Interim Results 2010

The Board of Sutherland Health Group announces its unaudited Interim Results for the six months to 30th September 2010

                                                                                                                                        5 November 2010
                                                     SUTHERLAND HEALTH GROUP PLC
                                          (“Sutherland Health Group” or “the Company”)
                                                              PLUS Symbol: SHGP
                                                                INTERIM RESULTS
The Board of Sutherland Health Group, a national supplier of patient hygiene, sexual health and gynaecology products to customers including the National Health Service (“NHS”), announces today its unaudited Interim Results for the six months to 30th September 2010.
 

Financial Highlights:

  • Sales growth of 0.6% in the six month period April to September compared to

          same period last year;

  • Gross Profit up 9.6%;
  • Gross margin improves from 51.2% to 55.8%;
  • Operating profit up 102%; and
  • Profit for the period up 298% from £7,245 to £28,847

 

Operational Highlights:

  • Relationship letter signed with Thames Valley Innovation & Growth;
  • New Sales and Marketing Assistants recruited;
  • New contract awarded by NHS England to supply Thixo-D® nutritional

          supplement; and

  • Placing closed raising £217,000 before expenses;

 

Commenting on today’s Interim Results Chairman John French said:
 

“We are delighted that we continue to improve our gross margins as the mix of our product sales changes with our new products beginning to improve our overall profitability. The last few months has seen a very busy period for the Company as we prepared for the launch of our new Gynaecology diagnostics for which we recently announced first orders had been received from the NHS. We look forward to updating
shareholders on further progress and developments in new distribution and sales”
 

CHAIRMAN’S STATEMENT
 

FINANCIAL REVIEW
For the six months to 30 September 2010, the Company’s turnover was GBP471,997 up 0.6% (2009: GBP469,089) producing a gross profit of GBP263,404 up 9.6% (2009: GBP240,383). Gross Margin for the current financial year has also improved by 55.8% (2009: 51.1%). Administrative expenses increased by 5.5% to GBP208,013 (2009: GBP197,163). The pre-tax profit was GBP28,847, which is an increase of 298.2% (2009: GBP7,245) and the profit per ordinary share was 0.045 pence (2009: 0.014 pence).
 

The first six months of the financial year has been a period of consolidating our position,
improving gross margins and profitability on our brands, whilst at the same time
preparing for our launch into the Gynaecology diagnostics market.
 

During this period we signed a relationship letter with Thames Valley Innovation and Growth (TVIG) enabling the Company to receive funding for specialist consultancy to further its research into new market opportunities.
 

We were also pleased to be awarded a new contract with NHS England to supply our nutritional product Thixo-D® that came into effect on 1 May 2010. Thixo-D® Original is a nutritional supplement that is an instant food and thickener for the management of Dysphagia.
 

We have also recruited two new sales and marketing people to strengthen our sales activities going forward.
 

FUNDING

The Company raised GBP217,000 by placing new ordinary shares at 2.5p during this period. The Directors purchased 600,000 new ordinary shares in this placing. The funds raised are being used by the Company for working capital, to continue new product development and to fund the sales and marketing team.
 

DIRECTORS DEALINGS

During the interim period, Chief Executive George Sutherland purchased 49,000 shares at 2.5p and a further 26,000 shares at 2.73p on 28 April 2010 and I purchased 78,000 shares at 2.5p on 28 April 2010. These transactions were reported to the market on 30th April 2010.
 

STRATEGY

It is our opinion that our strategy of working closely with health professionals to develop products that are needed or required within the NHS has to date been a success. We are regularly presented with new product opportunities for us to work on or consider. We have also begun to broaden our distribution network into other medical markets, which presents a further opportunity for the Company going forward.
 

PRODUCTS

We announced on 25 October 2010 that we had completed development and have now received first orders from NHS England for the Vision® Amniotic Leak Detector and the Vision® Vaginal Infection Swab. Both products are supplied under a national contract with NHS England until 30 September 2012. We are delighted that they have now been approved for marketing and look forward to an exciting period of gaining distribution and further sales opportunities with these two new important products.
 

JOHN FRENCH
CHAIRMAN

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