Interim Results
Clinical Computing PLC
02 September 2002
2nd September 2002
CLINICAL COMPUTING Plc
2002 INTERIM RESULTS
Clinical Computing Plc ('the Group'), the international developer of clinical
information systems for the healthcare market, announces Interim Results for the
six months ended 30 June 2002. 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.
Introduction
• Significant milestone achieved with development of latest generation of software, Clinical Vision 4.0
• Product required development beyond Group's original plan which impacted results
• Annual turnover again derived mainly from sale of software maintenance contracts and support services
associated with its legacy products (PROTON, di-PROTON and RENLStar).
Financial Overview
• Turnover down 6% to £1.10m (2001: £1.17m)
• Operating loss of £531,000 (2001:Loss £629,000)
• Loss after tax of £598,000 (2001: Loss £498,000)
• Loss per share (basic and diluted): 2.4p (2001:Loss 1.99p)
• Cost of sales increased 40%
• Distribution costs decreased 18%
• Admin costs, including development costs decreased by 22%
• Successful ongoing cost control measures at end of 2001
• Cash position £1.02m.
Business Review
• Clinical Vision 4.0 now being delivered to first two customers
• First users deploying the renal application; transplantation application deployed soon
• Targets include large dialysis chains and major hospitals
• Clinical Vision 4.0 to be the Group's cornerstone product
• Ability to now produce new Clinical Vision 4.0 applications in short timescale
• Localised versions for England, Scotland, Ireland and the USA
• Actively exploring markets in Australia/Asia.
Outlook
In his statement to shareholders, Jack Richardson, Chief Executive said:
'We enter the second half of 2002 with a market-leading product. We now have an
order backlog in excess of £900,000 for seven Clinical Vision customers two of
which are now being installed. Our sales and implementation teams are
established and our sales prospects continue to improve. We expect the value of
our software contracts to increase through 2002 as Clinical Vision 4.0 is
marketed to larger dialysis chains and to additional departments within
hospitals.
The Group has now moved Clinical Vision 4.0 from the development stage to the
product deployment stage and future results should reflect this important
transition.'
For further information, please contact:
Jack Richardson, Chief Executive, Clinical Computing Plc Tel: 001 513 651 3803
Joe Marlovits, Finance Director, Clinical Computing Plc Tel: 020 8380 4400
Paul McManus/Peter Binns, Binns & Co PR Ltd Tel: 020 7786 9600
Chief Executive's Statement
Introduction
The six months ended 30 June 2002 have seen the achievement of a significant
milestone in Clinical Computing's development of its latest generation of
software, Clinical Vision 4.0. This product has been designed to meet the
unique needs of healthcare professionals serving diverse clinical needs,
initially in the renal and transplantation markets, but providing a consistent
framework for further clinical information solutions.
I am pleased to report that Clinical Vision 4.0 has been delivered to our first
two customers and will be implemented over the coming months. The first users
of Clinical Vision 4.0 will be deploying the renal application; and we expect to
shortly deploy the liver transplantation application.
Clinical Vision is designed to provide scalability across large organisations
such as the largest dialysis chains, or major hospitals supporting many clinical
applications. I am confident that Clinical Vision 4.0 will be the cornerstone
that the Group builds upon to deliver its mission of providing leading
technology solutions to the clinical healthcare market.
Trading Results
Clinical Vision 4.0 required development beyond our original plan. This
extended development impacted our results for the six months ended 30 June 2002.
During this period, the Group's operations produced a loss of £531,000 (2001:
£629,000) on turnover of £1,102,000 (2001: £1,176,000).
Turnover when compared to the same period in the prior year decreased 6% and
continues to be derived mainly from the sale of software maintenance contracts
and support services associated with our legacy products (PROTON, di-PROTON and
RENLStar). Costs of sales increased 40% to £463,000 (2001: £330,000) and
represents costs of supporting and implementing current and future Clinical
Vision contracts, as well as the costs to support and maintain our other
software products.
Distribution costs have decreased 18% to £325,000 (2001: £394,000) and
administrative costs, which include development costs, have decreased 22% to
£845,000 (2001: £1,081,000). These cost decreases are the result of ongoing
cost control measures adopted at the end of 2001, along with the elimination of
certain one-time costs incurred during 2001.
