RNS Number:1133J
Clinical Computing PLC
29 August 2001
CLINICAL COMPUTING PLC
2001 INTERIM RESULTS
Clinical Computing PLC ("the Group"), the international developer of clinical
information systems for the healthcare market, announces Interim Results for
the six-month period ended 30 June 2001. The Group trades through two
operating subsidiaries: Clinical Computing UK, Ltd. in the United Kingdom and
Europe and Clinical Computing, Inc. in the United States.
In his statement to shareholders, Chairman Michael Gordon said:
"The six months to 30 June 2001 has been a period of considerable investment,
preparing the Group for future growth and increasing our marketing presence in
both the UK and US. With Clinical VisionTM sites now live in the US and UK,
the Group is focused on signing orders in the second half of the year and
rebuilding our backlog of business."
Financial Overview
* Turnover decreased marginally to #1.2m (2000: #1.3m)
* Operating loss of #566,000 (2000: profit #84,000)
* Loss after tax (nil) of #498,000 (2000: profit #157,000)
* Loss per share (basic and diluted): 1.99p (2000: 0.6p earnings)
* Sales and marketing costs increased to #394,000 (2000: #220,000)
* Increased investment in Clinical Vision Framework; development of new
applications
* Cash position remains strong at #2.2m
Business Review
* First Clinical Vision contract gain in US at Independent Dialysis
Facility in Baltimore: now live
* Negotiations nearing completion for supply of transplant application,
demonstrating capabilities to expand into new markets
* Clinical Vision framework positions the Group to benefit significantly
from the anticipated future growth of the e-healthcare market
Outlook and Prospects
In his statement to shareholders, Chief Executive Jack Richardson, commenting
on the second half outlook, said:
"The Group is now better positioned with product and people to take advantage
of our chosen markets.
Our cash position provides us the means to continue our current course of
investing in Clinical Vision as well as expanding our marketing presence in
both the UK and US.
The Group is confident that expanding our presence into wider markets through
new applications will enable the Group to better exploit opportunities for
future growth."
Contacts:
Jack Richardson , Chief Executive +1 513 651 3803
Joseph Marlovits, Finance Director 020 8380 4400
Peter Binns, Binns & Co PR Ltd 020 7786 9600
Chairman's and Chief Executive's Statement
Introduction
The six months to 30 June 2001 has been a period of considerable investment,
preparing the Group for future growth and increasing our marketing presence in
both the UK and US. During the period, the Group has focused on securing US
reference sites for Dialysis and Transplant, and building our pipeline of
order opportunities. In June, the Group announced the first US contract for
Clinical VisionTM. With Clinical Vision sites now live in the US and UK, the
Group is focused on signing orders in the second half of the year and
rebuilding our backlog of business.
Results
During the period under review, turnover decreased 12% to #1,176,000 (2000: #
1,331,000). The majority of the decrease is attributable to a reduction in
maintenance revenue on legacy systems. The Group produced an operating loss
of #566,000, which together with net interest income of #68,000 resulted in a
loss on ordinary activities of #498,000. Cost of sales has increased 14% due
to increased investment in the Clinical Vision framework and development of
new applications. Distribution costs have increased 79% as a result of the
Group rebuilding its sales and marketing presence in the US and the UK. The
combined cost increases for product development and expansion of sales
activities represent 50% of the operating loss incurred in the first half of
2001. Other operating income, which reflects exchange gains or losses on
certain monetary assets of the Group denominated in foreign currencies, has
decreased 69% when compared to the prior year.
Business Overview
In June, the Group announced its first US contract for Clinical Vision with
Independent Dialysis Facilities in Baltimore, Maryland USA. Independent
Dialysis Facilities is a 10-facility dialysis chain, and will collaborate with
us to produce a case study for marketing Clinical Vision. The site is now
live and serves as our premier Clinical Vision reference site in the US.
