RNS Number:7973S
Ultrasis PLC
22 April 2008
Ultrasis plc ("Ultrasis" or the "Company)
Interim results for the six months ended 31 January 2008
Highlights
* Sales growth of 50% for the period
* Maiden operating profit before charges for share based payments of
£74,000 (2007: loss £71,000)
* Deferred income of £1,955,000 (2007: £655,000)
* Debt free with cash at bank of £1,002,000
Commenting, Nigel Brabbins, Chief Executive, said:
"These results confirm Ultrasis' position in the interactive healthcare market
as the leading provider of CCBT (computer delivered cognitive behavioural
therapy) and demonstrate the Company's potential for strong, profitable growth
based on a robust renewable income stream. Now firmly established within the
NHS, we intend to address the retail market for Beating the Blues(R), together
with our other suite of products and will continue to seek other opportunities
in the interactive healthcare sector."
Further information:
Ultrasis plc:
Nigel Brabbins, Chief Executive +44 (0) 20 7566 3900
Gerald Malone, Chairman
nbrabbins@ultrasis.com www.ultrasis.com
Capital MS&L:
James Madsen +44 (0) 20 7307 5330
JMFinn Capital Markets Ltd, Nominated Adviser
and Joint Broker
Geoff Nash +44 (0) 20 7600 1658
www.jmfinncapitalmarkets.com
Marshall Securities, Joint Broker:
John Webb +44 (0) 20 7490 3788
ULTRASIS PLC
Interim report for the six months ended 31 January 2008
Statement from Chairman and Chief Executive
We are pleased to report a maiden operating profit of £74,000 before share based
payments which demonstrates the Company's continued progress. Strong and
sustainable revenues are reflected in the 50% sales growth over the same period
last year. Continued high renewal levels for the core product, Beating the Blues
(R) - confirm its effectiveness as a treatment for mild to moderate depression -
and point to a secure income base.
Beating the Blues
Uptake of Beating the Blues(R) continues to grow. Increasing numbers of PCTs are
complying with national policy and implementing Beating the Blues(R) for the
treatment of their population. We also continue to maintain robust renewal
levels from customers who have experienced the effectiveness of Beating the
Blues(R) and the benefits it provides in comparison with anti depressants and
other forms of treatment.
Public awareness of Beating the Blues(R) is growing. We are increasingly
contacted by individuals who do not wish to approach their GP about depressive
illness and wish to purchase Beating the Blues privately. An estimated six
million people suffer from anxiety and depression in the UK alone and evidence
suggests that in excess of 25% of people with mental health problems do not go
to their GP or the NHS for support. To meet this growing need for confidential
and immediate support we will soon be making available a retail version of
Beating the Blues(R) with 24/7 telephonic support. This will be sold via our
online portal, The Wellness Shop www.thewellnessshop.co.uk.
Financial highlights
These are the first results of the Group to be stated under International
Financial Reporting Standards (IFRS) and the comparatives have been restated on
this basis. The principal impact of IFRS on the results has been the
requirement to capitalise certain development expenditure as required by IAS 38,
resulting in a £82,000 reduction to the loss for the six months ended 31 January
2007 and £80,000 for the year ended 31 July 2007. The effect of the adjustments
on the results and equity of the Group are set out in note 4.
In the six months ended 31 January, 2008, recognised revenue from ordinary
operating activities grew 50% to £1,038,000 from £692,000, in the same period
last year. At 31 January 2008 deferred income which comprises invoiced amounts
for services to be rendered in future periods amounted to £1,955,000 (31 January
2007: £655,000). During the period operating expenses increased by 18% on the
same period last year, before share based payments, demonstrating continued
levels of control and improved operating efficiencies from increased volumes.
The loss for the period (after non-cash charges for share based payments
required under IFRS 2) was £200,000 (2007: £297,000).
Outlook
Ultrasis now has a growing interactive healthcare business and, with no debt and
sufficient cash reserves, is well positioned to promote both strategic and
organic growth. We are confident of building significantly on our UK base and we
are receiving increasing interest from the US, Europe and other overseas markets
where we intend developing our position, extending our reach and exploiting the
growing demand for innovative interactive health care.
