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Deltex Medical Group Plc LSE:DEMG London Ordinary Share GB0059337583 ORD 1P
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  0.00 0.0% 1.175 1.10 1.25 1.175 1.175 1.175 125,000 07:38:04
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Health Care Equipment & Services 5.0 -1.3 -0.3 - 6

Deltex Medical Group PLC Interim Results

23/09/2019 7:00am

UK Regulatory (RNS & others)


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RNS Number : 1736N

Deltex Medical Group PLC

23 September 2019

23 September 2019 - Deltex Medical Group plc (AIM: DEMG), the global leader in oesophageal Doppler monitoring today announces its unaudited interim results for the six-months ended 30 June 2019.

Deltex Medical Group plc

("Deltex Medical" or the "Group")

Interim results for the six-months ended 30 June 2019

Key financial information

-- revenues: GBP2.0 million (2018: 2.3 million)

-- gross margin: 76% (2018: 68%)

-- 55% reduction in sales & distribution expenses to GBP0.6 million (2018: GBP1.4 million)

-- 35% reduction in overhead costs (excluding exceptional items) to GBP1.7 million

(2018: GBP2.7 million)

-- adjusted EBITDA: positive GBP0.2 million (2018: loss GBP1.0 million)

-- loss for the period: GBP(0.3) million (2018: GBP(1.2) million)

-- cash on balance sheet: GBP0.6 million (31 December 2018: GBP0.6 million)

Key commercial activities

-- construction of leaner, more selective and better-targeted direct sales operations in the UK and the USA

-- successful programme to increase the average selling price of the single-use TrueVue Doppler probes in the USA

-- agreement to terminate a third-party UK distribution contract expected to result in a payment to Deltex Medical of c. GBP0.2 million before year-end

-- Innovative Technology contract signed with Vizient, a leading group purchasing organisation ("GPO") and the largest healthcare performance improvement company in the USA

-- award by Innovate UK of four product development/technology grants in 2019 to help fund the next stage of product development for the Group totalling c. GBP0.13 million of project costs, of which c. 70% are eligible for reimbursement

Nigel Keen, Chairman of Deltex Medical, commented:

"The significantly improved underlying financial performance of the Group can clearly be seen with positive adjusted EBITDA in the first half."

"We are delighted with the number of new technology grants that Deltex Medical has been awarded so far in 2019. As well as providing non-dilutive capital for our development programmes, these grant awards provide independent validation of the potential for the Group's technology with the increasing focus on patient safety."

"Deltex Medical is well placed to provide clinicians around the world with advanced haemodynamic monitoring which is becoming increasingly recognised as an important factor associated with improved patient safety as well as the reduction of avoidable complications during and after surgery."

 
 Deltex Medical Group plc                 01243 774 837 
                                           investorinfo@Deltexmedical.com 
 Nigel Keen, Chairman 
 Andy Mears, Chief Executive 
 Jonathan Shaw, Group Finance Director 
 
 
 Arden Partners plc                       020 7614 5900 
 Ciaran Walsh 
  Dan Gee-Summons 
 
 Joint Broker 
 Turner Pope Investments (TPI) Ltd        0203 621 4120 
                                           info@turnerpope.com 
 Andy Thacker 
 

This announcement contains Inside Information as defined under the Market Abuse Regulation (EU) No. 596/2014.

Notes for Editors

Deltex Medical manufactures and markets haemodynamic monitoring technologies. Deltex Medical's proprietary oesophageal Doppler monitoring ("ODM") (TrueVue Doppler) measures blood flow velocity in the central circulation in real time. Minimally invasive, easy to set-up and quick to focus, the technology generates a low-frequency ultrasound signal which is highly sensitive to changes in blood flow and measures such changes in 'real time'. Deltex Medical is the only company in the enhanced haemodynamic space to have built a robust and credible evidence base demonstrating both the clinical and economic benefits of its core technology, TrueVue Doppler. This technology has been proven in a wide range of clinical trials to reduce complications suffered by patients after surgery and consequently save hospitals the costs of treating those complications.

Deltex Medical's TrueVue System on the CardioQ-ODM+ monitor platform now provides clinicians with two further advanced haemodynamic monitoring technologies. TrueVue Impedance is an entirely non-invasive monitoring technology which transmits low magnitude, high frequency electrical signals through the thorax and measures the changes to this signal when the heart pumps blood. TrueVue PressureWave uses the peripheral blood pressure signal analysis to give doctors information on changes in the circulation and is particularly suited to monitoring lower risk or haemodynamically stable patients.

Group goal

Haemodynamic management is now becoming widely accepted as a vital part of the anaesthesia protocol for surgical patients. Consequently, the Group's focus is on maximising value from the opportunities presented, as enhanced haemodynamic management is adopted into routine clinical practice around the world. The Group aims to provide clinicians with a single platform - a 'haemodynamic workstation' - which offers them a range of technologies from simple to sophisticated to be deployed according to the patient's condition as well as the skill and expertise of the user. Doing this will enable the Group to partner healthcare providers to support modern haemodynamic management across the whole hospital.

The Group is currently in the implementation phase of achieving this goal in a number of territories worldwide, operating directly in the UK and the USA, and via agreements with approximately 40 distributors overseas.

Chairman's statement

Financial results

The financial results for the six-months ended 30 June 2019 validate the commercial success of the new strategy adopted by the Group midway through last year.

In 2019 Deltex Medical has continued to focus its direct selling teams on the more selective targeting of key accounts and new business prospects, particularly in the USA. In the first half of 2019, expenditure on sales and distribution more than halved to GBP0.6 million (2018: GBP1.4 million). This "re-baselining" of the business was aimed at significantly improving profitability, albeit with slightly lower revenues. This outcome can be seen in the 2019 interim results with H1 revenues of GBP2.0 million (2018: GBP2.3 million) generating a gross margin of GBP1.5 million (2018: GBP1.6 million). In H1 2019 the revenues declined in the period by GBP332,000 (equivalent to a reduction of 14%); however, the gross margin generated on these sales only declined by GBP69,000 (equivalent to a 4% reduction).

The next stage of implementation of the new strategy, which was adopted in 2018, will be focussed on carefully targeted growth.

The gross margin increased to 76% (2018: 68%) as a result of a number of initiatives around margin improvement. We have focussed on increasing the average selling price of US probes and this has been assisted by the continuing weakness of sterling against the US dollar. There is also ongoing work to drive down the standard cost of the probes used in the Group's TrueVue Doppler equipment.

Total overhead costs, excluding exceptional items, in the period were reduced by approximately GBP1.0 million to GBP1.7 million (2018: GBP2.7 million) representing an overall reduction in overheads of some 35%.

