RNS Number:5923L
Patientline PLC
28 May 2003
PATIENTLINE PLC
Preliminary announcement of results for year to 31 March 2003
Patientline plc, the leading provider of bedside entertainment, communication
and information services for the UK and Dutch hospitals, today announces its
preliminary results and its application to the Official List of the Stock
Exchange.
Highlights
*Revenue increased by 65% to #22.0 million.
*EBITDA of #2.4 million, excluding exchange gain, in line with forecasts
and up sharply in the second half to #2.2 million.
*Revenue per terminal for core patient services at mature hospitals increased
by 5%.
*Terminal 2 installed in 43 hospitals.
*Installation rate increased by over 70% to 11,000 terminals in the second
half(6,400 in first half) despite 'winter bed pressures.'
*Integrated services in operation at 75 UK Hospitals at year end with a
further 74 under contract or selected as preferred supplier.
Derek Lewis, Chairman of Patientline plc, commented:
'This has been another year of strong growth for Patientline in terms of
contract wins, installations and the development of new services. A first rate
management team is now in place to drive the business towards the breakeven and
build the infrastructure to ensure that we continue to offer an excellent
service to NHS patients and staff. We retain a tight grip on our cost base and
are focussed on adding to the functionality and revenue generation from our
terminals.
The strong growth in demand for our products has continued and we expect further
progress in generating increased revenues and in signing new contracts. The
Company is market leader in both the UK and the Netherlands, with long-term
exclusive contracts, and a revenue stream that is largely unaffected by the
economic cycle. The growing maturity of our base of operational sites,
opportunities for additional revenue per terminal, and escalating spend on
healthcare, enable the Board to view the future with confidence.'
Enquiries
Patientline plc
Derek Lewis, Chairman Tel: 01753 732444
Jim Glover, Chief Executive
Peter Coleridge, Finance Director
Tulchan Communications
Andrew Honnor Tel: 020 7353 4200
Tim Lynch
PATIENTLINE PLC
Chairman's statement
The group has continued to make rapid progress in both the UK and Netherlands in
the year to 31 March 2003, reinforcing its leading position in both healthcare
markets.
UK Operating Review
The year has been dominated by the successful roll out of the Company's latest
generation product, Terminal 2, and the signature of new contracts with NHS
hospitals.
At the beginning of the year Terminal 2 was operational in just 5 of our 37
hospitals. By the year end this had grown to 43 of 75 operational sites, with
over 18,000 Terminal 2 units in operation. 17,400 terminals 'went live' during
the year, with 11,000 completed in the second half - an increase of over 70% on
the first half rate despite the effect of 'winter bed pressures'. This resulted
in a total of over 35,000 'live' terminals by the end of the year. The systems
and resources devoted to the installation programme and the 'supply chain' have
been substantially enhanced during the past 12 months.
The number of hospitals for which contracts have been signed rose from 71 to 116
and has increased further since the year end. 33 additional hospitals selected
Patientline as their preferred supplier and contracts are being negotiated.
The new services available on Terminal 2, which are designed to enhance revenue
and patient satisfaction, have been received with enthusiasm. They include
internet access and email, menu display and on-screen satisfaction surveys - all
of which have been 'industry firsts' in the UK. The terminal's user-friendly
controls, ergonomic design and ease of cleaning have also been praised by
patients and hospital staff alike.
During the year we announced the signature of our first contract to use Terminal
2 for access at the bedside to an advanced Integrated Care Record System (ICRS
or electronic patient records) at the Chelsea and Westminster Hospital. Access
at the bedside to such systems can save time for nurses and reduce medical
errors. Patientline is well placed to help ensure that the current plan to
introduce ICRS throughout England under the National Programme for IT (NPfIT)
actually delivers benefits to patients and clinicians.
Patientline has continued to emphasise the importance of high quality service in
meeting the needs of patients and NHS trusts. The operation of the Company's
customer care centres was extended to 24 hours a day - another 'industry first'
- and the main Dumfries centre was doubled in size to accommodate growing
demand.
Dutch Operating Review
The Dutch business has successfully completed the integration of the former
Hospital Entertainment and Telehire businesses, which now operate as a single
entity.
The first hospital to sign a contract for the Terminal 2 system went live in
December 2002, after a programme to adapt the system to Dutch operating
requirements. The early response has been encouraging and was followed by the
official launch of the system to the Dutch market.
The Company has also signed contracts to install a less sophisticated television
and telephone system for those hospitals that do not require bedside access to
electronic patient records and other hospital systems in the immediate future.
PATIENTLINE PLC
Chairman's statement (continued)
Financial Review
Total turnover increased by 65 percent to #22.0 million for the year, driven by
the increase in the number of operational hospitals in the UK. Revenues from
core patient services for Terminal 1 increased by 5% on a like-for-like basis,
primarily reflecting improved telephone usage from new numbering and charging
arrangements. Lower advertising revenue largely offset the growth in core
revenues. Revenues for Terminal 2 showed significant increases as the early
hospitals progressed towards maturity.