Nigel Brabbins Gerald Malone
Chief Executive Non executive Chairman
22 April 2008
CONSOLIDATED INCOME STATEMENT for the six months ended 31 January 2008
Six months ended Six months ended
Year ended
31 Jan 31 Jan
31 Jul
Notes 2008 2007
2007
(unaudited) (unaudited)
(audited)
£'000 £'000
£'000
Revenue 2 1,038 692
1,577
Cost of sales (73) (9)
(23)
Gross profit 965 683
1,554
Administrative expenses
- Share based payments (283) (235)
(495)
- Other (891) (754)
(1,743)
- Loss on the disposal of non-current - -
(12)
assets
(1,174) (989)
(2,250)
Operating profit/(loss)
Before share based payments 74 (71)
(201)
Share based payments (283) (235)
(495)
(209) (306)
(696)
Finance costs (4) (1)
(9)
Finance income 13 10
16
9 9
7
Loss before taxation (200) (297)
(689)
Taxation - -
4
Loss for the period 2 (200) (297)
(685)
Loss per share
Basic and Diluted loss per share (p) 3 (0.013) (0.020)
(0.046)
CONSOLIDATED BALANCE SHEET as at 31 January 2008
31 Jan 31 Jan
31 Jul
Notes 2008 2007
2007
(unaudited) (unaudited)
(audited)
£'000 £'000
£'000
Non-current assets
Intangible assets 2,563 2,579
2,565
Plant and equipment 52 37
37
Total non-current assets 4 2,615 2,616
2,602
Current assets
Inventories 27 28
27
Trade and other receivables 1,373 301
929
Cash and cash equivalents 1,002 593
879
Total current assets 2,402 922
1,835
Current liabilities
Trade and other payables (438) (211)
(509)
Deferred revenue (1,955) (655)
(1,388)
Total current liabilities (2,393) (866)
(1,897)
Net current assets/(liabilities) 9 56
(62)
Net assets 2 2,624 2,672
2,540
Equity
Share capital 1,478 1,478
1,478
Share premium account 21,104 21,104
21,104
Share option reserve 953 410
670
Other reserves 6,650 6,650
6,650
Merger reserve 2,324 2,324
2,324
Foreign exchange reserve (28) (27)
(29)
Retained losses 4 (29,857) (29,267)
(29,657)
4 2,624 2,672
2,540
CONSOLIDATED CASH FLOW STATEMENT for the six months ended 31 January 2008
Six months Six months ended
Year ended 31
ended 31 Jan 31 Jan
Jul
2008 2007
2007
(unaudited) (unaudited)
(audited)
£'000 £'000
£'000
Cash generated from/(used in) operations
Operating profit/(loss) (209) (306)
(696)
Share based payments 283 235
495
Depreciation charge 12 6
13
Loss on disposal of non-current assets - -
12
Amortisation of capitalised development costs 2 -
2
(Increase)/decrease in inventories - -
1
(Increase)/decrease in debtors (444) 128
(500)
Increase/(decrease) in creditors 495 (268)
759
Tax received - -
4
Net cash generated from/(used in) operating 139 (205)
90
activities
Investing activities
Interest received 13 10
16
Development expenditure (1) (82)
(82)
Purchases of plant and equipment (24) (1)
(8)
Net cash used in investing activities (12) (73)
(74)
Financing activities
Interest paid (4) (1)
(9)
Net cash used in financing activities (4) (1)
(9)
Net increase/(decrease) in cash and cash 123 (279)
7
equivalents
Cash and cash equivalents at beginning of 879 872
872
period
Cash and cash equivalents at end of period 1,002 593
879
NOTES TO THE FINANCIAL INFORMATION for the six months ended 31 January 2008
1. Accounting policies
i. Basis of preparation
The next annual financial statements of Ultrasis plc (the "Company") will be
prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted for use in the EU, applied in accordance with the provisions of the
Companies (Northern Ireland) Order 1986.
Accordingly, the interim financial information in this report has been prepared
using accounting policies consistent with IFRS. IFRS is subject to amendment and
interpretation by the International Accounting Standards Board (IASB) and the
International Financial Reporting Interpretations Committee (IFRIC) and there is
an ongoing process of review and endorsement by the European Commission. The
financial information has been prepared on the basis of IFRS that the Directors
expect to be applicable as at 31 July 2008.
