23rd Jun 2005 07:01
DawMed Systems PLC23 June 2005 23 JUNE 2005 DAWMED SYSTEMS PLC INTERIM RESULTS FOR THE SIX MONTH PERIOD TO 31 MARCH 2005 The Board of DawMed Systems plc ("DawMed" or "the Company"), the medical devicescompany which designs, manufactures, sells and services washer disinfectors usedby NHS Trust hospitals, private hospitals and clinics, today announcessignificantly improved results, in comparison with the same period last year,for the six month period to 31 March 2005. Key Points: • Turnover up 33.3%;• Total Gross Profit up 40.1%;• EBITDA profit of £128,100 (2004: loss of £166,800);• Operating profit of £15,500 before interest represents a beneficial turnaround of £216,000 (2004: loss of £200,500);• Net pre-tax loss of £5,600 represents a beneficial turnaround of £203,900 (2004: loss of £209,500);• Clinic now on the preferred supplier lists of the NHS in both England and Scotland;• Two significant Hospital Trust contracts, with a combined value exceeding £1 million, awarded in January; and• Excellent overall growth exhibited by both the Wassenburg and the Support Services Divisions. Commenting on today's announcement, Kevin Gilmore, Executive Chairman of DawMed,said: "I am pleased to announce, on behalf of the Board, that the overall financialperformance of your Company for the first six months of the year 2004-5 has metthe Directors' expectations in showing much improved results in comparison withthe same period last year. Overall, I remain hopeful that the second half of the year will reflect theresults for the first half and produce a not unsatisfactory outcome at the yearend." --ENDS-- Enquiries: DawMed Systems plc Tel: 01789 450075Kevin Gilmore, Executive Chairman Beaumont Cornish Limited Tel: 020 7628 3396Roland Cornish Bishopsgate Communications Limited Tel: 020 7430 1600Maxine Barnes / Dominic Barretto For further information please visit DawMed's website at www.dawmed.com CHAIRMAN'S STATEMENT I am pleased to announce, on behalf of the Board, that the overall financialperformance of your Company for the first six months of the year 2004-5 has metthe Directors' expectations and showed significantly improved results incomparison with the same period last year. FinancialsOverall, turnover of over £3.0 million was 33.3% ahead of the same period lastyear, not least due to the forecasted excellent growth exhibited by both theWassenburg and the Support Services Divisions. On a Divisional basis, comparison with the same period of the previous yearshowed that sales of Wassenburg flexible endoscope washer-disinfectors ("WD"),together with ancillary products, were 54.4% ahead and sales of Support Servicesincreased by 37.9%. Sales of the Clinic bench top washer-disinfector-dryer("WDD") experienced a slow start to the half year, whilst sales of thetraditional large WDDs and related products for use in hospital CentralisedSterile Service Departments ("CSSD") declined by 13.6%. Encouragingly, like for like total gross profit for the half year produced a40.1% increase, a rise which was assisted by the strong performances in theWassenburg and Support Services Divisions, where substantially improved marginswere achieved. Total operating costs, before depreciation and financing charges, showed anincrease of only 5.5%, compared with the same period last year. The increase wasmostly in the Support Services Division, but was rewarded by a 42.2% increase inthe gross margin.Earnings after finance charges, but before interest, taxation, depreciation andamortisation ("EBITDA") amounted to £128,100. This achievement represents abeneficial turnaround of £294,900 from the EBITDA loss of £166,800 for the firstsix months of last year, not the least in consequence of the emphasis placed ontight cost control by the Directors. Operating profit before interest of £15,500 compares with an operating loss of£200,500 for the corresponding period last year, representing a beneficialturnaround of £216,000. The net loss after interest but before tax for the half year was just £5,600against a loss of £209,500 for the same period last year, a beneficialturnaround of £203,900. The balance of shareholders' funds at 31 March 2005 was £1.1 million, includingthe proceeds of a new ordinary share issue to existing institutional investorsamounting to £262,000 after expenses in January 2005. The funds were raised toprovide ongoing support to the marketing and sales of the Clinic bench top WDDand ancillary working capital. Capital expenditure was considerably reduced inthe period and net current assets showed some improvement over the position atthe end of corresponding