Interim Results

Clinical Computing PLC 14 September 2004 CLINICAL COMPUTING Plc 2004 INTERIM RESULTS Clinical Computing Plc (the 'Group' or the 'Company'), the international developer of clinical information systems for the healthcare market, announces its interim results for the six months ended 30 June 2004. Highlights • 8 Customers are now live on the Clinical Vision 4 product ('CV4'). • 6 CV4 deals won in 2004 from US market (2003: 1). • First CV 4 deal won in Australasia. Results • Turnover for period of £728,000 (2003: £1,150,000). • Operating loss £631,000 (2003: £367,000). • Loss per share (basic and diluted) 2.0p (2003: 1.6p). • Net funds at 30 June £1,445,000 (2003: £1,750,000). Business Review • Additions to senior management team. • Steady order flow from US market. • Encouraging buying signs in all geographic markets. • Revenue backlog of £664,000. • Business development success. Outlook In his statement to shareholders, Howard Kitchner, Chairman said: 'For the second half, the Company anticipates improved deal flow from the US market following our recent expansion of the sales team. In the UK and Australasia markets, the Company will continue to build relationships directly with hospital customers as well as with strategic third-party vendors where CV4 compliments their products and services. The implementation and training teams will be focused on delivering the backlog of orders that now totals £664,000.' For further information, please contact: Jack Richardson, Chief Executive, Clinical Computing Plc Tel: +1513651 3803 Joe Marlovits, Finance Director, Clinical Computing Plc Tel: 020 8747 8744 Paul McManus/Peter Binns, Binns & Co PR Ltd Tel: 020 7153 1485 Mob: 07980 541 893 Chairman's Statement Overview I am pleased to report increasing levels of interest for our Clinical Vision 4 ('CV4') product from healthcare organisations requiring a robust clinical information system. CV4 was built as a generic clinical information system to support patient care across multiple clinical modalities. The product's design and functionality was based on the Company's vision of how clinical software products should facilitate patient care in complex healthcare environments. Market inquiries from customers and potential partners are confirming the integrity of CV4's design. We are actively pursuing 21 open bids across our geographic markets. In these early stages of the product's lifecycle the Company continues to concentrate on its areas of leadership - renal medicine and transplantation. Eight customers are now using CV4 to manage 21 renal dialysis centres across the US and UK. A further seven customers are under contract including two US contracts signed in the last two months. These fifteen customers for this product cover the following geographic markets: 13 in the US, one in the UK and one in Australasia. As reported with our 2003 year-end results, trading conditions in the second half of 2003 proved to be challenging due to a general slow down in the purchasing of clinical information systems in our main geographic markets. During 2004, to date, we have experienced an improvement in our order book, particularly from the US market where we won six of the 13 US CV4 customers, which compares to only one US CV4 deal for all of 2003. Trading Results The Group's turnover for the six months ended 30 June 2004 was £728,000 (2003: £1,150,000). The operating loss was £630,000 (2003: £367,000). There was no charge to taxation and the loss after net interest and taxes for the period was £631,000 (2003: £397,000). Basic loss per share for the period was 2.0p (2003: loss 1.6p). Although trading conditions improved throughout the period, revenue recognition for projects won in 2004 has been limited due to delays by customers staffing their internal project implementation teams. During the period under review the Group completed one implementation (2003: five completed implementations). Due to these implementation delays and information currently available to the Board it is unlikely that the Company will meet the market forecast for the current year. The Group's main source of turnover for the period was derived from maintenance contracts for its software products: PROTON, di-PROTON, RENLStar and Clinical Vision (versions 3 and 4). Turnover from support contracts decreased 12 per cent when compared to the prior year and accounted for 74 per cent of total turnover (2003: 53 per cent). The decrease in support revenue is principally attributed to the weakening of the US dollar. Cash Flows The Group began the period with cash and short-term deposits of £1,750,000 and ended the period with £1,445,000. The ending net cash position was positively influenced by reducing our debtor balance from the end of 2003 and collecting deposits from customers for projects scheduled to begin in the second half 2004. These customer deposits are accounted for as creditors on the balance sheet. Business Overview During the