The financial information has been prepared under the historical cost
convention. The principal accounting policies set out below have been
consistently applied to all periods presented.
ii. IFRS transition
IFRS 1 permits companies adopting IFRS for the first time to take certain
exemptions from the full requirements of IFRS in the transition period. The
interim financial information has been prepared on the basis of the following
exemptions:
* Business combinations prior to 1 August 2006 have not been to comply
With IFRS 3 "Business Combinations"
* IFRS 2 "Share-based Payments has been applied retrospectively to
those options that were issued after 7 November 2002 and had not vested
by 1 August 2006.
The disclosures required by IFRS 1 concerning the transition from UK GAAP to
IFRS are given in note 4.
iii. Non-statutory accounts
The financial information for the year end 31 July 2007 set out in this interim
report does not comprise the Company's statutory accounts as defined by Article
248(3) (c) in Part VIII of the Companies (Northern Ireland) Order 1986.
The statutory accounts for the year ended 31 July 2007, which were prepared
under UK Generally Accepted Accounting Practice (UK GAAP), have been delivered
to the Registrar of Companies in Northern Ireland. The auditors reported on
those accounts; their report was unqualified and did not contain a statement
under Article 245(4) of the Companies (Northern Ireland) Order 1986.
The financial information for the 6 months ended 31 January 2008 and 31 January
2007 is unaudited.
iv. Basis of consolidation
The financial information incorporates the results of the Company and entities
controlled by the Company (its subsidiaries), together the "Group". Control is
achieved where the Company has the power to govern the financial and operating
policies of an investee entity so as to obtain benefits from its activities.
Where necessary, adjustments are made to the results of subsidiaries to bring
the accounting policies used into line with those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation.
v. Revenue recognition
Revenue is measured at the fair value of the consideration received or
receivable and represents amounts receivable for goods and services provided in
the normal course of business, net of discounts, VAT and other sales related
taxes.
Revenue arising from the sale of services is recognised when and to the extent
that the Group obtains the right to consideration in exchange for the
performance of its contractual obligations as follows:
- Revenue from software licenses and maintenance and support contracts is
recognised pro-rata over the duration of the agreement, provided that there are
no significant vendor obligations remaining and collectability of the debt is
expected.
- Revenue derived from the development of software products for customers
on a fixed-fee basis is recognised by the percentage completion method on a
contract-by-contract basis. Costs are written off in the year in which they are
incurred. Changes in estimated total costs or contract values may result in
revisions to revenue in the period in which the revisions arise. Provisions for
any estimated losses on uncompleted contracts are made in the period in which
such losses are determinable. For development services undertaken on a time and
expense basis, revenue is recognised as the service is performed.
Billings in excess of revenue recognised are held in the balance sheet under "
Deferred revenue".
vi. Foreign currency
Transactions in foreign currency are recorded at the rates of exchange
prevailing on the dates of the transactions. At each balance sheet date,
monetary assets and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the balance sheet date. Exchange gains
and losses on short-term foreign currency borrowings and deposits are included
with net interest payable. Exchange differences on all other transactions,
except relevant foreign currency loans, are taken to operating profit.
The results of overseas operations where the exchange rates do not fluctuate
significantly are translated at the average rates of exchange during the period.
Assets and liabilities on the balance sheet are translated at the closing rate
at the date of the balance sheet. All resulting exchange differences are
recognised as a separate component of equity
vii. Share based payments
The cost of share-based employee compensation arrangements, whereby directors
and employees receive remuneration in the form of shares or share options, is
recognised as an expense in the income statement.
The total expense to be apportioned over the vesting period of the benefit is
determined by reference to the fair value (excluding the effect of non
market-based vesting conditions) at the date of grant. The assumptions
underlying the number of awards expected to vest are subsequently adjusted for
the effects of non market-based vesting to reflect the conditions prevailing at
the balance sheet date. Fair value is measured by the use of a binomial model.
The expected life used in the model has been adjusted, based on management's
best estimate, for the effects of the non-transferability, exercise restrictions
and behavioural considerations.
viii. Plant and equipment
Plant and equipment are stated at cost less accumulated depreciation and any
recognised impairment loss.
