Interim Results

Clinical Computing PLC 25 September 2007 CLINICAL COMPUTING PLC 2007 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 2007. 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 6% to Â£1,025,370 (June 2006: Â£967,698) â€¢ Operating costs down 7% to Â£1,327,843 (June 2006: Â£1,420,572) â€¢ Loss for the period before tax reduced by 28% to Â£336,461 (June 2006: loss Â£464,112) â€¢ Loss for the period Â£267,944 (June 2006: loss Â£464,112) â€¢ Loss per share (basic and diluted): 0.8p (June 2006: loss 1.5p) â€¢ Borrowed Â£1,334,185 at 30 June 2007 (from Â£1,750,000 of available working capital facilities) Business Review â€¢ 5th consecutive six month period of improving bottom line results â€¢ Move to AIM complete â€¢ 4 Clinical Vision 4 (CV4) contracts won in the US market â€¢ 7 CV4 implementations in progress Outlook Chairman Howard Kitchner, commenting on the Group outlook, said: 'The results for the first half of 2007 continue a positive trend which now covers five consecutive reporting periods where the Group has reported decreasing losses for the period. The board and management team are completely focused on delivering further improving results in line with our business plan.' Contacts: Joe Marlovits, Chief Executive, Clinical Computing 020 8747 8744 www.ccl.com Paul McMannus, Parkgreen Communications Ltd 020 7479 7933 Ross Andrews, City Financial Associates - Nominated Adviser 020 7492 4777 Chairman's Statement Introduction I am pleased to report the fifth consecutive six month period of improving bottom line results for the Group. Since your board put into effect its restructuring plan the Group has reported progressively decreasing losses and this trend has continued with these results. Additionally, the first six months of 2007 shows increasing revenues compared to the same period in the prior year and when compared to the final six months of 2006. During the period the Group secured four Clinical Vision 4 (CV4) contracts from current customers who have been licensing legacy products. These contracts along with other legacy license orders in the US exceeded Â£1,000,000, and these contracts will be recognised as revenue in the second half of 2007 and into 2008. Three customers went live with CV4 in the first half and the Company is currently managing 7 other implementations. The restructuring plan included a re-organisation of the operations, and also included addressing the Company's financial structure so that the Group maximises its ability to deliver shareholder value. Earlier this summer your board announced plans to move the Company's share listing from the Official List to AIM. The cancellation from the Official List and admission and trading to AIM took effect on 17 September 2007. The Company has recently been supported with debt facilities backed by myself and two other shareholders. As the restructuring plan is showing positive and consistent progress against plan the board will continue to review the long term financing alternatives available to the Group. Included in the shareholder circular, the board sought and received authority to issue equity securities in the amount of Â£1,000,000 against the Company's ordinary shares of 1p nominal. This authority provides the board with the flexibility in providing alternatives in funding the delivery of the Clinical Vision product roadmap which sees the Clinical Vision product expanding internationally and supporting other chronic diseases. Trading Results During the period under review, Group revenues increased 6 %, from Â£967,698 to Â£1,025,370. 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 and providing support services to approximately 94 healthcare organisations. Maintenance revenue for the period was Â£566,776 or 55% of total revenue (2006: Â£621,841 or 64%). The majority of the decrease in maintenance revenue compared to the prior period is due to the strengthening of sterling versus both the US and Australian dollars, currencies in which 68% of our maintenance revenues were invoiced. Total operating costs decreased 7% from Â£1,420,572 to Â£1,327,843. The operating cost decrease is primarily attributed to staff costs which have fallen when compared to the prior period. The Group's operating loss before tax has reduced by 28% to Â£336,461 (2006: Â£464,112 loss). The loss for the period after tax was Â£267,944 or 0.8p per share (2006: Â£464,112 or 1.5p per share). Cash Flows and Liquidity As disclosed in the shareholder circular dated 23 July 2007, the Company increased its debt resources by a further Â£200,000 taking the borrowing available to the Group to Â£1,650,000 from sterling based facilities. The Group also has a US dollar based facility of Â£100,000 ($200,000) which is not utilised. The Company borrowed Â£465,032 during the period, which took its total borrowings from the sterling facilities to Â£1,334,185 at the end of the period. Although borrowing increased by Â£465,032 operations only used Â£228,554 and the Group is showing cash balance of Â£195,883 at the end of the reporting period. 