Final Results

RNS Number : 3142F

Clinical Computing PLC

21 April 2011

 



CLINICAL COMPUTING PLC

2010 PRELIMINARY RESULTS

Clinical Computing Plc (the "Company" or the "Group"), the international developer of clinical information systems and project and resource management software, announces its preliminary results for the year ended 31 December 2010.  During 2010 the Group traded 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 and Europe.

Financial Overview

·      Total revenue decreased 7% to £2,969,839 (2009: £3,179,365)

·      Operating costs decreased 10% to £3,043,561 (2009: £3,399,050)

·      Loss from operations reduced to £73,722 (2009: £219,685)

·      EBITDA positive £70,152 (2009: loss of £61,118)

·      Profit after tax £181,291 (2009: profit £220,394)   

·      Earnings per share of 0.2p (2009: 0.2p)

·      Operations generated £185,340 of cash (2009: operations generated £219,502)

Business Review

·      Clinicalvision V cloud computing solution now available in the US and Canada

·      Clinicalvision iPhone application released

·      Clinicalvision V live in four countries and two languages (English and French)

·      Clinical analytics module in beta testing as part of Sussex Renal Innovation Programme

·      Hydra revenues grew by 41% over prior year

·      Hydra has new customer references in marketing and support service sectors

·      Hydra released new "what-if"  planning solution in version 7.0

·      Significant development efforts completed in both businesses

Commenting on Outlook, Howard Kitchner, Chairman of Clinical Computing, said:

"We now have two businesses which, when taken together, are capable of delivering improving results.  In the Clinical business we look forward to continuing to develop our relationship with industry partners, enhancing our clinical applications to support new geographic markets and extending our license base in our traditional markets of the UK and US.  The Hydra business has delivered two consecutive years of revenue growth and we continue to see growing demand for the Hydra products."

Contacts:
Clinical Computing plc	http://www.ccl.com
Joe Marlovits, Chief Executive	020 3006 7536
Cairn Financial Advisers LLP	020 7148 7900
Simon Sacerdoti
James Caithie

Chairman's Statement

Business overview

 I am pleased to report that the Group has produced its second consecutive year of profitability with an after tax profit of £181,291 (2009: £220,394) as well as its second consecutive year of positive operating cash flow of £185,340 (2009: £219,502).

This performance has been underpinned by consistent new sales wins in the Hydra business, and revenues for this business unit are up 41% from the prior year.  In the Clinical business we have re-aligned the cost base to focus around the clinicalvision technology.  This has resulted in a cost reduction of 18% in this business unit and positions it to deliver improving results.  

Clinical business

We now have nine organisations in four countries using the clinicalvision web-enabled chronic disease software solution.  Additionally we expect to have another four customers using this product by the end of June 2011.  Clinicalvision is a web-enabled electronic medical record solution that supports the management of chronic disease with an emphasis on chronic kidney disease.  Clinicalvision can be licensed directly by our customers or provided as a service via our "cloud computing" solution which is now available in the US and Canada. 

During 2010 the business released its first "App" which provides clinicalvision users the ability to access patient information on the iPhone and iPod Touch.  This is the beginning of our mobile device initiatives which we hope to expand as the "web" becomes integrated in the delivery of healthcare information.  As noted above this business launched a "cloud computing" solution in Canada and the US with  three customers now using this service.

We have been invited by one of the UK's leading renal programmes to participate, as the technology partner, in an innovative research program to evaluate the effective use of technology to support the multi-disciplinary care of patients with kidney disease.  The Sussex Renal Innovation Programme(SRIP) has been set up to address the increasing complexity and cost involved in managing and treating patients with chronic kidney disease.  The Department of Economics, University of Surrey will be modellingthe before and after costs of care, which are intended to be shared with other NHS organisations.   As part of this project Clinical Computing will be delivering its first version of cv-analytics, a clinical analytics module aimed at identifying clinical risks across patient groups. 

From a marketing perspective, we continue to market directly to customers in our traditional geographic markets (the United States and the United Kingdom) and indirectly via Gambro in Canada and Australia.  Recently we won a new contract with a regional hospital in Australia; and we continue to derive benefits from our close working relationships with the Gambro sales teams in these countries. 