period last year as well as a substantial increase overthat at the end of the previous financial year. Products and ServicesThe comments I made in the Annual Report and Accounts 2004 under this headingregarding the Wassenburg flexible endoscope WD Division and the Support ServicesDivision have been fully justified insofar as these two of our three key driversof growth and profitability have delivered excellent results in the first halfof this year. The third key driver, namely the Clinic bench top WDD, has produced modestresults in the first half of the year with sales to both the private and NHSPrimary Care sectors and with improving penetration into the UK Primary Caremarket. The Clinic is now on the preferred supplier lists of the NHS in bothEngland and Scotland and is also stimulating important interest in exportmarkets following a successful presence at each of the two major internationaltrade exhibitions, namely "Medica" in Dusseldorf, and "Arab Health" in Dubai, inthe first half of the year.The traditional large WDDs Division, which supplies Hospital central sterileservice departments, continues to be closely monitored and I am happy to reportthat the Company secured its largest ever contract for the supply andinstallation of Beta WDDs to the Royal Victoria Hospital in Belfast. Deliverycommenced in March and the majority of the contract will be completed in thecurrent financial year. Remainder of the Year and Future ProspectsThe Support Services Division is growing from strength to strength and makingencouraging contributions in consequence of, inter alia, the previousinvestments in personnel and infrastructure. This strong performance in thefirst half of the year should continue through the second half and thushopefully ensure the ongoing substantial contribution that this Division makesto the Company. The Directors believe that the performance of the Wassenburg Division in thesecond half of this financial year will be in line with current expectations.New and improved products are being developed by the Wassenburg company inconjunction with the Company with a view to consolidating the major UK marketshare the Directors consider the product currently holds and improving thatshare in the future. As a consequence of a number of promotional and educational initiatives launchedby the Company in the first half of the year it is expected that the demand forthe Clinic bench top WDD will accelerate in the second half with improved salesto UK private and NHS dentists coming to fruition and gaining considerablemomentum during the ensuing two years of transition to full NHS compliancerequirements by March 2007, as advised by the Purchasing and Supply Agency ofthe NHS. Moreover, new and potentially exciting initiatives are being pursuedcurrently which the Directors believe will contribute to the Company'sperformance in the next financial year. Following the careful monitoring that I referred to in the Annual Report andAccounts 2004, the traditional large WDDs Division is expected to show improvedsales turnover and improved margins in the second half arising from thesubstantial orders awarded earlier in the year and the orders anticipated in thesecond half. To summarise, in the Support Services Division, the second half of this year isexpected to repeat the performance of the first half and the Wassenburg Divisionis anticipated to be in line with current expectations. The benefits of thecontracts achieved by the traditional large WDD Division in the first half ofthe year will be realised and should be augmented in the second half. In theClinic Division, volume shipments to the NHS Primary Care sector in the UK areexpected to commence and further penetration of the private dental healthcaremarket is anticipated to result in improved sales in the second half of theyear, whilst new initiatives are being pursued which are potentially rewardingand expected to make a contribution in the next financial year. Overall, I remain hopeful that the second half of the year will reflect theresults for the first half and produce a not unsatisfactory result at the yearend. Kevin M GilmoreExecutive Chairman INDEPENDENT REVIEW REPORT BY BAKER TILLY TO DAWMED SYSTEMS PLC IntroductionWe have been instructed by the company to review the consolidated profit andloss account for the six months to 31 March 2005, the group balance sheet at 31March 2005 and the consolidated cashflow statement for the six months ended 31March 2005 and we have read the other information contained in the interimreport and considered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report, including