Huntleigh Technology - parent group of West Midlands bed maker Huntleigh Nesbit Evans - says NHS structural changes are hitting the business climate.

However, the group said the Wednesbury operation was its strongest product line performer in the first six months of the year - with revenue up by 7.3 per cent.

Chairman Julian Schild said the second half of 2005 had begun steadily and there were a few large tenders in the UK that the board expects to be decided before the end of the year.

However he said "the business climate still remains hesitant as the acute hospital sector in the UK responds to structural organisational changes in the National Health Service".

Business elsewhere in the world remained strong compared to 2004, Mr Schild added.

The group said forecasts for full year profits broadly equivalent to 2004's record performance could prove to be slightly optimistic.

Mr Schild said: "It is becoming increasingly difficult to anticipate an improvement in the UK market before the end of 2005."

The comments came alongside results for the six months to June 30, which showed a fall in pretax profit to £13.1 million from £14.1 million after weaker NHS Capital sales.

Nesbitt Evans produces the group's patient positioning and transportation product line - including hospital beds, trolleys, hoists, lockers and couches.

The group reported that its half year revenue was £35.2 million, up 7.3 per cent and said "the development of the next generation hospital bed range continued on schedule".

The group's pressure area care section - which includes provision of mattresses and pumps - was down two per cent to £38.7 million.

Revenue was up 4.1 per cent to £19 million at the group's operation, called intermittent pneumatic compression, which produces deep vein thrombosis and compression therapy ranges.

And the diagnostics arm, which produces vital signs monitoring equipment, was up 6.5 per cent to £5.9 million.

Overall underlying revenue for the halfyear was up two per cent to £99 million made up of an improvement of 11 per cent in overseas revenue to £60.6 million and a fall in UK revenue of nine per cent to £38.4 million.

Operating margin fell to 13.6 per cent from 15.2 per cent.

Despite the lower profits however, the board increased the interim dividend to 3.7p from 3.3p