Half Yearly Report

RNS Number : 0752N

Clinical Computing PLC

26 August 2011

 

CLINICAL COMPUTING PLC

HALF YEAR RESULTS FOR THE SIX MONTHS TO 30 JUNE 2011

Clinical Computing Plc ("the Group"), the international developer of clinical information systems for the healthcare market and developer of programme management software, announces its Interim Results for the six months ended 30 June 2011.  The Group trades through four operating subsidiaries: Clinical Computing UK Limited in the United Kingdom and Europe, Clinical Computing Inc. in the United States, Clinical Computing Pty Limited in Australia and Hydra Management Limited ("Hydra") in the United Kingdom.

Financial Highlights

·     Total revenue of £1,342,813 (H1 2010: £1,517,767)

·     Recurring maintenance revenues  of £842,792 (H1 2010: £833,675)

·     Operating costs decreased to £1,402,544 (H1 2010: £1,606,367)

·     Loss from operations of £59,731 (H1 2010: loss £88,600)

·     R&D tax credit of £183,691 (H1 2010: £240,377)

·     Profit after tax of £115,691 (H1 2010: profit of £144,185)

·     Earnings per share of 0.1p (H1 2010: earnings 0.1p)

·     EBITDA positive at £4,014 (H1 2010:£3,877)

·     Positive cash flow from operating activities £373,546 (H1 2010:  £282,345)

Operational Highlights

·     Regional license agreement won in Australia, largest clinicalvision v roll-out to date

·     Sussex Renal Innovation Programme successfully delivering efficiencies to care teams

·     cv-analytics module beta testing a success

·     Partnering programmes being expanded across both the Clinical and Hydra businesses

·     Hydra business continues to deliver positive operating results 

·     Hydra Manager V7 implemented by majority of customers with V8 scheduled for later this year 

·     Hydra Manager new feature set to expand capabilities to other industries

Outlook

Chairman Gerry Musgrave, commenting on the Group's outlook said:

"The Group has two software solutions both of which, we believe, have unique selling propositions compared to their respective competitors.  Our near term strategy will include continuing our direct sales strategy for both products as well as expanding our partnership programme with organisations that will help us increase our revenue opportunities and leverage the software investments we have made in the clinicalvision and Hydra Manager products.

We believe that the demand for our products will increase as we expose our solutions to more partners and market these solutions with recent reference sites that are using our latest releases.  The management team will continue to prudently manage its cash resources throughout this process."

Contacts:
Joe Marlovits, Chief Executive Clinical Computing Plc www.ccl.com	01473 694770
Simon Sacerdoti / James Caithie Cairn Financial Advisers LLP - Nominated Adviser	020 7148 7900

 

 

 

CHAIRMAN'S STATEMENT

 

Introduction

We are pleased to report our interim results for the six month period to 30 June 2011.

The Group has two main software solutions:  clinicalvision which is a web-based electronic medical record application for chronic diseases and Hydra Manager which is an enterprise-wide programme management application.  Both of these solutions are expert systems and are aimed at the sophisticated end user for their respective markets. Likewise, each solution is a tool to drive effective and efficient use of resources.  In the clinicalvision world this is to provide clinical teams with the most up to date and accurate patient information, so that they can more effectively manage increasing number of patients. In the Hydra world this is to maximise project resources and manage on-time delivery of projects across diverse skill sets.  

Despite an overall drop in turnover, the Group continues its recent positive financial trends with respect to operating results, after tax profitability and positive operating cash flow.

In each business we expect to release an application update before the end of the year.  The clinicalvision product will be upgraded to include a visual scheduling component as well as further support for tablet type computers used in the healthcare environment.  Hydra Manager will be upgraded to include more generic resource planning so that we can expand the market potential for this product. 

Clinical business

We are pleased to announce that we have been awarded a large multi-year contract with a state-wide dialysis programme in Australia.  The Company has been pursuing several regional and state-wide opportunities in Australia, Canada and the UK.  This is the first win of several active regional tenders the business is pursuing.  The contract secured in Australia will provide the company with not only a significant reference site, but a fully integrated roll-out of clinicalvision involving 17 interfaces making this one of the most integrated clinical department roll-outs undertaken to support renal medicine.  We anticipate the implementation of this project to start in September 2011. 

