerminus Road, Chichester, West Sussex PO19 8TX. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Deltex Medical