DawMed sees losses increase as NHS tightens belt

DAWMED Systems, the AIM-listed medical devices company, today said government constraints on NHS spending had contributed to an “extremely difficult year” which saw the company make losses of more than £500,000.

Rotherham-based DawMed designs and makes decontamination equipment used in the healthcare sector.

Kevin Gilmore, the company's executive chairman, said the possibility of DawMed posting disappointing annual results had been previously forecast because of NHS budget cuts by the Government.

“I referred again to these restrictions on spending in the interim report for the six months ended March 31 2007 and it is regrattable that the forecast proved to be accurate,” he said.

DawMed saw its net loss after interest and taxation increase to £577,500 for the year to September 30, compared to a net loss of £87,800 in the previous year.

Operating loss was £500,400 against £129,300 last time.

Many of DawMed's products are used by NHS Trust hospitals, private hospitals, clinics and primary care practitioners.

Mr Gilmore said: “Notwithstanding that the year ended September 30 was an extremely difficult one for the company, the current year has started with a great deal more optimism and the board is hopefully looking forward to a return to profitability in the current year.”

Mr Gilmore said the company had achieved some notable positives during the year, including increased sales of its AERclens product, a washer-disinfector for endoscopes, while sales of its Clinic dryer, used to decontaminate surgical and dentists' instruments, increased by 22%.

Turnover for the full year was £4.98m, nominally down from the 2006 figure, while the company had gross profit of £1.89m.

Looking forward, Mr Gilmore said DawMed had started the present financial year by winning numerous contracts, including its largest contract to date, with East Kent Hospitals NHS Trust.

He said many NHS bodies which had been restricted on spending were now able to free up funding and had approached DawMed with work.

He added that the company now had the largest order book in its history.

Earlier this month, DawMed signed a Memorandum of Understanding with German company Schulke & Mayr to supply the company with its AERclens machine.

DawMed also has a collaboration with the University of Leeds to investigate further access into the European export market.