TIDMDXSP
DXS INTERNATIONAL PLC
ANNUAL RESULTS
for the year ended 30 April 2020
The Board of DXS International plc ("the Company"), the AQSE Growth
Market quoted healthcare information and digital clinical decision
support systems provider, is pleased to announce its audited Final
Results for the year ended 30 April 2020.
Financial Highlights:
-- Profit after tax rose nearly five-fold to GBP428,502, compared to
GBP85,096 in the previous year.
-- Operating Profit of GBP308,423 (2019: Loss GBP137,228) achieved mainly
due to a reduction in overhead for completed projects.
-- Turnover remained steady at GBP3,279,787 (2019: GBP3,346,343) in spite of
the unprecedented interruption to business as usual during the last
quarter of the financial year.
-- New equity of over GBP1 million raised in February 2020 to be applied to
launch and ongoing development of new solutions.
-- Cash at bank GBP1,010,645 as of 30 April 2020.
Operational Highlights
-- DXS' Point of Care solution re-accredited for the new NHS Digital
Framework to receive central NHS funding.
-- New Expert Hypertension solution, earmarked for UK and International
markets completed and ready for launch.
Current Trading Situation
Although the process continues, the current public health situation has
understandably delayed NHS accreditation of our new products, as well as
the planned launch of our new Hypertension solutions. However, as the
situation has begun to normalise, we have restarted our ExpertCare pilot
plans and engagement with prospective pilot participants has to date
been very positive. We look forward to updating the market on this as
appropriate.
We are however pleased to announce that during this lockdown period we
were able to sustain our core revenue stream, with only a marginal drop
from the previous year, and envisage revenue growth towards the end of
this year. Even without the funding the company remained cash positive.
We have used this period as an opportunity to redirect our focus on
bringing forward some solution development initiatives for ExpertCare,
MyVytalCare and CompleteCare that we expect will reap rewards once the
market normalises. These new solutions will play an important role in
helping clinicians manage mounting chronic disease and patient backlogs
created by the focus on the current pandemic.
As an NHS accredited supplier, we were able to conclude our agreement
with NHS Digital for the new GPIT Futures framework for our current
solution, DXS Point of Care, which became effective in April 2020.
We remain focused on our overall strategy of building significant
revenue through our Expert Long-Term Care solutions, into which we have
been heavily investing for the past five years. We remain confident and
optimistic about the future growth of the business, and this is
supported by our own organic investment into its development of
GBP904,503 during the year, supported by new investors committing over
GBP1 million in February this year.
David Immelman (Chief Executive) commented:
"The Covid-19 pandemic brought with it a host of new business
challenges. In this regard I am proud to say that both our management
and staff are facing these new challenges with great tenacity and
resolve. Over the past months we have been able to introduce seamless
home working protocols and procedures with only minimal disruption to
productivity. Additionally, despite our ongoing business continuity
efforts we have been working hard at laying the groundwork for our ISO
270001, ISO 22301 and ISO 2000 accreditation which we hope to achieve in
the final quarter of the year.
At the same time, we have been completing the clinical and technical
designs for the next version of our ExpertCare Hypertension solution
while also steering the solution through the arduous Medicines and
Healthcare products Regulatory Agency (MHRA) assessment, as ExpertCare
Hypertension is classed as a medical device. This process is well
advanced. I am convinced that these efforts together will place us on an
increasing sound footing enabling us to deliver greater shareholder
value in the next period."
The Directors of DXS International plc accept responsibility for this
announcement.
Contacts :
David Immelman 01252 719800
DXS International plc
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www.dxs-systems.com
Corporate Advisor
City & Merchant 020 7101 7676
David Papworth
Notes to Editors
About DXS:
DXS International presents up to date treatment guidelines and
recommendations, from Clinical Commissioning Groups and other trusted
NHS sources, to doctors, nurses and pharmacists in their workflow and
during the patient consultation. This effective clinical decision
support ultimately translates to improved healthcare outcomes delivered
more cost effectively and which should significantly contribute towards
the NHS achieving its projected efficiency savings.
The following information is extracted from the DXS International plc
audited accounts for the year ended 30 April 2020.
Report of the Directors
The directors present their annual report and the audited financial
statements for the year ended 30 April 2020. The Chairman's statement
which is included in this report includes a review of the achievements
of the Company, the trading performance, financial position and trading
prospects.
