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7 Sep 2009 07:00
7 September 2009
CLINICAL COMPUTING PLC
2009 INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2009
Clinical Computing Plc ("the Group"), 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 2009. 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 ("Hydra") in the United Kingdom.
Financial Highlights
Total revenue increased 9% to £1,528,439 (H1 2008: £1,406,370)
Recurring maintenance revenues increased by 27% to £884,969 (H1 2008: £697,274)
Operating costs decreased to £1,762,795 (H1 2008: £1,817,161)
R&D tax credit received for 2006, 2007 and 2008 of £394,183
Profit after tax of £154,550 (H1 2008: loss of £419,683)
Earnings per share of 0.1p (H1 2008: loss 0.4p)
Operational Highlights
Clinicalvision V hosting service available for the US and Canadian markets
Clinicalvision V hand-held device to be released in the fourth quarter 2009
Six clinicalvision V implementations underway
New reporting solution for Hydra product nearing completion
Outlook
Chairman Howard Kitchner, commenting on the Group outlook, said:
"Our results for the first half are a further indication that the Clinical business has a solid platform for growth. This has been built on the back of the completion of clinicalvision V, and the new sales generated with our Canadian Partner. Our sales and marketing activities are aimed at exploiting the opportunities now available to us as a result of the release of this product offering.
Against this, we are confident that the upward trend in revenue growth will continue and there are a number of near opportunities that we expect to move to firm contracts thus consolidating this revenue growth into 2010. "
| Contacts: | |
| Joe Marlovits, Chief Executive Clinical Computing www.ccl.com
| 020 3006 7537 |
| James Caithie / Antony Legge Dowgate Capital Advisers Limited - Nominated Adviser | 020 7492 4777 |
| These results are also available on the Group's web site: www.ccl.com | |
CHAIRMAN'S STATEMENT
Introduction
We report our interim results for the six month period to 30 June 2009. This period has been one of continued positive progress for the Group. With the release of clinicalvision V now behind us we have seen an increase in revenues for our clinical business and our geographic coverage has extended into the Canadian market. The Hydra business continues to be cash generative and although this business has been more impacted than the Clinical business by the overall economic climate we see improving revenues from this business in the second half of the year.
We are pleased to highlight Group revenue growth of 9% for the period and profit after tax of £154,550.
Clinical business
During the period under review we managed six customer clinicalvision V implementations and each of these projects will continue into the second half of the year as the customers fully migrate to this new product. The clinicalvision V product is a web-based application developed to support the effective management of chronic disease. This release provides the clinical team with an application and analytical tools to deliver and monitor care over large patient populations.
Additionally, we have now established two hosting facilities in the North American market and are now in a position to provide this service to large and small customers in the United States and Canada. This is another step forward in changing our business model to take full advantage of the clinicalvision V technology. Likewise, we are expecting to release an iPhone application as an additional module in the fourth quarter of 2009.
Our business concentration for the rest of 2009 and into 2010 will be to migrate our current customers to clinicalvision V and to further develop our offering for the Canadian market. To date we have won three clinicalvision V contracts in the Canadian market.
Hydra business
The programme and resource management business is now fully integrated into the Group. We are in the process of exploring partnerships in the United States where we believe the Hydra technology can exploit a market requirement at a competitive price point. The business is also experiencing an increase in demand for its software from the UK market, as organisations continue to seek ways of improving the return on their resources.
Following the roll-out of an updated version of the core Hydra technology in the first half, we anticipate releasing a new reporting solution in the second half of 2009.
Financial overview
Revenue increased 9% to £1,528,439 (H1 2008: £1,406,370).
Revenue from the clinical business was £1,237,569 or 81% of the Group revenues. Revenue from the Clinical business when compared to the prior year has increased 28% (H1 2008: £965,771). Revenue from the Hydra business for the period was £290,870 (H1 2008: £440,599).
Recurring maintenance revenues accounted for 58% (H1 2008: 50%) of our total revenues and increased 27% to £884,969 (H1 2008: £697,274).
The Group's cost base decreased to £1,762,795 (H1 2008: £1,817,161), principally due to the overhead reductions undertaken in October 2008.
Operations generated a loss of £234,356 (H1 2008: £410,791). The majority of the loss from operations was generated by the Clinical business.
During the period under review we undertook a project to review previous years R&D tax credit claims. This has resulted in amending our 2006 and 2007 R&D claims. During the period we are reporting a total tax credit of £394,183. £201,213 of this amount was from R&D undertaken in 2008 and £192,970 related to the amended claims for 2006 and 2007.