Adjusted EBITDA, comprising earnings before interest, tax, depreciation and amortisation, share-based payments' expenses and non-executive directors' fees, was GBP1.1 million better at GBP153,000 (2018: loss of GBP963,000).

The loss for the period of GBP0.3 million showed a GBP0.9 million improvement over the equivalent 2018 loss of GBP1.2 million.

Cash on the balance sheet at 30 June 2019 was GBP0.6 million (31 December 2018: GBP0.6 million).

Net cash generated from operating activities was GBP0.3 million (2018: net cash used of

GBP0.8 million).

The Board believes that this much-improved underlying financial performance puts the Group in a good position for the next stage of its development.

Commercial activities

One of the key objectives in the first half was to ensure that the Group successfully built a robust and stable platform for future growth. This objective has been achieved in a number of different ways.

Significant work has continued on more selective targeting of the direct selling activities in the USA and increasing the average selling price of the US probes. Deltex Medical's US business now has a much lower cost base than a year ago, contributed positive EBITDA to the consolidated results each month in the first half and is producing more reliable forecast information and better market-intelligence data.

In the USA a group purchasing organisation ("GPO") is an entity that helps healthcare providers - such as hospitals and nursing homes - realise savings and efficiencies by aggregating purchasing volume and using that leverage to negotiate discounts with manufacturers, distributors and other vendors. During the period Deltex Medical successfully negotiated an Innovative Technology contract with Vizient, a leading GPO and the largest member-driven healthcare performance improvement company in the USA. The contract was based on the recommendation of hospital experts in haemodynamics who serve on one of Vizient's member-led councils. Vizient's Innovative Technology contracts are reserved for technologies that demonstrate an ability to significantly enhance clinical care and patient safety, whilst improving an organisation's care delivery and business model. Whilst the Board believes that the effect on Group revenues associated with this Vizient contract will not be immediate, it is already apparent that securing this Innovative Technology contract is providing additional credibility to Deltex Medical's TrueVue System in the USA and is also facilitating easier access for its US salesforce into some hospitals.

The international division, comprising a network of approximately 40 distributors, performed satisfactorily in the first half although sales by the Group's French distributor were subdued due to inventory reductions, which are expected to continue until the year end. This is as a result of lower levels of probe sales made during the implementation of the previously announced Paris Hospitals' tender.

The UK market remains challenging. Notwithstanding the significant evidence base supporting the use of Deltex Medical's TrueVue Doppler system, it remains difficult to get NHS hospitals to invest in new technologies. However, the Group continues to have a number of close relationships with UK Key Opinion Leaders ("KOLs") working in the field of haemodynamic monitoring and is working with these KOLs to help guide its product development work.

Deltex Medical has, for a number of years, distributed into the UK market complementary products manufactured by third-party companies. One of these companies, which manufactures pulse oximetry equipment, was recently purchased by a competitor. Negotiations have recently concluded in respect of the termination of Deltex Medical's UK distribution contract relating to this equipment which is expected to give rise to, among other things, the payment to the Group of US$0.25 million before the year-end. In 2018, the revenues associated with this third-party equipment totalled GBP0.4 million; however, once an estimate of the 2018 fully-loaded expenses associated with selling and supporting this equipment are deducted from the 2018 gross margin generated by such sales, the product line was not significantly profitable. The Board believes that focussing the Group's direct sales force in the UK on Deltex Medical's TrueVue suite of haematological monitoring products complements the focussed strategy of the business. Moreover, the Group's own products enjoy higher gross margins than products manufactured by third parties.

It is not yet clear how Brexit will affect the Group's commercial activities; however, Deltex Medical has developed a number of contingency plans which can be deployed at short notice. Implementing these plans may, in the short term, require incremental expenditure and allocation of working capital.

New product development

We have carried out a detailed review of our product portfolio in order to determine how best to invest to develop new, complementary technologies which will augment the TrueVue System and help the Group deliver its ambitious growth plans.

The Group has been extremely successful this year at winning grant applications. Four grant applications have been awarded so far in 2019 by Innovate UK with a total value of eligible project costs of GBP132,000 of which GBP96,000 represents cash amounts to be reimbursed against eligible costs incurred by Deltex Medical Limited, with the balance funded from the Group's own resources. The Board believes that these grant awards help provide independent endorsement of its development plans as well as the potential for enhancing the Group's advanced haemodynamic monitoring technologies using non-dilutive finance.

The Group also continues to develop a small number of other complementary innovations using its resources in order to build an expanded portfolio of differentiated technologies for the international haemodynamic monitoring market.

The Board believes that around the world there is increasing clinical acceptance of the need for haemodynamic monitoring and this, combined with the Group's new technologies and more focussed direct sales activities, will be important drivers of growth for the Group in the future.

Current trading and prospects

The Group has built a robust platform for future growth. We have reported positive adjusted EBITDA in the first half and trading has started well in the second half.

In past years, the financial performance of the Group in the second half of the year has been stronger than the first half and the Board believes that this will continue to be the case in 2019. Despite second-half revenues being slightly reduced as a result of the termination of the UK distributor agreement described above, the expected US$0.25m termination payment should negate any adverse impact on profitability during this period, and the Company's profitability should remain in line with market expectations.

Advanced haemodynamic monitoring is becoming increasingly recognised as an important factor associated with improved patient safety as well as the reduction of avoidable complications during and after surgery. The Board believes that Deltex Medical is well positioned to help clinicians improve patients' outcomes.

Nigel Keen

Chairman

23 September 2019

Condensed Consolidated Statement of Comprehensive Income

for the six-months ended 30 June 2019

 
                                                               Unaudited               Audited 
                                                        Six months   Six months           Year 
                                                             ended        ended          ended 
                                                           30 June      30 June    31 December 
                                                              2019         2018           2018 
----------------------------------------------  -----  -----------  -----------  ------------- 
                                                 Note      GBP'000      GBP'000        GBP'000 
 Revenue                                            4        1,993        2,325          4,955 
 Cost of sales                                               (487)        (750)        (1,424) 
----------------------------------------------  -----  -----------  -----------  ------------- 
 Gross profit                                                1,506        1,575          3,531 
 Administrative expenses                                     (853)        (993)        (1,721) 
 Sales and distribution expenses                             (624)      (1,373)        (2,189) 
 Research and Development, Quality and 
  Regulatory                                                 (250)        (255)          (526) 
 Impairment loss on trade receivables                            -         (33)           (38) 
 Exceptional costs                                 15            -        (142)          (287) 
----------------------------------------------  -----  -----------  -----------  ------------- 
 Total costs                                               (1,727)      (2,796)        (4,761) 
----------------------------------------------  -----  -----------  ----------- 
 Operating loss before exceptional costs 
  and other gain                                             (221)      (1,079)          (943) 
 Exceptional costs                                 15            -        (142)          (287) 
----------------------------------------------  -----  -----------  -----------  ------------- 
 Other gain                                                      -           80             80 
 Operating loss                                              (221)      (1,141)        (1,150) 
 Finance income                                                  -            -              - 
 Finance costs                                                (86)         (99)          (188) 
----------------------------------------------  -----  -----------  -----------  ------------- 
 Loss before taxation                                        (307)      (1,240)        (1,338) 
 Tax credit on loss                                 7           38           46             74 
----------------------------------------------  -----  -----------  -----------  ------------- 
 Loss for the period/year                                    (269)      (1,194)        (1,264) 
----------------------------------------------  -----  -----------  -----------  ------------- 
 