The launch of Terminal 2 and the rapid expansion in the number of 'live'
hospitals resulted in a substantial increase in earnings before interest, tax,
depreciation and amortisation (Ebitda) from #1.3 million to #2.4 million (#2.8
million including exchange gains), with a particularly sharp increase during the
year from #200,000 in the first half to #2.2 million in the second half. The
rapid pace of growth required a significant increase in central costs resulting
in an increase in operating loss to #10.0 million. This loss masks the
significant cash flow and operating profit contribution now being made by the
growing body of mature or semi-mature sites, while the necessary growth in
central resources to support the roll-out has been completed.
The acceleration in the Government's timetable for the introduction of bedside
television and telephone services and Patientline's greater than expected
success in winning contracts required additional financing. This was achieved in
May 2002 through a placing and open offer to raise approximately #35 million net
of expenses, despite difficult market conditions, and an increase in the
Company's debt facilities from #40 million to #90 million. The additional equity
was used to repay existing borrowings and fund new capital investment, leaving
the Company with net debt of only #8.5 million and shareholders' funds of #52.1
million at the year end.
In line with our commitment at the time of the placing last May, the Board
intends to apply for admission to the Official List of the London Stock Exchange
following the publication of the Company's annual report and accounts for the
year ended 31 March 2003.
Employees and the Board
The demands of managing rapid growth, introducing new technology and installing
the systems required for the future development of the Company inevitably place
heavy demands on our staff, whose numbers grew from 664 to just over 1000 during
the year. As always they have responded magnificently to the challenge and have
continued to display enormous commitment to our customers and shareholders. I
would like to thank them all on behalf of the Board.
Further progress has been made in strengthening the management team to handle
the Company's ambitious plans, including the appointment of Jo O'Connor as UK
Managing Director as well as a number of other group and UK executives.
The Board is very conscious of the attention being paid to good governance
practices and awaits the outcome of the debate on the Higgs Report with
interest. In the interim it has continued to strengthen its Board and governance
processes, including the establishment of a Nominations Committee and the
appointment of its first full time Company secretary, Julyan Paul.
PATIENTLINE PLC
Chairman's statement (continued)
Dividend
For the foreseeable future, we believe the cash generated by the group's
operations will be best used to fund the continued expansion of the group.
Consequently we do not expect to declare a dividend in our early years as a
quoted Company, although the Board will keep this policy under review.
Current Trading and Prospects
The strong growth in demand for our products has continued and we expect further
progress in signing new contracts and growing revenues. The Company is the
market leader in both the UK and the Netherlands, with long-term exclusive
contracts and revenues that are largely unaffected by the economic cycle. The
growing maturity of our base of operational sites, opportunities for additional
revenue per terminal, increasing brand recognition and escalating spend on
healthcare, enable the Board to view the future with confidence.
Derek Lewis
Chairman
PATIENTLINE PLC
Consolidated profit and loss account for the year ended 31 March 2003
2003 2002
#'000 #'000
Turnover 21,981 13,307
Cost of sales (2,685) (1,551)
________ ________
Gross profit 19,296 11,756
Total administrative expenses (26,536) (14,769)
Earnings before interest, taxation, depreciation and 2,782 1,334
amortisation
Depreciation and amortisation (10,022) (4,347)
________ ________
Operating loss (7,240) (3,013)
Interest payable and similar charges (2,789) (485)
________ ________
Loss for the year before taxation (10,029) (3,498)
Taxation (139) (66)
________ ________
Loss for the year after taxation (10,168) (3,564)
________ ________
Loss per share - basic and diluted 12.16 5.95
pence pence
________ ________
All amounts related to continuing activities.
