RNS Number : 2558E
Clinical Computing PLC
25 September 2008
CLINICAL COMPUTING PLC
2008 INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2008
Clinical Computing Plc ("the Company"), the international developer of clinical information systems for the healthcare market and
developer of programme management software, announces its Interim Results for the six months ended 30 June 2008. The Group trades through
four operating subsidiaries: Clinical Computing UK, Ltd. in the United Kingdom and Europe, Clinical Computing, Inc. in the United States,
Clinical Computing Pty Limited in Australia and Hydra Management Limited ("HML") in the United Kingdom.
Business Overview
* Revenue increased 37 per cent to �1.406 million (2007: �1.025 million), this is mainly due to revenue relating to HML, which was
acquired on 22 February 2008.
* Recurring maintenance revenues increased by 23 per cent to �0.697 million (2007:�0.567 million) due to the acquisition of HML.
* First Clinical Vision order secured from a leading Pan-European renal care service provider.
* New contracts from the NHS market have been slower than previously anticipated.
* During the period the Group was appointed as a supplier to the NHS Framework Contract - ASCC (Additional Supply Capability and
Capacity Frameworks). The ASCC Framework will provide NHS organisations with a more efficient route to procure IT systems and services from
suppliers who have demonstrated their experience in the health sector.
* The cost base increased principally due to the addition of HML (HML operating costs �0.352 million).
* Loss from operations was �0.411 million (2007: �0.302 million).
* The Company issued 17,440,000 shares at 3.25p raising �545,000 before expenses to provide general working capital to the Group.
* Clinical Vision Web product release scheduled by the end of the fourth quarter of 2008.
Outlook
Chairman Howard Kitchner, commenting on the Group outlook, said:
"Whilst good progress has made been in a number of areas including product development and establishing new sales channels, the NHS
market continues to evolve slowly and causes uncertainty in predicting the timing of sales. However, the Group continues to pursue business
in the UK and internationally while focusing on moving towards profitability in 2009."
Contacts:
Joe Marlovits, Chief Executive 020 8747 8744
Clinical Computing
www.ccl.com
James Caithie/Simon Sacerdoti 020 7492 4777
Dowgate Capital Advisers
Limited - Nominated Adviser
Chairman's Statement
Introduction
We report our interim results for the six month period to 30th June 2008.
Clinical business
During the period five Clinical Vision 4 customers achieved "go live " status including a London NHS Trust which we believe will provide
us with a further UK based reference site to secure future NHS business. Additionally, during the period the Group was appointed as a
supplier to the NHS Framework Contract - ASCC (Additional Supply Capability and Capacity Frameworks). The ASCC Framework will provide NHS
organisations with a more efficient route to procure IT systems and services from suppliers who have demonstrated their experience in the
health sector. The Group achieved this status directly (without being fronted by a larger partner) and believes this is a consequence of its
strategy and product investment made in recent years. To date, direct revenue from the NHS market has been less than previously anticipated
in our plans.
However, we have further strengthened our mid-term revenue opportunities for Clinical Vision with the addition of a Pan-European renal
care service provider to our customer list and are anticipating revenues from its UK operations in the second half of 2008 and additional
revenues into 2009.
With respect to product development, we are nearing completion of our first full release of our web based Clinical Vision solution and
are anticipating a market release in the fourth quarter of 2008.
Acquisition of Hydra Management Limited ("HML")
On 22 February 2008 we completed the HML acquisition which has resulted in the Group adding approximately 50 more customers under annual
maintenance contracts. Since acquisition, HML has generated revenue of �0.441 million and has traded at an operating profit of approximately
�89,000. On the acquisition date, �16,000 was paid as cash consideration and an additional deferred payment will be due within seven years
based upon operating performance or sale of the business.
The acquisition resulted in goodwill arising of �0.864 million, of which approximately �0.624 million relates to deferred consideration.