Directors
The directors for the year were:
-- B Sutcliffe -- Chairman
-- D Immelman -- CEO
-- S Bauer -- COO
Principal Activities
The group's principal activities during the period were the development
and distribution of clinical decision support to General Practitioners,
Nurses and Retail Pharmacies in the United Kingdom. The commercial side
included the licensing of DXS to various CCG's and the sale of
e-detailing opportunities to the Pharmaceutical Industry.
The group continues to invest in research and development both locally
and internationally and during this financial year has invested
GBP904,503 into R&D for the introduction, continuation and completion of
a number of new DXS solutions. These are mainly targeted at providing
clinicians and patients with solutions to long term conditions. These
products are aligned with the NHS strategy of "Connected Care" and the
first hypertension solution, while delayed due to COVID-19, is market
ready.
Two other new products, also delayed, are targeted to be launched to
market during the course of the year.
Subsequent to year end the company received a COVID loan of GBP190,000.
Financial Instruments
The Directors believe that there is no material risk arising in respect
of interest rates on loans, credit and liquidity.
Dividend
The Directors do not recommend a dividend.
Directors' Responsibilities
The directors are responsible for preparing the financial statements for
each financial year. The directors have elected to prepare the financial
statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and applicable
law). Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair view
of the state of affairs of the company and of the profit or loss of the
company for that period. In preparing these financial statements, the
directors are required to:
-- Select suitable accounting policies and apply them consistently.
-- Make judgments and accounting estimates that are reasonable and prudent.
-- State whether UK accounting principles have been followed subject to any
material departures disclosed and explained in the financial statements
and,
-- Prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the company will continue in the business.
The directors are responsible for keeping proper accounting records that
are sufficient to show and explain the company's transactions and
disclose with reasonable accuracy at any time the financial position of
the company and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the company and hence for taking reasonable
steps for the prevention and detection of fraud and other
irregularities.
Directors' Responsibilities to Auditors
The directors have taken all the necessary steps that they ought to have
taken as directors in order to make themselves aware of all relevant
audit information and to establish that the company's auditors are aware
of that information.
So far as the director is aware, there is no relevant audit information
of which the company's auditor is unaware.
Approved by the board and signed on its behalf by:
D A Immelman
Director
15 July 2020
Strategic Report
Section 172 Report
Section 172 of the Companies Act requires that a director of the company
is managing in the best interests of all stakeholders -- Customers,
Employees and Shareholders.
In the spirit of above, the Directors of DXS International plc, strive
to maintain a reputation for high but fair standards in the best
interest of its stakeholders.
Our primary focus is on our Customers and here we regard our
relationships and channels of communications of paramount importance. We
operate in a sensitive environment, healthcare, and as such ensure that
we meet all the standards required by our Customers, such as Information
Governance and Clinical Safety. In addition, we are in the process of
complying with ISO which assures an overarching good governance approach
to all operations.
The Board is focused on delivering value for Shareholders underpinned by
motivated Employees delivering above average delivery of solutions and
service to Customers. In achieving the foregoing, the company focuses on
continued innovation via a policy of research and development funded
through organic investment plus capital raises, as agreed at shareholder
meetings, and supported by clearly communicated vision and direction.
In our communication to Shareholders the Board is clear in terms of its
short, medium and long-term strategy and maintains an open-door approach
to Shareholders seeking additional clarity on any issue. The Board
release notices on a regular basis informing Shareholders of
developments in areas of business progress, non-confidential strategic
decisions and any change to company policy. Risks and opportunities are
set out in this strategic review.
The Group is small and while clear management structures are in place
all Employees, if required, have direct access to the Executive
Directors on a daily basis and, if necessary, to the Chairman. The group
retains HR services to ensure the fair and equitable treatment of
Employees. The company promotes a policy of promoting from within
supported by training and mentorship. We encourage diverse thinking and
recognise strengths and contribution to the business. Finally, we
recognise that as a responsible organisation we identify and deliver on
our social responsibility.
Review of the company's business
The company's profit after tax is GBP428,502 (2019 - GBP85,096). The
pre-tax Profit before tax amounts to GBP239,307 (2019 Loss
(GBP199,615)). The company has a credit of GBP189,195 for UK Corporation
Tax (2019 credit- GBP284,711) for the year.