There are a number of government initiatives in the United States, Canada and the United Kingdom that are driving innovation in the electronic medical record market.  These initiatives require specific clinical data to be collected and reported to governmental entities primarily to determine the quality of care and future reimbursement and funding levels.  This creates both risk and opportunity for our business and we continue to adapt our solution to meet the needs of each country and its specific regulations and reporting requirements.   

Hydra business

The Hydra software provides detailed management information across a range of Key Performance Indicators ("KPI's") including resource optimisation, programme and project status and financial performance.  The information generated by the Hydra software aids decision making and maximises resource efficiencies within an organisation. 

Utilisation of the Hydra software enables fully automated decision making as the data captured in Hydra can be easily integrated with other enterprise systems, thereby providing comprehensive, real time information utilised for senior decision makers.

During the year under review there has been an increase in the demand for the enhanced functionality which has been added to the software from existing Hydra customers as well as new customers.  This has resulted in increased revenues of 41% for the year.    

During the year Hydra released version 7.0.  This release saw the addition of new reporting features and a "what if" planning scenario capability.  These features contributed to the addition of a number of new customers across a range of sectors including financial services, betting, marketing, insurance, engineering, and support services.  Hydra continues to have a strong presence in the public sector which uses its software to optimise resource utilisation and planning. 

Board appointment

As announced separately this morning, following Professor Stan Newman's retirement at the last Annual General Meeting, we have today appointed Professor Gerry Musgrave as our Senior Independent Director and Non-Executive Chairman.  With the appointment of Gerry Musgrave I will be taking a role of non-executive director.  Gerry brings with him over 40 years of directorial experience and significant experience with AIM listed companies.  Gerry has served on board positions with Cirrus Computers, Plessey Finance Corporation and Siemens PLC.  Most recently he was executive chairman of Corac Group plc and Mechadyne International plc.   He was also Pro-Vice Chancellor of Brunel University.

Registered Office

The Company has moved its registered office to IP City Centre, 1 Bath Street, Ipswich IP2 8SD with immediate effect. 

Borrowing facilities

In 2010 the Group's operations generated cash of £185,340 (2009: £219,502).  Additionallythe Group reduced its cost base in 2010 and we are anticipating the full benefit of these reductions will flow into 2011's financial results.  Given this recent performance and the Group's current forecasts and projections, which take into account different scenarios with respect to trading performance, the directors believe that the Group should be able to operate within the level of its current banking facilities. 

The Group has opened renewal negotiations with its banks to extend the current facilities for a further twelve month period, on their renewal dates.  At this stage it has not sought separate written commitment that the facilities will be renewed. However, during the course of the negotiations so far, no matters have been drawn to the Group's attention to suggest that renewal may not be forthcoming on acceptable terms.

Outlook

We now have two businesses that when taken together are capable of delivering improving results.  In the Clinical business we look forward to continuing to develop our relationship with industry partners, enhancing our clinical applications to support new geographic markets and extending our license base in our traditional markets of the UK and US.  The Hydra business has delivered two consecutive years of revenue growth and we continue to see growing demand for the Hydra products. 

In the current economic climate, we will continue to manage both businesses against the background of  local, regional and national government funding pressures and will manage our cost structure in line with our revenue expectations.           

H Kitchner

Chairman

21 April 2011

 

Finance Review

Results for the year

The Group derives its revenues from two business units: Hydra Management and Clinical Computing.  Review of each business has been provided in the Chairman's Statement.

Total revenues for the year ending 31 December 2010 decreased by 7% to £2,969,839 (2009:£3,179,365).  The revenues from the Clinical business generated 64% (2009: 76%) of the Group's revenues and 36% (2009: 24%) were derived from the Hydra business.  Across the Group maintenance revenues for the year were £1,692,305 or 57% of revenue (2009: £1,716,862 or 54%).  The decrease in maintenance revenues in absolute terms between the years was approximately 1%.     

The Group's total operating costs reduced 10% to £3,043,561 (2009: £3,399,050).  The costs for the Clinical business were 70% (2009: 76%) of the total operating costs with the Hydra business accounting for 25% (2009: 18%) and the parent company accounting for 5% (2009: 6%).  The decrease in Group costs arose from reductions in staff headcount in the Clinical business, and specifically in resources focused on its legacy software products.          

The Group's EBITDA improved from a negative of £61,118 in 2009 to a positive of £70,152 in 2010 primarily as a result of the reductions to costs in the Clinical business and increasing revenues in the Hydra business.

