DHAIS plc
LSE : DHAP

March 31, 2011 02:00 ET

Half year report six months to 31 December 2010

DHAIS PLC
Interim results for the six month period ended 31 December 2010

Chairman's statement

I  am pleased to report on the interim 6 months period ending 31 December 2010 for DHAIS plc (the "Company")
during  which  the largest activity was the retailing of Hearing and Mobility products through our  branches
and in clients own homes. The secondary activity was the generation of marketing leads and enquiries.

This transition to principally becoming a retailing business is in accordance with the intention at the time
of  joining  PLUS Market in June 2008, which was to take advantage of the business opportunities within  the
diverse  and  fragmented  hearing,  health and mobility sectors and to fully  exploit  the  Directors'  lead
generation  skills  and  to  enjoy  both  vertical and horizontal integration.  Central  to  this  plan  was
establishing  a  network  of Hearing and Mobility stores by way of acquisition of existing  businesses,  the
first of which was Hearing Health & Mobility Limited in December 2008.

Two  years after establishing the model, and with a current portfolio of 15 Hearing and Mobility stores, the
business  is  one  of  the top retailers of mobility products in the UK and is an expanding  player  in  the
hearing aid retail sector.

The  return to the profits enjoyed by the Company two years ago has been slower than anticipated,  and  with
group  sales of GBP 3,481,844, for the first half of this current financial year and a post-tax loss of  GBP
573,599, we have reduced the annualised loss by 25% when comparing with the loss for the year ended 30  June
2010.

The  Directors  were confident the Company's finances were "turning the corner" last November following  the
closure  of  the  administration  office  in Southport, which had been  inherited  as  part  of  an  earlier
acquisition,  and  with the further consolidation of all retail activities under one  Managing  Director  in
Kettering.  However,  the  severe weather in November and December, as with  many  retailers,  significantly
impacted  on  the  performance  of  the  retail stores.  Furthermore  the  redundancy  costs  and  costs  of
rationalisation exceeded initial estimates and January was also a weak month for retail activity.

All  the  above factors resulted in a significant further drain on cash flow. Losses and investment to  date
have  been  funded  by shareholder loans given the weak climate for equity fund raising and  obtaining  bank
finance.  As results improve we hope to attract conventional investment funds to enable growth opportunities
to continue. We currently carry high interest bearing loans and will seek to reduce that burden.

Funding

In  order  to  bolster our working capital we have closed one very small retail store and are  currently  in
discussions  regarding a cash injection from the disposal of our largest store in Staines  to  Owen  Hearing
Ltd,  a  company in which DHAIS plc has a 15% interest.  Owen Hearing Ltd trades as Owen Hearing +  Mobility
("OHAM")  and is to become the investment vehicle for Hearing and Health International ("HHI"), a Portuguese
company.   HHI has significant funds to invest not only in the UK but also plans to embark on a Pan European
expansion programme to establish a chain of mobility stores across Portugal.

Although  negotiations  are still subject to contract and completion of final due diligence,  we  expect  to
achieve  a  consideration in respect of the disposal of the Staines store of circa GBP 450,000. We  hope  to
make an announcement shortly once the transaction is completed.

We  recently  announced the issue of 327,869 Ordinary shares of GBP 0.001 each for a total consideration  of
GBP 100,000. The investment was by HHI, to whom these shares were issued.

Following significant cash investment from HHI into Owen Hearing Ltd, the latter will become a subsidiary of
HHI  and will continue to expand in the UK whilst HHI itself will concentrate on expansion in Europe.  DHAIS
plc  will  retain a stake of 7.5% in Owen Hearing Ltd going forward and sees this opportunity as  a  gateway
into Europe.

We  are delighted to have strengthened our ties with OHAM and HHI as we believe we can work better alongside
bringing scale benefits and experienced entrepreneurs closer together. Moreover alignment with OHAM  in  the
UK will be of operational benefit to the Company.

Outlook

February  and March of this calendar year have seen improved performance with a lower cost base and  we  are
optimistic for the second half of the financial year on a number of fronts.

    -   We will be fairly resilient to the increase in VAT as most of our customers do not pay VAT.
        
    -   We have recruited a highly experienced Marketing Director who is based at Kettering alongside the
        Managing Director.
        
    -   The market for the elderly is rapidly expanding as life expectancy in general increases.
        
    -   Our  strong service element means that our shops and home advisory service are well  placed  to
        compete with others with the additional benefit of substantial national advertising placed by our marketing
        division.

    -   Our business criterion is clearer and we are now more selective with our sites.
        
