Interim Results

CLINICAL COMPUTING PLC 16 September 1999 Clinical Computing Plc Interim Report 1999 Chairman's and Chief Executive's Statement For the first half of 1999 the Group has produced an operating profit of £195,000, which together with net interest income has resulted in a profit on ordinary activities of £253,000. This is an increase of 23 per cent. on the same period of the previous year. The Group continues to have a strong cash position and had cash and short term deposit balances totalling approximately £2.5 million at the end of the first half of 1999. Turnover has remained at a similar level to the first half of last year after removal of the non-recurring royalty payment of £100,000 received from Armstrong Healthcare last year. Total cost of sales also remains at a similar level to the same period of last year though with an increase in research and development expenditure offset by a corresponding decrease in other expenditure. Distribution costs and administration expenses have decreased by 23 per cent. and 24 per cent., respectively. Major Development Projects In the first half of 1999 the Group progressed its state of the art solution, Clinical Vision. We have delivered Phase I of the renal version of this product line to our initial reference site for beta testing. We expect to complete Phase II, with extended core functions to be used in many different clinical applications, by the end of the year and Phase III, the final renal phase, containing additional dialysis and transplant specific functions shortly thereafter. Demonstrations of Clinical Vision were well received at the main UK annual healthcare conference at Harrogate earlier this year. Both the renal and the transplant versions of Clinical Vision will be introduced to the US and wider marketplaces in the final quarter of this year. This will occur at the annual meeting of the American Society of Nephrologists where over fifteen thousand practising nephologists gather not just from the US but from all around the world. In preparation for the sales and marketing campaign for the new product line we are retraining our sales teams. We are also in the process of re-engineering our customer implementation and support activities, to ensure that the new products are installed in a timely manner. This involves updating our training and education courses, and the accompanying materials and documentation. Year 2000 Compliance As reported in our final report for 1998, all of our standard products have been tested for Year 2000 compliance. Many of our customers have already upgraded their own systems to current hardware platforms and user software so as to maintain their Year 2000 compliance. We continue to work with other customers in assisting their migration to new hardware platforms and upgraded user software. All of our own internal systems in both the UK and US offices have been tested for Year 2000 compliance and upgraded as necessary. Any changes that are still required will be completed by the end of the third quarter of this year. The Group now has established its own virtual private network (VPN) between the UK and US offices. Besides using the latest Year 2000 versions of operating software, the VPN incorporates the latest anti-virus and security features. The Future There is strong interest in the worldwide market for our Clinical Vision product line. We have made our Phase I delivery to our initial reference site in the UK, and are on schedule for completion of the expanded product by the first quarter of 2000. We expect a high level of activity to be generated in 2000 and beyond. The product has been designed to facilitate translation into other languages, without making any code changes. It is expected that this feature will open up large European and Latin American markets that would otherwise prove cost prohibitive to enter. Your Directors believe that the Group is well positioned to take advantage of the many commercial opportunities that will follow the successful transition to Year 2000 and beyond. M. Gordon J. Richardson Chairman Chief Executive Clinical Computing Plc Unaudited Consolidated Profit and Loss Account Six Months Ended 30 June 1999 6 Months 6 Months Year ended ended ended 30.06.99 30.06.98 31.12.98 £'000 £'000 £'000 Turnover 1,561 1,664 3,039 ------ ------ ------ Cost of sales Research and 414 369 790 development Other 419 456 833 ------ ------ ------ (833) (825) (1,623) ------ ------ ------ Gross profit 728 839 1,416 Distribution costs 216 281 460 Administrative expenses 317 415 804 ------ ------ ------ (533) (696) (1,264) Operating profit 195 143 152 Net interest receivable 58 62 125 ------ ------ ------ Profit on ordinary activities before and after taxation 253 205 277 ==== ==== ==== Basic and diluted 1.0p 0.8p 1.1p earnings per share ==== ==== ==== All results are derived from continuing operations. Clinical Computing Plc Unaudited Consolidated Statement of Total Recognised Gains and Losses Six Months Ended 