RNS Number:4179K
Clinical Computing PLC
28 April 2003
For Immediate Release
28 April 2003
CLINICAL COMPUTING PLC
2002 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 2002. The Group trades through three operating
subsidiaries: Clinical Computing UK, Ltd. in the United Kingdom and Europe,
Clinical Computing, Inc. in the United States and Clinical Computing Pty Limited
in Australia.
Financial Overview
* Turnover up 7.2% to #2.39m (2001: #2.23m) - 81% from the US (2001: 81%)
* Software maintenance and support contracts provide 54% of total turnover
(2002: 61%)
* Operating costs decreased 13.1% to #3.25m (2001: #3.74m)
* Operating loss halved to #0.86m (2001: #1.51m)
* Results impacted by extended development and longer installation periods
for initial customers of new Clinical Vision 4.0 (CV4) product
* Loss per share (basic and diluted): 3.8p (2001: 5.5p)
* R&D costs of #0.91m (2001: #1.08m) - mainly on CV4 product
Business Review
* CV4 "live" at four customer sites in the USA
* Three more customers installing CV4 (2 US, 1 UK) - fully operational in
current year
* Actively pursuing 11 open bids, both new and legacy customers
* Transplant application for liver, kidney, pancreas and heart developed
* Expected transition of customer base from legacy products to CV4 product
* CV4 designed to meet needs of single site centres, large teaching
hospitals, and dialysis chains with over 1,000 sites
Outlook and Prospects
In his statement, Chairman Howard Kitchner, commenting on the Group outlook,
said:
"As always, the success and timing of converting pipeline to sales are subject
to normal business risks, but we believe that CV4 positions us favourably in
each case. As such, the full benefits of this product may not be reflected in
our results until 2004."
"Our strategy remains one of providing leading clinical solutions in a growing
number of clinical specialties. We will soon have reference sites spread
strategically in our core geographic markets, with demonstrable add on product
offerings like the four transplant applications, and it is with this CV4
customer base that we look forward to the future with optimism."
Contacts:
Jack Richardson , Chief Executive +1 513 651 3803
Joe Marlovits, Finance Director 020 8747 8744
Peter Binns/Paul McManus Binns & Co PR Ltd 020 7786 9600
Chairman's Statement
Introduction
I am pleased to report that our newest product, Clinical Vision 4.0 (CV4) is now
operating "live" at four customer sites in the USA, while three more customers
with whom contracts have been agreed are in the process of commissioning this
product. Four of our first seven CV4 customers are existing customers who were
using one of our legacy products, while the three new customers are either new
users of clinical systems or customers replacing other competitive products.
CV4 is a clinical information system, developed by the Group based on our
expertise in the clinical software market. It uses a dynamic framework
architecture, which allows us to generate new applications from a basic core
package. The first application built on the CV4 framework is targeted at our
existing core market of renal medicine. We have also developed transplant
applications for the liver, kidney, pancreas and heart. As we have now achieved
successful "live" installations with CV4, your directors believe that the
product will provide a foundation for future growth within our core market and
progressively in other medical specialties.
Results
For the year ended 31 December 2002 the Group is reporting a 7.2 per cent
increase in turnover to #2,392,000 (2001: #2,232,000) with the majority of
turnover being generated in the United States (81 per cent 2002 and 2001), and a
13.1 per cent decrease in operating costs to #3,251,000 (2001: #3,742,000),
resulting in an operating loss before interest and taxation of #859,000, a 43.1
per cent improvement from the prior year (2001: loss #1,510,000). Loss on
ordinary activities after tax for the year was #955,000, an improvement of 30.3
per cent (2001: loss #1,370,000). Loss per share was 3.8p (2001: loss per share
5.5p).
Operating review
The Group's turnover is derived from the provision of software and services in
the area of clinical information solutions for healthcare organisations,
primarily those that specialise in renal medicine. The Group's main source of
revenue at the present time continues to be from support and maintenance
contracts for its legacy products: PROTON, di-PROTON, RENLStar as well as
Clinical Vision. Total maintenance and support revenues accounted for 54.1 per
cent of total turnover (2001: 60.8 per cent).
During the year under review the Group recognised software and service revenues
from Clinical Vision contracts (versions 3 and 4) of #718,000 (2001: #109,000).
Clinical Vision contributed 67.8 per cent of the software and service turnover
in 2002 compared to only 13.4 per cent in 2001.
Trading results for the year under review were impacted by an extended period of
development beyond our initial plan as reported with the first half results and
longer installation periods for our initial CV4 customers than planned.
Throughout 2002 we focused on reducing our operating costs, and one of the
largest of these cost reduction projects resulted in moving our registered head
office to smaller premises. The Company headquarters are now located at 2 Kew
Bridge Road, Brentford, Middlesex TW8 OJF. We will continue to focus on cost
controls throughout the year.
Market opportunity
In the short term, the directors believe that the unique requirements of renal
medicine coupled with the diversity of the care providers serving this market -
ranging from single site centres and large teaching hospitals to dialysis chains
with more than 1,000 sites - provides a challenging environment for CV4. This
environment will allow the Group to demonstrate the scalability of the product
and its ability to capture vast amounts of data from many different locations.
