RNS Number:4782T
Clinical Computing PLC
25 March 2002
For Immediate Release 25 March 2002
CLINICAL COMPUTING PLC
2001 PRELIMINARY RESULTS
Clinical Computing PLC ("the Group"), the international developer of clinical
information systems for the healthcare market, announces Preliminary Results for
the year ended 31 December 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.
Financial Overview
• Turnover decreased marginally to £2.18m (2000: £2.26m)
• Software maintenance and support contracts provided 62% of Group turnover
(2000: 65%)
• Operating loss of £1.47m (2000: loss £486,000)
• Loss after tax (nil) of £1.37m (2000: loss £329,000)
• Loss per share (basic and diluted): 5.5p (2000: loss 1.3p)
• Sales and marketing costs increased to £748,000 (2000: £475,000)
• Research and development costs increased to £1.08m (2000: £1.01m)
• Cash position remains strong at £1.58m
• 81% of turnover derived from the US (2000: 77%)
Business Review
• Three Clinical Vision reference sites installed
• 5 additional Clinical Vision product contract gains in Q4 with software/
service value of £515k to be recognised in 2002 figures
• Licensing arrangement with the University Hospital of Cincinnati to
deliver four transplant applications, including modules for liver, kidney,
heart and pancreas
• The Group generated 95% of its turnover from its legacy products (PROTON,
di-PROTON and RENLStar), the remaining 5% was derived from Clinical Vision
• Development costs of Clinical Vision expected to wind down in 2002
• Board considers Group now has the capacity to facilitate growth without
significant additions to costs of sales in 2002.
Outlook and Prospects
In his statement, Chairman Michael Gordon, commenting on the Group outlook,
said:
"Group strategy remains clear: to continue to deliver leading clinical solutions
in a growing number of specialities and on a more global basis. We believe the
architecture of Clinical Vision, and customer relationships such as we are
building with the Health Alliance, will make the strategy successful.
We enter 2002 with a stable customer base for our legacy products and an order
book of Clinical Vision contracts worth in excess of £750,000 at the end of
2001. We believe our contract gains in the US are creating market awareness for
our new technology. We expect that European orders should start to filter in
during the second half of 2002."
Contacts:
Jack Richardson , Chief Executive +1 513 651 3803
Joe Marlovits, Finance Director 020 8380 4400
Peter Binns/Paul McManus Binns & Co PR Ltd 020 7786 9600
Chairman's Statement
Introduction
The Group's focus has continued to be the Clinical Vision product, which will
provide a solution for multiple clinical departments, and further extend our
established presence in both renal medicine and transplant markets.
We are pleased to report we have installed three Clinical Vision reference sites
and are beginning to see our sales and marketing programmes pay off. In the
fourth quarter of 2001, we were awarded five additional Clinical Vision
contracts, with a software and service value of £515,000, all of which we will
recognise in the Group's accounts for the current financial year ending 31
December 2002.
Earlier in the year we entered into a licensing arrangement with The University
Hospital of Cincinnati to deliver four transplant applications, including
modules for liver, kidney, heart and pancreas. The University Hospital is part
of the Health Alliance, which comprises five hospitals all located in the
greater Cincinnati area. This network of hospitals will soon serve as strategic
sites for our US sales operations.
The Group continues to sell and maintain its legacy products, and initial
feedback from our reference sites and from the market indicates that Clinical
Vision is well positioned for both our current markets and broader clinical
markets.
Trading Results
Trading results for the year reflect our investment in resources to develop,
market and deliver Clinical Vision. Total costs increased 23 per cent compared
to the previous year to £3.69m (2000: £3.0m), while turnover of £2.18m (2000:
£2.26m) declined by four per cent. For the year ended 31 December 2001, the
Group reports a loss of £1.37m or 5.5p per share (2000: loss £329,000 and 1.3p
per share, respectively).