Goodwill has been based on estimates and due to the uncertainty caused by the short length of time we have been managing the business, may
be subject to revisions of our accounting estimates in the full year accounts. A more detailed review will take place prior to the
publication of our 2008 Annual Report when we would have had approximately 12 months ownership of the HML business.
Financial overview
Revenue increased 37 per cent to �1.406 million (2007:�1.025 million) due to revenue of �0.441 million from HML .Revenue from the
clinical software business was lower in this period compared to the same period in 2007 due to reduced revenues from the UK market.
Recurring maintenance revenues accounted for 50% (2007:55%) of our total revenues and increased 23 per cent to �0.697 million (2007:�0.567
million) due to the HML acquisition.
The Group's cost base increased to �1.817 million (2007: �1.328 million), principally due to the addition of HML operating costs of
�0.352 million .
Operations generated a loss of �0.411 million (2007: �0.302 million) and the loss for the period was �0.42 million or 0.4p per share
(2007: �0.268 million or 0.8p per share)
Intangible assets increased �0.957 million from 31 December 2007 to �1.155 million, primarily due to goodwill arising on the HML
acquisition of �0.864 million and �0.093 million net increase from capitalised software.
The Group maintains two debt facilities which in total provide funding for working capital of �1.1 million, of which the �0.365 million
was drawn at 30th June 2008.
The Group is now carrying a provision of �0.625 million related to the estimated deferred consideration arising on the acquisition of
HML.
On 29 February 2008 the Company issued 17,440,000 shares at 3.25p raising �0.545 million (gross) before expenses to provide general
working capital to the Group.
Outlook
Whilst good progress has made been in a number of areas including product development and establishing new sales channels, the NHS
market continues to evolve slowly and causes uncertainty in predicting the timing of sales. However, the Group continues pursue business in
the UK and internationally while focusing on moving towards profitability in 2009.
Howard Kitchner
Chairman
25 September 2008
Unaudited condensed consolidated income statement
Six months ended 30 June 2008
Audited
Six months Six months year
ended ended ended
30 June 2008 30 June 2007 31 December 2007
� � �
Continuing operations
- Acquisitions 440,599 - -
- Continuing 965,771 1,025,370 1,875,083
----------------- ---------------- ---------------
Revenue (Note 3) 1,406,370 1,025,370 1,875,083
Cost of sales (440,304) (359,280) (741,453)
-------------- -------------- -----------------
Gross profit 966,066 666,090 1,133,630
Distribution costs (185,614) (116,611) (245,496)
Administrative expenses
Research & development (668,410) (475,102) (890,434)
Other (522,833) (376,850) (839,729)
Total administrative expenses (1,191,243) (851,952) (1,730,163)
-------------- ------------- -----------------
Profit/(Loss) from operations
- Acquisitions 88,896 - -
- Continuing (499,687) (302,473) (842,029)
------------- --------------- -------------
Loss from operations (410,791) (302,473) (842,029)
Finance income 4,214 1,629 6,220
Finance costs (13,106) (35,617) (77,544)
-------------- ------------ -----------------
Loss before tax (419,683) (336,461) (913,353)
Income tax credit (Note 4) - 68,517 68,517
-------------- ------------ -----------------
Loss for the period (419,683) (267,944) (844,836)
-------------- ------------ ----------------
Basic and diluted loss per (0.4p) (0.8p) (2.0p)
share (Note 5) -------------- ------------ ----------------
Unaudited condensed consolidated statement of recognised income and expense
Six months ended 30 June 2008
Audited
Six months Six months year
Ended ended ended
30 June 2008 30 June 2007 31 December 2007
� � �
Exchange differences on
translation of foreign (79) 9,827 11,063
