- Deltex Medical Group posts an operating loss of £2.1m for the six months to the end of June - up from £1.5m last time.

Consumable revenues were flat at £2,530,000. ODM probe revenues were £110,000 (4%) lower with increases of £132,000 (28%) from the US and £102,000 (19%) from International offset by a £344,000 (23%) decrease from the UK. £102,000 (2014: £nil) of additional consumables revenues were generated from third party sales.

Gross profit on consumables was £167,000 (77%) lower than in H1 2014 at 71%. This reduction was due to a number of factors including a change in the mix between direct and distributor ODM probe sales, the introduction of third party sales as distributor, the movement in exchange rates and the under absorption of production costs.

The cost of building probes has been close to flat and average end user prices continue to increase in the US as new accounts are brought on stream.

Cost of consumables sales includes unabsorbed production labour and overhead of over £150,000, which has led to a reduction of 5% in gross margin as we trained staff in building sub-assemblies that have been brought in-house and reduced probe stocks in anticipation of making design changes to improve both functionality and increase margins.

Cash costs were £675,000 (30%) higher than in H1 2014. Excluding £152,000 of exceptional costs relating to redundancies, cash costs were 24% higher than in H1 2014 and 3% lower than in H2 2014 when we started to increase investment in each of the US market, research and development and a number of operational improvements.

The company expects the full year effect of H1 cost savings to come through in the second half. Furthermore the introduction of online e-learning modules and further deployment of training simulators is reducing the cost of training new customers.

At 8:29am: [LON:DEMG] Deltex Medical Group PLC share price was -0.25p at 5p

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