Trading Update

The Board of Sutherland Health Group updates its shareholders on current trading and on news of its progress in increasing distribution of its products

                                                                                                                                       23 FEBRUARY 2011
                                                       SUTHERLAND HEALTH GROUP PLC
                                             ("Sutherland Health Group" or "the company")
                                                                PLUS Symbol: SHGP


                                                                   
Trading Update


The Board of Sutherland Health Group, a national supplier of patient hygiene, sexual health and diagnostic products to customers including the NHS, updates its shareholders on current trading and on news of its progress in increasing distribution of its products.


Trading Outlook


Whilst the Company recognises the importance of the NHS market, it is continuing to reduce its dependence on NHS Hospitals for its revenue and profitability. This is particularly important at a time
when, as seen in the media, the NHS is looking to make savings in its expenditure going forward. The Company has already experienced competitive activity in its patient hygiene range of products in recent months, which has had an effect on the revenue and profitability of the patient hygiene range for the current financial year, therefore impacting the overall profitability of the Group to the extent that the Group is now expected to report a small loss for the year. In addition, the Group invested during this period in launching the new Vision gynaecology diagnostics, which has also had an impact on the Company’s profitability.


Vision diagnostics successfully evaluated by NHS Supply
Chain Innovation Scorecard


Following the announcement in October 2010, that the Company had completed development and gained approval from the NHS to market its two new gynaecology diagnostics, Vision® Amniotic Leak Detector and Vision® Vaginal Infection Swab, the Company have recently been notified that both products have also been evaluated by NHS Supply Chain Innovation Scorecard.


The NHS Supply Chain Innovation Scorecard was developed in collaboration with NHS National Innovation Centre (NIC) and is designed to enable assessment of new products beyond prototype stage. The products assessed must be CE marked and have clinical trials where appropriate. The Scorecard consists of 47 questions which identify the concept, value and capability of the products assessed. The Company is pleased to inform Shareholders that both products were given excellent ratings and as such will be promoted to all key healthcare and purchasing professionals within NHS England from March 2011. First orders have already been received for the products from NHS England.


New Distributors outside the NHS


In line with the Company’s strategy of broadening distribution of its products outside of NHS Hospitals, the Board has been in negotiations with a number of key distributors who specialise in the supply of GP’s Private Clinics, and Private Hospitals. The Board are pleased to inform Shareholders that these negotiations have now been completed and orders have been received for the Company’s products to supply into these key sales markets.

In the opinion of the Board the strategy of gaining new additional
distribution channels for its products outside of the NHS will ensure a better balanced revenue stream and a quicker return to an even more profitable trading position.


Chairman John French commented:


“It has been a competitive trading environment in recent months with our patient hygiene range seeing some effects from that, however we have been successful in identifying new opportunities for sales of all our products, and in particular for our new Vision diagnostics range that we believe will make the Group even stronger going forward as we enter these new sectors in the coming months whilst continuing to build sales in the Hospital market. I look forward to announcing further distribution gains shortly.”


The Directors of the Issuer accept responsibility for this announcement.


For further information:


John French, Chairman
Sutherland Health Group plc
E: john@sutherlandhealth.com
T: 07836 722 482


Heena Karani
Rivington St Corporate Finance Ltd
E: heena.karani@rs-cf.com
T: 0207 562 3393

Notes to Editors:


Sutherland Health Group Plc is a national supplier of patient hygiene, sexual health and diagnostic products to the UK National Health Service (NHS) and other UK customers. Its aim is to supply innovative solutions to current health issues by studying current trends and working alongside leading professionals who also work within the health sector.


The company is committed to developing and marketing high quality brands and products that will benefit health professionals and consumers alike in many areas of health. The Group has established its own brands: Condomania® Condoms; Sutherland® Patient Hygiene and Personal Care; Lubricating Jelly; and Vision® pregnancy and gynaecology diagnostics. These products have already become established within the NHS business.


The Group is ISO and MHRA registered, and at present principally
operates within the United Kingdom.


The Vision® Amniotic Leak Detector is a diagnostic panty liner worn by pregnant women that has a patented technology proven in clinical trials that can warn if any amniotic fluid leak has been detected on the panty liner. This helps to protect the mother and baby and also helps to reduce the risk of complications or premature birth. The product is recommended for use in both high risk and normal pregnancies.


The Vision® Vaginal Infection Swab is a point of care professional probe for use by Health Professionals that detects in a matter of seconds whether a woman has Bacterial Vaginosis, Trichomonas, or other parasitic infections. It can be used when a patient has an abnormal vaginal discharge, but can also be used to routinely check women who have a history of pre-term delivery in pregnancy, before IVF procedures, and other vaginal procedures.


 

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