Operations generated a loss of £73,722 (2009: loss £219,685).  The loss before tax was  £89,188 (2009: loss £232,632). The Group is reporting a profit for the year after tax of £181,291 or 0.2p per share as a result of cash receipts from the UK R&D tax credit as explain below  (2009: profit of £220,394 or 0.2p per share). 

Software development

During the year under review the development teams undertook a number of projects to enhance our current technologies.  In the Hydra business we release Hydra 7.0 and in the Clinical business we released an iPhone application, a clinical document centre and version 5.1 of clinicalvision.  None of the costs associated with these projects were capitalised during the year as the projects were general enhancements which would not be separately licensed to customers or identified as separate assets under the Group accounting policies.  

The Group has previously capitalised development costs associated with its clinicalvision V web based chronic disease product framework and the clinicalvision transplant module.  The amortisation expense for previously capitalised development costs during the year was £93,872 (2009: £93,871), which is included in the Group's research and development expense for the year of £1,276,582 (2009: £1,341,838).  

The Group is not anticipating any increases in its development costs in 2011 as the majority of significant development activities in the Group were undertaken in 2010 and prior years.   

Taxation

The Company and all subsidiaries have sufficient tax losses such that no tax expense has been recognised during the year.  For the year under review, the Group, through its two UK trading subsidiaries, filed research and development ("R&D") tax credit claims with respect to research activities undertaken in 2009 on various components of the clinicalvision and Hydra products.   An election was made, under the terms of the current United Kingdom R&D tax credit regime, for a percentage of the R&D expenditure to be settled in cash.  A tax credit in the amount of £270,479 has been reported in 2010 based on 2009 research activities.   Total cash settlements from the R&D tax credit in 2009 were £453,026 which included 2008 activity as well as amended claims for 2007 and 2006 activities.

Consistent with prior years, R&D tax credit/claims for activities undertaken in 2010 will be accounted for when received in 2011. 

Cash flow and debt

During the year cash generated by operations was £185,340 (2009: £219,502) which resulted in the Group's cash balance increasing 44% to £795,212 (2009: £551,404).

The Group actively uses one of its two working capital facilities and is reporting an increase in borrowings for the year of £55,401.  Outstanding debt at the end of the year is £782,065 (2009: £726,664).  Given the above cash balance and outstanding debt the company now has a positive net cash position at the end of the year of £13,147 (2009: negative £175,351).

At 31 December 2010 the Group had two debt facilities which in total provided approximately £961,000 of working capital facilities with £782,065 borrowed. 

The Group has opened renewal negotiations with its banks to extend the current facilities for a further twelve month period, on their renewal dates.  At this stage it has not sought separate written commitment that the facilities will be renewed. However, during the course of the negotiations so far, no matters have been drawn to the Group's attention to suggest that renewal may not be forthcoming on acceptable terms.

Capital structure and finance

The Group's consolidated equity position at 31 December 2010 was a deficit of £135,349 (2009: deficit £282,959).  The change to the equity position was impacted primarily by the Group's results for the year and the impact of foreign currency translation of foreign owned subsidiaries. 

The Company's current issued shares and voting capital consists of 110,883,694 1p ordinary shares. 

J Marlovits

Director

21 April 2011

Consolidated Income Statement

For the year ended 31 December 2010

	Notes	Unaudited	Audited
		2010	2009
		£	£
Continuing Operations
Total revenue	2	2,969,839	3,179,365
Cost of sales		(637,839)	(805,487)
		__________	__________
Gross profit		2,332,000	2,373,878
Distribution costs		(346,373)	(330,578)
Administrative expenses
Research and development		(1,276,582)	(1,341,838)
Other		(782,767)	(921,147)
Total administrative expenses		(2,059,349)	(2,262,985)
		__________	__________
Loss from operations		(73,722)	(219,685)
Finance income		316	1,506
Finance expense		(15,782)	(14,453)
		__________	__________
Loss before tax		(89,188)	(232,632)
Income tax credit		270,479	453,026
		__________	__________
Profit for the  year attributable to equity holders		181,291	220,394
		__________	__________
Basic earnings per share	3	0.2p	0.2p
Diluted earnings per share	3	0.2p	0.2p
		__________	__________