We have also completed the majority of the work involved with the Sussex Renal Innovation Programme in the UK and have received extremely positive feedback with respect to the efficiency and time savings our clinicalvision solution is delivering to this programme, particularly the analysis module (cv-analytics) which was beta tested at this site.  We continue to gather strong evidence to support the pay-back time on an investment in clinicalvision, and the analytics module is one of the primary features delivering a significant savings in Nephrologists' time. 

Looking ahead to the second half of 2011, the Company is focusing its resources on specific initiatives in the US, Canada, Australia and the UK where healthcare providers are required to demonstrate that they are improving the quality of patient care.  In most cases these initiatives do not require changes to our product, but do require a professional service approach to package a solution which meets the needs of each geographic market.  We anticipate that these initiatives will generate new revenues from our current clients. 

Hydra business

The business continues to win new orders from existing as well as new customers.  Following a very successful 2010, Hydra has delivered very consistent result for the first half of 2011.  

The depth and breadth of features and stability of the Hydra Software combined with the rapid implementation processes we now have, are proving to be key reasons for customers continuing to select Hydra over other alternatives.

The Hydra Manager application assists organisations in improving efficiencies and identifying project constraints.   The valuable management information regarding the performance of portfolios, projects and resources that is available from Hydra at the planning stage as well as throughout the life of the project continues to ensure that the uptake of Hydra expands within most of our customer accounts.

Businesses continue to seek efficiency improvements and Hydra Manager is a key tool in managing the delivery of these improvements.

The combination of market focus, product strengths and a short payback period has contributed to the revenue and profit growth in the first half.   Hydra operating profit for the period was £120,075 (2010 H1: £78,851).

Financial results

Total revenue of £1,342,813 decreased from the amount reported for the same period in the prior year (H1 2010: £1,517,767) primarily due to a decrease in new business from Clinical's NHS customers. 

The Group's revenue mix by business was:

63% Clinical with revenues of £842,578 (H1 2010: £1,074,897 and 71%)

37% Hydra with revenues of £500,235 (H1 2010: £442,870 and 29%).

Recurring maintenance revenues of £842,792 (H1 2010: £833,675) accounted for 63% (H1 2010: 55%) of our total revenues. 

The Group's operating costs continue to decrease as we adjust our operating structure away from research and development. Total operating costs have decreased 13% to £1,402,544 (H1 2010: £1,606,367). 

Group operating costs are attributed to each business unit as follows:

68% Clinical business or £953,776 (H1 2010: £1,156,435 and 72%)

27% Hydra business or £380,160 (H1 2010: £364,019 and 23%)

5% Parent company costs were £68,608 (H1 2010: £85,913 and 5%).

Loss from operations improved to £59,731 (H1 2010: loss £88,600) and are shown below by business unit:

Clinical business operating loss £111,198 (H1 2010: loss £81,538)

Hydra business operating profit £120,075 (H1 2010: profit £78,851)

Parent Company operating loss £68,608 (H1 2010: loss £85,913) 

As in prior years the Group continues to develop its core technologies: clinicalvision and Hydra Manager. This development effort has resulted in the Group receiving R&D tax credits under the United Kingdom R&D tax credit regime. In the period under review the Group has received £183,691 of tax credits for research and development activities undertaken in 2010 (H1 2010: R&D tax credit of £240,377 for research and development undertaken in 2009). 

The Group is reporting a profit after tax of £115,691 for the period (H1 2010: profit £144,185). Earnings per share for the period under review was 0.1p (H1 2010: earnings per share of 0.1p).

EBITDA for the first half 2011 was a positive £4,014 compared to £3,877 in the first half of 2010. The non-cash charge for the first half of 2011 was £63,745 (H1 2010: £92,477). This is the fourth consecutive six month period in which the Group has reported positive EBITDA.