Despite the circuitous route taken, we now have a substantial chain of Hearing and Mobility stores,  we  are
well  known  within the industry, and we advise, sell and service products in an expanding market  place  in
well equipped branches, or in clients' own homes.

Within  the  branch areas that we operate in, we have a significant share of the market place and  with  the
competitive  advantage  of combining Hearing and Mobility stores we believe we are  achieving  economies  of
scale in our purchasing and that our return per square foot of premises is substantially better than that of
our competitors who operate free standing stores.

On  a  stand alone basis and pre central costs, the branches are now trading profitably on a 12 month  cycle
taking into account seasonality. We can now look for carefully targeted acquisitions once again.

The  retail  hearing aid division which provides a dispenser service both in the branches and  at  home  has
taken  longer than expected to rationalise.  The balance between employed dispensers and those who are  self
employed ("franchisees") has been readjusted with a determination to operate profitably throughout.

The  marketing division which struggled last year due to increased competition has shown resilience. We have
many  years  of  experience and with a growing number of franchised and other dealers  benefiting  from  our
national advertising we should remain profitable in the 2nd half of the financial year.

The  mail  order/catalogue division is presently on hold while we focus on the existing business model.  Our
website is being developed as a support rather than to replace retail operations.

We  are  working  closely with a Home Care business, which now operates through one of our  branches.  Early
indications show a great synergy opportunity.

Our  main objective is to achieve a position whereby we can trade profitably each month in order to build  a
base  for the future.  We thank our employees, suppliers and shareholders for their support to date  and  we
look forward to an improved overall performance in the second half of the financial year.



Mark Moss
Chairman
        
31 March 2011


The Directors of the Issuer accept responsibility for this announcement.

Enquiries:

Amin Kiddy
Director, DHAIS Plc
Tel:  +44 (0) 2920 666888


Jon Isaacs
Alfred Henry Corporate Finance Limited
Tel: +44 (0) 20 7251 3762




Consolidated Group Profit and Loss Account
for the six month period ended 31 December 2010

                                                          6 months to         6 months to            Year to
                                                             31.12.10            31.12.09           30.06.10
                                                                  GBP                 GBP                GBP
                                                                                            
 Turnover                                                   3,481,844           5,058,090          9,392,688
                                                                                            
 Cost of sales                                             (1,779,271)         (2,529,160)        (4,349,008)
                                                            ---------           ---------          ---------           
 Gross profit                                               1,702,573           2,528,930          5,043,680
                                                                                            
 Distribution costs                                        (1,811,237)         (2,740,886)        (5,585,281)
                                                                                            
 Administrative expenses                                     (313,853)           (423,010)          (749,881)
                                                            ---------           ---------          ---------           
 Operating loss                                              (422,517)           (634,966)        (1,291,482)
                                                            ---------           ---------          ---------           
 Interest receivable and similar income                            14                 236                240
                                                            ---------           ---------          ---------           
                                                             (422,503)           (634,731)        (1,291,242)
                                                                                            
 Interest payable and similar charges                        (156,561)            (99,624)          (233,744)
                                                            ---------           ---------          ---------           
 Loss on ordinary activities before taxation                 (579,064)           (734,355)        (1,524,986)
                                                                                            
 Tax on loss on ordinary activities                             5,465                   -                  -
                                                            ---------           ---------          ---------           
 Loss on ordinary activities after taxation                  (573,599)           (734,355)        (1,524,986)
                                                            ---------           ---------          ---------           
                                                                                            
 Loss retained for the period                                (573,599)           (734,355)        (1,524,986)
                                                            =========           =========          =========           
 
 Retained deficit brought forward                          (1,893,359)            331,627            331,627
                                                            =========           =========          =========          
 
 Retained deficit carried forward                          (2,866,958)         (1,102,728)        (1,893,359)
                                                            =========           =========          =========          
 Loss per share                                                                             
 Basic/diluted                                              GBP (2.00)          GBP (2.46)         GBP (2.62)
                                                            =========           =========          =========

CONTINUING OPERATIONS

Turnover and operating loss derive wholly from continuing operations.

TOTAL RECOGNISED GAINS AND LOSSES

The group has no recognised gains or losses other than the profits or losses above and therefore no separate
statement of total recognised gains or losses has been presented.


