Mediwatch-Trading Update

RNS Number : 2275H
Mediwatch PLC
25 May 2011

25 May 2011



Mediwatch plc



Trading Update for the six months to 30 April 2011



Mediwatch plc ("Mediwatch" or "the Company") (AIM: MDW), the innovative urological diagnostic manufacturing company, announces an update on the trading results for the six months to 30 April 2011.



The Directors of Mediwatch are pleased to report that in a more challenging marketplace turnover for the first six months of the 2011 financial year was marginally ahead of the same period last year. However, gross margins have come under pressure due to increases in component and manufacturing costs and increased industry competition. This has led to a reduction of gross profits by approximately 1% when compared to the second half of 2010.



In a concerted effort to improve margins, management is implementing a number of programmes aimed at reducing manufacturing costs. In addition, the Company has been actively pursuing a strategy of reducing overhead expenses over the last six months and the current level of overheads is 11% below that for the second half of 2010. Management expects these savings to continue throughout the rest of the financial year. Furthermore, research and development costs have also been reduced by 19% in the first half of the financial year as compared to those costs for the same period the previous year.



Mediwatch is pleased to announce that its wholly owned subsidiary, Mediwatch USA Inc. has executed a three year contract with Amerinet, Inc. to supply the Portascan+ unit to the Amerinet hospital network. The Amerinet network consists of over 41,000 hospitals, institutions and healthcare providers. The Mediwatch Portascan+ unit will be made available to this network through this agreement.



New product introductions which are expected to contribute to sales in the second half include Urinewatch, a comprehensive urinalysis system which is currently available and a new bladder ultrasound platform which is expected to be available from July 2011.



MobileWatch is continuing its progress in Florida and the Board is looking at various growth strategies to extend the programme into other states in the US.



In house manufacturing of PSAwatch is now well underway and a constructive marketing programme has been initiated.



The US division continues to secure group purchasing agreements for the Company's products with the most recent agreement with Amerinet and an arrangement with PSS World Medical, Inc. to market its products and services.



Overall, the Company's performance for the first half of the 2011 financial year is in line with management's expectations and the reduction in costs has enabled the Company to continue to be profitable in difficult markets. With the introduction of new products the Board is optimistic for the second half of the 2011 financial year.



Enquiries:

Mediwatch +44 (0)1788 547888
Philip Stimpson, Chief Executive

Fairfax I.S. PLC +44 (0)20 7598 5368
Nominated Adviser / Broker
Ewan Leggat / Laura Littley

Editor's Notes

Mediwatch plc: Innovative Diagnostic Solutions

Mediwatch is a leader in its field. The Company is continually striving to develop and market faster, simpler and less invasive diagnostic products to save lives and restore quality of life for people with a variety of urological conditions. Founded in 1995, Mediwatch (www.mediwatch.com) has developed a range of point-of-care medical equipment for the diagnosis of urological disorders.

The business focuses its design skills towards diagnostic products that can be used across the medical profession.

Mediwatch has established excellent foundations for continued growth building on the acquisition and integration of a division of Medtronic Inc in 2007, an international distribution network and its research and development programmes.

Mediwatch has a global presence with offices in both the UK and US. The UK office is the base for manufacturing, research and development, sales and marketing to the rest of the world outside of the US and Canada with a direct sales force for the UK markets. The US office manages a direct sales and marketing infrastructure to cover the US and Canada along with some research and development activities.


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The company news service from the London Stock Exchange

Trading Update for the six months to 30 April 2011