The Group is reporting an overall profit after tax of £154,550 for the period (H1 2008: loss of £419,683). Earnings per share for the period were 0.1p (H1 2008: loss of 0.4p per share).
The Group maintains two debt facilities which in total provide funding for working capital of £950,000, of which the £682,467 was drawn at 30 June 2009. In the twelve month period to 30 June 2009 the amount borrowed under the above facilities increased £317,271 of which only £9,712 of this amount was drawn in the six month period to 30 June 2009.
Outlook
Our results for the first half are a further indication that the Clinical business has a solid platform for growth. This has been built on the back of the completion of clinicalvision V, and the new sales generated with our Canadian Partner. Our sales and marketing activities are aimed at exploiting the opportunities now available to us as a result of the release of this product offering.
Against this, we are confident that the upward trend in revenue growth will continue and there are a number of near opportunities that we expect to move to firm contracts thus consolidating this revenue growth into 2010.
Howard Kitchner
Chairman
7 September 2009
Unaudited condensed consolidated income statement
Six months ended 30 June 2009
| Audited | |||
| Six months | Six months | year | |
| ended | ended | ended | |
| 30 June 2009 | 30 June 2008 | 31 December 2008 | |
| £ | £ | £ | |
| Continuing operations | |||
|
| |||
| Revenue (Note 3) | 1,528,439 | 1,406,370 | 2,825,032 |
| Cost of sales | (366,532) | (440,304) | (834,691) |
| -------------- | -------------- | ----------------- | |
| Gross profit | 1,161,907 | 966,066 | 1,990,341 |
| Distribution costs | (141,004) | (185,614) | (328,705) |
| Administrative expenses | |||
| Research & development | (758,012) | (668,410) | (1,444,404) |
| Other | (497,247) | (522,833) | (1,029,576) |
| Total administrative expenses | (1,255,259) | (1,191,243) | (2,473,980) |
| -------------- | ------------- | ----------------- | |
| Loss from operations | (234,356) | (410,791) | (812,344) |
| Finance income | 1,327 | 4,214 | 66,489 |
| Finance expense | (6,604) | (13,106) | (27,531) |
| -------------- | ------------ | ----------------- | |
| Loss before tax | (239,633) | (419,683) | (773,386) |
| Income tax credit (Note 4) | 394,183 | - | 41,909 |
| -------------- | ------------ | ----------------- | |
| Profit/ (loss) for the period attributable to equity holders of the company | 154,550 | (419,683) | (731,477) |
| -------------- | ------------ | ---------------- | |
| Basic earnings/(loss) per share (Note 5) | 0.1p -------------- | (0.4p) ------------ | (0.7p) ---------------- |
| Diluted earnings/(loss) per share (Note 5) | 0.1p -------------- | (0.4p) ------------ | (0.7p) ---------------- |
The notes form part of this condensed financial information.
Unaudited condensed consolidated statement of comprehensive income
Six months ended 30 June 2009
| Audited | |||
| Six months | Six months | Year | |
| ended | ended | Ended | |
| 30 June 2009 | 30 June 2008 | 31 December 2008 | |
| £ | £ | £ | |
| Profit/(loss) for the period | 154,550 | (419,683) | (731,477) |
| Exchange differences on translation of foreign operations | 19,621 | (79) | (130,699) |
| ------------- | ------------- | ---------------- | |
| Total comprehensive income for the period | 174,171 | (419,762) | (862,176) |
| ------------- | ------------- | ---------------- |
The notes form part of this condensed financial information.