The profit after tax for the year was increased by GBP343,406 allowing
for a significant investment into R&D of GBP904,503. Considering the
overall impact of COVID-19, revenue remained robust with only a marginal
drop of 2.5% in revenue.
Being an accredited NHS solutions provider, DXS has well-established
business continuity and disaster recovery protocols in place. These were
triggered during the early stages of the COVID-19 outbreak and at this
point, all our staff with the exception of one, both in the United
Kingdom and South Africa are successfully working from home and the
company remains fully operational.
Although the framework agreement for GPIT Futures (the revised NHS
Digital accredited supplier initiative) was signed in March 2020, there
are delays in moving onto the new pricing plan which could increase
revenue on the current user base by approximately GBP200,000 p.a.
It should be noted that currently the recently signed GPIT Futures
framework agreement, only covers DXS' core solution, DXS Point of Care.
There have been delays in completing accreditation for the new DXS
solutions where we expect three new DXS solutions will be centrally
funded.
Following a successful fundraise of more than GBP1 million in February
2020, our planned launch of our long-term condition solution has been
delayed due to the current pandemic. We have utilised this time to add
certain enhancements to these solutions which we believe will increase
the attractiveness of our offering once the market reopens for business
as usual.
Our strategy remains aligned with both the new NHS Long Term Plan and
opportunities abroad.
Principal risks and uncertainties
The principal risk to the company in the UK is that the NHS dramatically
changes its plans or cuts its budgets. This seems unlikely, particularly
with the current pandemic highlighting the need for clinicians to
operate using digital technologies. We are also confident that our new
Hypertension solution can play a significant role in assisting already
overloaded clinicians to manage patient backlogs as the situation begins
to normalise.
Failure to achieve predicted quantities of DXS contracts, and slower
development of additional revenue streams may result in revenues growing
more slowly than anticipated. These may be mitigated due to the launch
of market ready new products once the current situation normalises.
While the country is moving to easing of restrictions, the impact of
COVID-19 on business going forward remains uncertain, and can impact the
GPIT Futures accreditation of our new solutions as well as a slower than
anticipated access to market of our new Hypertension solution.
In addition, our plans for expansion outside of the UK mitigate this
risk.
Analysis of Business during Year Ending April 2020
While revenue was marginally below expectations largely due to the
unprecedented pandemic and business as usual being put on hold, profit
increased significantly by GBP316,406. This was due to some projects
being completed and related expenses being rationalised resulting in
reduced costs.
Financial KPI
-- Group Revenue of GBP3,279,787 has decreased 2.5%. This was largely due to
the unprecedented pandemic and business as usual being put on hold.
Definition: Total Group sales including distribution of clinical decision
support to General Practitioners and the licensing of DXS to CCGs and
healthcare publishers. Includes the sale of medicine education slots to
the Pharmaceutical industry.
-- Underlying Group Profit After Tax increased by GBP316,406. This was
mainly due to a reduction in overhead for completed projects. Definition:
Underlying profit provides information on the underlying performance of
the business.
-- Depreciation and amortisation of deferred Research and Development
expenditure in 2020 was GBP571,562 and in 2019 was GBP530,292.
-- Earnings Per Share 2020 1.1p, 2019 0.2p. Definition: Earnings per share
is the underlying profit divided by the weighted average number of
ordinary shares in issue.
-- ROE 2020 16%, 2019 4%. Definition: Return on Equity (ROE) is the ratio of
net profit of a company to its shareholders funds. It measures the
profitability of a company by expressing its net profit as a percentage
of its shareholders funds which include share capital, share premium,
provision for costs of share option awards and retained earnings. Due to
the significant share issue in February 2020, the calculated ROE 2020
has excluded this increase in share capital and share premium from the
ROE calculation as the directors believe that the results for the year
were unaffected by the proceeds of the share issue.