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2010

		Unaudited	Audited
		2010	2009
		£	£
Profit for the year		181,291	220,394
Other comprehensive income:
Exchange difference on translating foreign operations		(69,103)	(22,522)
		_________	_________
Other comprehensive loss for the year		(69,103)	(22,522)
		_________	_________
Total comprehensive income for the year		112,188	197,872
		__________	__________

Consolidated Statement of Financial Position

As at 31 December 2010

		Unaudited	Audited
		2010	2009
		£	£
Non-current assets
Intangible assets		205,462	309,426
Goodwill		157,658	157,658
Property, plant and equipment		42,342	78,269
		__________	__________
		405,462	545,353
		__________	__________
Current assets
Trade and other receivables		560,919	450,574
Cash and cash equivalents		795,212	551,404
		__________	__________
		1,356,131	1,001,978
		__________	__________
Total assets		1,761,593	1,547,331
		__________	__________
Current liabilities
Trade and other payables		(376,326)	(391,754)
Deferred income		(738,551)	(711,872)
Borrowings		(782,065)	(726,664)
		__________	__________
		(1,896,942)	(1,830,290)
		__________	__________
Net liabilities		(135,349)	(282,959)
		_________	_________
Equity
Share capital		(2,433,251)	2,433,251
Share premium account		7,750,957	7,750,957
Share option reserve		160,104	124,661
Translation reserve		(63,481)	5,623
Retained earnings		(10,416,180)	(10,597,471)
		__________	__________
Shareholders' funds - deficit		(135,349)	(282,959)
		_________	_________

Consolidated Cash Flow Statement

For the year ended 31 December 2010

	Notes	Unaudited	Audited
		2010	2009
		£	£
Net cash inflow from operating activities	4	185,340	219,502
		__________	__________
Investing activities
Interest received		316	1,506
Purchases of property, plant and equipment		(2,677)	(12,203)
		__________	__________
Net cash used in investing activities		(2,361)	(10,697)
		__________	__________
Financing activities
Increase in bank loan		55,401	53,909
		__________	__________
Net cash from financing activities		55,401	53,909
		__________	__________
Net increase in cash and cash equivalents		238,380	262,714
Cash and cash equivalents at beginning of year		551,404	299,188
Effect of foreign exchange rate changes		5,428	(10,498)
		__________	__________
Cash and cash equivalents at end of year		795,212	551,404
		__________	__________

Consolidated Statement of Changes in Equity

For the year ended 31 December 2010

	Share capital	Share premium  account	Share option reserve	Translation  reserve	Retained earnings	Shareholders' funds
	£	£	£	£	£	£
At 1 January 2009	2,433,251	7,750,957	97,588	28,144	(10,817,865)	(507,925)
Share option charge	-	-	27,093	-	-	27,093
Exchange difference on translation of foreign operations	-	-	-	(22,521)	-	(22,521)
Profit for the year	-	-	-	-	220,394	220,394
	_________	__________	__________	__________	__________	__________
At 31 December 2009	2,433,251	7,750,957	124,681	5,623	(10,597,471)	(282,959)
	_______	__________	__________	__________	__________	__________
Share option charge	-	-	35,423	-	-	35,423
Exchange difference on translation of foreign operations	-	-	-	(69,103)	-	(69,103)
'Profit for the year	-	-	-	-	181,291	181,291
	________	__________	__________	__________	__________	__________
At 31 December 2010 - Unaudited	2,433,251	7,750,957	160,104	(63,481)	(10,416,180)	(135,349)
	_______	__________	__________	__________	__________	__________

Notes
1.	Basis of preparation The unaudited preliminary announcement has been prepared under the historical cost convention, on a going concern basis and consistent with applicable International Financial Reporting Standards and IFRIC interpretations ("IFRS") as adopted by the EU.   The preliminary announcement has been prepared on the basis of the same accounting policies as published in the statutory accounts for the year ended 31 December 2009.   The financial information set out in this preliminary announcement was approved by the board on 21 April 2011 and does not constitute statutory financial statements as defined by the Companies Act 2006.  The statutory accounts for the year ended 31 December 2010 have not yet been delivered to the Registrar of Companies and no audit report has yet been given on the statutory financials statements.  Statutory accounts for the year ended 31 December 2009have been delivered to the Registrar of Companies.  The audit report on these statutory accounts was unqualified and did not contain a statement either under section 237(2) or 237 (3) of the Companies Act. The Annual Report and Accounts for the year ended 31 December 2010 will be posted to shareholders in due course and will be available at the Company's registered office and on the Company's website simultaneously with posting.