Unaudited condensed consolidated balance sheet
30 June 2009
|
| 30 June | 30 June | Audited 31 December |
| 2009 | 2008 | 2008 | |
| £ | £ | £ | |
| Non-current assets | |||
| Intangible assets | 365,960 | 291,209 | 413,466 |
| Goodwill | 157,658 | 864,391 | 157,658 |
| Property, plant and equipment | 94,861 | 151,546 | 125,988 |
| --------------- | --------------- | ------------ | |
| 618,479 | 1,307,146 | 697,112 | |
| Current assets | |||
| Trade and other receivables | 722,002 | 643,723 | 437,149 |
| Cash and cash equivalents | 260,794 | 242,723 | 299,188 |
| --------------- | --------------- | ------------ | |
| 982,796 | 886,446 | 736,177 | |
| --------------- | --------------- | ------------ | |
| Total assets | 1,601,275 | 2,193,592 | 1,433,449 |
| --------------- | --------------- | ------------ | |
| Current liabilities | |||
| Trade and other payables | (1,239,456) | (1,371,520) | (1,268,619) |
| Bank loans | (682,467) | (365,196) | (672,755) |
| --------------- | --------------- | ------------- | |
| (1,921,923) | (1,736,716) | (1,941,374) | |
| --------------- | --------------- | --------------- | |
| Long term liabilities - provisions | - | (624,531) | - |
| --------------- | --------------- | --------------- | |
| Net liabilities | (320,648) | (167,655) | (507,925) |
| --------------- | --------------- | ------------- | |
| Equity | |||
| Share capital | 2,433,251 | 2,433,251 | 2,433,251 |
| Share premium account | 7,750,957 | 7,661,920 | 7,750,957 |
| Share option reserve | 110,694 | 84,481 | 97,588 |
| Translation reserve | 47,765 | 158,764 | 28,144 |
| Retained earnings | (10,663,315) | (10,506,071) | (10,817,865) |
| --------------- | --------------- | --------------- | |
| Shareholders' funds - deficit (Note 6) | (320,648) | (167,655) | (507,925) |
| -------------- | -------------- | ------------ |
The notes form part of this condensed financial information
Unaudited condensed consolidated statement of cash flows
Six months ended 30 June 2009
| Audited | |||
| Six months | Six months | year | |
| ended | ended | ended | |
| 30 June 2009 | 30 June 2008 | 31 December 2008 | |
| £ | £ | £ | |
| Net cash used in operating activities (Note 7) | (36,669) | (393,052) | (742,523) |
| Investing activities | |||
| Interest received | 1,327 | 4,214 | 66,489 |
| Acquisition of Hydra | - | (56,750) | (56,750) |
| Expenditure on product development | - | (100,908) | (171,541) |
| Proceeds from sale of fixed assets | - | 566 | 606 |
| Purchases of property, plant and equipment | (4,042) | (28,389) | (38,353) |
| --------------- | --------------- | -------------- | |
| Net cash used in investing activities | (2,715) | (181,267) | (199,549) |
| --------------- | --------------- | -------------- | |
| Financing activities | |||
| VAT recovery from equity issues | - | - | 89,037 |
| Proceeds from equity issue | - | 545,000 | 545,000 |
| Costs of equity issue | - | (34,813) | (34,813) |
| Increase in bank loan | 9,712 | 143,516 | 451,075 |
| --------------- | --------------- | --------------- | |
| Net cash from financing activities | 9,712 | 653,703 | 1,050,299 |
| --------------- | --------------- | --------------- | |
| Net (decrease)/increase in cash and cash equivalents | (29,672) | 79,384 | 108,227 |
| Cash and cash equivalents at beginning of period | 299,188 | 164,365 | 164,365 |
| Effect of foreign exchange rate changes | (8,722) | (1,026) | 26,596 |
| --------------- | --------------- | ---------------- | |
| Cash and cash equivalents at end of period | 260,794 | 242,723 | 299,188 |
| --------------- | --------------- | --------------- |
The notes form part of this condensed financial information.
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 2009. The un-audited financial statements have been, prepared using accounting policies consistent in all material respects with those applied in the Group's Annual Report for the year ended 31 December 2008 and consistent with those that will be applied during the year ended 31 December 2009. 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 2008.
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 435 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2008, have been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain a statement under section 498 of the Companies Act 2006.
2. Business and geographic segments
| Unaudited six months | Unaudited six months | Audited year | ||
| ended | ended | ended | ||
| 30 June | 30 June | 31 December | ||
| 2009 | 2008 | 2008 | ||
| £ | £ | £ | ||
| Revenue by segment | ||||
| Clinical business UK | 342,668 | 333,254 | 568,508 | |
| Clinical business USA | 861,713 | 616,839 | 1,351,826 | |
| Clinical business Australia | 33,188 | 15,678 | 31,409 | |
| Hydra business | 290,870 | 440,599 | 873,289 | |
| --------------- | --------------- | ---------------- | ||
| 1,528,439 | 1,406,370 | 2,825,032 | ||
| --------------- | ---------------- | ---------------- |
3. Revenue
| Unaudited six months | Unaudited six months | Audited year | ||
| ended | ended | ended | ||
| 30 June | 30 June | 31 December | ||
| 2009 | 2008 | 2008 | ||
| £ | £ | £ | ||
| Revenue by type | ||||
| Software licences | 466,872 | 445,313 | 825,155 | |
| Maintenance | 884,969 | 697,274 | 1,515,615 | |
| Services and other revenue | 176,598 | 263,783 | 484,262 | |
| ------------- | ------------- | -------------- | ||
| Revenue | 1,528,439 | 1,406,370 | 2,825,032 | |
| ------------- | ------------- | -------------- |
4. Tax
The tax credits of £394,183 for the half year ended 30 June 2009 includes credits for R&D undertaken in 2006 and 2007 of £192,970 and tax credits for R&D undertaken in 2008 of £201,213. The Group accounts for research and development tax credits when there is sufficient certainty over receipt of the amounts involved, which is generally, when the claim has been filed with the applicable tax authority. The Group has one further claim for 2008 that it has yet to file and is anticipating that this claim will be settled and accounted for in the second half of 2009.