After the addition of net interest payable of £67,000 (2001: £131,000
receivable), the loss on ordinary activities for the half-year was £598,000
(2001: loss £498,000). Net interest reflects both interest income and exchange
gains or losses on US dollar denominated short term funding to our US
operations. The weakening of the US dollar in the first half has resulted in
unrealised losses of £85,000 (2001: gains £63,000). Loss per share for the six
months ended 30 June 2002 was 2.4p (2001: loss 1.99p), and our cash balance on
30 June 2002 was £1,024,000 (31 December 2001: £1,577,000).
Business Overview
Our investment in Clinical Vision 4.0 has taken advantage of our accumulated
clinical knowledge to produce a product that is both highly adaptable for
specific clinical practices and also can rapidly generate new applications. We
are now near completion of the liver transplantation application, the first of
four transplantation modules planned to be available in 2002. Our experience
using Clinical Vision 4.0 to develop this application has confirmed that we have
the ability to produce new applications in a short timescale.
Clinical Vision has been designed to cater to unique geographic or local
preferences that exist in our target markets. We now have localised versions
for England, Scotland, Ireland, and the USA. This tailored approach to
providing specific market oriented solutions is one of the many new features
facilitated by Clinical Vision 4.0, which we believe will make us successful in
our chosen markets. We are now actively exploring the market for Clinical
Vision in Australia/Asia, and we will soon have a localised version for these
territories.
Outlook
We believe that in the United Kingdom, Australia/Asia and the United States the
replacement of clinical healthcare systems will continue to gain priority, while
over time health organisations will demand more advanced functionality from the
systems they acquire. We believe that Clinical Vision will meet the needs of
the organisations in our target markets.
We enter the second half of 2002 with a market-leading product. We have an
order backlog of seven Clinical Vision customers valued in excess of £900,000
two of which are now being installed. Our sales and implementation teams are
established and our sales prospects continue to improve. We expect the value of
our software contracts to increase through 2002 as Clinical Vision 4.0 is
marketed to larger dialysis chains and to additional departments within
hospitals.
The Group has now moved Clinical Vision 4.0 from the development stage to the
product deployment stage and future results should reflect this important
transition.
Jack Richardson
Chief Executive
30 August 2002
Unaudited Consolidated Profit and Loss Account
Six months ended 30 June 2002
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2002 2001 2001
(as restated) (as restated)
£'000 £'000 £'000
Turnover (Note 2) 1,102 1,176 2,180
---------- --------- ---------
Cost of sales (463) (330) (824)
---------- ---------- ----------
Gross profit 639 846 1,356
Distribution costs (325) (394) (748)
Administrative expenses
Development costs (496) (565) (1,085)
Other (349) (516) (1,033)
Total (845) (1,081) (2,118)
---------- ---------- ----------
Operating loss (531) (629) (1,510)
Net interest (payable) receivable (67) 131 140
---------- ---------- ----------
Loss on ordinary activities before and after taxation
and retained loss (598) (498) (1,370)
---------- ---------- ----------
Basic and diluted loss per share (Note 3) (2.4p) (1.99p) (5.5p)
----------- ---------- -----------
All amounts relate to continuing operations.
The comparative figures have been restated to reclassify exchange gains and
losses from administrative expenses to net interest payable and development
costs from cost of sales to administrative expenses as described in note 1.
Unaudited Consolidated Statement of Total Recognised Gains and Losses
Six months ended 30 June 2002
Six months Six months Year
ended ended ended
30 June 30 June 31 December 2001
2002 2001
£'000 £'000 £'000
Loss for the period (598) (498) (1,370)
Gain (loss) on foreign currency translation 77 (54) (25)
---------- ---------- ----------
Total recognised gains and losses (521) (552) (1,395)
---------- ---------- ----------
Unaudited Consolidated Balance Sheet
30 June 2002
30 June 30 June 31 December
2002 2001 2001
£'000 £'000 £'000
Tangible fixed assets 207 329 262
---------- ---------- ----------
Current assets
Stock - 41 1
Debtors 507 506 405
Current asset investments - 504 -
Cash at bank and in hand 1,024 1,657 1,577
---------- ---------- ----------
1,531 2,708 1,983
---------- ---------- ----------
Creditors: Amounts falling due within one year
Deferred income (897) (743) (760)
Other creditors (153) (247) (276)
---------- ---------- ----------
(1,050) (990) (1,036)
---------- ---------- ----------
Net current assets 481 1,718 947
---------- ---------- ----------
Net assets 688 2,047 1,209
---------- ---------- ----------
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 (4,814) (3,455) (4,293)
---------- ---------- ----------
Equity shareholders' funds 688 2,047 1,209
---------- ---------- ----------
Unaudited Consolidated Cash Flow Statement
Six months ended 30 June 2002
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2002 2001 2001
