Highlights

1.1 Corporate Events and Significant Distribution Expansion

• A placing of £3.7m (net) of new shares was completed in June 2004, giving additional working capital to support the new US, German and Austrian distributor programmes and additional R&D
• Final contracts have been signed appointing four regional distributors in the US
• German & Austrian distributors were appointed (June) - sales have commenced in both territories
• Final lithium chloride registration in Italy (in September) sales commenced
• In May 2004, a contract was signed with Philips Medical Systems to create a communications link between LiDCO’s proprietary stand-alone monitoring system and Philips’ patient monitor. The necessary software has been developed and launch of the software is expected around the end of this year

1.2 Financial Highlights of the Period

• Continued transition from a capital sales model to an annuity revenue stream. Sensor and fee for use volumes increased by 76% across the period
• Annuity revenue now represents 65% of sales – up from 20% in 2002 and 45% in 2003
• Total revenues of £0.915m (£1.655m) - which adjusted for a major stocking order from Japan in 2003 and licence fees increased by 11.5% to £0.88m (£0.789m)
• Reduced administrative expenses – down 8% (£2.910m against £3.158m in 2003) and cash usage down 25% (£1.573m against £2.094m in 2003)
• Despite the reduced admin expenses and cash use the pre-tax loss was higher (by 17%) at £2.295m - due to the additional margin in 2003 (£0.52m) generated from the Japanese stocking order and the continued effects of the shift from capital to annuity revenue
• Loss per share slightly higher at 2.91p (2003: 2.58p)
• Gross margins improved: 80% disposables (up 3%) and monitors 74% (up 11%)

1.3 Commercial Highlights

• The number of PulseCO/LiDCOplus monitors sold/placed during the period increased by 23% (76 against 62) in USA, UK and Europe
• Sensor and fee per use volumes up 76% to 7,614 from 4,315
• Significant expansion in sales activities commenced in second half of year
  
  
  

Revenue Summary – Showing Transition to Annuity Stream
Sales detail	June 2004 £’000	June 2003 £’000
Capital	321	1,139*
Sensors Standard price Up charge price	296 219	292 55
Sensors total revenue	515	347
Monitor fee per use	44	-
Licence fees	35	169
Total	915	1,655
Installed base (number of monitors)	667	469



* Includes stocking order of £0.71m from Japan

Dr Terry O’Brien, Chief Executive, stated:

“Following the progress made this year in finding, negotiating with and appointing distributors in the US, Germany and Austria, distributor sales activities in these territories have begun and I am encouraged by the progress they are already making. The additional sales in these territories will add to our existing and growing annuity revenue, further reducing our dependence on revenue from lumpy and less predictable capital sales. The Directors believe that the annuity sales growth will continue and translate into our first profits on a monthly basis by the end of 2005. ”

The Directors have decided to change the Company’s financial year-end from 31 December 2004 to 31 January 2005. The Directors believe that a January year-end is more suitable date operationally. The Company will therefore announce audited results for the 13 month period 1 January 2004 to 31 January 2005.

Enquiries:
LiDCO Group Plc
Terry O'Brien (CEO) terry@lidco.com	020-7749 1502
Bankside Consultants Limited
Charles Ponsonby (PR) charles.ponsonby@bankside.com	020-7444 4166

Notes for Editors

LiDCO is a leading developer of minimally invasive, computer-based hemodynamic monitoring equipment and disposables used primarily for the management of critical care and cardiovascular risk hospital patients. The Company’s current products are:

• the LiDCOplus and PulseCO monitors, computer-based platforms for displaying a range of real-time continuous hemodynamic parameters including cardiac output, oxygen delivery and fluid volume; and
• the LiDCO disposable for accurately determining cardiac output in a minimally-invasive manner.

LiDCO was founded in 1991 by Doctors Terry O’Brien (the current CEO), David Band (the current Scientific Director), Robert Linton and Jiri Kratochvil and by King’s College, London. LiDCO’s head office is in Hoxton, London N1, whilst its sales offices are located in the Granta Science Park, Cambridge and in Dallas, Texas.