 Other comprehensive (expense)/income 
 Items that may be reclassified to profit 
  or loss: 
 Net translation differences on overseas 
  subsidiaries                                                   1          (4)              2 
----------------------------------------------  -----  -----------  -----------  ------------- 
 Other comprehensive (expense)/income 
  for the period/year, net of tax                                1          (4)              2 
----------------------------------------------  -----  -----------  -----------  ------------- 
 Total comprehensive loss for the period/year                (268)      (1,198)        (1,262) 
----------------------------------------------  -----  -----------  -----------  ------------- 
 
 Total comprehensive loss for the period/year 
  attributable to: 
 Owners of the Parent                                        (269)      (1,203)        (1,268) 
 Non-controlling interests                                       1            5              6 
----------------------------------------------  -----  -----------  -----------  ------------- 
                                                             (268)      (1,198)        (1,262) 
----------------------------------------------  -----  -----------  -----------  ------------- 
 
 Loss per share - basic and diluted                 8      (0.05)p       (0.3p)         (0.3p) 
----------------------------------------------  -----  -----------  -----------  ------------- 
 
 

Condensed Consolidated Balance Sheet

 
                                                          Unaudited                Audited 
                                                   30 June           30 June   31 December 
                                                                                      2018 
                                                      2019           2018(1) 
                                          Note                 (As restated)       GBP'000 
                                                   GBP'000           GBP'000 
--------------------------------------  ------  ----------  ----------------  ------------ 
 Assets 
 Non-current assets 
 Property, plant and equipment                         490               681           587 
 Intangible assets                                   2,595             2,529         2,528 
 Financial assets at amortised cost                    161               155           155 
--------------------------------------  ------  ----------  ----------------  ------------ 
 Total non-current assets                            3,246             3,365         3,270 
 Current assets 
 Inventories                                           946               700           680 
 Trade and other receivables                         1,051             1,008         1,410 
 Financial assets at amortised cost                    214               245           245 
 Other current assets                                  104                72           190 
 Current income tax recoverable                        100               139            74 
 Cash and cash equivalents                   9         595             1,065           580 
--------------------------------------  ------  ----------  ----------------  ------------ 
 Total current assets                                3,010             3,229         3,179 
--------------------------------------  ------  ----------  ----------------  ------------ 
 Total assets                                        6,256             6,594         6,449 
 Liabilities 
 Current liabilities 
 Borrowings                                 11       (267)             (453)         (553) 
 Trade and other payables                   12     (2,026)           (2,195)       (1,983) 
 Total current liabilities                         (2,293)           (2,648)       (2,536) 
--------------------------------------  ------  ----------  ----------------  ------------ 
 Non-current liabilities 
 Borrowings                                 11     (1,052)           (1,017)       (1,035) 
 Trade and other payables                            (334)             (369)         (352) 
 Provisions                                          (114)             (114)         (114) 
--------------------------------------  ------  ----------  ----------------  ------------ 
 Total non-current liabilities                     (1,500)           (1,500)       (1,501) 
--------------------------------------  ------  ----------  ----------------  ------------ 
 Total liabilities                                 (3,793)           (4,148)       (4,037) 
--------------------------------------  ------  ----------  ----------------  ------------ 
 Net assets                                          2,463             2,446         2,412 
--------------------------------------  ------  ----------  ----------------  ------------ 
 
 Equity 
 Share capital                              14       5,123             4,927         4,927 
 Share premium                                      33,230            33,230        33,230 
 Capital redemption reserve                         17,476            17,476        17,476 
 Other reserve                                       1,076             4,888           953 
 Translation reserve                                   150               143           149 
 Convertible loan note reserve                          82                84            82 
 Accumulated losses                               (54,534)          (58,160)      (54,264) 
--------------------------------------  ------  ----------  ----------------  ------------ 
 Equity attributable to owners of the 
  Parent                                             2,603             2,588         2,553 
 Non-controlling interests                           (140)             (142)         (141) 
--------------------------------------  ------  ----------  ----------------  ------------ 
 Total equity                                        2,463             2,446         2,412 
--------------------------------------  ------  ----------  ----------------  ------------ 
 

1. Certain comparatives have been restated to be consistent with the presentation used in the 2018 Annual Report & Accounts. (Note 17)

Condensed Consolidated Statement of Changes in Equity for the six-months ended 30 June 2019 (unaudited)

 
                                          Capital             Convertible                                         Non-controlling 
                     Share     Share   redemption     Other     loan note   Translation   Accumulated                    interest     Total 
                   capital   premium      reserve   reserve       reserve       reserve        losses     Total                      equity 
                   GBP'000   GBP'000      GBP'000   GBP'000       GBP'000       GBP'000       GBP'000   GBP'000           GBP'000   GBP'000 
----------------  --------  --------  -----------  --------  ------------  ------------  ------------  --------  ----------------  -------- 
 Balance at 
  1 January 2019     4,927    33,230       17,476       953            82           149      (54,264)     2,553             (141)     2,412 
 Comprehensive 
  income 
 Loss for the 
  period                 -         -            -         -             -             -         (270)     (270)                 1     (269) 
 Other 
  comprehensive 
  income for the 
  period                 -         -            -         -             -             1             -         1                 -         1 
----------------  --------  --------  -----------  --------  ------------  ------------  ------------  --------  ----------------  -------- 
 Total 
  comprehensive 
  income for the 
  six-months             -         -            -         -             -             1         (270)     (269)                 1     (268) 
 Transactions 
  with owners 
  of the company 
 Equity-settled 
  share-based 
  payment                -         -            -       123             -             -             -       123                 -       123 
 Share options 
  exercised            196         -            -         -             -             -             -       196                 -       196 
----------------  --------  --------  -----------  --------  ------------  ------------  ------------  --------  ----------------  -------- 
 Balance at 
  30 June 2019       5,123    33,230       17,476     1,076            82           150      (54,534)     2,603             (140)     2,463 
----------------  --------  --------  -----------  --------  ------------  ------------  ------------  --------  ----------------  -------- 
 