The Group's cash position at the end of the year was £1.58m (2000: £2.6m). Net
outflows during the year were £1.02m (2000: £180,000). The increase in cash
outflow compared to the previous financial year is due to the investment in the
product development and business infrastructure needed for future Clinical
Vision sales.
Business Overview
As in the previous year the Group's turnover was principally derived from its
core market of renal medicine. The Group generated 95 per cent of its turnover
from its legacy products: PROTON, di-PROTON and RENLStar. The remaining five
percent was derived from Clinical Vision customers, all of whom were acquired in
2001.
The Group continues to serve primarily two geographic markets: the UK and the
US. 81 percent of turnover was derived from customers in the US (2000: 77
percent).
Our core development effort remains in the UK whilst our main sales, marketing
and customer management functions are based in the US. During the year we made
a number of changes to personnel that will better equip us to sell and support
Clinical Vision. Over the course of the year our average headcount increased by
five full time staff to a total of 44 people.
Research and Development
Our legacy products have had a very long and successful life. Clinical Vision
brings our product range into line with today's technologies. Its
component-based, dynamic framework architecture is highly adaptable to evolving
customer practice, and for generating new applications. It is not tied to any
proprietary platform, and thus establishes Clinical Vision as a long-term market
solution. The applications we are building in Clinical Vision take advantage of
our legacy knowledge to meet the constantly growing needs of our customers.
We are several months behind the initial development targets we established at
the end of 2000. This has impacted the results for 2001 and may have an impact
on 2002 results. However we remain focused on completing this development
effort in 2002 and our recent experience indicates that Clinical Vision will be
successful.
Strategy and Prospects
Group strategy remains clear: to continue to deliver leading clinical solutions
in a growing number of specialities and on a more global basis. We believe the
architecture of Clinical Vision, and customer relationships such as we are
building with the Health Alliance, will make the strategy successful.
We enter 2002 with a stable customer base for our legacy products and an order
book of Clinical Vision contracts worth in excess of £750,000 at the end of
2001. We believe our contract gains in the US are creating market awareness for
our new technology. We expect that European orders should start to filter in
during the second half of 2002.
Our plan is to keep costs contained having regard to our current cash resources
and likely revenue streams until the main Clinical Vision development ends in
the second half of 2002.
Shareholder Value
The Board is cognisant of the significant investment in time and money committed
to developing Clinical Vision. The development of an advanced software product
is a high-risk exercise. It should have a correspondingly high rate of return.
We believe that by undertaking this development effort the best value will be
provided to our shareholders over the medium to long term.
We wish to acknowledge the hard work and commitment of the Group's employees in
support of our strategy.
Michael Gordon
Chairman
Financial Director's Statement
Group Performance
The Group's operations produced a loss of £1.47m (2000: loss £486,000) on
turnover of £2.18m (2000: £2.26m). Group turnover for the year of £2.18m was
down four per cent, compared with turnover in the previous year. Turnover from
operations in the UK fell 21 per cent while in the US turnover has increased two
per cent. Software maintenance and support contracts provided 62 per cent
(2000: 65 per cent) of the Group's total turnover. Turnover from these
maintenance and support contracts decreased seven per cent compared with the
previous year, while the Group showed small turnover gains in the software
systems and related services revenue when compared to the previous year.
Total costs for the Group were £3.69m (2000: £3.0m), an increase of 23 per cent.
Research and development costs were £1.08m for the year and have increased
£71,000 or seven per cent from 2000. For the second consecutive year the Group
has invested over £1 million in research and development and this continues to
be our largest expense. All costs associated with research and development are
written off to the profit and loss account as incurred. As our development of
Clinical Vision is expected to wind down in 2002 these costs as a percentage of
turnover and in absolute pounds are expected to be lower in 2002.
Other costs included under the caption Cost of Sales represent costs associated
with implementation and support services for our software products. Other costs
increased £239,000 or 41 per cent when compared to the previous year as we added
staff to support the installations of Clinical Vision. During 2001 we incurred
certain installation costs while the corresponding revenue will be recognised in
the Group's accounts for the year ending 31 December 2002.The Board considers
that the Group now has the capacity to facilitate growth without significant
additions to costs of sales in 2002.