2.     Revenue

An analysis of the Group's revenue is as follows:

	Unaudited	Audited
	2010	2009
	£	£
Software licenses	913,217	1,016,954
Maintenance	1,692,305	1,716,862
Services and other revenue	364,317	445,549
	__________	__________
Revenue	2,969,839	3,179,365
	__________	__________

3. Earnings per share

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

	Unaudited	Audited
	2010	2009
	£	£
Earnings
Earnings for the purposes of basic and diluted earnings per share	181,291	220,394
	__________	__________
Number of shares
	Number	Number
Weighted average number of ordinary shares for the purposes of basic and diluted earnings per share	110,883,694	110,883,694
Dilutive share options for the purpose of diluted earnings per share	-	1,149,833
	__________	__________
Earnings per share
Basic earnings per share	0.2p	0.2p
Diluted earnings per share	0.2p	0.2p

4.  Notes to the cash flow statement

	Unaudited	Audited
	2010	2009
	£	£
Loss from operations	(73,722)	(219,685)
Adjustments for:
Depreciation of property, plant and equipment	39,910	54,527
Amortisation of intangible assets	103,964	104,040
Share option charges	35,423	27,093
	__________	__________
Operating cash flows before movements in working capital	105,575	(34,025)
Increase in receivables	(83,916)	(23,828)
Decrease in payables	(60,914)	(161,218)
	__________	__________
Cash used by operations	(39,255)	(219,071)
Interest paid	(15,782)	(14,453)
Tax credit received	240,377	453,026
	__________	__________
Net cash from operating activities	185,340	219,502
	__________	__________

5. Business and geographical segments

For management and legal purposes, the Group consists of four operating companies and the parent company.  These companies are the basis on which the Group reports its primary segment information.  The operating companies provide software, maintenance and related services around their clinical and programme management software products.  There is no significant difference between risk and return on the software and services offered between the operating companies.  The geographic segmental information presented below excludes any intra-group revenue or expense.

	Clinical	Clinical	Clinical	Hydra	Parent
	US	UK	Australia	UK	UK	Total
	£	£	£	£	£	£
2010 - Unaudited
Revenue
Total Revenue	1,216,659	610,285	83,429	1,059,466	-	2,969,839
	__________	__________	_______	_________	__________	__________
Segment result
Operating profit/(loss)	393,937	(718,920)	108,981	304,249	(161,969)	(73,722)
						__________
Finance income						316
Finance expense						(15,782)
						__________
Loss before tax						(89,188)
Income tax credit						270,479
						__________
Income for the year attributable to equity holders of the company						181,291
						__________
Balance Sheet
Segment assets	322,946	273,368	1,428	1,099,360	64,491	1,761,593
						__________
Segment liabilities	298,873	283,408	1,036	460,485	71,075	1,114,877
Current borrowings	-	782,065	-	-	-	782,065
						__________
Total liabilities						1,896,942
Other Information						__________
Capital Expenditure	-	-	-	2,677	-	2,677
Depreciation	20,030	18,810	-	1,070	-	39,910
Amortisation	-	93,872	-	10,092	-	103,964

	Clinical	Clinical	Clinical	Hydra	Parent
	US	UK	Australia	UK	UK	Total
	£	£	£	£	£	£
2009
Revenue
Total Revenue	1,747,973	602,916	77,465	751,011	-	3,179,365
	__________	__________	_______	_________	__________	__________
Segment result
Operating profit/(loss)	888,398	(1,114,943)	58,257	134,392	(185,789)	(219,685)
						__________
Finance income						1,506
Finance expense						(14,453)
						__________
Loss before tax						(232,632)
Income tax credit						453,026
						__________
Income for the year attributable to equity holders of the company						220,394
						__________
Balance Sheet
Segment assets	328,878	384,854	8,166	761,899	63,534	1,547,331
						__________
Segment liabilities	280,957	298,385	6,664	446,545	71,075	1,103,626
Current borrowings	-	726,664	-	-	-	726,664
						__________
Total liabilities						1,830,290
						__________
Other Information
Capital Expenditure	7,941	4,262	-	-	-	12,203
Depreciation	22,405	31,506	-	616	-	54,527
Amortisation	-	93,871	-	10,169	-	104,040

 

END

 

 

FR URUBRAVASUAR