22nd Jun 2006 07:01
DawMed Systems PLC22 June 2006 22 JUNE 2006 DAWMED SYSTEMS PLC INTERIM RESULTS FOR THE SIX MONTH PERIOD TO 31 MARCH 2006 The Board of DawMed Systems plc ("DawMed" or "the Company"), the AIM listedmedical devices company which designs, manufactures, sells and serviceshealthcare decontamination equipment used by NHS Trust hospitals, privatehospitals, clinics and Primary Care practitioners, today announces InterimResults for the six months to 31 March 2006, which again show an improvementover the same period last year and have exceeded the Board's expectations. KEY POINTS •EBITDA up 21.9% to £156,100 (2005: £128,100); •Profit on ordinary activities before tax of £33,700 - an increase of £39,300; •Increase in shareholders funds; •Successful re-alignment of business to concentrate on higher margin activities with good future growth potential; •Beneficial disposal of SSD intellectual property assets, thus eliminating a loss making activity; •Margin growth on "Clinic", Spares, Support Services and Wassenburg products; and •Product portfolio significantly enhanced with new "AERclens" system, new Wassenburg "Dry 300" sterile storage/dryer cabinets and new "pass-through" Wassenburg equipment. Commenting on today's announcement, Kevin Gilmore, Executive Chairman of DawMed,said: "Your Board is confident that the improvement in the Company's performanceachieved during the first half has created a solid base upon which to furthergrow the sales volume of its newly widened and balanced range of products andservices. The Board therefore expects the second half of the year to be at leastin line with the first half performance, with the emphasis continuing to be ongrowth and profitability from the higher margin business elements within oursame areas of experience and competence." --ENDS-- Enquiries: DawMed Systems plc Tel: 01709 731351Kevin Gilmore, Executive Chairman : 01789 74 0010 Beaumont Cornish Limited Tel: 020 7628 3396Roland Cornish Bishopsgate Communications Limited Tel: 020 7430 1600Dominic Barretto / Maxine Barnes For further information please visit DawMed's website at www.dawmed.com CHAIRMAN'S STATEMENT I have pleasure in announcing that the results produced by your Company for thefirst half of the year 2005-06 again showed an improvement over the same periodlast year. These results were achieved during a period of substantial changewithin the business and have exceeded the Board's expectations. Financials The overall performance of the Company in producing earnings, after financecharges but before interest, taxation, depreciation and amortisation ("EBITDA"),of £156,100 representing an increase of 21.9% and a profit on ordinaryactivities before tax of £33,700, representing a increase of £39,300, bothcompared with the same period last year, has fully justified your Board'sdecision to re-align the business in order to concentrate on higher marginactivities with good future growth potential. The overall performance at the gross profit level showed an improvement of 5.1%over the same period last year, despite a reduction in turnover of 13% to £2.6million. The disposal of the SSD intellectual property assets (announced on 30January 2006) accounted for the majority of that turnover reduction. Lower salesof Wassenburg products also contributed to the reduction, due to theunavailability of the pass-through version of the Wassenburg flexible endoscopewasher-disinfectors ("WD"). Conversely, Support Services continued to grow with turnover materiallyincreased over the same period last year. In addition, the sales performance ofthe "Clinic" bench top washer-disinfector-dryer ("WDD") and sales of sparescontinued a noteworthy improvement in comparison with the first half of lastyear. Margins on "Clinic", Spares and Support Services each showed a substantialimprovement, while there was also a modest margin improvement on the Wassenburgproducts. The low margins on the SSD equipment, which is no longer part of ourrange of products, fully reflected the downturn in the turnover of that originalelement of the business. Total operating costs, before depreciation, provisions and financing charges,increased by 2.0% over the same period last year and was reflective of theincreased activity in "Clinic" manufacturing and Support Services. The profit after tax of £26,100 compared favourably with a net loss after tax of£5,600 for the same period last year. The balance of shareholders' funds at 31 March 2006 was £1,160,000 compared with£1,101,200 at the same date last year. Products and Services The product portfolio of the business has been substantially re-aligned,following the disposal of the intellectual property rights and stock of the SSDrange of equipment announced in January this year. This significant event,together with the launch of the new "AERclens" washer-disinfector system,designed specifically for the decontamination of small flexible nasendoscopesused in the Ear, Nose and Throat ("ENT") departments of Secondary Carehospitals, clinics and consulting rooms, as well as the new Wassenburg"pass-through" washer-disinfectors and "Dry 300" sterile storage/dryer cabinets,is expected to further improve the gross margins earned on all products sold bythe Company. The "AERclens" system represents the only one of its type in theworld, so far as the Directors are aware. The improved penetration of the "Clinic" product in the UK Primary Care market,and the continuing growth being achieved by Support Services, reinforces theexpectations referred to above. Overall, gross margins have already shownsignificant improvements in the first half of the current year, therebyvalidating the strategic asset disposal decision made by your Board at the startof the current financial year. Enhanced Product Portfolio Existing products, and new products which were introduced in the period,include: • "Clinic" bench top WDD - providing washing, thermal disinfection anddrying for use in all NHS and private dentists, clinics and other Primary Carepractitioners and also targeting the European and worldwide markets; • "AERclens" washer-disinfector system for the decontamination of smallflexible nasendoscopes - a completely new product providing washing and chemicaldisinfection for use in all NHS and private Ear, Nose & Throat ("ENT")Departments, clinics and consulting rooms and also targeting the European andworldwide markets; • New Wassenburg "pass-through" flexible endoscope washer-disinfector("WD") and the continuation of the original Wassenburg space-saving flexibleendoscope WD, both providing washing and chemical disinfection for use in NHSand private Endoscopy Departments et al in the UK; and • New Wassenburg "Dry 300" - a flexible endoscope storage/drying cabinetproviding a daytime and overnight sterile environment for use in NHS and privateEndoscopy Departments et al in the UK. Remainder of the Year and Future Prospects The "Clinic" bench top washer-disinfector-dryer ("WDD"), having taken longerthan expected to establish itself in the UK primary care market, is now makinggood progress in gaining business from both the public and private sectors andis anticipated to produce increased year-on-year growth which will comparefavourably with the first half of this year. Furthermore, the export potentialfor the product is now beginning to emerge and several opportunities could reachsatisfactory conclusions. The Wassenburg product range will be enhanced in the second half by the additionof the recently launched "Dry 300" sterile storage/dryer cabinets and this,together with the new "pass-through" flexible endoscope washer-disinfector,provides further opportunity to grow this already successful element of theCompany's business. The launch of the new "AERclens" system for the decontamination of smallflexible nasendoscopes used in ENT departments of Secondary Care NHS and privatehospitals, clinics and consulting rooms has enjoyed an enthusiastic receptionand is anticipated to achieve not insignificant levels of revenue generation,not least due to your Board's belief that this product is currently the first ofits type in the world and is capable of achieving savings for customers againstthe costs of cleaning such instruments by current non-validated manual methods. Following the completion of the recent strategic rationalisation of the Group,working capital has been released for marketing and selling the new "AERclens"system, the "Clinic" bench top WDD, the Wassenburg standard and new"pass-through" WDs, the new Wassenburg "Dry 300" sterile storage/dryer cabinets,Spare Parts and the continued expansion of the already highly successful SupportServices organisation. Your Board is confident that the improvement in the Company's performanceachieved during the first half has created a solid base upon which to furthergrow the sales volume of its newly widened and balanced range of products andservices. The Board therefore expects the second half of