Likewise, we are also reporting positive cash flow from operating activities. Operating cash flows were £373,546 for the period under review (H1 2010: £282,345). 

During the twelve month period ending 30 June 2011 the Group increased its borrowings by £8,390 (twelve months ended 30 June 2010 increased £52,220).  The Group's available debt facilities amount to £956,000, of which £790,455 was drawn at 30 June 2011.  Consequently at 30 June 2011 there were undrawn facilities of £165,545, in addition to the cash balance of £1,172,600.  Given the above cash resources, the Group's operational performance and order book, and its forecasts and projections, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.

Outlook

The Group has two software solutions both of which, we believe, have unique selling propositions compared to their respective competitors.  Our near term strategy will include continuing our direct sales strategy for both products as well as expanding our partnership programme with organisations that will help us increase our revenue opportunities and leverage the software investments we have made in the clinicalvision and Hydra Manager products.

We believe that the demand for our products will increase as we expose our solutions to more partners and market these solutions with recent reference sites that are using our latest releases.  The management team will continue to prudently manage its cash resources throughout this process. 

Gerry Musgrave

Chairman

26 August 2011

 

Unaudited condensed consolidated income statement

Six months ended 30 June 2011

			Audited
	Six months	Six months	year
	ended	ended	ended
	30 June 2011	30 June 2010	31 December 2010
	£	£	£
Continuing operations
Total revenue (Note 3)	1,342,813	1,517,767	2,969,839
Cost of sales	(352,392)	(365,956)	(637,839)
	--------------	--------------	-----------------
Gross profit	990,421	1,151,811	2,332,000
Distribution costs	(139,064)	(155,132)	(346,373)
Administrative expenses
Research and development	(544,830)	(654,947)	(1,276,582)
Other	(366,258)	(430,332)	(782,767)
Total administrative expenses	(911,088)	(1,085,279)	(2,059,349)
	--------------	-------------	-----------------
Loss from operations	(59,731)	(88,600)	(73,722)
Finance income	121	101	316
Finance expense	(8,390)	(7,693)	(15,782)
	--------------	------------	-----------------
Loss before tax	(68,000)	(96,192)	(89,188)
Income tax credit (Note 4)	183,691	240,377	270,479
	--------------	------------	-----------------
Profit for the period attributable to company equity holders	115,691	144,185	181,291
	--------------	------------	----------------
Basic earnings per share (Note 5)	0.1p --------------	0.1p ------------	0.2p ----------------
Diluted earnings per share (Note 5)	0.1p --------------	0.1p --------------	0.2p ----------------

The notes form part of this condensed financial information.

Unaudited condensed consolidated statement of comprehensive income

Six months ended 30 June 2011

			Audited
	Six months	Six months	Year
	Ended	Ended	Ended
	30 June 2011	30 June 2010	31 December 2010
	£	£	£
Profit for the period	115,691	144,185	181,291
Exchange differences on translating foreign operations	(2,385)	(37,333)	(69,104)
	-------------	-------------	----------------
Total comprehensive income for the period	113,306	106,852	112,187
	-------------	-------------	----------------

The notes form part of this condensed financial information.

Unaudited condensed consolidated statement of financial position

30 June 2011

	30 June	30 June	Audited 31 December
	2011	2010	2010
	£	£	£
Non-current assets
Intangible assets	160,367	257,444	205,462
Goodwill	157,658	157,658	157,658
Property, plant and equipment	30,577	60,485	42,342
	---------------	---------------	------------
	348,602	475,587	405,462
	---------------	---------------	------------
Current assets
Trade and other receivables	483,541	530,857	560,919
Cash and cash equivalents	1,172,600	847,859	795,212
	---------------	---------------	------------
	1,656,141	1,378,716	1,356,131
	---------------	---------------	------------
Total assets	2,004,743	1,854,303	1,761,593
	---------------	---------------	------------
Current liabilities
Trade and other payables	(368,637)	(424,290)	(376,326)
Deferred income	(862,155)	(853,721)	(738,551)
Bank loans	(790,455)	(734,687)	(782,065)
	---------------	---------------	-------------
	(2,021,47)	(2,012,698)	(1,896,942)
	---------------	---------------	---------------
Net liabilities	(16,504)	(158,395)	(135,349)
	---------------	---------------	-------------
Equity
Share capital	2,433,251	2,433,251	2,433,251
Share premium account	7,750,957	7,750,957	7,750,957
Share option reserve	165,643	142,393	160,104
Translation reserve	(65,866)	(31,710)	(63,481)
Retained earnings	(10,300,489)	(10,453,286)	(10,416,180)
	---------------	---------------	-----------------
Shareholders' funds - deficit (Note 6)	(16,504)	(158,395)	(135,349)
	--------------	--------------	------------