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 current facilities provides sufficient working capital to support the Group and allow it 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 results for the first half of 2007 continue a positive trend which now covers five consecutive reporting periods where the Group has reported decreasing losses for the period. The board and management team are completely focused on delivering further improving results in line with our business plan. Howard Kitchner Chairman 26 September 2007 Unaudited consolidated income statement Six months ended 30 June 2007 Audited Six months Six months year ended ended ended 30 June 2007 30 June 2006 31 December 2006 Â£ Â£ Â£ Continuing operations Revenue (Note 3) 1,025,370 967,698 1,781,658 Cost of sales (359,280) (345,161) (711,663) -------------- -------------- ----------------- Gross profit 666,090 622,537 1,069,995 Distribution costs (116,611) (211,659) (371,830) Administrative expenses Research & development (475,102) (471,308) (965,120) Other (376,850) (392,444) (676,772) Total administrative expenses (851,952) (863,752) (1,641,892) -------------- ------------- ----------------- Loss from operations (302,473) (452,874) (943,727) Interest income 1,629 1,656 2,565 Finance costs (35,617) (12,894) (23,476) -------------- ------------ ----------------- Loss before income tax (336,461) (464,112) (964,638) Income tax (Note 4) 68,517 - 121,234 -------------- ------------ ----------------- Loss for the period (267,944) (464,112) (843,404) -------------- ------------ ---------------- Basic and diluted loss per share (Note 5) (0.8p) (1.5p) (2.6p) -------------- ------------ ---------------- Unaudited consolidated statement of recognised income and expense Six months ended 30 June 2007 Audited Six months Six months year ended ended ended 30 June 2007 30 June 2006 31 December 2006 Â£ Â£ Â£ Exchange differences on translation of foreign operations 9,827 32,662 69,243 Loss for the period (267,944) (464,112) (843,404) ------------- ------------- ---------------- Total recognised expense for the period (258,117) (431,450) (774,161) ------------- ------------- ---------------- Unaudited consolidated balance sheet 30 June 2007 Audited 30 June 30 June 31 December 2007 2006 2006 Â£ Â£ Â£ Non-current assets Intangibles 59,834 - 29,360 Property, plant and equipment 139,770 74,378 146,141 --------------- --------------- ----------------- 199,604 74,378 175,501 Current assets Trade and other receivables 405,036 357,973 353,001 Cash and cash equivalents 195,883 54,878 14,418 --------------- --------------- ----------------- 600,919 412,851 367,419 --------------- --------------- ----------------- Total assets 800,523 487,229 542,920 --------------- ---------------- ----------------- Current liabilities Trade and other payables (949,528) (1,090,650) (904,382) Bank overdrafts and loans (1,334,185) (292,594) (869,153) --------------- --------------- ----------------- (2,283,713) (1,383,244) (1,773,535) --------------- --------------- ----------------- Net liabilities (1,483,190) (896,015) (1,230,615) --------------- -------------- ----------------- Equity Share capital 1,655,518 1,655,518 1,655,518 Share premium account 6,149,063 6,149,063 6,149,063 Share option reserve 64,118 50,465 58,576 Translation reserve 157,607 111,199 147,780 Retained earnings (9,509,496) (8,862,260) (9,241,552) --------------- ---------------- ----------------- Shareholders' funds (Note 6) (1,483,190) (896,015) (1,230,615) -------------- -------------- ----------------- Unaudited consolidated cash flow statement Six months ended 30 June 2007 Audited Six months Six months year ended ended ended 30 June 30 June 31 December 2007 2006 2006 Â£ Â£ Â£ Net cash from operating activities (Note 7) (228,554) (491,621) (984,024) Investing activities Interest received 1,629 1,656 2,565 Expenditure on product development (33,075) - (29,360) Purchases of property, plant and equipment (24,601) (16,580) (113,972) --------------- ---------------- -------------- Net