Sutherland Health Group (Plus: SHGP), the Plus listed health supplies company that counts the NHS as one of its main customers, continued to drive profits in the right direction during the first half of the year. Sutherland, which is chaired by John French, the serial AIM and Plus entrepreneur who also leads Resources In Insurance (LON:RIIG) , saw sales nudge up 0.6% to £0.5m in the six months to September 30, with profits coming in at £0.03m and gross margins rising to 55.8% from 51.2% previously.

During this period the company signed a relationship letter with Thames Valley Innovation and Growth (TVIG) enabling it to receive funding for specialist consultancy to further its research into new market opportunities. It was also awarded a new contract with NHS England to supply the nutritional product Thixo-D® that came into effect in May 2010. Thixo-D® Original is a nutritional supplement that is an instant food and thickener for the management of Dysphagia, which is a medical condition connected to swallowing. Since then, the company has also received the first orders from NHS England for two new gynaecology products.

In January Sutherland raised £217,000 by placing new ordinary shares at 2.5p each in order to fund working capital, new product development and invest in its sales and marketing team. The company said it regarded as a success its strategy of working closely with health professionals to develop products that are needed or required within the NHS. It has now begun to broaden its distribution network into other medical markets, which it said presented a further opportunity going forward.

Commenting on the figures, Mr French said: “We are delighted that we continue to improve our gross margins as the mix of our product sales changes with our new products beginning to improve our overall profitability. The last few months has seen a very busy period for the company as we prepared for the launch of our new gynaecology diagnostics for which we recently announced first orders had been received from the NHS. We look forward to updating shareholders on further progress and developments in new distribution and sales.”

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