Interim Results

Clinical Computing PLC 29 September 2006 CLINICAL COMPUTING PLC 2006 INTERIM RESULTS Clinical Computing Plc ('the Company'), the international developer of clinical information systems for the healthcare market, announces Interim Results for the six months ended 30 June 2006. The Group trades through three operating subsidiaries: Clinical Computing UK, Ltd. in the United Kingdom and Europe, Clinical Computing, Inc. in the United States and Clinical Computing Pty Limited in Australia. Financial Overview â€¢ Revenue up 36% to Â£967,698 (2005: Â£710,332) â€¢ Operating costs down 12% to Â£1,420,572 (June 2005: Â£1,621,498) â€¢ Loss for the period before tax reduced by 48% to Â£464,112 (June 2005: loss Â£895,582) â€¢ Loss for the period Â£464,112 (June 2005: loss Â£736,648) â€¢ Loss per share (basic and diluted): 1.5p (June 2005: loss 2.3p) â€¢ Borrowed Â£292,594 at 30 June 2006 (from the Â£1,000,000 facility) to support working capital Business Review â€¢ 21 customers under contract for Clinical Vision 4 (CV4) (2005:18) â€¢ 8 implementations underway in second half â€¢ 2 CV4 contracts secured from NHS Trusts â€¢ Continued progress on web-enabling CV4 technology â€¢ Staff restructuring nearing completion â€¢ Progress in UK on upgrade proposition to move ProtonTM customers on to CV4 Outlook Chairman Howard Kitchner, commenting on the Group Outlook, said: 'I believe that as we have now implemented the majority of our restructuring plan, which we agreed over a year ago, your Company is stronger today than it was a year ago and that it is capable of delivering improving results in line with our plan.' Contacts: Joe Marlovits, Chief Executive, Clinical Computing 020 8747 8744 www.ccl.com Paul McManus, Parkgreen Communications Ltd 020 7493 3713 07980 541 893 Chairman's Statement Introduction I am pleased to report that as we closed out the first half of 2006 the Company had nearly completed the restructuring plan that began in the first half of 2005 (as highlighted in the 30 June 2005 Chairman's Statement). Under this plan the management team has realigned its staff resources and commercial focus, balancing the Group's emphasis equally between the US and Europe (primarily the UK). Prior to this the Group's main focus was on the US renal dialysis market. This transition has taken more than twelve months to implement, and your directors believe that as we near completion of this transition that this balanced focus will improve the Group's near term and long term prospects. The restructuring plan called for several new full time positions to be created to improve our operating performance. I can report that we have filled positions in the following areas: product management, quality assurance and product support. The individuals joining the Group bring management experience from larger organisations and new skills that are expected to benefit our operational performance going forward. In the UK we are making significant progress on marketing our Clinical Vision 4 TM (CV4) transition programme to a selected number of the larger ProtonTM customers. The management team continues to explore and evaluate potential channel partnerships in other parts of Europe that could enhance our mid term revenue opportunities. Our development team continues to make steady progress on web-enabling the CV4 framework. This effort should have a favourable impact on 2007 and beyond. As noted below the Group is reporting an increase in revenue for the period under review when compared to the same period last year. This increase was partially driven by the eight CV4 implementations that are currently active. We have determined that our customers require more service from us to assist them in moving an implementation through to go-live. Our strategy in the second half is to increase the amount of professional services that we provide which we believe will assist our customers in moving implementations to full use faster which should result in recognising revenue sooner. Trading Results During the period under review, Group revenues increased 36 %, from Â£710,322 to Â£967,698. The increase in revenue compared to the same period in the prior year is attributed to software licenses for both CV4 and our legacy products, primarily Proton. The Group continues to derive revenue from maintenance contracts from approximately 100 healthcare organisations using one of its 4 product lines. Maintenance revenue for the period was Â£621,841 or 64% of total revenue (2005: Â£540,345 or 76%). Total operating costs