EKF Diagnostics Holdings plc

("EKF", the "Company" or the "Group")

Interim Results

EKF Diagnostics Holdings plc (AIM: EKF), the point-of-care diagnostics business, announces its unaudited interim results for the 6 month period ended 30 June 2011, a period of transition, investment and progression.

Given the acquisitions completed in the last 12 months the year-on-year comparisons given in the highlights below show 2011 actual figures versus pro-forma figures for 2010 based on a like-for-like comparison for the first six months of the year.

Financial Highlights

·      Revenues up 23% to £7.38m (H1'10: £6.01m)

·      Gross margins improved to 64% from 58% - but still impacted by strategy of placing Quo-Test at cost

·      Operating loss of £1.49m (H1'10: loss of £0.66m) - reflecting investment in infrastructure and increased overhead

·      Adjusted EBITDA of £210k (H1'10: loss of £51k)

·      Cash at 30 June 2011 of £5.52m

Operational Highlights

·      Acquisition of Stanbio for an overall consideration of c. £16m

·      Agreement signed with Alere for distribution of CLIA waived Hemo_Control device and cuvettes

·      SFDA approval for Quo-Test in China

·      Cumulative placement of 1,000 Quo-Test instruments by September

·      Development of Quo-Lab for Medica launch in November with first shipments expected in Q1'12

·      Successful development of Argutus kidney markers onto POC platform

·      Richard Evans appointed as full-time Finance Director

Post-period end

·      Richard Evans appointed as Finance Director as of 28 September 2011 (see separate RNS)

·      1,000th Quo-Test instrument expected to be placed by end of September 2011

·      Quo-Lab to be launched at Medica (Nov 2011); first shipments expected Q1 2012

Commenting on Outlook, David Evans, Executive Chairman of EKF, said:

"Trading continues to be in line with management expectations. We remain confident with regard to our future growth which will continue both organically and via acquisition."

Enquiries:

CHAIRMAN'S STATEMENT

Dear Fellow Shareholder

I have pleasure in reporting to you on the results of your Company for the six months ended 30 June 2011.

The period under review has been one of transition, investment and progression.

Transition

We have been seeking to make the transition to a fully-fledged and integrated in-vitro diagnostic company from the initial foundation provided by our first acquisition EKF GmbH last year and the subsequent acquisitions of Quotient Diagnostics, Argutus Medical and StanBio. This has involved moving from an essentially owner-managed structure and culture to one that is more reflective of the demands of a higher-growth/higher governance led environment.

This transitional process is on-going as we seek to empower people across the Group and install common and appropriate management and reporting systems across seven different site locations.

As part of the  aforementioned transition I have pleasure in announcing the appointment of Richard Evans as full-time Finance Director, he will replace Paul Foulger who has been fulfilling the role on a part-time basis. Paul will continue with the Company as Company Secretary.

Investment

To achieve the transition across the Group we have sought to make the necessary investment to ensure that we can deliver on the demands being placed on the organisation both from an internal and external perspective.

In part, the investment being made has been a necessity to do what should have been done in previous regimen and, again, perhaps reflective of an owner-managed culture. This has been particularly so in Barleben, Germany. This investment has been in both personnel and infrastructure.

The greater part of the investment has been to capitalise upon both current and future growth opportunities for Hemo_Control and Quo-Test.

In May 2011 we opened a new manufacturing plant in Poland in order to cope with increased demand for Hemo_Control cuvettes.

Although completed after June, during the period we have invested approximately £350,000 in the Quotient facility which was necessary from both an existing quality manufacturing viewpoint but also from the increased levels of demand as the Group adopted a more aggressive approach to instrument placement.

Overall employee numbers have increased from 159 at the start of the year to 200 by 30 June (excluding any via the acquisition of Stanbio).

Finally in June we acquired Stanbio for an overall consideration of approximately £16 million. This is a strategically important acquisition for the Group and helps take us to the next level and gives us a foothold in the Americas.

Progression

The Company has progressed across a number of fronts in the period and post-period end;

·   Signing of the contract for Hemo_Control with Alere.

·   SFDA (China) registration of Quo-Test.

·   The cumulative placement of 1,000 Quo-Test instruments expected by September with growth of analysers and consumables sales expected to continue in the year.