Approved by the board and signed on its behalf by:
D Immelman
Director
15 July
FINANCIAL STATEMENTS
INCOME STATEMENT
Year ended 30 April 2020
2019
2020 Continuing
Continuing Operations Operations
GBP GBP
Turnover 3,279,787 3,346,343
Cost of Sales (318,424) (385,426)
_________ _________
Gross Profit 2,961,363 2,960,917
Administrative Costs (2,085,776) (2,568,074)
Depreciation and Amortisation (571,562) (530,292)
_________ _________
Operating Profit/(Loss) 304,025 (137,449)
Interest received and
similar income 4,398 221
_________ _________
308,423 (137,228)
Interest payable and similar
expenses (69,116) (62,387)
_________ _________
Profit/(Loss) on ordinary
activities before taxation 239,307 (199,615)
Tax on profit/loss ordinary
activities 189,195 284,711
_________ _________
Profit for the period 428,502 85,096
========= =========
Profit per share
- basic 1.1p 0.2p
- fully diluted 1.1p 0.2p
========= =========
Statement of Other Comprehensive Income
Year ended 30 April 2020
2020 2019
GBP GBP
Profit for the year 428,502 85,096
Other comprehensive income
Tax on components of other comprehensive
income - -
_________ _________
Total comprehensive income for
the year 428,502 85,096
========= =========
Statement of Financial Position
Year ended 30 April 2020
Company Company
Group 2020 Group 2019 2020 2019
GBP GBP GBP
Fixed Assets
Intangible Assets 4,007,411 3,673,141 - -
Tangible Assets 1,105 3,060 - -
Investments - - 2,010,500 1,899,384
_________ _________ _________ _________
4,008,516 3,676,201 2,010,500 1,899,384
_________ _________ _________ _________
Current assets
Debtors: amounts falling due
within one year 759,405 1,688,720 91,051 46,638
Cash at bank and in hand 1,010,645 55,242 911,854 41,344
_________ _________ _________ _________
1,770,050 1,743,962 1,002,905 87,982
Creditors: amounts falling due
within one year (1,180,704) (1,518,021) (37,360) (69,817)
_________ _________ _________ _________
Net current assets 589,346 225,941 965,545 18,165
_________ _________ _________ _________
Total assets less current
liabilities 4,597,862 3,902,142 2,976,045 1,917,549
Creditors:
Amounts falling due after more
than one year (376,289) (464,951) - -
Deferred income (571,094) (1,193,611) - -
_________ _________ _________ _________
3,650,479 2,243,580 2,976,045 1,917,549
========= ========= ========= =========
Capital and reserves
Called up share capital 159,246 116,099 159,246 116,099
Share Premium 2,676,321 1,752,299 2,676,321 1,752,299
Share option reserve 173,808 162,580 173,808 162,580
Retained earnings 641,104 212,602 (33,330) (113,429)
_________ _________ _________ _________
Shareholders' funds 3,650,479 2,243,580 2,976,045 1,917,549
========= ========= ========= =========
As permitted by Section 408 of the Companies Act 2006, the Income
Statement of the parent company is not presented as part of these
financial statements. The Company made a profit of GBP80,099 for the
year (2019 Loss GBP393,488).
Notes to the Financial Statements
Year ended 30 April 2020
1 Summary of significant accounting policies
(a) General information and basis of preparation.
DXS International PLC is a public company limited by shares incorporated
in England and Wales. The address of the registered office is given in
the company information on Page 1 of these financial statements.
The group's principal activities during the year were the development
and distribution of clinical decision support to General Practitioners,
Nurses and Retail Pharmacies in the United Kingdom and South Africa. The
commercial side includes the licensing of DXS products to various CCG's,
(Central Commissioning Groups) the sale of e- detailing opportunities to
the pharmaceutical industry, the UK Primary Care sector and the
licencing of DXS technology to healthcare publishers.
The financial statements have been prepared in accordance with
applicable accounting standards including Financial Reporting Standard
102 Applicable in the UK and Republic of Ireland (FRS 102) and the
Companies Act 2006. The financial statements have been prepared on a
going concern basis under the historical cost convention. The financial
statements are prepared in sterling which is the functional currency of
the company.
In the opinion of the Directors the group has sufficient funding to
continue as a going concern for at least twelve months from the date of
approval of the financial statements.
Should the group be unable to continue trading, adjustments would have
to be made to reduce the value of assets to their recoverable amounts
and to provide for any further liabilities that might arise. The
financial statements do not reflect any such adjustments.
The significant accounting policies applied in the preparation of these
financial statements are set out below. These policies have been
consistently applied to all years presented unless otherwise stated.
(b) Intangible assets
Intangible assets acquired separately from a business are capitalised at
cost.
Research and development expenditure, other than specific identifiable
development expenditure, is written off against profits in the year in
which it is incurred.
Identifiable development expenditure is capitalised to the extent that
the technical, commercial and financial feasibility can be demonstrated.