decreased 12 % from Â£1,621,498 to Â£1,420,572. The operating cost decrease is primarily attributed to staff costs which have fallen compared to the prior year as we implemented our restructuring plan. As noted above management continues to make strategic appointments according to our plan and as at the date of this announcement had hired 11 new employees since the beginning of the year. However, as we continue to re-align our resources we do not expect the average headcount for 2006 to exceed the 2005 average of 40 staff. The effect of the increase in revenue and decrease in costs resulted in the Group's operating loss before tax being reduced by 48% to Â£464,112 (2005: Â£895,582 loss). The loss for the period after tax was Â£ 464,112 or 1.5p per share (2005: Â£736,648 (see note 4) or 2.3p per share). Clinical Vision 4 We now have 21 healthcare organisations under contract to use CV4. These 21 customers are spread over five countries and we are currently implementing a French version of the renal application in Europe. As of the date of this announcement we have 13 customers using CV4 with eight implementations currently underway. During the period under review we have made several enhancements to the clinical application including the addition of a more generic clinical scheduling component. We are scheduled to implement a transplantation module for both the kidney and pancreas during the second half of the year. These application extensions to CV4 continue to expand the functionality of the system for our core renal market as well as the general clinical healthcare market. Cash Flows and Liquidity In June the board of directors secured a Â£1,000,000 credit facility for the Group's working capital needs through to September 2007. At the AGM in June a resolution was passed to allow the Company to borrow against this facility and at 30 June 2006 Â£292,594 has been used to support the Group. Also in June the Company completed an equity fundraising of Â£102,375 under a Private Issue of 1,575,000 new ordinary 5p shares at 6.5 pence per share representing 4.99% of the ordinary shares then outstanding. The new shares were admitted to trading on 12 June 2006 and following this transaction the Company has 33,110,361 shares in issue. During the period under review the Group's required Â£495,000 to support its operations and it is likely that a similar amount will be required in the second half of the year. The board regularly monitors the progress of the contract pipeline and evaluates the likely timing of cash inflow from signed and potential new contracts along with ongoing maintenance contracts against our cost structure. At this time your directors believe that the Â£1,000,000 line of credit provides the working capital support for the Group to continue to pursue its business objectives and as of the date of this announcement has the appropriate level of funding to continue as a going concern. Outlook The Group has a backlog of eight CV4 implementations and we are adding resources to ensure the timely delivery of these contracts. This additional resource will allow us to handle larger contracts in the future. I believe that as we have now implemented the majority of our restructuring plan, which we agreed over a year ago, your Company is stronger today than it was a year ago and that it is capable of delivering improving results in line with our plan. Howard Kitchner Chairman 28 September 2006 Unaudited consolidated income statement Six months ended 30 June 2006 Six months Six months Year ended ended ended 30 June 2006 30 June 2005 31 December 2005 Â£ Â£ Â£ Continuing operations Revenue (Note 3) 967,698 710,322 1,655,806 Cost of sales (345,161) (368,064) (720,228) -------------- -------------- ----------------- Gross profit 622,537 342,258 935,578 Distribution costs (211,659) (301,024) (496,194) Administrative expenses Research & development (471,308) (450,245) (878,561) Other (392,444) (502,165) (1,122,065) Total administrative expenses (863,752) (952,410) (2,000,626) -------------- ------------- ----------------- Loss from operations (452,874) (911,176) (1,561,242) Interest income 1,656 15,594 22,743 Finance costs (12,894) - - -------------- ------------ ----------------- Loss before income tax (464,112) (895,582) (1,538,499) Income tax (Note 4) - 158,934 158,934 -------------- ------------ ----------------- Loss for the period (464,112) (736,648) (1,379,565) -------------- ------------ ---------------- Basic and diluted loss per share (Note 5) (1.5p) (2.3p) (4.4p) -------------- ------------ ---------------- Unaudited consolidated statement of recognised income and expense Six months ended 30 June 2006 Six months Six months Year ended ended Ended 30 June 2006 30 June 2005 31 December 2005 Â£ Â£ Â£ Exchange differences on translation of foreign operations 32,662 (23,770) (40,722) Loss for the period (464,112) (736,648) (1,379,565) ------------- ------------- ---------------- Total recognised expense for the period (431,450) (760,418) (1,420,287) ------------- ------------- ---------------- Unaudited consolidated balance sheet 30 June 2006 30 June 30 June 31 December 2006 2005 2005 Â£ Â£ Â£ Non-current assets Property, plant and equipment 74,378 90,780 81,883 --------------- --------------- ----------------- Current assets Trade and other receivables 357,973 503,116 345,977 Cash and cash equivalents 54,878 391,566 173,010 --------------- --------------- ----------------- 412,851 894,682 518,987 --------------- --------------- ----------------- Total assets 487,229 985,462 600,870 --------------- ---------------- ----------------- Current liabilities Trade and other payables (1,090,650) (919,019) (1,180,620) Bank overdrafts and loans (292,594) - - --------------- --------------- ----------------- (1,383,244) (919,019) (1,180,620) --------------- --------------- ----------------- Net current liabilities (970,393) (24,337) (661,633) --------------- --------------- ----------------- Net (liabilities) / assets (896,015) 66,443 (579,750) --------------- -------------- ----------------- Equity Share capital 1,655,518 1,576,768 1,576,768 Share premium account 6,149,063 6,125,438 6,125,438 Share option reserve 50,465 23,979 37,655 Translation reserve 111,199 95,489 78,537 Retained earnings (8,862,260) (7,755,231) (8,398,148) --------------- ---------------- ------------------- Total (deficit) / equity (Note 6) (896,015) 66,443 (579,750) ---------- ---------- ---------- Unaudited consolidated cash flow statement Six months ended 30 June 2006 Six months Six months Year ended ended ended 30 June 30 June 31 December 2006 2005 2005 Â£ Â£ Â£ Net cash from operating activities (Note 7) (491,621) (491,589) (714,913) Investing activities Interest received 1,656 15,594 22,743 Purchases of property, plant and equipment (16,580) (10,367) (21,923) --------------- ---------------- -------------- Net cash (used in) from investing activities (14,924) 5,227 820 --------------- --------------- -------------- Financing activities New bank loans raised 292,594 - - Proceeds from equity 102,375 - - --------------- ---------------- --------------- Net cash from financing activities 394,969 - - --------------- ---------------- --------------- Net decrease in cash and cash equivalents (111,576) (486,362) (714,093) Cash and cash equivalents at beginning of period 173,010 875,731 875,731 Effect of foreign exchange rate changes (6,556) 2,197 11,372 --------------- ----------------- ---------------- Cash and cash equivalents at end of period 54,878 391,566 173,010 --------------- ----------------- --------------- NOTES: 1. Basis of preparation The accounting policies applied in the un-audited interim financial statements have been prepared in conformity with recognition and measurement principles required by International Financial Reporting Standards ('IFRS') and the Listing Rules of the Financial Services Authority. The un-audited financial statements have been prepared using accounting policies consistent in all material respects with those applied in the Company's Annual Report for the year ended 31 December 2005 and consistent with those that will be applied during the year ended 31 December 2006. The financial information provided herein should be read in connection with the company's audited Consolidated Financial Statements and the notes thereto for the year ended 31 December 2005. The Company continues to be loss making and cash negative 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. Supporting this plan is a Â£1,000,000 working capital facility which is secured by personal guarantees of the Chairman and two other shareholders. Following a review of the above noted forecasts and taking into account the available borrowing facility, the directors have formed a judgement, at the time of approving this interim announcement, that there is reasonable expectation that the Company 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 240 of the Companies Act 1985. Statutory accounts for the year ended 31 December 2005, have been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain a statement under section 237 of the Companies Act 1985. 