The Group is further pleased to announce that we are in final negotiations to
supply a transplant application that begins Clinical Vision's expansion into
broader markets. The application will provide for solid organ transplants,
and will include modules for heart, lung, liver, kidney, small bowel and
pancreas transplantation. The first beta module is scheduled for delivery by
31 December 2001, with subsequent deliveries of modules to follow in 2002.
Clinical Vision is the result of a four-year development effort and like its
predecessor, PROTONTM, has been developed to deliver future-proofed
technologies that are ahead of its competition. It allows for scalability
across large organizations such as the largest dialysis chain customers, and
major hospitals running multiple Clinical Vision applications.
Healthcare providers such as hospitals, medical centres, and laboratories, are
moving to Internet-delivered systems. The conversion of the healthcare
business and patient-centered processes to electronic record keeping, known as
e-healthcare, is an ever-expanding industry. Clinical Vision has been
developed to meet the needs of e-healthcare and our investment in the Clinical
Vision framework positions us to share in this market.
Outlook
The Group expects turnover to remain stable through the rest of year. We
anticipate that less than 50% of new orders signed in the second half will
translate to turnover before year-end due to the nature of our customer base
and the Group's revenue recognition policy. However, the order backlog built
during the second half of the year will become the building block for 2002.
The Group will continue forward with the investment in new applications for
Clinical Vision and with the expansion of our UK and US marketing efforts.
The Group continues to maintain a strong cash position and ended the period
with cash and investments of #2,161,000. During the period #455,000 of cash
was used to support operations, and a similar cash requirement is expected for
the second half of the year. Our cash position provides us the means to
continue investing in Clinical Vision and expanding our marketing presence.
With Clinical Vision sites now live in both the US and the UK, the Group
believes that investment in our marketing presence will allow us to maximise
potential orders of this product. The Group is confident that expanding into
broader markets with new applications will lead to future growth.
Michael Gordon Jack Richardson
Chairman Chief Executive
29 August 2001
Unaudited Consolidated Profit and Loss Account
Six Months Ended 30 June 2001
Six Six Year
Months Months ended
ended ended 31
30 June 30 June December
2001 2000 2000
#'000 #'000 #'000
Turnover 1,176 1,331 2,259
Cost of sales
Research & development 565 507 1,014
Other 330 279 585
---------- --------- ----------
(895) (786) (1,599)
---------- --------- ----------
Gross profit 281 545 660
Distribution costs 394 220 476
Administrative expenses 516 444 924
Other operating income (63) (203) (253)
---------- ---------- ---------
(847) (461) (1,147)
---------- ---------- ---------
Operating (loss) profit (566) 84 (487)
Net interest receivable 68 73 158
---------- ---------- ---------
(Loss) profit on ordinary activities before and
after taxation (498) 157 (329)
---------- ---------- ---------
Basic and diluted (loss) earnings per share
(Note 3) (1.99p) 0.6p (1.3p)
---------- ---------- ---------
All results are derived from continuing operations.
