Interim Results

RNS Number:5068M
DawMed Systems PLC
19 June 2003

Strictly Embargoed until: 07.00, 19 June 2003


                              DawMed Systems plc

                               Interim Results


DawMed Systems plc ("DawMed" or "the Company"), the medical devices company
which designs, manufactures, sells and services washer disinfectors used by NHS
Trust hospitals, private hospitals and clinics, today announces results for the
six month period to 31 March 2003.

Key Points (Six months from 1 October 2002 to 31 March 2003)

* Turnover increased by 65% to #2.18m (2002: #1.32m) 

* Gross profit increased by 51% to #0.70m (2002: #0.46m) 

* Net loss of #0.21m (2002: #0.10m) largely due to pre-production marketing 
  costs of "Clinic" Bench Top 

* Gross margin fell by 3% due to pressure on pricing in traditional market 
  and strengthening Euro impacting on import costs of Wassenburg products 

* Equity share capital raised, #0.25m; shareholders' funds #0.63m (2002: #0.63m) 

* Prototype "Clinic" Bench Top well received and launch anticipated in the 
  fourth quarter of 2003  


Kevin Gilmore, Executive Chairman commented "The Company continues to be 
proactive in its traditional business of washer disinfectors for Sterile Service 
Departments in acute hospitals as well as its Wassenburg flexible endoscope 
washer disinfector business and we expect sales across the whole product range 
to show an improvement in the second half of the year. It is the Directors' 
opinion that the "Clinic" machine will offer the Company real opportunities and 
that the anticipated emergence, within this calendar year, of the first ever NHS
engineering specification for washer disinfectors for use in primary care
decontamination in the UK, will add considerable impetus to its market
potential."  

For further information please visit www.dawmed.com or contact: 

                                                                                
Kevin Gilmore, Chairman      Roland Cornish             Rosie Brown/Claire Melly
DawMed Systems plc           Beaumont Cornish Limited   Tavistock Communications                    
Tel: [phone]            Tel: [phone]         Tel: [phone]



Chairman's Statement 

The first six months of the year have seen significant growth in sales with
total turnover increasing by 65% to #2.18 million, compared to #1.32 million for
the same period last year and gross profit growing by 51% to #0.70 million.
However, the gross margin fell by 3% due to a combination of both increased
competition in tendering for hospital Sterile Service Department ("SSD")
contracts, leading to pressure on pricing and to the recent strengthening of the
Euro, which has impacted on the cost of importing products from Wassenburg & Co.
b.v. As a result of this and a necessary increase in overheads, largely related
to the costs of pre-production marketing of the new "Clinic" Bench Top machine,
there was a net loss for the half-year of #0.21 million (2002: #0.10 million).

Balance Sheet

Shareholders' funds at the half-year were #0.63 million. A new ordinary share
issue of #0.05 million was made in October 2002, coinciding with the Company's
admission to AIM. A further ordinary share issue of #0.20 million was arranged
at the same time, but implemented in April 2003, thus helping to restore the
balance sheet to its previous opening position, despite the interim losses.

Products 

We have achieved a substantial increase in our traditional business of washer
disinfector sales to hospital SSDs in the UK through direct sales and via the
NHS Purchasing and Supply Agency and sales in the second half of the year are
expected to show improvement over the first half across this product range.

The Wassenburg flexible endoscope washer disinfector business also continued to
show strong growth over the half-year. As this business has developed it has
become clear that end users increasingly want to choose the particular type of
cleaning/disinfection fluid they favour. The Company has responded by
collaborating with Wassenburg & Co. b.v., to enable the machines to operate
satisfactorily with this wider range of solutions, thus helping to ensure that
the product maintains and consolidates its current strong position in the market
place. It is anticipated that the sales performance of this product in the
second half of the year will be more buoyant than in the first half.

"Clinic" Bench Top

The research and development phase of DawMed's new purpose designed and
regulatory compliant "Clinic" Bench Top Washer Disinfector Dryer machine for the
primary care market is now coming to an end and 'productionisation' has
commenced. Pre-production marketing through advertising and promotions
incorporating displays at several trade exhibitions in the UK and overseas,
together with initial presentations to end users and intermediaries, have
elicited very favourable responses.

It is anticipated that the "Clinic" will be launched in the fourth quarter of
this calendar year and, although the Directors had originally anticipated that
it would start to have a positive effect in the second half of this financial
year, the delayed timetable of the outsourced design contract means that we now
expect the initial financial impact of this product to be in the first half of
the next financial year.

Service Organisation

Our service organisation now comprises twelve operational field engineers and is
growing from strength to strength under a newly recruited Service Manager. The
number of service and maintenance contracts, the volume of regulatory testing,
the organisational turnover and the organisational profitability are all
increasing in a satisfactory manner and the Directors look forward to continuing
improvements in the current financial year and in the longer term future.