operations
Loss for the period (419,683) (267,944) (844,836)
------------- ------------- ----------------
Total recognised expense for (419,762) (258,117) (883,773)
the period
------------- ------------- ----------------
Unaudited condensed consolidated balance sheet
30 June 2008
Audited
30 June 30 June 31 December
2008 2007 2007
� � �
Non-current assets
Intangibles (Note 8) 1,155,600 59,834 198,105
Property, plant and equipment 151,546 139,770 137,871
--------------- --------------- ------------
1,307,146 199,604 335,976
Current assets
Trade and other receivables 643,723 405,036 361,253
Cash and cash equivalents 242,723 195,883 164,365
--------------- --------------- ------------
886,446 600,919 525,618
--------------- --------------- ------------
Total assets 2,193,592 800,523 861,594
--------------- --------------- ------------
Current liabilities
Trade and other payables (1,371,520) (949,528) (911,100)
Bank loans (365,196) (1,334,185) (221,680)
--------------- --------------- -------------
(1,736,716) (2,283,713) (1,132,780)
--------------- --------------- ---------------
Long term liabilities - (624,531) - -
provisions (Note 8)
--------------- --------------- ---------------
Net liabilities (167,655) (1,483,190) (271,186)
--------------- --------------- -------------
Equity
Share capital 2,433,251 1,655,518 2,258,851
Share premium account 7,661,920 6,149,063 7,326,133
Share option reserve 84,481 64,118 71,375
Translation reserve 158,764 157,607 158,843
Retained earnings (10,506,071) (9,509,496) (10,086,388)
--------------- --------------- -----------------
Shareholders' funds (Note 6) (167,655) (1,483,190) (271,186)
-------------- -------------- ------------
Unaudited condensed consolidated cash flow statement
Six months ended 30 June 2008
Audited
Six months Six months year
Ended ended ended
30 June 30 June 31 December
2008 2007 2007
� � �
Net cash from operating (393,052) (228,554) (768,868)
activities (Note 7)
Investing activities
Interest received 4,214 1,629 6,220
Acquisition of Hydra (56,750) - -
Expenditure on product (100,908) (33,075) (179,151)
development
Proceeds from sale of fixed 566 - -
assets
Purchases of property, plant (28,389) (24,601) (40,643)
and equipment
--------------- --------------- --------------
Net cash used in investing (181,267) (56,047) (213,574)
activities
--------------- --------------- --------------
Financing activities
Proceeds from equity issue 545,000 465,032 1,810,000
Costs of equity issue (34,813) - (29,597)
Increase / (decrease) in bank 143,516 - (647,473)
loan
--------------- --------------- ---------------
Net cash from financing 653,703 465,032 1,132,930
activities
--------------- --------------- ---------------
Net increase in cash and cash 79,384 180,431 150,488
equivalents
Cash and cash equivalents at
beginning of period 164,365 14,418 14,418
Effect of foreign exchange (1,026) 1,034 (541)
rate changes
--------------- --------------- ----------------
Cash and cash equivalents at 242,723 195,883 164,365
end of period
--------------- --------------- ---------------
NOTES:
1. Basis of preparation
The accounting policies applied in the un-audited condensed interim financial statements have been prepared in conformity with
recognition and measurement principles required by International Financial Reporting Standards ("IFRS") in issue and as adopted by the
European Union and are effective or are expected to be adopted and effective at 31 December 2008. The un-audited financial statements have
been, prepared using accounting policies consistent in all material respects with those applied in the Groups Annual Report for the year
ended 31 December 2007 and consistent with those that will be applied during the year ended 31 December 2008. The financial information
provided herein should be read in connection with the Group's audited Consolidated Financial Statements and the notes thereto for the year
ended 31 December 2007.