Depreciation is charged so as to write off the cost of assets, over their
estimated useful lives, using the straight-line method, on the following bases:
Leasehold improvements - 10 years or the life of the lease whichever is shorter
Office equipment - 4 to 15 years
Fixtures and fittings - 4 to 10 years
When assets are sold or retired the difference between the net proceeds and the
net carrying amount of the assets is recognised as a gain or loss in other
operating income or expenses, respectively.
ix. Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is
comprised of direct materials and, where applicable, direct labour costs and
those overheads that have been incurred in bringing the inventories to their
present location and condition. Cost is calculated using the weighted average
method. Net realisable value represents the estimated selling price less all
estimated costs of completion and costs to be incurred in marketing, selling and
distribution.
x. Financial instruments
Cash and cash equivalents comprises cash held by the Group and short-term bank
deposits with an original maturity of three months or less.
xi. Intangible assets
Purchased intangible assets are capitalised at cost and written off on a
straight line basis over their estimated useful economic life of 20 years. The
carrying value of Intangible Assets is reviewed annually by the Directors and
provision is made for any impairment.
Development costs where they meet the criteria defined in IAS 38 are capitalised
and are written off over their estimated useful economic life. Capitalised
development costs are reviewed annually and provision is made for any
impairment.
xii. Critical accounting judgements and key sources of estimation
uncertainty
The preparation of financial information in conformity with generally accepted
accounting practice requires management to make estimates and judgements that
affect the reported amounts of assets and liabilities as well as the disclosure
of contingent assets and liabilities at the balance sheet date and the reported
amounts of revenues and expenses during the reporting period.
Estimates and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The significant judgements
made by management in applying the Group's accounting policies and the key
sources of estimation uncertainty were:
1. Valuation of the Group's Intangible Assets
The Group acquired a licence to the retail market for its products as part of
the acquisition of the Healthstar Group in 2006. The Directors believe that the
conditions prevailing at the balance sheet date indicate that the carrying value
of the licence has not been impaired. Amortisation of the licence has not yet
commenced as the Group has not as yet realised commercial benefit from it.
2. Share based payments
In determining the fair value of equity settled share based payments and the
related charge to the income statement, the Group makes assumptions about future
events and market conditions. In particular, judgement must be made as to the
likely number of shares that will vest, and the fair value of each award
granted. The fair value is determined using a valuation model which is dependent
on further estimates, including the Group's future dividend policy, employee
turnover, the timing with which options will be exercised and the future
volatility in the price of the Group's shares. Such assumptions are based on
publicly available information and reflect market expectations and advice taken
from qualified personnel. Different assumptions about these factors to those
made by the Group could materially affect the reported value of share based
payments.
3. Revenue Recognition
In deciding when to recognise revenue the Directors are required to consider on
a case by case basis whether there are any ongoing obligations to the Group's
customers. When, in their opinion, there are no significant ongoing
obligations, revenue is recognised immediately, otherwise it is deferred and is
recognised pro-rata over the duration of the agreement as described in Note 1,
part v above.
4. Capitalised Development Costs
Development costs where they meet the criteria defined in IAS 38 are capitalised
and are written off over their estimated useful economic life. The judgements
and key sources of estimation uncertainty relate to the Directors estimation of
the useful economic life and how the intangible asset will generate probable
future economic benefits. In assessing this, the Directors consider the
existence of a market for the product being developed based on their experience
and estimate how long revenues may be generated from the sale of the product.
The Directors annually review both the estimated useful life and whether
previously capitalised development costs continue to meet IAS 38 criteria.
2. Segment information
The Company considers there to be only one class of business, interactive
healthcare.