·   The continued development of Quo-Lab which will have its marketing launch at Medica in November with first shipments expected in Q1 2012.

·   The development of the kidney markers from Argutus on to a Point of Care platform.

·   The development of a combination test for HbA1c and glucose on a modified Biosen instrument, combining an innovative new test with the quality of tried and tested technology platform.

Financials

The financial statements are set out in the accompanying pages.

In order to allow you to make sense of the published numbers I have set out below the comparison of actual versus a pro-forma based on a like-for-like comparison for the first six months of the year broken down by company entity.

For the purposes of the analysis Stanbio's results for the period to 30 June only reflect 14 days of trading from the date of acquisition.

Overall Revenue has increased by £1,370,000, an increase of 23% reflecting growth across all the key units and in particularly EKF Germany where the results have been skewed by the nature of the tender business won during the period. We have adopted a more aggressive approach to instrument placement in Quotient and we expect to continue with this tactic going forward.

Overall Gross Margin percentages have increased from 58% to 64% resulting in an overall increase in gross margin to £4,717,000 from £3,486,000. This change primarily reflects a combination of product mix and cost allocations. The decision to place Quo-Test out at cost has and will continue to impact margins in Quotient for some time as we continue to expand our HbA1C franchise in the new economies of Asia.

Notes

-       EKF Germany includes Polish and Russian subsidiaries and Senslab.

-       Head office includes amortisation of intangibles on consolidation.

The Group has made an overall operating loss for the six months of £1,490,000 reflecting both the investment being made across the Group in terms of infrastructure and the overall increased overhead burden as we move the various businesses from an owner-managed structure to one that is more compliant with the demands of being a larger organisation. Within Head Office expenses is included £361,000 (2010: £30,000) of share based payments, £320,000 of costs incurred in relation to the acquisition of Stanbio which now are required to be taken through the Income Statement, the 2010 equivalent was £64,000 in relation to the then proposed acquisition of EKF. There were also £568,000 (2010 £nil) of Amortisation costs included within the Head Office total.

Overall Finance costs were £62,000 net compared with an income in the prior period of £11,000.

Tax credit for the period was £34,000 compared with a nil tax charge in the prior period.

Finally £108,000 of costs were incurred in this period relating to discontinued operations resulting in an overall loss for the period of £1,626,000 (2010: £675,000 loss).

Balance Sheet

During the period the Group invested £352,000 on Development Costs and £1,021,000 on Plant, Machinery and Equipment. The Development costs don't include Research costs as these will not meet the requirement to be capitalised as an intangible cost.

The Group Cash at 30 June 2011 amounted to £5,515,000 which is sufficient to maintain our continued programme of investment for the foreseeable future.

The Group raised £12,403,750 (net of expenses) through an issue of new shares . Part of the funding was used for acquisition of Stanbio and the rest will be utilised to support the Group's operations and on-going programme of investment. A further £370,250 was received through the exercise of certain share options.

Outlook

Trading continues to be in line with management expectations, with cumulative revenues to the end of August 2011 of circa. £11.4m.  As of the end of August 2011, the installed base of analysers was approximately 41,000, of which c.50% were Hemo_Control units.

As we move forward I look forward to being able to update you on;

·   Progression of the submission to the FDA for Quo-Test.

·   Launch of Quo-Lab.

·   Progress with Alere regarding the distribution of Hemo_Control.

·   The status of discussions with Hemocue regarding outstanding patent matters relating to the old version of Hemo_Control cuvette.

·   The output of any clinical trials in relation to our kidney markers.

We remain confident with regard to our future growth which will continue both organically and via acquisition. Whilst our primary focus remains in diabetes, in its widest context from measurement to management including education, we continue to look for novel markers in areas of unmet clinical need where carrying out the test in a near-patient environment will make a difference to both the patient and the clinician.

Finally, I would like to thank all EKF Group employees for their dedicated application during a period of continued change.

David Evans

Chairman

CONSOLIDATED INCOME STATEMENT

FOR THE 6 MONTHS ENDED 30 JUNE 2011

CONSOLIDATED STATEMENT OF COMPREHENSIVE

FOR THE 6 MONTHS ENDED 30 JUNE 2011

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2011

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE 6 MONTHS ENDED 30 JUNE 2011

STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2011