Group Balance Sheet
As at 31 December 2010

                                               31.12.10                   31.12.09                   30.06.10
                                           GBP          GBP           GBP          GBP           GBP          GBP
 Fixed assets                                                                                            
                                                                                                         
 Tangible assets                                    402,007                    494,259                    515,877
 Intangible assets                                1,789,072                  1,890,045                  1,826,576
                                                  ---------                  ---------                  ---------
                                                  2,191,079                  2,384,304                  2,342,453
                                    
 Current assets                                                                                          
                                                                                                         
 Stock                                 419,565                    645,725                     455,353       
 Debtors                               379,629                  1,106,569                   1,143,480     
 Cash at bank and in hand              163,450                    316,634                     229,519       
                                     ---------                  ---------                   ---------
                                       962,644                  2,068,928                   1,828,352     
                                                                                                         
 Creditors: amounts falling                                                                              
 due within one year                                                                       
                                    (2,064,471)                (1,601,283)                 (2,456,528)
                                     ---------                  ---------                   ---------

 Net current assets /                            (1,101,827)                    467,645                  (628,176)
 (liabilities)                                    ---------                   ---------                 --------- 
                                    
 Total assets less current                                                                               
 liabilities                                      1,089,252                   2,851,949                 1,714,277
                                                                                                         
 Creditors: amounts falling                                                                              
 due after more than one year                                                                            
                                                 (2,460,000)                 (2,458,467)               (2,111,426)
                                                  ---------                   ---------                 ---------
 Total assets less total                                                                                 
 liabilities                                     (1,370,748)                    393,482                  (397,149)
                                                  =========                   =========                 =========
                                                                                       
 Capital and reserves                                                                                    
                                                                                                         
 Called up share capital                             55,486                      56,941                    56,941
 Share premium                                    1,425,514                   1,425,514                 1,425,514
 Other reserves                                      15,210                      13,755                    13,755
 Profit and loss account                         (2,866,958)                 (1,102,728)               (1,893,359)
                                                  ---------                   ---------                 ---------

 Shareholders' funds                             (1,370,748)                    393,482                  (397,149)
                                                  =========                   =========                 =========


Group Cash Flow Statement
for the six month period ended 31 December 2010

                                                        6 months to         6 months to            Year to
                                                           31.12.10            31.12.09           30.06.10
                                                                GBP                 GBP                GBP
                                                                                             
 Net cash outflow from operating activities                (283,245)           (530,467)          (453,664)
                                                                                            
 Returns on investments and servicing of finance           (143,121)           (126,131)          (140,817)
                                                                                            
 Taxation                                                   (34,532)                  -             51,012
                                                                                            
 Capital expenditure and financial investment               (18,071)            (99,736)          (252,489)
                                                          ---------           ---------          ---------             
                                                           (478,969)           (756,334)          (795,958)
                                                                                            
 Financing                                                  412,900             452,960            405,469
                                                          ---------           ---------          ---------             
 Decrease in cash in the period                             (66,069)           (303,374)          (390,489)
                                                          =========           =========          =========


Notes to Interim Group Results
for the six month period ended 31 December 2010


1.      The  financial information set out above does not constitute statutory accounts for the  purpose  of
        Section  435  of  the  Companies Act 2006.  The financial information has been  extracted  from  the
        management  accounts of DHAIS plc and its subsidiary company Hearing Health & Mobility  Limited  and
        is  presented  using  the same accounting policies as those used in the statutory  accounts  of  the
        respective  companies.  The accounts for the year ended 30 June 2010 have been  extracted  from  the
        statutory  accounts  filed  with the Registrar of Companies; the report of  the  auditors  on  those
        accounts was unqualified.


2.      Loss per share

        Basic  loss  per share is calculated by dividing the earnings attributable to ordinary  shareholders
        by  the  weighted average number of ordinary shares during the period.  The weighted average  number
        of  equity  shares in issue during the period was 28,620,596 (31.12.09 - 29,824,494)  and  the  loss
        after tax was GBP 573,599 (6 month period to 31.12.09 - GBP 734,355).
        
        
3.      Reserves - Group

                                                  Profit and        Share         Other        Totals
                                                loss account      premium      reserves
                                                         GBP          GBP           GBP           GBP
                                                                                                     
        At 1 July 2010                            (1,893,359)   1,425,514        13,755       (454,090)
        Deficit for the period                      (573,599)           -             -       (573,599)
        Purchase of own shares                      (400,000)           -         1,455       (398,545)
                                                   ---------    ---------     ---------      ---------
        At 31 December 2010                       (2,866,958)   1,425,514        15,210     (1,426,234)
                                                   =========    =========     =========      =========  
                                                                                          
        On  10 December 2010 the company purchased back 1,454,545 of its own ordinary shares of GBP
        0.001 each for an aggregate price of GBP 400,000.



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