Unaudited Consolidated Statement of Total Recognised Gains and Losses
Six Months Ended 30 June 2001
Six Months Six Months Year
ended ended ended
30 June 30 June 31 December
2001 2000 2000
#'000 #'000 #'000
(Loss) profit for the period (498) 157 (329)
Loss on foreign currency translation (54) (33) (49)
---------- ---------- ----------
Total recognised gains and losses (552) 124 (378)
---------- ---------- ----------
Unaudited Consolidated Balance Sheet
30 June 2001
30 June 30 June 31 December
2001 2000 2000
#'000 #'000 #'000
Tangible fixed assets 329 313 338
---------- ---------- ----------
Current assets
Stocks 41 41 41
Debtors 506 727 568
Cash at bank and in hand
(including short term deposits) 1,657 2,957 2,600
Current asset investment 504 - -
---------- ---------- ----------
2,708 3,725 3,209
---------- ---------- ----------
Creditors: Amounts falling due within one year
Deferred income 743 727 645
Other 247 216 303
---------- ---------- ----------
990 943 948
---------- ---------- ----------
Net current assets 1,718 2,782 2,261
---------- ---------- ----------
Net assets 2,047 3,095 2,599
---------- ---------- ----------
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 (3,455) (2,407) (2,903)
---------- ---------- ----------
Shareholders' funds - all equity 2,047 3,095 2,599
---------- ---------- ----------
Unaudited Consolidated Cash Flow Statement
Six months Ended 30 June 2001
Six Six Year
Months Months ended
ended ended 31
30 June 30 June December
2001 2000 2000
#'000 #'000 #'000
Net cash (outflow) inflow from operating
activities (Note 4) (455) 48 (147)
Returns on investments 68 73 158
Capital expenditure (59) (31) (133)
--------- ---------- ---------
9 42 25
--------- ---------- ---------
Cash (outflow) inflow before management of liquid
resources (446) 90 (122)
Management of liquid resources 54 (345) 447
--------- --------- ----------
(Decrease) increase in cash (392) (255) 325
--------- --------- ----------
Reconciliation of net cash flow to movement in net funds
(Decrease) increase in cash in the period
(including overdrafts) (392) (255) 335
--------- --------- ---------
Cash (outflow) inflow from movement in liquid
resources (54) 345 (447)
--------- --------- ---------
Change in net funds resulting from cash flows (446) 90 (112)
Exchange movement 29 85 (72)
Other non-cash changes (20) - -
---------- --------- ---------
Movement of net funds in the period (437) 175 (184)
Net funds at beginning of period 2,598 2,782 2,782
---------- --------- ---------
Net funds at end of period 2,161 2,957 2,598
---------- --------- ---------
Notes:
1. The interim results for the six months ended 30 June 2001, set out here,
have been complied in accordance with applicable accounting standards and
on a basis consistent with the most recent set of annual financial
statements. 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 financial
statements within the meaning of Section 240 of the Companies Act 1985.
Group statutory financial statements for the year ended 31 December 2000,
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 2001, six months ended 30 June 2000, and for the year ended
31 December 2000.
Diluted 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 2001, 25,426,926 for the six months ended 30 June 2000, and
25,321,638 for the year ended 31 December 2000.
4. Reconciliation of operating (loss) profit to operating cash flows
30 June 30 June 31
December
2001 2000 2000
#'000 #'000 #'000
Operating (loss) profit (566) 84 (486)
Depreciation charge 79 75 154
Loss on disposal of fixed assets - - 1
Decrease in debtors 78 48 212
Decrease in creditors (70) (159) (33)
Loss on current asset investment 24 - -
Share options issued at a discount - - 5
---------- ---------- ----------
Net cash (outflow) inflow from operating
activities (455) 48 (147)
---------- ---------- ----------
5. Analysis and reconciliation of net funds
Other
31 December Cash Exchange non-cash 30 June
2000 flow movement changes 2001
#'000 #'000 #'000 #'000 #'000
Cash at bank and in 465 (394) 6 - 77
hand
Overdraft (2) 2 - - -
---------- --------- ---------- ---------- ----------
463 (392) 6 - 77
Short term deposits 2,135 (575) 20 - 1,580
Current asset - 521 3 (20) 504
investment
---------- --------- ---------- ---------- ----------
Net funds 2,598 (466) 29 (20) 2,161
---------- --------- ---------- ---------- ----------
6. 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 OHF.
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 2001, which comprises the profit and loss
account, the statement of total recognised gains and losses, the balance
sheet, the 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.
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 which require that the
accounting policies and presentation applied to the interim figures should be
consistent with those applied in preparing the preceding annual accounts
except where any changes, and the reasons for them, are disclosed.
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 accounting policies
and presentation 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 performed in accordance with United Kingdom Auditing Standards and
therefore provides a lower level of assurance than an audit. 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 2001.
Arthur Andersen
Chartered Accountants
Betjeman House
104 Hills Road
Cambridge CB2 1LH
29 August 2001
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