cash (used in) from investing activities (56,047) (14,924) (140,767) --------------- --------------- -------------- Financing activities New bank loans raised 465,032 292,594 869,153 Proceeds from equity - 102,375 102,375 --------------- ---------------- --------------- Net cash from financing activities 465,032 394,969 971,528 --------------- ---------------- --------------- Net increase / (decrease) in cash and cash equivalents 180,431 (111,576) (153,263) Cash and cash equivalents at beginning of period 14,418 173,010 173,010 Effect of foreign exchange rate changes 1,034 (6,556) (5,329) --------------- ----------------- ---------------- Cash and cash equivalents at end of period 195,883 54,878 14,418 --------------- ----------------- --------------- 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'). 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 2006 and consistent with those that will be applied during the year ended 31 December 2007. 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 2006. 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£1,650,000 working capital facility which is secured by personal guarantees of the Chairman and two other shareholders as well as a further facility for Â£100,000. 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 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 2006, 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 2007 2006 2006 Â£ Â£ Â£ Revenue by segment UK 414,947 305,108 578,495 USA 596,713 604,288 1,063,614 Australia 13,710 58,302 139,549 --------------- ---------------- ---------------- 1,025,370 967,698 1,781,658 --------------- ---------------- ---------------- 3. Revenue Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 Â£ Â£ Â£ Revenue by type Software licences 404,270 265,013 425,914 Services and other revenue 54,324 80,844 146,181 Maintenance 566,776 621,841 1,209,563 ------------- ------------- -------------- 1,025,370 967,698 1,781,658 ------------- ------------- -------------- 4. Tax The tax credit of Â£68,517 for the six-month period ended 30 June 2007 relates to a cash settlement of research and development credits claimed for work performed in 2006. The tax credit of Â£121,234 for the year ended 31 December 2006 relates to a cash settlement of research and development credits claimed for work performed in 2005. Research and development tax credits which are settled in cash (not as an off-set to tax due) are accounted for when received from the applicable tax authority. 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 2007 2006 2006 Â£ Â£ Â£ Loss for the purposes of basic and diluted loss (267,944) (464,112) (843,404) --------------- -------------- ----------------- Number Number Number Weighted average number of ordinary shares For purposes of basic and diluted loss per share 33,110,361 31,700,692 32,411,320 --------------- -------------- ---------------- 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 per IAS 33. 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 2006 1,655,518 6,149,063 58,576 147,780 (9,241,552) (1,230,615) Share options - - 5,542 - - 5,542 Translation of foreign operations - - - 9,827 - 9,827 Retained loss for the year - - - - (267,944) (267,944) ------------- ------------ ----------- ----------- -------------- --------------- At 30 June 2007 1,655,518 6,149,063 64,118 157,607 (9,509,496) (1,483,190) ------------- ------------ ---------- ----------- -------------- --------------- 7. Reconciliation of operating loss to operating cash flows Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 Â£ Â£ Â£ Loss from operations (302,473) (452,874) (943,727) Adjustments for: Depreciation of property, plant and equipment 30,211 21,428 44,040 Share option charge 5,542 12,810 20,921 Amortisation of capitalised R&D 2,601 - - -------------- ---------------- ---------------- Operating cash flows before movements in working capital (264,119) (418,636) (878,766) (Increase) / decrease in receivables (52,068) (7,779) 1,208 Increase / (decrease) in payables 54,733 (52,312) (204,224) -------------- ---------------- ----------------- Cash used by operations (261,454) (478,727) (1,081,782) Taxes received 68,517 - 121,234 Interest paid (35,617) (12,894) (23,476) --------------- ---------------- ----------------- Net cash from operating activities (288,554) (491,621) (984,024) --------------- ---------------- ---------------- This information is provided by RNS The company news service from the London Stock Exchange

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