Last checked at 15 Jun 2010 07:00
System C Healthcare PLC
Pre-Close Trading Update - Year ended 31 May 2010
15th June 2010
System C Healthcare plc (AIM:SYS) ("System C" or "the Company"), a leading provider of information solutions and services to the health and social care sector, is pleased to provide the following trading update for financial year ended 31 May 2010.
System C expects to report an increase in annual revenue of some 75%, compared with the previous year. This includes substantial organic growth. Profits before tax are expected to be in-line with current market expectations of £5.4m for the year ended 31 May 2010 (2009: £4.1m). Despite tougher trading conditions, the medium-term prospects are considerable and the Board remains confident that strategic plans in place will enable the Company to capitalise on the substantial opportunities ahead, including a number of Trust-wide procurement processes in which it is currently involved.
Products
The group's business continues to shift towards the Products Division, in line with the stated strategy to diversify its revenue streams. System C's Medway product suite continues to develop and deliver well, with a number of important milestones achieved. The implementation of the Medway clinical information system at Aintree University Hospital NHS Foundation Trust has progressed well and according to expectations, which should act as an important reference site for our Electronic Patient Record System. Following this success, the Company announced on 12 May 2010 that it had been selected by The Royal Devon & Exeter NHS Foundation Trust to supply its Medway order communications and electronic-prescribing software. This represents a significant strategic win in one of the first major procurements outside the Government's National Programme for IT.
Other recent product installations have included multiple deployments of the Company's clinical dashboard, web portal, maternity, accident and emergency, and other departmental modules. The latter stages of the deployment of a wide range of health and social care systems on behalf of the Isle of Man Government have also gone to plan, and it is expected that this large-scale programme will be completed successfully by August 2010.
Liquidlogic, acquired in July 2009, has begun integrating its product and marketing efforts with System C's healthcare ranges and has made its first sale of a Medway dashboard to a social care client. System C and Liquidlogic have also produced the UK's first health and social care link under NHS Connecting for Health's (CfH) new standards for systems integration. The procurement pipeline for social care systems is strong with ten active procurements in progress, and procurements are running at more than twice the rate of 2009/10.
Services
Services revenues for the year ended 31 May 2010 are comparable to the previous year. The Company continues to deploy a wide range of third party systems for NHS trusts across the UK. The Company remains heavily involved in deploying third party products from iSoft and Cerner under the National Programme for IT, with both CfH and Local Service Providers as clients. System C staff have been involved with many of the major acute system go-lives this year, including Lorenzo and Cerner Millennium deployments. Our Healthcare Improvement team continues to deliver results with a number of contracts wins at NHS Trusts in England and in Northern Ireland.
Outlook
The market for IT products in the NHS is now opening up to a wider range of suppliers, and with its substantial five year strategic investment in its Medway product suite, System C is well placed to take advantage of this change. The Company is already experiencing a significant increase in interest for its hospital products and is active in a number of procurements. Negotiation periods for these large scale contracts are inevitably long-term in nature and revenues from sales of the new hospital-wide system are expected to come on stream in the second half of the current financial year and beyond.
The Directors recognise that in the short term, government spending cuts present a risk to revenues, particularly services revenues. The timing of NHS procurements and deployments will have a significant impact on the Company's performance during the current year as System C continues its transition into a product-led company. During this period the Company will be focused in particular on cash management to ensure that costs remain in line with the revenue streams. As at 31 May 2010 the Company had net cash balances of approximately £18.6 million.
The Board considers there to be significant product opportunities in the medium term, which will lead to greater visibility of contract revenues, improved margins and increased predictability in services utilisation.
For further information please contact:
System C Healthcare plc
| Dr Ian Denley, Chief Executive | Tel: 01622 691616 |
| Thomas Chambers, Acting Finance Director |
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| Charles Stanley Securities (Nominated Adviser) | Tel: 020 7149 6000 |
| Russell Cook/Mark Taylor |
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| Maitland (Financial and Corporate Communications) | Tel: 020 7379 5151 |
| Emma Burdett/Tom Eckersley |
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Notes to editors:
System C Healthcare plc (www.systemc.com), specialises in the design and development of clinical patient management and business intelligence software, and provides systems implementation and consulting services to the health and social care sectors.
System C Healthcare is quoted on the London Stock Exchange's Alternative Investment Market.