The notes form part of this condensed financial information.

 

Unaudited condensed consolidated statement of cash flow

Six months ended 30 June 2011

			Audited
	Six months	Six months	year
	ended	ended	ended
	30 June 2011	30 June 2010	31 December 2010
	£	£	£
Net cash from operating activities (Note 7)	373,546	282,345	185,340
Investing activities
Interest received	121	101	316
Purchases of property, plant and equipment	(2,231)	(2,676)	(2,677)
	---------------	---------------	--------------
Net cash used in investing activities	(2,110)	(2,575)	(2,361)
	---------------	---------------	--------------
Financing activities
Increase in bank loan	8,390	8,023	55,401
	---------------	---------------	---------------
Net cash from financing activities	8,390	8,023	55,401
	---------------	---------------	---------------
Net increase in cash and cash equivalents	379,826	287,793	238,380
Cash and cash equivalents at beginning of period	795,212	551,404	551,404
Effect of foreign exchange rate changes	(2,438)	8,662	5,428
	---------------	---------------	----------------
Cash and cash equivalents at end of period	1,172,600	847,859	795,212
	---------------	---------------	---------------

The notes form part of this condensed financial information.

NOTES:

1. Basis of preparation

The accounting policies applied in the unaudited condensed interim financial statements have been prepared in conformity with recognition and measurement principles required by International Financial Reporting Standards ("IFRS") in issue and as adopted by the European Union and are effective or are expected to be adopted and effective at 31 December 2011. The unaudited financial statements have been prepared using accounting policies consistent in all material respects with those applied in the Group's Annual Report for the year ended 31 December 2010 and consistent with those that will be applied during the year ended 31 December 2011. The financial information provided herein should be read in connection with the Group's audited Consolidated Financial Statements and the notes thereto for the year ended 31 December 2010.

The Group is marginally loss making at the operational level. The directors continue to monitor management's forecasts for revenues, costs and working capital needs on a regular basis. Although these projections show improving trading conditions, inherently there can be no certainty that these forecasts will be achieved. Following a review of the above noted forecasts and taking into account available borrowing facilities, the directors have formed a judgement, at the time of approving this interim announcement, that there is reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future.

This interim report does not constitute statutory accounts of the Group within the meaning of section 435 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2010 have been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain a statement under section 498 of the Companies Act 2006.

2.     Business and geographic segments

		Unaudited six months	Unaudited six months	Audited year
		Ended	ended	ended
		30 June	30 June	31 December
		2011	2010	2010
		£	£	£
	Revenue by segment
	Clinical business UK	228,507	406,502	610,285
	Clinical business USA	546,399	627,480	1,216,659
	Clinical business Australia	67,672	40,915	83,429
	Hydra business	500,235	442,870	1,059,466
		---------------	---------------	----------------
		1,342,813	1,517,767	2,969,839
		---------------	----------------	----------------

3.         Revenue 

		Unaudited six months	Unaudited six months	Audited year
		Ended	Ended	Ended
		30 June	30 June	31 December
		2011	2010	2010
		£	£	£
	Revenue by type
	Software licences	301,027	506,747	913,217
	Maintenance	842,792	833,675	1,692,305
	Services and other revenue	198,994	177,345	364,317
		-------------	-------------	--------------
	Revenue	1,342,813	1,517,767	2,969,839
		-------------	-------------	--------------

4.     Tax

The tax credits of £183,691 for the first half 2011 were derived from activities under taken in 2010. The tax credits of £240,377 reported for the half year ended 30 June 2010 were derived from activities undertaken in 2009.   The Group accounts for research and development tax credits when there is sufficient certainty over receipt of the amounts involved, which is generally, when the claim has been filed with the applicable tax authority.