period we continued our investment in the further development and marketing of CV4. We also focused on strengthening our management team. In January 2004, Joel Tatham joined the Group as Vice President of R&D and Product. Joel previously worked for Crystal Decisions, makers of Crystal Reports, leading the development of Crystal Decisions' Analytic Products line. In June 2004, John Mock joined the Company Group as Vice President Sales and Marketing. Prior to joining the Company, John was the Vice President of Sales with Physicians Interactive a division of Allscripts, Inc., a NASDAQ listed medical software and technology company. On the business development side we have won our first CV4 deal in the Australasian market with a hospital based renal services department. This contract was won as part of combined bid with Gambro Pty Ltd. In the UK market, the National Programme for IT ('NPfIT') is underway within the English National Health Service ('NHS'). Much of the early emphasis of the NPfIT will be on building the national information network spine, which will allow health professionals as well as patients to access their medical records electronically. The CV4 technology has been designed to integrate into such a national system, while delivering the specialist clinical expertise required by healthcare workers managing patients in a complex environment. Selling CV4 into the NPfIT is being done directly to the NHS hospitals and by partnering with organisations selected to deliver integrated solutions under the NPfIT. We are also pursuing business opportunities for clinical information systems in Scotland and Ireland. Outlook For the second half, the Company anticipates improved deal flow from the US market, particularly following our recent expansion of the sales team. In the UK and Australasia markets, the Company will continue to build relationships directly with hospital customers as well as with strategic third-party vendors where CV4 compliments their products and services. The implementation and training teams will be focused on delivering the backlog of orders that now totals £664,000. The priority for the second half of 2004 will be to convert the high level of bid activity into the orders necessary to carry us into a successful 2005. Howard Kitchner Chairman 13 September 2004 Unaudited Consolidated Profit and Loss Account Six months ended 30 June 2004 Six months Six months Year ended ended ended 30 June 30 June 31 December 2004 2003 2003 £'000 £'000 £'000 Turnover (Note 2) 728 1,150 1,859 Cost of sales (410) (462) (917) ---------- ---------- ---------- Gross profit 318 688 942 Distribution costs (215) (276) (526) Administrative expenses Development costs (383) (404) (855) Other (350) (375) (700) Total (733) (779) (1,555) ---------- ---------- ---------- Operating loss (630) (367) (1,139) Net interest payable (1) (30) (98) ---------- ---------- ---------- Loss on ordinary activities before taxation (631) (397) (1,237) Taxation - - - ---------- ---------- ---------- Loss on ordinary activities after taxation and retained loss (631) (397) (1,237) ---------- ---------- ---------- Basic and diluted loss per share (Note 3) (2.0p) (1.6p) (4.5p) ----------- ---------- ----------- All amounts are derived from continuing operations. Unaudited Consolidated Statement of Total Recognised Gains and Losses Six months ended 30 June 2004 Six months Six months Year ended ended ended 30 June 30 June 31 December 2003 2004 2003 £'000 £'000 £'000 Loss for the period (631) (397) (1,237) Gain on foreign currency translation 31 28 133 ---------- ---------- ---------- Total recognised gains and losses (600) (369) (1,104) ---------- ---------- ---------- Unaudited Consolidated Balance Sheet 30 June 2004 30 June 30 June 31 December 2004 2003 2003 £'000 £'000 £'000 Tangible fixed assets 110 141 111 ---------- ---------- ---------- Current assets Debtors 228 440 326 Cash at bank and in hand (including short term deposits) 1,445 195 1,750 ---------- ---------- ---------- 1,673 635 2,076 ---------- ---------- ---------- Creditors: amounts falling due within one year (953) (763) (757) ---------- ---------- ---------- Net current assets (liabilities) 720 (128) 1,319 ---------- ---------- ---------- Net assets less current liabilities 830 13 1,430 ---------- ---------- ---------- Capital and reserves Called up share capital 1,577 1,254 1,577 Share premium account 6,099 4,248 6,099 Profit and loss account (6,846) (5,489) (6,246) ---------- ---------- ---------- Equity shareholders' funds 830 13 1,430 ---------- ---------- ---------- Unaudited Consolidated Cash Flow Statement Six months ended 30 June 2004 Six months Six months Year ended ended ended 30 June 30 June 31 December 2004 2003 2003 £'000 £'000 £'000 Net cash outflow from operating activities (Note 4) (303) (265) (994) Returns on investments and serving of finance 27 2 23 Capital expenditure (28) (19) (27) ---------- ---------- ---------- (1) (17) (4) ---------- ---------- ---------- Cash