Developed products are for use within the NHS and other medical
institutions within both the UK and internationally. The Group is
already a supplier of services to the NHS.
Goodwill arising on business combinations is capitalised, classed as an
asset on the balance sheet and amortised over its useful life. The
period originally chosen for writing off the current goodwill was 20
years because the directors believed that this was the period of time
for the benefit to be received. Any future goodwill purchased will be
amortised over a period which the directors believe to be applicable to
that goodwill purchased.
Intangible assets are amortised over a straight line basis over their
useful lives. The useful lives of intangible assets are as follows:
Intangible type Useful life Reasons
Development expenditure 5 years from the date that Period of time for
the specific product is benefit to be received
completed and available
for distribution
Provision is made for any impairment.
(c) Tangible fixed assets
The company capitalises items purchased as Tangible Fixed Assets which
have a cost in excess of GBP500.
Tangible fixed assets are stated at cost less accumulated depreciation.
Depreciation is provided on all tangible fixed assets at rates
calculated to write off the cost, less estimated residual value, of each
asset on a systematic basis over its expected useful life as follows:
Plant and equipment 3-4 years straight line
(d) Debtors and creditors receivable/ payable within one year
Debtors and creditors with no stated interest rate and receivable or
payable within one year are recorded at transaction price. Any losses
arising from impairment are recognised in the profit and loss account in
other administration expenses
(e) Loans and borrowings
Loans and borrowings are initially recognised at the transaction price
including transaction costs. Subsequently they are measured at amortised
cost using an effective interest rate method, less impairment. If an
arrangement constitutes a finance transaction it is measured at present
value.
(f) Grants
Government Grants, including non - monetary grants, shall not be
recognised until there is reasonable assurance that:
(a) the entity will comply with the conditions attached to them; and
(b) the grants will be received.
An entity shall recognise grants either based on the performance model
or the accrual model. This policy choice shall be applied on a
class-by-class basis.
(g) Tax
Current tax represents the amount of tax payable or receivable in
respect of the taxable profit for the current or past reporting periods.
It is measured at the amount expected to be paid or recovered using the
tax rates and laws that have been enacted or substantively enacted by
the balance sheet date.
(h) Turnover and other income
Turnover is measured at the fair value of the consideration received or
receivable net of VAT and trade discounts. The policy adopted for the
recognition of turnover is as follows --
Sale of services
Turnover is from the sale of opportunities to the pharmaceutical
industry and the UK Primary Care sector and is recognised over the term
of service contract and is apportioned on a time basis representing the
delivery of the service.
(i) Foreign currency
Foreign currency transactions are initially recognised by applying to
the foreign currency amount the exchange rate between the functional
currency and the foreign currency at the date of the transaction.
Monetary assets and liabilities denominated in a foreign currency at the
balance sheet date are translated using the closing rate.
(j) Employee benefits
When employees have rendered service to the company, short term employee
benefits to which the employees are entitled are recognised at the
undiscounted amount expected to be paid in exchange for that service.
The company operates a defined contribution plan for the benefit of its
employees. Contributions are expensed as they become payable.
(k) Leases
Rentals payable and receivable under operating leases are charged to the
profit and loss account on a straight line basis over the period of the
lease
(l) Share option reserve policy
The company recognised as an expense, the fair value of share options
granted over their vesting period. The fair value is calculated by
applying an option pricing model
Factors affecting the model are: expected volatility, exercise price,
weighted average share price, option life and risk free interest rate.
In respect of options granted by the company --
- use of the Black Scholes calculator as the option pricing model,
- calculated volatility using the Adam Greene Volatility method using
an average share price of the previous 104 weeks
- the directors base their calculations on an option life of 2 years
(m) Key judgements and key accounting estimates
There are no Key judgements or Key Accounting estimates with a material
effect on the carrying value of assets and liabilities.
The Group has used a level of judgement around key assumptions on the
technical feasibilty of products under development, the consideration of
the estimated useful lives of these products and a degree of estimate in
respect of the capitalised attributable cost.
(n) Reduced disclosure
DXS International PLC meets the definition of a qualifying company under
FRS 102 paragraph 1.12(b) and has therefore taken advantage of the
disclosure exemption in relation to the parent cash flow statement.
(END) Dow Jones Newswires
July 20, 2020 02:00 ET (06:00 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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