Infrastructure

The Company has continued to invest in additional infrastructure, particularly
with regard to the service organisation and the marketing of the "Clinic". In
consequence, although overheads before depreciation and financing costs have
increased by 59% compared with the same period last year and by 40% compared
with the second half of last year, a significant proportion of these increases
relates to the costs of the pre-production marketing of the "Clinic".

The major structural overhead spend programme, representing investment for the
future, is drawing towards conclusion by the end of this financial year.

Future Prospects

Over the last three years, we have been heavily committed to investing in the
Company, successfully growing the service organisation, the Wassenburg side of
the business and launching new and improved machines. Looking forward, whilst
research and development will remain important to DawMed, the launch of the
"Clinic" will draw the current programme and the structural overhead spend to a
close.

It is the Directors' opinion that the "Clinic" machine will offer the Company
real opportunities. The anticipated emergence within this calendar year of the
first ever NHS engineering specification for washer disinfectors for use in
primary care decontamination in the UK will add considerable impetus to its
market potential and the Directors also perceive opportunities for export sales
in the reasonably foreseeable future.

That said, the Company continues to be proactive in its traditional business of
washer disinfectors for Sterile Service Departments in acute hospitals and we
expect sales across the whole product range, including the Wassenburg flexible
endoscope washer disinfectors, to show an improvement in the second half of the
year over the first half.

Kevin M Gilmore
Chairman



Unaudited Consolidated profit and loss account for the half year ended 
31 March 2003 
                                                                                                   
                                                                          Unaudited       Unaudited
                                                                      31 March 2003   31 March 2002
                                                                              #'000           #'000

                     Turnover                                               2,179.7         1,317.8
                     Cost of Sales (1)                                      1,476.1           853.1
                     Gross profit                                             703.6           464.7
                     Administrative Expenses                                  906.9           557.9
                     Operating (Loss)                                       (203.3)          (93.2)
                     Interest Receivable                                        1.8             1.4
                     Interest Payable                                          10.5            11.2
                     (Loss) on ordinary activities before taxation          (212.0)         (103.0)
                     Taxation                                                     -               -
                     (Loss) for the half year                               (212.0)         (103.0)

                     Profit/(Loss) per share                                (1.39p)         (0.75p)

                     Diluted Profit/(Loss) per share                        (1.31p)         (0.71p)


Unaudited Group Balance Sheet as at 31 March 2003

                                                                                                       
                                                                              Unaudited       Unaudited
                                                                          31 March 2003   31 March 2002
                                                                                  #'000           #'000

                Fixed assets                                                      533.1           118.1

                Current assets                                                                         
                Stocks                                                            583.3           545.1
                Debtors                                                         1,089.8           711.8
                Cash at Bank & in hand                                                -           200.7
                                                                                1,673.1         1,457.6
                Creditors: amounts falling due within one year                  1,504.1           938.0

                Net current assets                                                169.0           519.6

                Total assets less current liabilities                             702.1           637.7
                Creditors: amounts falling due after more                          71.5             3.3
                than one year                                                                          
                Net assets                                                        630.6           634.4

                Capital & Reserves                                                                     

                Called up share capital                                           763.2           723.2
                Share premium account                                           1,171.7         1,115.4
                Merger reserve                                                  (350.5)         (350.5)
                Profit and loss account                                         (953.8)         (853.7)

                Shareholders' funds                                               630.6           634.4


Notes to the accounts:

(1) Cost of Sales now includes variable costs of carriage outwards and warranty 
    provisions previously included in overheads. Comparative figures have been 
    amended accordingly.

(2) The calculation of loss per share is based upon the loss of #212,000 
    (2002: loss #103,000) and on 15,252,301 shares (2002: 13,797,296 shares) 
    being the weighted average number of shares in issue during the period.
    The diluted loss per share shows the effect on the calculation as if the 
    share options granted in each period had been converted to shares.

A copy of this announcement is available from Beaumont Cornish Limited, 
63 Coleman Street, London EC2R 5BB, for a period of one month free of charge.


Review Report by the Auditors to DawMed Systems plc 
Six months ended 31 March 2003 

Introduction

We have been instructed by the company, to review the consolidated profit and
loss account for the six months to 31 March 2003 and the Group Balance Sheet at
31 March 2003 and have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.

Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors.  The Listing
Rules of the Financial Services Authority require that the accounting policies
and presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.

Review work performed

We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board.  A review consists principally of making
enquiries of management and applying analytical procedures to the financial
information and underlying financial data and based thereon, assessing whether
the accounting policies and presentation have been consistently applied unless
otherwise disclosed.  A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions.  It is
substantially less in scope than an audit performed in accordance with Auditing
Standards and therefore provides a lower level of assurance than an audit.
Accordingly we do not express any audit opinion on the financial information.

Review conclusion

On the basis of our review, which does not constitute an audit, we are not aware
of any material modifications that should be made to the financial information
as presented for the six months ended 31 March 2003.


Baker Tilly
Chartered Accountants
Birmingham
19 June 2003




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