5.     Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:

		Unaudited six months	Unaudited six months	Audited year
		ended	ended	ended
		30 June	30 June	31 December
		2011	2010	2010
		£	£	£
	Earnings for the purposes of basic and diluted earnings per share	115,691	144,185	181,291
		---------------	---------------	-----------------
		Number	Number	Number
	Weighted average number of ordinary shares used in basic earnings per share calculation	110,883,694	110,883,694	110,883,694
	Dilutive share options	-	-	-
		---------------	---------------	----------------
	Weighted average number of shares used in diluted earnings per share calculation	110,883,694	110,883,694	110,883,694
		---------------	---------------	----------------

6.     Unaudited condensed consolidated statement of changes in equity

			Share
	Share	Share	option	Translation	Retained	Shareholders'
	capital	premium	reserve	reserve	losses	funds
	£	£	£	£	£	£
At 31 December 2009	2,433,251	7,750,957	124,681	5,623	(10,597,471)	(282,959)
Share options	-	-	35,423	-	-	35,423
Translation of foreign operations	-	-	-	(69,104)	-	(69,104)
Profit for the year	-	-	-	-	181,291	181,291
	-------------	------------	-----------	-----------	--------------	---------------
At 31 December 2010	2,433,251	7,750,957	160,104	(63,481)	(10,416,180)	(135,349)
	-------------	------------	----------	-----------	--------------	---------------
Share options	-	-	5,539	-	-	5,539
Translation of foreign operations	-	-	-	(2,385)	-	(2,385)
Profit for the period	-	-	-	-	115,691	115,691
	-------------	------------	-----------	-----------	--------------	---------------
At 30 June 2011	2,433,251	7,750,957	165,643	(65,866)	(10,300,489)	(16,504)
	-------------	------------	----------	-----------	--------------	---------------

			Share
	Share	Share	option	Translation	Retained	Shareholders'
	capital	premium	reserve	reserve	losses	funds
	£	£	£	£	£	£
At 31 December 2009	2,433,251	7,750,957	124,681	5,623	(10,597,471)	(282,959)
Share options	-	-	17,712	-	-	17,712
Translation of foreign operations	-	-	-	(37,333)	-	(37,333)
Profit for the period	-	-	-	-	144,185	144,185
	-------------	------------	-----------	-----------	--------------	---------------
At 30 June 2010	2,433,251	7,750,957	142,393	(31,710)	(10,453,286)	(158,395)
	-------------	------------	----------	-----------	--------------	---------------

7.	Reconciliation of operating loss to operating cash flows

	Unaudited six months	Unaudited six months	Audited  year
	ended	ended	Ended
	30 June 2011	30 June 2010	31 December 2010
	£	£	£

Loss from operations	(59,731)	(88,600)	(73,722)
Adjustments for:
Depreciation of property, plant and equipment	13,111	22,783	39,910
Share option charges	5,539	17,712	35,423
Amortisation of intangible assets	45,095	51,982	103,964
	--------------	----------------	----------------
Operating cash flows before movements in working capital	4,014	3,877	105,575
Decrease/(increase) in receivables	86,690	(85,691)	(83,916)
Increase/(decrease) in payables	77,439	131,475	(60,914)
	--------------	----------------	-----------------
Cash generated/(used) by operations	168,143	49,661	(39,255)
Tax credits received	213,793	240,377	240,377
Interest paid	(8,390)	(7,693)	(15,782)
	---------------	----------------	-----------------
Net cash inflow from operating activities	373,546 ---------------	282,345 ----------------	185,340 -----------------

 

END

 

 

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