Distribution costs, which primarily consist of sales and marketing costs, have
increased £273,000 or 57 per cent against the previous year. The results for
2001 show a full year of sales and marketing costs, whereas in the prior year
the Group did not begin rebuilding this function until the fourth quarter.
Administrative costs have increased £111,000 or 12 per cent when compared to the
previous year and the increase reflects certain one-off costs incurred in 2001.
Other operating income is derived from foreign currency transactions including
the movement of funds between sterling and the US dollar. The decrease of
£207,000 in other operating income for 2001 when compared to the prior year is
the result of a decrease in the overall movement of funds and less volatility in
exchange rate fluctuations between sterling and the US dollar.
After the addition of net interest income of £95,000 (2000: £158,000), the loss
on ordinary activities for the year was £1.37m (2000: loss £329,000). Loss per
share was 5.5p (2000: loss 1.3p).
Cash Flows
The Group started the year with total cash balances of £2.6m and ended with a
cash balance of £1.58m. The net cash outflow of £1.02m occurred rateably
throughout the year.
The Group has a cash balance at 31 December 2001 of £1.58m and contracts in hand
which we expect to realise cash of £450,000, in 2002. This known cash flow
together with our on-going maintenance and support agreements, which we believe
are a growing revenue source, will provide the Group with the operating cash
flow to continue with its current strategy of developing the Clinical Vision
product.
Foreign Currency and Interest Rates
The Group's practice is not to hedge against transactions that occur in the
functional currencies of its subsidiaries. These currencies are sterling and US
dollar and no sales or expenses of significance occurred in any other currency.
These accounts have been prepared using a year-end exchange rate of £1: $1.4515
(2000: $1.4938) and an average exchange rate for the year of £1: $1.4411 (2000:
$1.5136).
The Group did not incur any interest or finance charges during the year and
invests excess cash in short term time deposits in both the US and UK. The
Group does not hedge against any balance sheet currency translation risks.
Taxation
As in previous years both the UK and US operating companies retain substantial
tax losses for use against future years' trading profits.
Joe Marlovits
Financial Director
Clinical Computing Plc
Consolidated Profit and Loss Account
For the year ended 31 December 2001
2001 2000
£ £
Turnover 2,179,894 2,259,201
-------------- --------------
Cost of sales
Research and development (1,084,704) (1,013,777)
Other (824,161) (585,377)
-------------- --------------
(1,908,865) (1,599,154)
-------------- --------------
Gross profit 271,029 660,047
Distribution costs (including sales and
marketing) (748,223) (475,458)
Administrative expenses (1,033,100) (922,505)
Other operating income 44,882 251,427
-------------- --------------
(1,736,441) (1,146,536)
-------------- --------------
Operating loss (1,465,412) (486,489)
Interest receivable and other finance
charges (net) 95,478 157,816
-------------- --------------
Loss on ordinary activities before and
after taxation, being the retained loss for
the year (1,369,934) (328,673)
-------------- --------------
Basic and diluted loss per share (5.5p) (1.3p)
-------------- --------------
Clinical Computing Plc
Consolidated Statement of Total Recognised Gains and Losses
For the year ended 31 December 2001
2001 2000
£ £
Loss for the financial year (1,369,934) (328,673)
Loss on foreign currency translation (25,327) (48,833)
-------------- --------------
Total recognised gains and losses relating
to the year (1,395,261) (377,506)
-------------- --------------
Clinical Computing Plc
Consolidated Balance Sheet
31 December 2001
2001 2000
£ £
Fixed assets
Tangible assets 261,870 338,557
-------------- --------------
Current assets
Stocks 1,500 41,500
Debtors 405,454 567,633
Cash at bank and in hand (including short 1,576,952 2,599,647
term deposits)
-------------- --------------
1,983,906 3,208,780
-------------- --------------
Creditors: Amounts falling due within one
year