Condensed Consolidated Statement of Changes in Equity for the six-months ended 30 June 2018 (unaudited)

 
                                          Capital             Convertible                                          Non-controlling 
                     Share     Share   redemption     Other     loan note   Translation   Accumulated                     interest      Total 
                   capital   premium      reserve   reserve       reserve       reserve        losses      Total                       equity 
                   GBP'000   GBP'000      GBP'000   GBP'000       GBP'000       GBP'000       GBP'000    GBP'000           GBP'000    GBP'000 
----------------  --------  --------  -----------  --------  ------------  ------------  ------------  ---------  ----------------  --------- 
 Balance at 1 
  January 2018, 
  as previously 
  reported           3,132    32,915       17,476     4,752            84           147      (57,059)      1,447             (147)      1,300 
 Effect of new 
  standards              -         -            -         -             -             -            98         98                 -         98 
----------------  --------  --------  -----------  --------  ------------  ------------  ------------  ---------  ----------------  --------- 
 Balance at 1 
  January 2018, 
  as restated        3,132    32,915       17,476     4,752            84           147      (56,961)      1,545             (147)      1,398 
 Comprehensive 
  income 
 Loss for the 
  period                 -         -            -         -             -             -       (1,199)    (1,199)                 5    (1,194) 
 Other 
  comprehensive 
  income for the 
  period                 -         -            -         -             -           (4)             -        (4)                 -        (4) 
----------------  --------  --------  -----------  --------  ------------  ------------  ------------  ---------  ----------------  --------- 
 Total 
  comprehensive 
  income for the 
  six-months             -         -            -         -             -           (4)       (1,199)    (1,203)                 5    (1,198) 
 Transactions 
  with owners 
  of the company 
 Shares issued 
  during the 
  period             1,787         -            -         -             -             -             -      1,787                 -      1,787 
 Premium on 
  shares 
  issued during 
  the period             -       447            -         -             -             -             -        447                 -        447 
 Issue expenses          -     (132)            -         -                           -             -      (132)                 -      (132) 
 Equity-settled 
  share-based 
  payment                -         -            -       136             -             -             -        136                 -        136 
 Share options 
  exercised              8         -            -         -             -             -             -          8                 -          8 
----------------  --------  --------  -----------  --------  ------------  ------------  ------------  ---------  ----------------  --------- 
 Balance at 
  30 June 2018       4,927    33,230       17,476     4,888            84           143      (58,160)      2,588             (142)      2,446 
----------------  --------  --------  -----------  --------  ------------  ------------  ------------  ---------  ----------------  --------- 
 

Condensed Consolidated Statement of Changes in Equity for the year ended 31 December 2018 (audited)

 
                                          Capital             Convertible                                          Non-controlling 
                     Share     Share   redemption     Other     loan note   Translation   Accumulated                     interest 
                   capital   premium      reserve   reserve       reserve       reserve        losses      Total                        Total 
                                                                                                                                       equity 
                   GBP'000   GBP'000      GBP'000   GBP'000       GBP'000       GBP'000       GBP'000    GBP'000           GBP'000    GBP'000 
----------------  --------  --------  -----------  --------  ------------  ------------  ------------  ---------  ----------------  --------- 
 Balance at 1 
  January 2018, 
  as previously 
  reported           3,132    32,915       17,476     4,752            84           147      (57,059)      1,447             (147)      1,300 
 Effect of new 
  standards              -         -            -         -             -             -            98         98                 -         98 
----------------  --------  --------  -----------  --------  ------------  ------------  ------------  ---------  ----------------  --------- 
 Balance at 1 
  January 2018, 
  as restated        3,132    32,915       17,476     4,752            84           147      (56,961)      1,545             (147)      1,398 
 Comprehensive 
  income 
 Loss for the 
  period                 -         -            -         -             -             -       (1,270)    (1,270)                 6    (1,264) 
 Other 
  comprehensive 
  income for the 
  period                 -         -            -         -             -             2             -          2                 -          2 
----------------  --------  --------  -----------  --------  ------------  ------------  ------------  ---------  ----------------  --------- 
 Total 
  comprehensive 
  income for 
  year                   -         -            -         -             -             2       (1,270)    (1,268)                 6    (1,262) 
 Transactions 
  with owners 
  of the Group 
 Shares issued 
  during the 
  year               1,787       447            -         -             -             -             -      2,234                 -      2,234 
 Issue expenses          -     (132)            -         -             -             -             -      (132)                 -      (132) 
 Equity-settled 
  share-based 
  payment                -         -            -       166             -             -             -        166                 -        166 
 Transfers               -         -            -   (3,965)           (2)             -         3,967          -                 -          - 
 Share options 
  exercised              8         -            -         -             -             -             -          8                 -          8 
----------------  --------  --------  -----------  --------  ------------  ------------  ------------  ---------  ----------------  --------- 
 Balance at 
  31 December 
  2018               4,927    33,230       17,476       953            82           149      (54,264)      2,553             (141)      2,412 
----------------  --------  --------  -----------  --------  ------------  ------------  ------------  ---------  ----------------  --------- 
 