the year to be at leastin line with the first half performance, with the emphasis continuing to be ongrowth and profitability from the higher margin business elements within oursame areas of experience and competence. Kevin M Gilmore Executive Chairman 22 June 2006 Dawmed Systems plc Unaudited UnauditedUNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT 6 months to 6 months tofor the half year ended 31 March 2006 31 March 31 March 2006 2005 £'000 £'000TURNOVER 2,611.7 3,002.8Cost of sales 1,414.8 1,864.2 ________ _________GROSS PROFIT 1,196.9 1,138.6Administrative expenses 1,149.0 1,123.1 ________ _________OPERATING PROFIT 47.9 15.5Interest receivable and similar income 9.0 5.1Interest payable and similar charges 23.2 26.2 ________ _________PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE 33.7 (5.6)TAXATIONTaxation (7.6) - ________ _________PROFIT/(LOSS) FOR THE HALF YEAR 26.1 (5.6) ________ _________BASIC EARNINGS/(LOSS) PER SHARE (see Note 1) 0.13p (0.03)p ________ _________DILUTED EARNINGS/(LOSS) PER SHARE (see Note 1) 0.13p (0.03)p ________ _________ NOTES TO THE INTERIM STATEMENT 1) The calculation of basic earnings/(loss) per share is based upon the profitof £26,036 (2005: loss £5,625) and on 20,463,292 shares (2005: 19,353,400shares), being the weighted average number of shares in issue during the period. For the six months to 31 March 2006 the diluted earnings per share is based uponthe profit of £26,036 and on 20,469,100 shares. The 160,000 options issued on 8February 2006 are dilutive since the exercise price is below the average fairprice for the period. The remaining 2,236,676 options have exercise prices abovethe average fair price for the period and are therefore not dilutive. For the six months to 31 March 2005 the exercise price of the 2,236,676 shareoptions was above the average fair price for the period, therefore the dilutedloss per share was equivalent to the basic loss per share. 2) Earnings before interest tax depreciation and amortisation ("EBITDA") consistof the Operating Profit of £47.9k (2005: £15.5k) plus depreciation andamortisation charges of £108.2k (2005: £112.6k). 3) The accounting information presented does not constitute statutory accountsand has not been audited. 4) Copies of the interim report will be available in 30 days at the offices ofBeaumont Cornish Limited, 5th Floor, 10-12 Copthall Avenue, London, EC2R 7DE. Dawmed Systems plc Unaudited UnauditedUNAUDITED CONSOLIDATED BALANCE SHEET 31 March 31 Marchas at 31 March 2006 2006 2005 £'000 £'000 FIXED ASSETS 462.9 631.5 CURRENT ASSETSStocks 352.0 682.7Debtors 1,651.8 1,367.7Cash at bank and in hand 608.3 233.8 ________ _________ 2,612.1 2,284.2 CREDITORS: Amounts falling due within one year 1,861.8 1,690.4 ________ _________NET CURRENT ASSETS 750.3 593.8 ________ _________TOTAL ASSETS LESS CURRENT LIABILITIES 1,213.2 1,225.3 ________ _________CREDITORS: Amounts falling due after more than 53.2 124.1one year ________ _________NET ASSETS 1,160.0 1,101.2 ________ _________Called up share capital 1,023.2 1,023.2Share premium account 1,872.2 1,872.2Merger reserve (350.5) (350.5)Profit and loss account (1,384.9) (1,443.7) ________ _________SHAREHOLDERS' FUNDS 1,160.0 1,101.2 ________ _________ Dawmed Systems plc Unaudited UnauditedUNAUDITED CONSOLIDATED CASHFLOW STATEMENT 6 months to 6 months tofor the half year ended 31 March 2006 31 March 31 March 2006 2005 £'000 £'000 Net cash inflow from operating activities 162.4 364.6 ________ _________Returns on investments and servicing offinance Interest received 9.0 5.1Interest paid (23.2) (26.2) ________ _________ (14.2) (21.1) ________ _________Capital expenditure and financial investment Purchase of fixed assets (54.7) (25.1)Disposal of fixed assets 34.8 - ________ _________ (19.9) (25.1) ________ _________Financing Issue of ordinary shares - 262.5Factoring and stock advances (126.3) (663.9)Finance leases 5.2 (10.4) ________ _________ (121.1) (411.8) ________ _________Increase/(decrease) in cash 7.2 (93.4) ________ _________Reconciliation of operating profit to net cashinflow from operating activities Operating profit 47.9 15.5Depreciation and amortisation charges 108.2 112.6Movement in stocks 154.1 (168.7)Movement in debtors (264.1) 57.0Movement in creditors 116.3 348.2 ________ _________Net cash inflow from operating activities 162.4 364.6 ________ _________ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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