£'000 £'000 £'000
Net cash outflow from operating activities (Note 4) (537) (455) (1,066)
Returns on investments 18 68 95
Capital expenditure (15) (59) (68)
---------- ---------- ----------
3 9 27
---------- ---------- ----------
Cash outflow before management of liquid resources (534) (446) (1,039)
Management of liquid resources 463 54 688
---------- ---------- ----------
Decrease in cash (71) (392) (351)
---------- ---------- ----------
Reconciliation of net cash flow to movement in net funds
Six months ended 30 June 2002
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2002 2001 2001
£'000 £'000 £'000
Decrease in cash in the period
(including overdrafts) (71) (392) (351)
---------- ---------- ----------
Cash inflow from movement in
liquid resources (463) (54) (688)
---------- ---------- ----------
Change in net funds resulting from
cash flows (534) (446) (1,039)
Exchange movement (19) 29 18
Other non-cash changes - (20) -
---------- ---------- ----------
Movement of net funds in the period (553) (437) (1,021)
Net funds at beginning of period 1,577 2,598 2,598
---------- ---------- ----------
Net funds at end of period 1,024 2,161 1,577
---------- ---------- ----------
Notes:
1. This interim report was approved by the board of directors on 30 August 2002 and follows the accounting
policies adopted in the 2001 annual report except that the new accounting standard in relation to deferred tax
(FRS 19) which was adopted on the first day of the period. The group has a deferred tax asset overall,
principally in relation to tax losses, which has not been recognised following an assessment of the likelihood
of recovery. In the comparative figures foreign exchange gains and losses recorded by Clinical Computing Plc
in respect of the dollar denominated transactions with its US subsidiary had previously been disclosed as other
operating income. As these transactions are financing items this is now included within net interest in the
current period and restated accordingly. The directors have reclassified development expenditure from cost of
sales to administrative expenses to make such disclosure more in line with industry practice. The financial
information contained in this interim report does not constitute statutory accounts as defined in section 240
of the Companies Act 1985 and should be read in conjunction with the 2001 annual report. The comparative
financial information is based on the interim report for the six months ended 30 June 2001.
The figures for the year to 31 December 2001 are an abridged statement from the group's accounts at that date
which have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified
and did not contain a statement under section 237(2) or 237(3) of the Companies Act 1985.
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.
2 Segmental analysis
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2002 2001 2001
Turnover by source
UK 155 194 343
USA 883 947 1,766
Other 64 35 71
--------- --------- ---------
1,102 1,176 2,180
--------- --------- ---------
Turnover by destination is not materially different from that by source.
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2002 2001 2001
£'000 £'000 £'000
Turnover by business type
Software licenses 321 417 603
Services 93 81 211
Hardware sales 7 9 9
Maintenance 681 669 1,357
---------- ---------- ----------
1,102 1,176 2,180
---------- ----------- ----------
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 2002, six months ended 30 June 2001, and for the year ended 31 December
2001.
Diluted earnings per share has been calculated on the basis of the
weighted average number of shares in issue, being 25,090,241 for the six months
ended 30 June 2002, 25,080,310 for the six months ended 30 June 2001, and
25,087,568 for the year ended 31 December 2001.
4. Reconciliation of operating loss to operating cash flows
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2002 2001 2001
£'000 £'000 £'000
(as restated) (as restated)
Operating loss (531) (629) (1,510)
Depreciation charge 62 79 150
(Increase) decrease in debtors (116) 78 168
Increase (decrease) in creditors 48 (7) 81
Loss on current asset investment - 24 -
Write down of stocks - - 40
Share options issued at a discount - - 5
--------- -------- -------
Net cash outflow from operating activities (537) (455) (1,066)
---------- ---------- ----------
The comparative figures have been restated as described in note 1.
5. Analysis and reconciliation of net funds
31 December Cash Exchange 30 June
2001 flow movement 2002
£'000 £'000 £'000 £'000
Cash 121 (71) (2) 48
Short term deposits 1,456 (463) (17) 976
---------- --------- ---------- ----------
Net funds (cash at bank and in hand) 1,577 (534) (19) 1,024
---------- --------- ---------- ----------
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 2002, which comprises the consolidated profit and
loss account, the consolidated balance sheet, the consolidated statement of
total recognised gains and losses, the consolidated cash flow statement, the
reconciliation of net cash flow to movement in net funds and related notes 1 to
5. 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 2002.
Deloitte & Touche
Chartered Accountants and Registered Auditors
London
30 August 2002
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