In each of our selected geographic markets, United Kingdom, United States, and
Australia/ Asia interest in clinical information systems is growing among
clinicians struggling to balance increasing patient expectations, care provider
demands for cost effective treatment, and continually evolving medical best
practices. Medical technology is becoming more focused on enterprise-wide
standards, and clinicians are increasingly required to adopt information systems
to meet both the reporting needs of the institution and the needs of their
clinical work. The directors believe that the resulting trend towards
inter-operable systems will require many existing clinical systems to be
replaced.
CV4 has been designed to support specialist clinical areas and thus builds on
the Group's history in providing clinical information systems that meet the
needs of healthcare professionals across many specialties. In expanding our CV4
offering to other disciplines, we are now ready to install the first of four
contracted transplantation applications built using the CV4 technology at a
hospital in the USA. It is expected that the other three applications will also
be installed at this hospital in the current year.
Cash flows
The organic development of a clinical information system, which is capable of
supporting and integrating many specialties as well as providing scalability for
high end users, has required a significant investment in both time and money.
During the year under review the Group continued its investment in CV4 and the
majority of the #912,000 of research and development costs for 2002 was invested
in the CV4 product. The Group started the year with cash and short-term
deposits of #1,577,000. Group operations generated a net outflow of #1,044,000,
which occurred evenly throughout the year.
The Group had cash and short-term deposits in hand at 31 December 2002 of
#488,000. This cash balance along with our expected cash flow from new CV4
customers, on-going maintenance contracts and cash available from two committed
debt facilities totaling #800,000, gives the directors confidence to continue to
pursue its current strategy of developing the business around CV4. Certain
directors of the Company have provided personal guarantees in respect to one of
these debt facilities in the amount of #400,000; these directors have received
no compensation or other benefits for doing so.
Outlook
We started the second quarter of 2003 with successful "go-lives" at four CV4
customers, and have another two customers in the United States and one customer
in England going "live" during 2003.
Each of our 106 customers now using our legacy products is a potential candidate
for CV4 and we expect a progressive transition of our customer base now that
sites are fully demonstrable. We are actively pursing eleven open bids, which
include both new and legacy customers. As always the success and timing of
converting pipeline to sales are subject to normal business risks, but we
believe that CV4 positions us favourably in each case. As such, the full
benefits of this product may not be reflected in our results until 2004.
Our strategy remains one of providing leading clinical solutions in a growing
number of clinical specialties. We will soon have reference sites spread
strategically in our core geographic markets, with demonstrable add on product
offerings like the four transplant applications, and it is with this CV4
customer base that we look forward to the future with optimism.
H Kitchner
Chairman
25 April 2003
Clinical Computing Plc
Consolidated Profit and Loss Account
For the year ended 31 December 2002
Notes 2002 2001
(As restated)
# #
Turnover 2 2,391,565 2,232,158
Cost of sales (978,536) (876,425)
--------------- ---------------
Gross profit 1,413,029 1,355,733
Distribution costs (625,484) (748,223)
Administrative expenses
Research & development (912,038) (1,084,704)
Other (734,117) (1,033,100)
Total (1,646,155) (2,117,804)
-------------- --------------
Operating loss (858,610) (1,510,294)
Net interest (payable) receivable (124,394) 140,360
-------------- --------------
Loss on ordinary activities before taxation (983,004) (1,369,934)
Tax credit on loss on ordinary activities 27,516 -
-------------- --------------
Loss on ordinary activities after taxation
and retained loss for the financial year (955,488) (1,369,934)
-------------- --------------
Basic and diluted loss per share 3 (3.8p) (5.5p)
-------------- --------------
The comparative figures have been restated to reclassify billed expenses from
cost of sales to turnover, exchange gains and losses from administrative
expenses to net interest (payable) receivable and development costs from cost of
sales to administrative expenses as described in note 1.
All activities are derived from continuing operations.