outflow before management of liquid resources (304) (282) (998) Management of liquid resources 485 243 (1,310) Financing - - 2,267 ---------- ---------- ---------- Increase (decrease) in cash 181 (39) (41) ---------- ---------- ---------- Reconciliation of net cash flow to movement in net funds Six months ended 30 June 2004 Six months Six months Year ended ended ended 30 June 30 June 31 December 2004 2003 2003 £'000 £'000 £'000 Increase (decrease) in cash in the period 181 (39) (41) ---------- ---------- ---------- Cash (outflow) inflow from movement in liquid resources (485) (243) 1,310 ---------- ---------- ---------- Change in net funds resulting from cash flows (304) (282) 1,269 Exchange movement (1) (11) (7) ---------- ---------- ---------- Movement of net funds in the period (305) (293) 1,262 Net funds at beginning of period 1,750 488 488 ---------- ---------- ---------- Net funds at end of period 1,445 195 1,750 ---------- ---------- ---------- Notes: 1. Basis of preparation This interim report was approved by the board of directors on 13 September 2004 and follows the accounting policies adopted in the 2003 Annual Report. The financial information contained in this interim report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985 and should be read in conjunction with the 2003 Annual Report. The comparative financial information is based on the interim results for the six months ended 30 June 2003. The financial information for the year ended 31 December 2003 is an abridged statement from the group's accounts at that date which have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain a statement under section 237(2) or 237(3) of the Companies Act 1985. Copies of this interim report will be sent to shareholders and are available from the Company's head office at 2 Kew Bridge Road, Brentford, Middlesex, TW8 OJF. 2. Segmental analysis Six months Six months Year ended ended ended 30 June 30 June 31 December 2004 2003 2003 £'000 £'000 £'000 Turnover by source UK 149 203 381 USA 541 909 1,404 Other 38 38 74 --------- --------- --------- 728 1,150 1,859 --------- --------- --------- Turnover by destination is not materially different from that by source. Six months Six months Year ended Ended ended 30 June 30 June 31 December 2004 2003 2003 £'000 £'000 £'000 Turnover by business type Software licences 118 427 514 Services 59 104 138 Maintenance 535 605 1,187 Other 16 14 20 ---------- ---------- ---------- 728 1,150 1,859 ---------- ----------- ---------- 3. Basic loss per share has been calculated on the basis of the weighted average number of shares in issue, being 31,535,361 for the six months ended 30 June 2004, 25,080,310 for the six months ended 30 June 2003, and 27,235,423 for the year ended 31 December 2003. The loss for the period and the weighted average number of share for the purpose of calculating the diluted earnings per share are the same as for the basic loss per share calculation. This is because any share options included in the diluted computation would have the effect of reducing the loss per ordinary share and not be diluting under the terms of Financial Reporting Standard No.14 (FRS 14). 4. Reconciliation of operating loss to operating cash flows Six months Six months Year ended ended ended 30 June 30 June 31 December 2004 2003 2003 £'000 £'000 £'000 Operating loss (630) (367) (1,139) Depreciation charge 29 44 77 Decrease in debtors 96 80 187 Increase (decrease) in creditors 202 (22) (97) Share option charge - - (22) --------- -------- ------- Net cash outflow from operating activities (303) (265) (994) ---------- ---------- ---------- 5. Analysis and reconciliation of net funds 31 December Cash Exchange 30 June 2003 flow movement 2004 £'000 £'000 £'000 £'000 Cash 77 181 (1) 257 Short term deposits 1,673 (485) (-) 1,188 ---------- --------- ---------- ---------- Net funds (cash at bank and in hand) 1,750 (304) (1) 1,445 ---------- --------- ---------- ---------- INDEPENDENT REVIEW REPORT TO CLINICAL COMPUTING PLC Introduction We have been instructed by the company to review the financial information for the six months ended 30 June 2004, which comprises the consolidated profit and loss account, the consolidated balance sheet, the consolidated statement of total recognised gains and losses, the consolidated cash flow statement, the reconciliation of net cash flow to movement in net funds and related notes 1 to 5. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the Company in accordance with Bulletin 1999/4 issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of Group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom auditing standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 June 2004. Deloitte & Touche LLP Chartered Accountants Registered Auditors London 13 September 2004 This information is provided by RNS The company news service from the London Stock Exchange

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