Condensed Consolidated Statement of Cash Flows

for the six-months ended 30 June 2019

 
                                                         Unaudited            Audited 
                                                  Six months   Six months        Year 
                                                       ended        ended    ended 31 
                                                     30 June      30 June    December 
                                                        2019         2018        2018 
                                                     GBP'000      GBP'000     GBP'000 
----------------------------------------------   -----------  -----------  ---------- 
 Cash flows from operating activities 
 Loss before taxation                                  (307)      (1,240)     (1,338) 
 Adjustments for: 
 Net finance costs                                        86           99         188 
 Depreciation of property, plant and 
  equipment                                              100          122         246 
 Profit on disposal of loan monitors                     (2)          (6)        (12) 
 Amortisation of intangible assets                        71           96         173 
 Modification gain on convertible loan 
  note                                                     -         (80)        (80) 
 Share-based payment expense                             123          136         166 
 Effect of exchange rate fluctuations                      2            4         (9) 
-----------------------------------------------  -----------  -----------  ---------- 
                                                          73        (869)       (666) 
 (Increase)/decrease in inventories                    (257)           47          38 
 Decrease in trade and other receivables                 479          564          52 
 Increase/(decrease) in trade and other 
  payables                                                27        (513)       (694) 
 Increase in provisions                                    -           38         (1) 
-----------------------------------------------  -----------  -----------  ---------- 
 Net cash from/(used in) operations                      322        (733)     (1,271) 
 Interest paid                                          (69)         (70)       (141) 
 Income taxes received                                    11            -          94 
-----------------------------------------------  -----------  -----------  ---------- 
 Net cash generated from/(used in) 
  operating activities                                   264        (803)     (1,318) 
 Cash flows from investing activities 
 Purchase of property, plant and equipment              (12)         (13)        (18) 
 Proceeds from the sale of loan monitors                   6            7          18 
 Capitalised development expenditure                   (138)        (138)       (214) 
 Interest received                                         -            -           - 
----------------------------------------------   -----------  -----------  ---------- 
 Net cash used in investing activities                 (144)        (144)       (214) 
 Cash flows from financing activities 
 Issue of ordinary share capital                         196        2,216       2,216 
 Expenses in connection with share 
  issue                                                    -        (132)       (132) 
 Outflow from decrease in invoice discounting 
  facility                                             (281)        (268)       (171) 
 Repayment of obligations under finance 
  leases                                                (16)         (22)        (36) 
-----------------------------------------------  -----------  -----------  ---------- 
 Net cash (used in)/generated from 
  financing activities                                 (101)        1,794       1,877 
-----------------------------------------------  -----------  -----------  ---------- 
 Net increase in cash and cash equivalents                19          847         345 
 Cash and cash equivalents at beginning 
  of the period                                          580          219         219 
 Exchange (loss)/gain on cash and cash 
  equivalents                                            (4)          (1)        (16) 
-----------------------------------------------  -----------  -----------  ---------- 
 Cash and cash equivalents at the end 
  of the period/year                                     595        1,065         580 
-----------------------------------------------  -----------  -----------  ---------- 
 

Notes to the condensed consolidated interim financial statements

   1.   Reporting Entity 

Deltex Medical Group plc is a company that is domiciled in the United Kingdom. It is incorporated in England and Wales (Company Number 03902895) and its registered office is at Terminus Road, Chichester, PO19 8TX, United Kingdom. These condensed consolidated interim financial statements (Interim Financial Statements) as at and for the period ended 30 June 2019 comprise the Company and its subsidiaries (together referred to as 'the Group'). The Group is principally involved with the manufacture and sale of advanced haemodynamic monitoring technologies.

   2.   Basis of accounting 

These interim financial statements have been prepared in accordance with IAS 34, 'Interim Financial Reporting', and should be read in conjunction with the Group's last annual consolidated financial statements as at and for the year ended 31 December 2018 (Annual Report & Accounts 2018). They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position.

These condensed consolidated interim financial statements do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The summary of results for the year ended 31 December 2018 is an extract from the published consolidated financial statements of the Group for that year which have been reported on by the Group's auditors and delivered to the Registrar of Companies. The Independent Auditors' Report on the Annual Report & Accounts for 2018 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

These condensed consolidated interim financial statements have been prepared applying the accounting policies and presentation that were applied in the preparation of the Group's published consolidated financial statements for the year ended 31 December 2018 and are expected to be applied in the preparation of the financial statements for the year ending 31 December 2019. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

Several other amendments and interpretations apply for the first time in 2019, but do not have an impact on the interim condensed consolidated financial statements of the Group.

These condensed consolidated interim financial statements were approved by the Board of Directors and approved for issue on 23 September 2019.

   3.   Use of judgements and estimates 

In preparing these interim financial statements, management has made judgements and estimates that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Although these estimates are based on the directors' best knowledge of the amount, event or actions, it should be noted that actual results may differ from those estimates.

The significant judgements and estimates made by the directors in applying the Group's accounting policies and key sources of estimation uncertainty were the same as those disclosed in Annual Report & Accounts 2018.

   4.   Revenue 

The Group's revenue disaggregated by primary geographical markets is as follows:

 
                           For the six months ended 30 June 2019 (Unaudited) 
                                  Direct markets                       Indirect markets 
                     Probes   Monitors   Third Party     Other    Probes   Monitors     Other     Total 
                    GBP'000    GBP'000       GBP'000   GBP'000   GBP'000    GBP'000   GBP'000   GBP'000 
-----------------  --------  ---------  ------------  --------  --------  ---------  --------  -------- 
 UK                     441         19           178        44         -          -         -       682 
 USA                    719          -             -         2         -          -         -       721 
 France                   -          -             -         -       250          -         4       254 
 Scandinavia              -          -             -         -        42          -         1        43 
 South Korea              -          -             -         -       139          -         2       141 
 Peru                     -          -             -         -         -          -         -         - 
 Other countries         16          -             -         -       102         27         7       152 
-----------------  --------  ---------  ------------  --------  --------  ---------  --------  -------- 
                      1,176         19           178        46       533         27        14     1,993 
-----------------  --------  ---------  ------------  --------  --------  ---------  --------  -------- 
 
                           For the six months ended 30 June 2018 (Unaudited) 
                                  Direct markets                       Indirect markets 
                     Probes   Monitors   Third Party     Other    Probes   Monitors     Other     Total 
                    GBP'000    GBP'000       GBP'000   GBP'000   GBP'000    GBP'000   GBP'000   GBP'000 
-----------------  --------  ---------  ------------  --------  --------  ---------  --------  -------- 
 UK                     540          -           183        39         -          -         -       782 
 USA                    824          -             -        10         -          -         -       834 
 France                   -          -             -         -       365         66        32       463 
 Scandinavia              -          -             -         -        20          -         -        20 
 South Korea              -          -             -         -       134          -         -       134 
 Peru                     -          -             -         -         -          -         -         - 
 Other countries         32         14             -         -        59          6         1       112 
-----------------  --------  ---------  ------------  --------  --------  ---------  --------  -------- 
                      1,396         14           183        49       578         72        33     2,325 
-----------------  --------  ---------  ------------  --------  --------  ---------  --------  -------- 
 
                             For the year ended 31 December 2018 (Audited) 
                                  Direct markets                       Indirect markets 
                     Probes   Monitors   Third Party     Other    Probes   Monitors     Other     Total 
                    GBP'000    GBP'000       GBP'000   GBP'000   GBP'000    GBP'000   GBP'000   GBP'000 
-----------------  --------  ---------  ------------  --------  --------  ---------  --------  -------- 
 UK                   1,051          5           448       108         -          -         -     1,612 
 USA                  1,534         17             -        17         -          -         -     1,568 
 France                   -          -             -         -       799         66        35       900 
 Scandinavia              -          -             -         -        62          -         -        62 
 South Korea              -          -             -         -       258          -         1       259 
 Peru                     -          -             -         -       116        165         -       281 
 Other countries         49         14             -         -       166         34        10       273 
-----------------  --------  ---------  ------------  --------  --------  ---------  --------  -------- 
                      2,634         36           448       125     1,401        265        46     4,955 
-----------------  --------  ---------  ------------  --------  --------  ---------  --------  -------- 
 

The Group's revenue disaggregated between the sale of goods and the provision of services is set out below. All revenues are recognised at a point in time.