Clinical Computing Plc
Consolidated Statement of Total Recognised Gains and Losses
For the year ended 31 December 2002
Notes 2002 2001
# #
Loss for the financial year (955,488) (1,369,934)
Gain (loss) on foreign currency
translation 127,968 (25,327)
-------------- --------------
Total recognised gains and losses relating
to the year (827,520) (1,395,261)
-------------- --------------
Clinical Computing Plc
Consolidated Balance Sheet
31 December 2002
Notes 2002 2001
# #
Fixed assets
Tangible assets 169,124 261,870
-------------- --------------
Current assets
Debtors 533,722 406,954
Cash at bank and in hand (including short
term deposits) 5 488,089 1,576,952
-------------- --------------
1,021,811 1,983,906
-------------- --------------
Creditors: amounts falling due within one
year
Deferred income (575,525) (760,201)
Other creditors (233,490) (276,135)
Total (809,015) (1,036,336)
-------------- --------------
Net current assets 212,796 947,570
-------------- --------------
Total assets less current liabilities 381,920 1,209,440
-------------- --------------
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 (5,120,484) (4,292,964)
-------------- --------------
Equity shareholders' funds 381,920 1,209,440
-------------- --------------
Clinical Computing Plc
Consolidated Cash Flow Statement
For the year ended 31 December 2002
Notes 2002 2001
(As restated)
# #
Net cash outflow from operating
activities (1,044,142) (1,067,012)
Returns on investments and servicing of
finance 27,863 95,478
Capital expenditure (41,957) (67,904)
-------------- --------------
(14,094) 27,574
-------------- --------------
Cash outflow before management of liquid
resources and financing (1,058,236) (1,039,438)
Management of liquid resources 1,060,297 688,388
-------------- --------------
Increase (decrease) in cash in the year 2,061 (351,050)
-------------- --------------
Clinical Computing Plc
Reconciliation of net cash flow to movement in net funds
For the year ended 31 December 2002
2002 2001
# #
Increase (decrease) in cash in the year 2,061 (351,050)
-------------- --------------
Cash outflow from movement in liquid
resources (1,060,297) (688,388)
-------------- --------------
Change in net funds resulting from cash
flows (1,058,236) (1,039,438)
Exchange movement (30,627) 18,291
-------------- --------------
Movement in net funds in year (1,088,863) (1,021,147)
Net funds at beginning of year 1,576,952 2,598,099
-------------- --------------
Net funds at end of year 488,089 1,576,952
-------------- --------------
Notes:
1. Basis of preparation
The financial information set out in the preliminary announcement does not constitute the
company's statutory accounts for the years ended 31 December 2002 or 2001, but is derived
from those accounts. Statutory accounts for 2001 have been delivered to the Registrar of
Companies and those for 2002 will be delivered following the company's Annual General
Meeting in due course. The auditors have reported on those accounts; their reports were
unqualified and did not contain statements under s237(2) or (3) Companies Act 1985.
The financial information for the year ended 31 December 2002 has been prepared in
accordance with the accounting policies set out in the Group's 2001 annual report, except
for the adoption of FRS19 'Deferred Tax' and certain reclassifications as follows: the
comparative figures have been restated to reclassify #52,264 billed expenses from cost of
sales to turnover, #44,882 exchange gains and losses from administrative expenses to net
interest (payable) receivable and #1,084,704 development costs from cost of sales to
administrative expenses. There has been no impact on current or prior year results from
the adoption of FRS19.
Based on the Group's business plan, which includes certain assumptions regarding new
contract wins, and taking into account two separate debt facilities available to the Group
with a total available borrowing of #800,000, the directors believe that the Group has
sufficient funds to continue to pursue its business plan. Accordingly, the financial
statements are prepared on a going concern basis.
2. Segmental analysis
Turnover
An analysis of Group turnover by geographical region is given below:
2002 2001
(As restated)
# #
UK 317,311 342,650
USA 1,940,252 1,818,658
Other 134,002 70,850
------------ -----------
2,391,565 2,232,158
------------ -----------
Turnover by destination is not materially different from that by origin.
The Directors consider that the Group operates in one class of business.
However, turnover is derived as follows:
2002 2001
(As restated)
# #
Software systems 789,539 603,185
Maintenance 1,294,278 1,356,536
Services 269,249 210,945
Hardware sales 1,783 9,228
Other 36,716 52,264
----------- ----------
2,391,565 2,232,158
----------- ----------
3. Basic loss per share is based upon the loss attributable to shareholders of #955,488 (2001:
loss of #1,369,934) and weighted average number of shares in issue during the year of
25,080,310 (2001: 25,080,310).
Diluted loss per share is based upon the loss attributable to shareholders of #955,488 (2001:
loss of #1,369,934) and weighted average number of shares in issue during the year of
25,088,319 (2000: 25,087,568), allowing for the exercise of all outstanding share options.
4. Reconciliation of operating loss to operating cash flows
2002 2001
(As restated)
# #
Operating loss (858,610) (1,510,294)
Depreciation charge 120,086 149,515
Gain on disposal of tangible fixed
assets - -
(Increase) decrease in debtors (129,872) 167,684
(Decrease) increase in creditors (175,746) 80,583
Write down on stock - 40,000
Share options issued at a discount - 5,500
-------------- --------------
Net cash outflow from operating
activities (1,044,142) (1,067,012)
-------------- --------------
5. Analysis and reconciliation of net funds
1 January Cash Exchange 31 December
2002 flow movement 2002
# # # #
Cash in hand and at bank 121,150 2,061 (3,708) 119,503
Short term deposits 1,455,802 (1,060,297) (26,919) 368,586
-------------- -------------- -------------- --------------
Net funds 1,576,952 (1,058,236) (30,627) 488,089
-------------- -------------- -------------- --------------
6. This announcement was approved by the Board on 25 April 2003. Copies of the full annual report
and accounts will be sent to shareholders in May, and will also be available from the Company's
registered office at 2 Kew Bridge Road, Brentford, Middlesex, TW8 0JF.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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