the conclusion, has been prepared for and only for thecompany for the purpose of the Listing Rules of the Financial Services Authorityand for no other purpose. We do not, therefore in producing this report, acceptor assume responsibility for any other purpose or to any other person to whomthis report is shown or into whose hands it may come save where expressly agreedby our prior consent in writing. Directors' responsibilitiesThe interim statement, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the Interim Statement in accordance with theAlternative Investment Market Rules which require that the accounting policiesand presentation applied to the interim figures should be consistent with thosethat will be adopted in the company's annual accounts. Review work performedWe conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board as if that Bulletin applied. A reviewconsists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand based thereon assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with Auditing Standards and therefore provides a lowerlevel of assurance than an audit. Accordingly we do not express an audit opinionon the financial information. Review conclusionOn the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 March 2005. BAKER TILLYChartered AccountantsCity PlazaTemple RowBirminghamB2 5AF 23 June 2005 DAWMED SYSTEMS PLCUNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THEHALF YEAR ENDED 31 MARCH 2005 Unaudited Unaudited 6 months 6 months to to 31 March 31 March 2005 2004 £'000 £'000 TURNOVER 3,002.8 2,253.1 Cost of sales 1,864.2 1,440.4 Gross profit 1,138.6 812.7 Administrative expenses 1,123.1 1,013.2 OPERATING PROFIT/(LOSS) 15.5 (200.5) Interest receivable 5.1 3.2 Interest payable 26.2 12.2 (LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION (5.6) (209.5) Taxation - - (LOSS) FOR THE HALF YEAR (5.6) (209.5) BASIC (LOSS) PER SHARE (0.03)p (1.20)p DILUTED (LOSS) PER SHARE (0.03)p (1.20)p DAWMED SYSTEMS PLC Unaudited UnauditedUNAUDITED BALANCE SHEET AS AT 31 MARCH 2005 31 March 2005 31 March £'000 2004 £'000 FIXED ASSETS 631.5 673.2 CURRENT ASSETSStock 682.7 548.0Debtors 1,367.7 1,544.1Cash at bank and in hand 233.8 243.7 2,284.2 2,335.8 CREDITORS: Amounts falling due within one year 1,690.4 1,816.1 NET CURRENT ASSETS 593.8 519.7 TOTAL ASSETS LESS CURRENT LIABILITIES 1,225.3 1,192.9 CREDITORS: Amounts falling due after more than oneyear 124.1 154.8 NET ASSETS 1,101.2 1,038.1 Called up share capital 1,023.2 923.2Share premium account 1,872.2 1,709.7Merger reserve (350.5) (350.5)Profit and loss account (1,443.7) (1,244.3) SHAREHOLDERS' FUNDS 1,101.2 1,038.1 DAWMED SYSTEMS PLC Unaudited UnauditedUNAUDITED CONSOLIDATED CASHFLOW STATEMENT FOR THE HALF 6 months 6 monthsYEAR ENDED 31 MARCH 2005 to to 31 March 31 March 2005 2004 £'000 £'000 Net cash inflow/(outflow) from operatingactivities 364.6 (431.2) Returns on investments and servicing of financeInterest received 5.1 3.2Interest paid (26.2) (12.2) (21.1) (9.0) Capital expenditure and financial investmentPurchase of fixed assets (25.1) (54.5) FinancingIssue of ordinary shares 262.5 513.4Factoring and stock advances (663.9) 14.0Finance leases (10.4) (4.7) (411.8) 522.7 (Decrease)/increase in cash (93.4) 28.0 Reconciliation of operating profit/(loss) to net cashinflow/(outflow) from operating activities Operating profit/(loss) 15.5 (200.5)Depreciation and amortisation charges 112.6 34.5Movement in stocks (168.7) (73.5)Movement in debtors 57.0 (367.0)Movement in creditors 348.2 175.3 Net cash inflow/(outflow) from operatingactivities 364.6 (431.2) NOTES TO THE ACCOUNTS: 1) The calculation of loss per share is based upon the loss of £5,625 (2004:£209,500) and on 19,353,400 shares (2004: 17,519,030 shares), being the weightedaverage number of shares in issue during the period. Since the exercise price of the 2,236,676 share options is above the averagefair price for the 6 months to 31 March 2005, the diluted loss per share isequivalent to the basic loss per share. The diluted loss per share for the six months to 31 March 2004 is equivalent tothe basic loss per share since conversion of the share options would decreasethe net loss per share from continuing operations. 2) The accounting information presented does not constitute statutory accountsand has not been audited. 3) Copies of the interim report will be posted to shareholders and will beavailable for 30 days at the offices of Beaumont Cornish Limited, 63 ColemanStreet, London, EC2R 5BB. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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