30 June 1999 6 Months 6 Months Year ended ended ended 30.06.99 30.06.98 31.12.98 £'000 £'000 £'000 Profit for the period 253 205 277 (Loss)/gain on foreign currency translation (38) 39 9 ------- ------- ------- Total recognised gains 215 244 286 and losses ==== ==== ==== Clinical Computing Plc Unaudited Consolidated Balance Sheet 30 June 1999 30.06.99 30.06.98 31.12.98 £'000 £'000 £'000 Tangible fixed assets 341 316 327 ------ ------ ------ Current assets Stocks 41 0 41 Debtors 1,137 1,095 1,067 Cash at bank and in hand (including short term 2,495 2,098 2,332 deposits) ----- ----- ----- 3,673 3,193 3,440 ===== ===== ===== Creditors: Amounts falling due within one year Deferred income 909 735 814 Other 268 213 328 --------- -------- --------- 1,177 948 1,142 ===== ==== ===== Net current assets 2,496 2,245 2,298 Total assets less 2,837 2,561 2,625 current liabilities Creditors: Amounts falling due after more than one year 13 0 16 ----- ----- ----- Net assets 2,824 2,561 2,609 ===== ===== ===== Capital and reserves Called-up share capital 1,254 1,254 1,254 Share premium account 4,248 4,248 4,248 Profit and loss account (2,678) (2,941) (2,893) ------ ----- ----- Shareholders' funds - 2,824 2,561 2,609 all equity ===== ===== ===== Clinical Computing Plc Unaudited Consolidated Cash Flow Statement Six Months Ended 30 June 1999 6 Months 6 Months Year ended ended ended 30.06.99 30.06.98 31.12.98 £'000 £'000 £'000 Operating profit 195 143 152 Depreciation and 71 67 128 amortisation charges (Profit) on sale of 0 (3) (1) fixed assets (Increase) in stocks 0 0 (41) (Increase)/decrease in (70) 439 467 debtors Increase/(decrease) in 7 (298) (139) creditors --- --- --- Net cashflow from 203 348 566 operating activities --- --- --- Returns on investments 58 62 125 Capital expenditure (85) (108) (158) --- --- --- (27) (46) (33) --- --- --- Net cashflow before 176 302 533 financing Financing (3) 0 (2) --- --- --- Increase in cash 173 302 531 === === === Clinical Computing Plc Interim Report Six Months Ended 30 June 1999 Notes 1. The interim results for the six months ended 30 June 1999, set out here, have been compiled in accordance with applicable accounting standards and on a basis consistent with the annual accounts. They have been reviewed by our auditors, Arthur Andersen, and a copy of their report is attached. The auditors discussed their review and findings with the Audit Committee. 2. The above financial information does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. Group statutory accounts for the year ended 31 December 1998, which included an unqualified audit report, have been filed with the Registrar of Companies. 3. Basic earnings per share has been calculated on the basis of the weighted average number of shares in issue, being 25,080,310 for the six months ended 30 June 1999, six months ended 30 June 1998 and for the year ended 31 December 1998. Diluted earnings per share has been calculated on the basis of the weighted average number of shares in issue, being 25,426,926 for the six months ended 30 June 1999, 25,080,310 for the six months ended 30 June 1998, and 25,426,926 for the year ended 31 December 1998. 4. All costs associated with Year 2000 compliance are charged to the profit and loss account as incurred and are not considered to be material. 5. Copies of this interim report will be sent to shareholders and are available from the Company's head office at 4 Thameside Centre, Kew Bridge Road, Brentford, Middlesex, TW8 0HF. Auditors' Report to the Shareholders of Clinical Computing Plc We have reviewed the interim financial information for the six months ended 30 June 1999 set out on pages 3 to 5 which is the responsibility of, and has been approved by, the Directors. Our responsibility is to report on the results of our review. Our review was carried out having regard to the Bulletin, Review of Interim Financial Information, issued by the Auditing Practices Board. This review consisted principally of applying analytical procedures to the underlying financial data, assessing whether accounting policies have been consistently applied, and making enquiries of company management responsible for financial and accounting matters. The review excluded audit procedures such as tests of controls and verification of assets and liabilities, and was therefore substantially less in scope than an audit performed in accordance with Auditing Standards. Accordingly we do not express an audit opinion on the interim financial information. On the basis of our review: * in our opinion the interim financial information has been prepared using accounting policies consistent with those adopted by Clinical Computing Plc in its accounts for the year ended 31 December 1998; and * we are not aware of any material modifications that should be made to the interim financial information as presented. Arthur Andersen Chartered Accountants Cambridge Registered Auditors 16 September 1999

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