PATIENTLINE PLC
Consolidated balance sheet at 31 March 2003
2003 2002
#'000 #'000 #'000 #'000
Fixed assets
Intangible fixed assets 9,445 9,232
Tangible assets 56,592 28,898
________ ________
66,037 38,130
Current assets
Stocks 271 247
Debtors 3,423 3,061
Cash at bank and in hand 1,127 1,091
________ ________
4,821 4,399
Creditors: amounts falling due (9,769) (17,096)
within one year
________ ________
Net current liabilities (4,948) (12,697)
________ ________
Total assets less current
liabilities 61,089 25,433
Creditors: amounts falling due after
more than one year (9,000) (63)
Provision for liabilities and - (43)
charges
________ ________
Net assets 52,089 25,327
________ ________
======== ========
Capital and reserves - equity
Called up share capital 4,562 3,030
Share premium 76,180 40,783
Capital redemption reserve 1 1
Profit and loss account (28,654) (18,487)
________ ________
Shareholders' funds 52,089 25,327
________ ________
======== ========
PATIENTLINE PLC
Statement of movement in reserves
Capital Share Profit and
redemption premium loss
reserve account account
#'000 #'000 #'000
The Group
At 1 April 2002 1 40,783 (18,487)
Loss for the year - - (10,168)
Premium on shares issued - 35,397 -
Exchange gain - - 1
________ ________ ________
At 31 March 2003 1 76,180 (28,654)
________ ________ ________
======== ======== ========
Statement of total recognised gains and losses
2003 2002
#'000 #'000
Loss for the financial year (10,168) (3,564)
Exchange gain/(loss) 1 (30)
________ ________
Total recognised gains and losses relating to the (10,167) (3,594)
year
________ ________
======== ========
PATIENTLINE PLC
Consolidated cashflow statement
2003 2002
#'000 #'000 #'000 #'000
Net cash inflow from operating 2,061 2,507
activities
Returns on investments and servicing
of finance
Interest received 128 -
Debt issue costs (1,769) -
Interest paid (1,044) (427)
Interest element of finance lease - (3)
rental payments
________ ________
Net cash outflow from returns on
investments and servicing of
finance (2,685) (430)
Taxation (35) -
Capital expenditure
Purchase of intangible fixed (1,670) (1,769)
assets
Purchase of tangible fixed assets (33,968) (14,821)
Sale of tangible fixed assets 23 -
________ ________
Net cash outflow from capital (35,615) (16,590)
expenditure
Acquisitions
Acquisition of subsidiary - (309)
undertaking
Net cash acquired with subsidiary - 91
undertaking
Payment of deferred consideration (107) (842)
________ ________
Net cash outflow from acquisitions (107) (1,060)
________ ________
Net cash outflow before financing (36,381) (15,573)
Financing
Issue of shares 37,980 124
Expenses paid in connection with (2,543) -
share issues
Repayment of loan notes - (400)
Inception of bank loans 9,000 7,289
Repayment of bank loans (7,676) -
Capital element of finance lease - (26)
rental payments
________ ________
Net cash inflow from financing 36,761 6,987
________ ________
Increase/(decrease) in cash 380 (8,586)
________ ________
======== ========
PATIENTLINE PLC
Notes to the consolidated cash flow statement
Reconciliation of operating loss to net cash inflow from operating activities
2003 2002
#'000 #'000
Operating loss (7,240) (3,013)
Depreciation 8,197 3,730
Amortisation 1,825 617
Profit on sale of fixed assets (3) -
(Increase)/decrease in stocks (24) 324
Increase in debtors (362) (1,574)
(Decrease)/increase in (289) 2,630
creditors
Decrease in provisions (43) (207)
________ ________
2,061 2,507
________ ________
========= ========
Analysis of changes in net debt
At Other
1 April non-cash 31 March
2002 Cashflow changes 2003
#'000 #'000 #'000 #'000
Cash at bank and in hand 1,091 36 - 1,127
Overdraft (906) 344 - (562)
________ ________ ________ ________
185 380 - 565
Bank loan (7,676) (1,324) - (9,000)
Unsecured loan notes 2000 (855) - 855 -
Unsecured convertible loan (395) - 323 (72)
notes
Deferred consideration (421) 107 314 -
________ ________ ________ ________
(9,162) (837) 1,492 (8,507)
________ ________ ________ ________
======== ======== ======== ========
PATIENTLINE PLC
Notes to the consolidated cash flow statement (continued)
Reconciliation of net cash flow to movement in net debt
2003 2002
#'000 #'000
Increase/(decrease) in cash in year 380 (8,586)
Cash inflow from increase in debt (1,324) (6,863)
________ ________
Increase in net debt from cashflows (944) (15,449)
Unsecured loan notes 2000 855 495
Unsecured convertible loan notes 323 (395)
Deferred consideration 421 (421)
Debt acquired - (387)
________ ________
655 (16,157)
Net (debt)/funds at 31 March 2002 (9,162) 6,995
________ ________
Net debt at 31 March 2003 (8,507) (9,162)
________ ________
======== ========
PATIENTLINE PLC
Notes to the preliminary results
1. The preliminary results have been prepared under the historical
cost convention, in accordance with applicable Accounting Standards in the
United Kingdom and with the company's accounting policies as set out in the
financial statements for the year ended 31 March 2002. The preliminary results
were approved by the Board on 28 May 2003 and are unaudited. The financial
information contained in these unaudited preliminary results statement does not
constitute accounts as defined by Section 240 of the Companies Act 1985. The
financial information for the year ended 31 March 2002 is derived from the
statutory accounts for that year which have been delivered to the Registrar of
Companies. The auditors reported on those accounts; their report was unqualified
and did not contain a statement under either Section 237 (2) or Section 237 (3)
of the Companies Act 1985. The statutory accounts for the year ended 31 March
2003 will be finalised based on the information in this preliminary announcement
and will be delivered to the Registrar of Companies following the company's AGM.
2. The calculation of loss per ordinary share is based on losses of
#10,168,000 (2002: #3,564,000) and on a weighted average of 83,649,858 (2001:
59,857,221) ordinary shares in issue during the year. The share options are
anti-dilutive due to the loss in the year.
3. The Annual Report and financial statements will be posted to shareholders
shortly.
4. The financial information included in the preliminary announcement is
prepared on the basis of accounting policies set out in the most recently
published set of financial statements.
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END
FR EANSXALADEFE