 
                                                     Period ended                       Year ended 
                                             30 June              30 June              31 December 
                                                2019                 2018                     2018 
                                             GBP'000              GBP'000                  GBP'000 
-------------------------------  -------------------  -------------------  ----------------------- 
            Sale of goods                      1,961                2,305                    4,882 
            Maintenance income                    32                   20                       73 
                                               1,993                2,325                    4,955 
-------------------------------  -------------------  -------------------  ----------------------- 
 

The following table provides information about trade receivables and contract liabilities from contracts with customers. There were no contract assets at either 30 June 2019 or 1 January 2019.

 
                                                                          30 June              1 January 
                                                                             2019                   2019 
                                                                          GBP'000                GBP'000 
------------------------------------------------------------  -------------------  --------------------- 
            Trade receivables which are in 'Trade and other 
             receivables'                                                   1,047                  1,410 
            Contract liabilities                                            (150)                  (151) 
------------------------------------------------------------  -------------------  --------------------- 
 

The following aggregated amounts of transaction prices relate to the performance obligations from existing contracts that are unsatisfied or partially unsatisfied as at 30 June 2019:

 
                                        2019                 2020                 2021                 2022                Total 
                                     GBP'000              GBP'000              GBP'000              GBP'000              GBP'000 
-----------------------  -------------------  -------------------  -------------------  -------------------  ------------------- 
            Revenue 
             expected 
             to be 
             recognised                  116                   16                    1                   17                  150 
-----------------------  -------------------  -------------------  -------------------  -------------------  ------------------- 
 
   5.   Segment results 

Performance is monitored, and the allocation of resources is made on the basis of results derived from the sale of probes, monitors and third-party products for which revenues and gross margins are regularly reported to the Group's Chief Executive Officer who has been identified as the Chief Operating Decision Maker (CODM). The CODM also monitors a profit measure described internally as 'adjusted earnings before interest, tax, depreciation and amortisation (Adjusted EBITDA). However, this measure is reported at a Group level rather than an operating segment which is based on the nature of the goods provided rather than the geographical market in which they are sold.

The unaudited segment results for the six months ended 30 June 2019 were:

 
                                                          Third 
                              Probes(1)    Monitors       party     Other    Unallocated     Total 
                                                       products 
                                GBP'000     GBP'000     GBP'000   GBP'000        GBP'000   GBP'000 
--------------------------  -----------  ----------  ----------  --------  -------------  -------- 
 Revenues                         1,709          46         178        60              -     1,993 
--------------------------  -----------  ----------  ----------  --------  -------------  -------- 
 Adjusted gross profit(2)         1,416          41          83        32              -     1,572 
--------------------------  -----------  ----------  ----------  --------  -------------  -------- 
 
 Sales and marketing 
  costs(3)                            -           -           -         -              -     (632) 
 Administration costs(3)              -           -           -         -              -     (615) 
 R&D costs(3)                         -           -           -         -              -      (62) 
 Quality and regulation 
  costs(3)                            -           -           -         -              -     (110) 
--------------------------  -----------  ----------  ----------  --------  -------------  -------- 
 Adjusted EBITDA(4)                   -           -           -         -              -       153 
--------------------------  -----------  ----------  ----------  --------  -------------  -------- 
 
   1.     Managed care service revenue is categorised as probe revenue 

2. Gross profit excluding the depreciation charge relating to monitors loaned to customers and production equipment

3. Excluding non-cash costs namely depreciation, amortisation, share-based payment expense, non-executive directors' fees and accumulated absence costs

4. Earnings before interest, tax, depreciation and amortisation, share-based payment expense and non-executive directors' fees

The unaudited segment results for the six months ended 30 June 2018 were:

 
                                                          Third 
                              Probes(1)    Monitors       party     Other    Unallocated     Total 
                                                       products 
                                GBP'000     GBP'000     GBP'000   GBP'000        GBP'000   GBP'000 
--------------------------  -----------  ----------  ----------  --------  -------------  -------- 
 Revenues                         1,974          86         182        83              -     2,325 
--------------------------  -----------  ----------  ----------  --------  -------------  -------- 
 Adjusted gross profit(2)         1,520          21          83        34              -     1,658 
--------------------------  -----------  ----------  ----------  --------  -------------  -------- 
 
 Sales and marketing 
  costs(3)                            -           -           -         -        (1,398)   (1,398) 
 Administration costs(3)              -           -           -         -        (1,071)   (1,071) 
 R&D costs(3)                         -           -           -         -           (39)      (39) 
 Quality and regulation 
  costs(3)                            -           -           -         -          (113)     (113) 
--------------------------  -----------  ----------  ----------  --------  -------------  -------- 
 Adjusted EBITDA(4)                   -           -           -         -              -     (963) 
--------------------------  -----------  ----------  ----------  --------  -------------  -------- 
 
   1.     Managed care service revenue is categorised as probe revenue 

2. Gross profit excluding the depreciation charge relating to monitors loaned to customers and production equipment

3. Excluding non-cash costs namely depreciation, amortisation, share-based payment expense, non-executive directors' fees and accumulated absence costs

4. Earnings before interest, tax, depreciation and amortisation, share-based payment expense and non-executive directors' fees

The audited segment results for the year ended 31 December 2018 were:

 
                                                          Third 
                              Probes(1)    Monitors       party     Other    Unallocated     Total 
                                                       products 
                                GBP'000     GBP'000     GBP'000   GBP'000        GBP'000   GBP'000 
--------------------------  -----------  ----------  ----------  --------  -------------  -------- 
 Revenues                         4,035         301         448       171              -     4,955 
--------------------------  -----------  ----------  ----------  --------  -------------  -------- 
 Adjusted gross profit(2)         3,240         154         216        86              -     3,696 
--------------------------  -----------  ----------  ----------  --------  -------------  -------- 
 
 Sales and marketing 
  costs(3)                            -           -           -         -        (2,324)   (2,324) 
 Administration costs(3)              -           -           -         -        (1,751)   (1,751) 
 R&D costs(3)                         -           -           -         -          (139)     (139) 
 Quality and regulation 
  costs(3)                            -           -                     -          (200)     (200) 
--------------------------  -----------  ----------  ----------  --------  -------------  -------- 
 Adjusted EBITDA(4)                   -           -           -         -              -     (718) 
--------------------------  -----------  ----------  ----------  --------  -------------  -------- 
 