The Group 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. 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 Group 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 2007, 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
Unaudited six months Unaudited six months Audited
year
ended ended ended
30 June 30 June 31 December
2008 2007 2007
� � �
Revenue by segment
UK 773,853 414,947 641,351
USA 616,839 596,713 1,182,404
Australia 15,678 13,710 51,328
--------------- --------------- ----------------
1,406,370 1,025,370 1,875,083
--------------- ---------------- ----------------
3. Revenue
Unaudited six months Unaudited six months Audited
year
ended ended ended
30 June 30 June 31 December
2008 2007 2007
� � �
Revenue by type
Software licences 445,313 404,270 613,263
Services and other 263,783 54,324 1,110,675
revenue
Maintenance 697,274 566,776 151,145
------------- ------------- --------------
1,406,370 1,025,370 1,875,083
------------- ------------- --------------
4. Tax
The tax credit of �68,517 for the half year ended 30 June 2007 and year ended 31 December 2007 relates to a cash settlement of research
and development credits claimed for work performed in 2006. Research and development tax credits settled in cash are accounted for when
received from the applicable tax authority. The company has claimed for a research and development tax credit for work performed in 2007 and
is anticipating that this claim will be settled and accounted for in the second half of 2008.
5. Loss per share
The calculation of the basic and diluted loss per share is based on the following data:
Unaudited six months Unaudited six months Audited
year
ended ended ended
30 June 30 June 31 December
2008 2007 2007
� � �
Loss for the (419,683) (267,944) (844,836)
purposes of basic
and diluted loss
--------------- --------------- -----------------
Number Number Number
Weighted average
number of ordinary
shares
for the purposes of
basic and diluted 105,996,661 33,110,361 42,729,082
loss per share
--------------- --------------- ----------------
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. Unaudited Statement of changes in equity
Share
Share Share Option Translation Accumulated
capital premium Reserve reserve losses Total
� � � � � �
At 31 December 2007 2,258,851 7,326,133 71,375 158,843 (10,086,388) (271,186)
Shares issued 174,400 335,787 - - - 510,187
Share options - - 13,106 - - 13,106
Translation of foreign - - - - - -
operations - - - -
Loss for the period - - - (79) (419,683) (419,762)
------------- ------------ ----------- ----------- -------------- ---------------
At 30 June 2008 2,433,251 7,661,920 84,481 158,764 (10,506,071) (167,655)
------------- ------------ ---------- ----------- -------------- ---------------
7. Reconciliation of operating loss to operating cash flows
Unaudited six months Unaudited six months Audited
year
ended ended ended
30 June 30 June 31 December
2008 2007 2007
� � �
Loss from operations (410,791) (302,473) (842,029)
Adjustments for:
Depreciation of property, 37,552 30,211 58,909
plant and equipment
Share option charge 13,106 5,542 12,799
Amortisation of capitalised 7,804 2,601 10,406
R&D
-------------- ---------------- ----------------
Operating cash flows before (352,329) (264,119) (759,915)
movements in working capital
Increase in receivables (279,886) (52,068) (10,783)
Increase in payables 252,269 54,733 10,857
-------------- ---------------- -----------------
Cash used by operations (379,946) (261,454) (759,841)
Taxes received - 68,517 68,517
Interest paid (13,106) (35,617) (77,544)
--------------- ---------------- -----------------
Net cash outflow from (393,052) (288,554) (768,868)
operating activities
8. Acquisition of business undertaking
On 22 February 2008 the Group completed the acquisition of Hydra Management Limited. The goodwill arising from the acquisition is set
out below. Goodwill has been based on estimates and due to the uncertainty caused by the short length of time we have been managing the
business, may be subject to change. A more detailed review will take place prior to the publication of our 2008 Annual Report when we would
have had approximately 12 months ownership of the business and more information to rely on.
Fair value
�
Net assets acquired
IPR, Property, plant and equipment 76,000
Liabilities (259,110)
----------------
Fair Value of Net Assets (183,110)
----------------
Consideration
Cash consideration 16,000
Transaction expenses 40,750
Deferred consideration 624,531
--------------
Total consideration 681,281
--------------
Goodwill 864,391
--------------
The Cash Flows that resulted from the acquisition are set out below:
�
Net cash from operating activities 192,053
Net cash used in investing activities (59,213)
Net increase from financing activities 37,468
----------------
Cash and cash equivalents at end of period 170,308
----------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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