Deferred income (760,201) (644,796)
Other (276,135) (303,340)
-------------- --------------
(1,036,336) (948,136)
-------------- --------------
Net current assets 947,570 2,260,644
-------------- --------------
Net assets 1,209,440 2,599,201
-------------- --------------
Capital and reserves
Called-up share capital 1,254,016 1,254,016
Share premium account 4,248,388 4,248,388
Profit and loss account (4,292,964) (2,903,203)
-------------- --------------
Shareholders' funds - all equity 1,209,440 2,599,201
-------------- --------------
Clinical Computing Plc
Consolidated Cash Flow Statement
For the year ended 31 December 2001
2001 2000
£ £
Net cash outflow from operating
activities (1,068,560) (146,681)
Returns on investments and servicing of 95,478 157,816
finance
Capital expenditure (67,904) (132,911)
-------------- --------------
27,574 24,905
-------------- --------------
Cash outflow before management of liquid
resources and financing (1,040,986) (121,776)
Management of liquid resources 688,388 446,961
-------------- --------------
(Decrease) increase in cash in the year (352,598) 325,185
-------------- --------------
Clinical Computing Plc
Reconciliation of net cash flow to movement in net funds
For the year ended 31 December 2001
2001 2000
£ £
(Decrease) increase in cash in the period
(including overdrafts) (351,050) 335,252
-------------- --------------
Cash outflow from movement in liquid
resources (688,388) (446,961)
-------------- --------------
Change in net funds resulting from cash
flows (1,039,438) (111,709)
Exchange movement 18,291 (72,149)
-------------- --------------
Movement in net funds in year (1,021,147) (183,858)
Net funds at beginning of year 2,598,099 2,781,957
-------------- --------------
Net funds at end of year 1,576,952 2,598,099
-------------- --------------
Notes:
1. The financial information for the year ended 31 December 2001 is unaudited and does not
constitute statutory accounts. The auditors have not reported on the financial statements for
the year ended 31 December 2001, nor have any such financial statements been delivered to the
Registrar of Companies. The financial information for the year ended 31 December 2000 has
been extracted from the full report and accounts for that year, which have been filed with the
Registrar of Companies. The preliminary results have been prepared using accounting policies
consistent with those adopted in the statutory accounts for the year ended 31 December 2000.
2. Basic loss per share is based upon the loss attributable to shareholders of £1,369,934 (2000:
loss of £328,673) and weighted average number of shares in issue during the year of 25,080,310
(2000: 25,080,310).
Diluted loss per share is based upon the loss attributable to shareholders of £1,369,934
(2000: loss of £328,673) and weighted average number of shares in issue during the year of
25,087,568 (2000: 25,321,638), allowing for the exercise of all outstanding share options.
3. Reconciliation of operating loss to operating cash flows
2001 2000
£ £
Operating loss (1,465,412) (486,489)
Depreciation charge 149,515 153,960
Loss on disposal of fixed assets - 1,523
Decrease in debtors 167,684 211,548
Increase (decrease) in creditors 34,153 (32,723)
Write down on stock 40,000 -
Share options issued at a discount 5,500 5,500
-------------- --------------
Net cash outflow from operating
activities
(1,068,560) (146,681)
-------------- --------------
4. Analysis and reconciliation of net funds
1 January Cash Exchange 31 December
2001 flow movement 2001
£ £ £ £
Cash at bank and in hand 465,014 (352,598) 8,734 121,150
Overdraft (1,548) 1,548 - -
Short term deposits 2,134,633 (688,388) 9,557 1,455,802
-------------- -------------- -------------- --------------
Net funds 2,598,099 (1,039,438) 18,291 1,576,952
-------------- -------------- -------------- --------------
5. A copy of the full annual report and accounts will be sent to shareholders in March, and will
also be available from the company's registered office at 4 Thameside Centre, Kew Bridge Road,
Brentford, Middlesex, TW8 OHF.
This information is provided by RNS
The company news service from the London Stock Exchange
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