   1.     Managed care service revenue is categorised as probe revenue 

2. Gross profit excluding the depreciation charge relating to monitors loaned to customers and production equipment

3. Excluding non-cash costs namely depreciation, amortisation, share-based payment expense, non-executive directors' fees and accumulated absence costs

4. Earnings before interest, tax, depreciation and amortisation, share-based payment expense and non-executive directors' fees

The reconciliation of the profit measure used by the Group's CODM to the result reported in the Group's consolidated SOCI is set out below:

 
                                                       Unaudited            Audited 
                                                   30 June    30 June   31 December 
                                                      2019       2018          2018 
                                                   GBP'000    GBP'000       GBP'000 
-----------------------------------------------  ---------  ---------  ------------ 
 Adjusted EBITDA                                       153      (963)         (718) 
 Non-cash items: 
 Depreciation of property, plant and equipment        (98)      (122)         (246) 
 Amortisation of development costs                    (71)       (96)         (173) 
 Non-executive directors' fees and employer's 
  social security costs                               (72)       (69)         (140) 
 Share-based payment expense                         (123)      (136)         (166) 
 Change in accumulated absence cost liability         (10)       (37)            24 
 Bonus accrual releases                                  -        202           189 
 Gain on convertible loan note                           -         80            80 
-----------------------------------------------  ---------  ---------  ------------ 
                                                     (374)      (178)         (432) 
-----------------------------------------------  ---------  ---------  ------------ 
 Operating loss                                      (221)    (1,141)       (1,150) 
 Finance costs                                        (86)       (99)         (188) 
-----------------------------------------------  ---------  ---------  ------------ 
 Loss before tax                                     (307)    (1,240)       (1,338) 
 Tax credit on loss                                     38         46            74 
-----------------------------------------------  ---------  ---------  ------------ 
 Loss for the period/year                            (269)    (1,194)       (1,264) 
-----------------------------------------------  ---------  ---------  ------------ 
 
   6.   Dividends 

The Directors cannot recommend the payment of a dividend (2018: nil) for 2019.

   7.   Tax credit on loss 
 
                                                                          Unaudited                          Audited 
                                                                 30 June              30 June              31 December 
                                                                    2019                 2018                     2018 
                                                                 GBP'000              GBP'000                  GBP'000 
---------------------------------------------------  -------------------  -------------------  ----------------------- 
            Research and development tax credit                     (52)                 (46)                     (63) 
            Adjustment in respect of prior periods                    14                    -                     (11) 
---------------------------------------------------  -------------------  -------------------  ----------------------- 
            Total tax credit on loss                                  38                 (46)                     (74) 
---------------------------------------------------  -------------------  -------------------  ----------------------- 
 

The adjustment in respect of prior years of GBP14,000 relates to an adjustment that was required following the completion of the corporation tax computation for the year ended 31 December 2018 which finalised the amount of current year trading losses that were available for surrender under HMRC's small company R&D tax credit regime.

   8.   Loss per share 

Basic loss per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares issued during the year.

The loss per share calculation for six months to 30 June 2019 is based on the loss after tax attributable to owners of the parent of GBP270,000 and the weighted average number of shares in issue of 502,437,787.

The loss per share calculation for six months to 30 June 2018 is based on the loss after tax attributable to owners of the parent of GBP1,199,000 and the weighted average number of shares in issue of 449,907,014.

The loss per share calculation for the year ended 31 December 2018 is based on the loss after tax attributable to owners of the parent of GBP1,270,000 and the weighted average number of shares in issue of 471,460,901. While the Company is loss-making, the diluted loss per share and the loss per share are the same.

   9.   Cash at bank 
 
                                                Unaudited                          Audited 
                                       30 June              30 June              31 December 
                                          2019                 2018                     2018 
                                       GBP'000              GBP'000                  GBP'000 
-------------------------  -------------------  -------------------  ----------------------- 
            Cash at bank                   595                1,065                      580 
-------------------------  -------------------  -------------------  ----------------------- 
 

10. Net cash

 
                                                                  Unaudited                          Audited 
                                                         30 June              30 June              31 December 
                                                            2019                 2018                     2018 
                                                         GBP'000              GBP'000                  GBP'000 
-------------------------------------------  -------------------  -------------------  ----------------------- 
            Cash at bank                                     595                1,065                      580 
            Less Invoice discount facility                 (267)                (453)                    (553) 
-------------------------------------------  -------------------  -------------------  ----------------------- 
                                                             328                  612                       27 
-------------------------------------------  -------------------  -------------------  ----------------------- 
 

11. Borrowings

 
                                                                        Unaudited                                                                          Audited 
                                                          30 June 2019                        30 June 2018                                31 December 2018 
                                      Current              Non-current              Current              Non-current              Current              Non-current 
                                      GBP'000                  GBP'000              GBP'000                  GBP'000              GBP'000                  GBP'000 
------------------------  -------------------  -----------------------  -------------------  -----------------------  -------------------  ----------------------- 
            Invoice 
             discount 
             facility                     267                        -                  453                        -                  553                        - 
            Convertible 
             loan 
             notes                          -                    1,052                    -                    1,017                    -                    1,035 
------------------------  -------------------  -----------------------  -------------------  -----------------------  -------------------  ----------------------- 
                                          267                    1,052                  453                    1,017                  553                    1,035 
------------------------  -------------------  -----------------------  -------------------  -----------------------  -------------------  ----------------------- 
 

12. Trade and other payables

 
                                                                        Unaudited                                                                          Audited 
                                                          30 June 2019                        30 June 2018                                31 December 2018 
                                      Current              Non-current              Current              Non-current              Current              Non-current 
                                      GBP'000                  GBP'000              GBP'000                  GBP'000              GBP'000                  GBP'000 
------------------------  -------------------  -----------------------  -------------------  -----------------------  -------------------  ----------------------- 
            Trade 
             payables                     360                        -                  388                        -                  346                        - 
            Other 
             payables                     345                        -                  298                        -                  333                        - 
            Social 
             security 
             and other 
             taxes                        122                        -                  298                        -                  146                        - 
            Lease 
             obligations                   35                      334                   31                      369                   33                      352 
            Contract 
             liabilities                  150                        -                   75                        -                  151                        - 
            Employee 
             short-term 
             liabilities                   67                        -                  120                        -                   57                        - 
            Accrued 
             expenses                     947                        -                  985                                           917                        - 
------------------------  -------------------  -----------------------  -------------------  -----------------------  -------------------  ----------------------- 
                                        2,026                      334                2,195                      369                1,983                      352 
------------------------  -------------------  -----------------------  -------------------  -----------------------  -------------------  ----------------------- 
 