Geographical Segments
United Kingdom Rest of the World
Group
Jan 2008 Jan 2007 Jan 2008 Jan 2007
Jan 2008 Jan 2007
(unaudited) (unaudited) (unaudited) (unaudited)
(unaudited) (unaudited)
£'000 £'000 £'000 £'000
£'000 £'000
Revenue by destination: 961 524 77 168
1,038 692
Revenue by origin: 961 524 77 168
1,038 692
Loss on ordinary (188) (282) (12) (15)
(200) (297)
activities before
taxation:
Net assets / liabilities 3,784 3,296 (1,160) (624)
2,624 2,672
3. Basic and Diluted loss per share
Six months ended Six months
Year ended 31
31 Jan ended 31 Jan
Jul
2008 2007
2007
£'000 £'000
£'000
(unaudited) (unaudited)
(audited)
Loss
Loss for the purposes of basic and diluted loss (200) (297)
(685)
per share being loss for the period
attributable to equity shareholders
Number of shares
Weighted average number of ordinary shares for 1,478,070,955 1,478,070,955
1,478,070,955
the purposes of basic and diluted loss per
share
4. Transition to IFRS
Ultrasis plc reported under UK GAAP in its previously published financial
statements for the year ended 31 July 2007. The interim financial information in
this report has been prepared using accounting policies consistent with IFRS.
The analysis below shows a reconciliation of net assets and loss as reported
under UK GAAP as at 31 July 2007 to the revised net assets and loss under IFRS
as reported in these financial statements. There is also a reconciliation of net
assets under UK GAAP to IFRS at the comparative interim date, being 31 January
2007.
The differences all arise from the requirement under IFRS to capitalise
development costs that meet certain criteria. Under UK GAAP this was optional
and hence it had been the Company's policy to write off all development costs as
incurred. The development costs incurred in the year ended 31 July 2007 have now
been retrospectively capitalised and are being amortised through the Income
Statement in the current period.
Reconciliation of equity at Previous GAAP Effect of
IFRS
transition to IFRS
31 July 2007
£'000 £'000
£'000
Non-current assets 2,522 80
2,602
Current liabilities (1,781) (116)
(1,897)
Non-current liabilities (116) 116
-
Net assets 2,460 80
2,540
Retained losses (29,737) 80
(29,657)
Equity shareholders' funds 2,460 80
2,540
Reconciliation of equity at Previous GAAP Effect of
IFRS
transition to IFRS
31 January 2007
£'000 £'000
£'000
Non-current assets 2,534 82
2,616
Net assets 2,590 82
2,672
Retained losses (29,349) 82
(29,267)
Equity shareholders' funds 2,590 82
2,672
Reconciliation of loss for Previous GAAP Effect of
IFRS
the year ended 31 July 2007 transition to IFRS
£'000 £'000
£'000
Administrative expenses (2,318) 80
(2,238)
Loss for the period (765) 80
(685)
Losses on disposal of non-current assets were shown separately after operating
profit/loss under UK GAAP, under IFRS they are shown within administrative
expenses. The change is purely presentational hence this has not been included
in the above reconciliation.
Reconciliation of loss for Previous GAAP Effect of
IFRS
the year ended 31 January transition to IFRS
2007 £'000 £'000
£'000
Administrative expenses (1,071) 82
(989)
Loss for the period (379) 82
(297)
Cashflow statement
The Group's consolidated cash flow statements are presented in accordance with
IAS 7. The statements present substantially the same information as that
required under UK GAAP, with the following principal exceptions:
1. Under UK GAAP, cashflows are presented under nine standard headings, whereas
IFRS requires the classification of cash flows resulting from operating,
investing and financing activities.
2. The cash flows reported under IAS 7 relate to movements in cash and cash
equivalents, which include cash and short term liquid investments. Under UK
GAAP, cash comprises cash in hand and deposits repayable on demand.
3. Development expenditure under UK GAAP was written off within operating profit
/(loss), whereas under IFRS it is capitalised and amortised. The resultant
impact on the cashflow statement is purely presentational and sees the cash
generated from operations in the comparative figures for both 31 January 2007
and 31 July 2007 increased by £82,000 and the development expenditure under the
heading of Investing Activities increased by an equal amount.
4. Tax received under UK GAAP was presented under the heading of Taxation
whereas under IFRS is it shown within operating activities in the comparative
figures for 31 July 2007.
The Company advises that its Nominated Adviser and Joint Broker, JMFinn Capital
Markets Ltd, now conducts business under the trading name FinnCap.
Copies of this interim report will be available from the Company's website:
www.ultrasis.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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