5. Earnings 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 | ||
| 2009 | 2008 | 2008 | ||
| £ | £ | £ | ||
| Profit/(loss) for the purposes of basic and diluted loss | 154,550 | (419,683) | (731,477) | |
| --------------- | --------------- | ----------------- | ||
| Number | Number | Number | ||
| Weighted average number of ordinary shares used in basic earnings per share calculation | 110,883,694 | 105,996,661 | 108,446,872 | |
| Dilutive share options | 467,831 | - | - | |
| --------------- | --------------- | ---------------- | ||
| Weighted average number of shares used in diluted earnings per share calculation | 111,351,525 | 105,996,661 | 108,446,872 | |
| --------------- | --------------- | ---------------- |
6. Unaudited Statement of changes in equity
| Share | ||||||
| Share | Share | option | Translation | Retained | ||
| 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) |
| Issue of equity shares | 174,400 | 370,600 | - | - | - | 545,000 |
| Share options | - | - | 26,213 | - | - | 26,213 |
| Translation of foreign operations | - | - | - | (130,699) | - | (130,699) |
| Expenses from issue of equity shares | - | (34,813) | - | - | - | (34,813) |
| Recovery of VAT | - | 89,037 | - | - | - | 89,037 |
| Loss for the year | - | - | - | - | (731,477) | (731,477) |
| ------------- | ------------ | ----------- | ----------- | -------------- | --------------- | |
| At 31 December 2008 | 2,433,251 | 7,750,957 | 97,588 | 28,144 | (10,817,865) | (507,925) |
| ------------- | ------------ | ---------- | ----------- | -------------- | --------------- | |
| Share options | - | - | 13,106 | - | - | 13,106 |
| Translation of foreign operations | - | - | - | 19,621 | - | 19,621 |
| Profit for the period | - | - | - | - | 154,550 | 154,550 |
| ------------- | ------------ | ----------- | ----------- | -------------- | --------------- | |
| At 30 June 2009 | 2,433,251 | 7,750,957 | 110,694 | 47,765 | (10,663,315) | (320,648) |
| ------------- | ------------ | ---------- | ----------- | -------------- | --------------- |
| Share | ||||||
| Share | Share | option | Translation | Retained | ||
| 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) |
| Issue of equity shares | 174,400 | 335,787 | - | - | - | 510,187 |
| Share options | - | - | 13,106 | - | - | 13,106 |
| Translation of foreign operations | - | - | - | (79) | - | (79) |
| Loss for the period | - | - | - | - | (419,683) | (419,683) |
| ------------- | ------------ | ----------- | ----------- | -------------- | --------------- | |
| 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 2009 | 30 June 2008 | 31 December 2008 | |
| £ | £ | £ |
| Loss from operations | (234,356) | (410,791) | (812,344) |
| Adjustments for: | |||
| Depreciation of property, plant and equipment | 28,338 | 37,552 | 58,780 |
| Share option charge | 13,106 | 13,106 | 16,180 |
| Amortisation of capitalised R&D | 47,507 | 7,804 | 26,213 |
| -------------- | ---------------- | ---------------- | |
| Operating cash flows before movements in working capital | (145,405) | (352,329) | (711,171) |
| Increase in receivables | (62,405) | (279,886) | (42,408) |
| (Decrease) / increase in payables | (15,225) | 252,269 | (3,322) |
| -------------- | ---------------- | ----------------- | |
| Cash used by operations | (223,035) | (379,946) | (756,901) |
| Taxes received | 192,970 | - | 41,909 |
| Interest paid | (6,604) | (13,106) | (27,531) |
| --------------- | ---------------- | ----------------- | |
| Net cash outflow from operating activities | (36,669) --------------- | (393,052) ---------------- | (742,523) -----------------
|