13. Convertible loan note

The convertible loan note recognised in the Condensed Consolidated Balance Sheet is calculated as:

 
                                                             Financial                  Equity 
                                                             liability               component                Total 
                                                               GBP'000                 GBP'000              GBP'000 
----------------------------------------------  ----------------------  ----------------------  ------------------- 
            Carrying amount at 1 January 2019                    1,035                      82                1,117 
            Interest expense                                        62                       -                   62 
            Interest paid                                         (45)                       -                 (45) 
----------------------------------------------  ----------------------  ----------------------  ------------------- 
            Carrying amount at 30 June 2019                      1,052                      82                1,134 
----------------------------------------------  ----------------------  ----------------------  ------------------- 
 

The convertible loan note falls due for repayment in February 2021. The convertible loan note is, at the option of the loan note holder, convertible at anytime into new ordinary shares of 1 penny each at a conversion price of 4 pence per share.

14. Share capital

During the six months ended 30 June 2019, 19,604,742 new Ordinary Shares of 1 penny each were issued to satisfy share options with an exercise price of 1 penny granted under the Company's EMI share scheme. During this period, the weighted average share price at the date of exercise was 1.29 pence (six-month period to 30 June 2018: 1.25 pence; December 2018: 1.25 pence)

15. Exceptional items

The net exceptional cost reported in the prior period relates to restructuring costs incurred during the year which includes payments for loss of office, redundancy payments, professional fees and share-based payment expense offset by the release of contractual bonus accruals.

 
            Exceptional items reported in the six month period to               GBP'000 
             30 June 2018 
------------------------------------------------------------------  ------------------- 
            Compensation for loss of office                                         194 
            Redundancy payments                                                      38 
            Legal and consulting fees                                                31 
            Share-based payment expense                                              81 
            Contractual bonus accruals reversal                                   (202) 
------------------------------------------------------------------  ------------------- 
                                                                                    142 
------------------------------------------------------------------  ------------------- 
 

There were no exceptional items in the current period.

16. Seasonal fluctuations

Revenues in our Distributor markets are traditionally higher in the second half of the financial year due to the purchasing patterns of customers.

17. Restatement of prior period balance sheet amounts

Certain comparative balances at 30 June 2018 have been restated to reflect presentational changes made in the preparation of the 2018 Annual Report & Accounts. The table below summarises the changes made:

 
                                                Separate presentation    Separate presentation 
                                 As reported     of financial assets           of other assets    As restated 
                                                  held at amortised 
                                                         cost 
                                                 Current   Non-current 
                                     GBP'000     GBP'000       GBP'000                 GBP'000        GBP'000 
-----------------------------  -------------  ----------  ------------  ----------------------  ------------- 
 Trade and other receivables           1,480       (245)         (155)                    (72)          1,008 
-----------------------------  -------------  ----------  ------------  ----------------------  ------------- 
 
 
 
 
                                         Re-classification 
                                            as non-current    Re-categorisation 
                                                 component             of lease 
                                            of convertible            liability 
                                                 loan note             as other 
                          As reported                                   payable    As restated 
                              GBP'000              GBP'000              GBP'000        GBP'000 
----------------------  -------------  -------------------  -------------------  ------------- 
 Borrowings - current           (594)                   88                   53          (453) 
----------------------  -------------  -------------------  -------------------  ------------- 
 
 
 
                                             Re-categorisation 
                                                   of employee    Re-categorisation 
                                                    short-term             of lease 
                                                   liabilities            liability 
                                               from provisions             as other 
                              As reported                                   payable    As restated 
                                  GBP'000              GBP'000              GBP'000        GBP'000 
--------------------------  -------------  -------------------  -------------------  ------------- 
 Current liabilities 
 Trade and other payables         (2,043)                (121)                 (31)        (2,195) 
--------------------------  -------------  -------------------  -------------------  ------------- 
 
 
                                             Re-classification 
                                                as non-current    Re-categorisation 
                                                     component             of lease 
                                                of convertible            liability 
                                                     loan note             as other 
                               As reported                                  payable    As restated 
                                   GBP'000             GBP'000              GBP'000        GBP'000 
---------------------------  -------------  ------------------  -------------------  ------------- 
 Non - current liabilities 
 Borrowings                        (1,276)                (88)                  347          1,017 
---------------------------  -------------  ------------------  -------------------  ------------- 
 
 
 
 
 
                                                Re-categorisation 
                                               of lease liability 
                                As reported      as other payable    As restated 
                                    GBP'000               GBP'000        GBP'000 
---------------------------  --------------  --------------------  ------------- 
 Non - current liabilities 
 Trade and other payables                 -                 (369)          (369) 
---------------------------  --------------  --------------------  ------------- 
 
 
 
 
 
                                                    Re-categorisation 
                                               of employee short-term 
                               As reported             liabilities to    As restated 
                                                       other payables 
                                   GBP'000                    GBP'000        GBP'000 
---------------------------  -------------  -------------------------  ------------- 
 Non - current liabilities 
 Provisions                          (235)                        121          (114) 
---------------------------  -------------  -------------------------  ------------- 
 

18. Foreign exchange rates

The following are the principal foreign exchange rates used in the preparation of the condensed consolidated interim financial statements:

 
                                                                          Unaudited                                                       Audited 
                                                    30 June 2019                              30 June 2018                            31 December 2018 
                                            Average              Closing              Average              Closing              Average              Closing 
                                               rate                 rate                 rate                 rate                 rate                 rate 
------------------------------  -------------------  -------------------  -------------------  -------------------  -------------------  ------------------- 
            Sterling/US dollar                 1.30                 1.27                 1.37                 1.32                 1.33                 1.27 
            Sterling/Euro                      1.15                 1.12                 1.14                 1.13                 1.13                 1.11 
            Sterling/Canadian 
             dollar                            1.73                 1.66                 1.73                 1.73                 1.73                 1.73 
------------------------------  -------------------  -------------------  -------------------  -------------------  -------------------  ------------------- 
 

19. Distribution of the announcement

Copies of this announcement are sent to shareholders on request and will be available for collection free of charge from the Company's registered office at Terminus Road, Chichester, PO19 8TX, United Kingdom. This announcement is available, free of charge, from the Company's website at www. deltexmedical.com

20. Cautionary statement

This announcement contains forward-looking statements which are made in good faith based on the information available at the time of its approval. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by several risks and uncertainties that are inherent in any forward-looking statement which could cause actual results to differ materially from those currently anticipated. Nothing in this document should be considered to be a profit forecast.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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