2. Business and geographic segments Six months Six months Year ended ended ended 30 June 30 June 31 December 2006 2005 2005 Â£ Â£ Â£ Revenue by segment UK 305,108 200,404 397,201 USA 604,288 509,918 1,258,605 Australia 58,302 - - --------------- ---------------- ---------------- 967,698 710,322 1,655,806 --------------- ---------------- ---------------- 3. Revenue Six months Six months Year ended ended Ended 30 June 30 June 31 December 2006 2005 2005 Â£ Â£ Â£ Revenue by type Software licences 265,013 78,976 391,602 Services and other revenue 80,844 91,001 147,805 Maintenance 621,841 540,345 1,116,399 ------------- ------------- -------------- 967,698 710,322 1,655,806 ------------- ------------- -------------- 4. Tax The tax credit of Â£158,934 for the six-month period ended 30 June 2005 and year ended 31 December 2005 relates to a research and development claim for 2004. A claim has been made for research and development efforts undertaken in 2005, but no amount is included in this report. 5. Loss per share The calculation of the basic and diluted loss per share is based on the following data: Six months Six months Year ended ended Ended 30 June 30 June 31 December 2006 2005 2005 Â£ Â£ Â£ Loss for the purposes of basic and diluted loss (464,112) (736,648) (1,379,565) --------------- -------------- ----------------- Number Number Number Weighted average number of ordinary shares For purposes of basic and diluted loss 31,700,692 31,535,361 31,535,361 --------------- -------------- ---------------- The calculation of basic and diluted loss per share is the same because the effect of including share options would be anti-dilutive and are excluded from the calculation. 6. Statement of changes in equity Share Share Share Option translation Retained Capital Premium reserve Reserve loss Total Â£ Â£ Â£ Â£ Â£ Â£ At 31 December 2005 1,576,768 6,125,438 37,655 78,537 (8,398,148) (579,750) Share options - - 12,810 - - 12,810 Translation of foreign operations - - - 32,662 - 32,662 Issue of equity shares 78,750 23,625 - - - 102,375 Retained loss for the year - - - - (464,112) (464,112) ------------- ------------ ----------- ----------- -------------- ----------- At 30 June 2006 1,655,518 6,149,063 50,465 111,199 (8,862,260) (896,015) ------------- ------------ ----------- ----------- -------------- ----------- 7. Reconciliation of operating loss to operating cash flows Six months Six months Year ended ended ended 30 June 30 June 31 December 2006 2005 2005 Â£ Â£ Â£ Loss from operations (452,874) (911,176) (1,561,242) Adjustments for: Depreciation of property, plant and equipment 21,428 22,951 45,943 Share option charge 12,810 14,325 28,001 -------------- ---------------- ---------------- Operating cash flows before movements in working (418,636) (873,900) (1,487,298) capital (Increase) / decrease in receivables (7,779) 39,152 35,060 (Decrease) / increase in payables (52,312) 181,030 416,262 -------------- ---------------- ----------------- Cash used by operations (478,727) (653,718) (1,035,976) Taxes received - 162,129 321,063 Interest paid (12,894) - - --------------- ---------------- ----------------- Net cash from operating activities (491,621) (491,589) (714,913) --------------- ---------------- ---------------- 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 2006 which comprises the consolidated income statement, the consolidated statement of recognised income and expense, the consolidated balance sheet, the consolidated cash flow statement, and the related notes. 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, including the conclusion, has been prepared for and only for the company for the purpose of meeting the requirements of the Listing Rules of the Financial Services Authority and for no other purpose. We do not, therefore in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. 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. The accounting policies are consistent with those that the directors intend to use in the next annual financial statements. 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 disclosed accounting policies 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 and therefore provides a lower level of assurance. 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 2006. Baker Tilly Chartered Accountants 28 September 2006 This information is provided by RNS The company news service from the London Stock Exchange

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