Final Results

4th Nov 2008 07:00



Ultrasis plc

Final results for the year ended 31 July 2008

Highlights:

Sales growth of 66% on prior year at £2,614,000 (2007: £1,577,000) 

Deferred income of £2,142,000 (2007: £1,388,000)

Strong cash generation and debt free, with year end cash balances of £2,036,000 (2007: £879,000)

Beating the Blues Connect launched to meet growing demand from private patients

Partnership with Innohealth.BV to provide Dutch version of Beating the Blues in the Netherlands healthcare markets, reimbursable by insurers.

Continued high renewals and significant growth expectation for 2008/09.

For further information please contact:

Ultrasis plc:

Nigel Brabbins, Chief Executive +44 (0) 20 7566 3900

[email protected]  www.ultrasis.com

FinnCap, Nominated Adviser 

and Joint Broker

Geoff Nash  +44 (0) 20 7600 1658

www. finncap.com

Marshall Securities, Joint Broker:

John Webb +44 (0) 20 7490 3788

Media enquiries:

JBP Public Relations 

Karen White/Sarah Rice: +44 (0) 117 9073400 

  

Statement from Chairman and Chief Executive:

This year has been one of continued growth, particularly in our key market, the NHS, evidenced by 95% growth in UK revenue. A strong team of account managers has been built to ensure consistent penetration of the NHS and successful delivery and implementation of Beating the Blues across Primary Care Trusts (PCTs). We have announced new regional contracts with three more Strategic Health Authorities (SHAs); North East, East of England and West Midlands. In addition many individual PCTs have also procured Beating the Blues. Currently four of the ten Strategic Health Authorities (SHA's) provide Beating the Blues for their patients through a regional procurement process. This is a significant achievement for Ultrasis.

We have made strong progress in international markets with the partnership in Holland with Innohealth.BV who are currently completing the translation to Dutch of Beating the Blues in readiness for launch in the Netherlands healthcare markets. We have also had early success in treating patients in New Zealand where Beating the Blues is being used across five Primary Health Organisations and we continue to develop our presence in the USA through YourCity.md and other initiatives.

Financial results

Consolidated turnover of £2,614,000 shows a 66% increase on 2007 (£1,577,000). Actual sales invoiced during the year were £3,369,000 (2007: £2,127,000) of which £2,142,000 (2007: £1,388,000) is deferred income to be recognised in future periods.

In accordance with IFRS 2 the Group has incurred a non-cash charge of £566,000 in respect of share options. Other administrative expenses increased by 26%, mostly incurred in strengthening the Ultrasis team to meet implementation and service requirements in the NHS. We are pleased to report a maiden full year operating profit of £196,000 before share based payments (2007: loss of £201,000) and an operating loss of £370,000 after share based payments (2007: £696,000 as restated). Cash generation remains very strong and at 31 July 2008 Group cash balances were £2,036,000 (2007: £879,000). The Group remains debt free.

The financial accounts for the current year have been prepared in accordance with IFRS as applied by the EU. The comparative results for the year ended 31 July 2007 have been restated. Apart from presentational differences, 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 prior years have now been retrospectively capitalised and are being amortised through the Income Statement in the current period.

The UK market

Following the announcement by the Rt. Hon. Alan Johnson MP, Secretary of State for Health in October 2007 of an additional £170m support for the Improving Access to Psychological Therapies programme (IAPT) there was an expectation that the Department of Health's commitment to provide Beating the Blues to all patients who require it would be fully met, but this is not yet so. However, Beating the Blues is now available in 80 of the 153 PCTs in line with the terms of the National Framework Agreement.. We continue to press the Department of Health to ensure that Beating the Blues, the only computerised treatment for mild and moderate depression recommended by NICE, is provided across England to fulfil commitments made by successive ministers.

There have been moves into new markets, such as Health Insurance with AXA and BUPA and an initiative across six leading Universities. We are now capable of meeting the need of private patients (who do not wish to use traditional NHS service) for confidential and immediate access to therapy having launched Beating the Blues Connect in June 2008, combining on line therapy with 24/7 telephonic support. This is available through our on-line facility the wellness shop www.thewellnessshop.co.uk.

We have renewed our contract with AXA ICAS (formerly ICAS, the EAP provider acquired this year by AXA) and won an initial contract with BUPA to provide 500 treatments through the BUPA Wellness Programme. We were pleased to announce last month the extension of our existing contract with Priory Group for the provision of psychological therapies to Richmond and Twickenham PCT for three years. The good clinical outcomes achieved already in the contract with Croydon PCT were instrumental in the Priory's decision to provide Beating the Blues.

International

Building on the reputation gained from successful deployment in the NHS, the cross border appeal of Beating the Blues is growing, other countries increasingly recognising the value of the cost benefits and evidence based outcomes Beating the Blues provides. Examples are the recent deployment in New Zealand and the first translation, into Dutch, enabling the provision of Beating the Blues across the Netherlands. 

We were delighted to announce an agreement with Innohealth.BV to provide Beating the Blues in the Dutch and Belgian healthcare markets. This is the first time Beating the Blues will be translated into a foreign language and is an indicator of the significant potential of markets worldwide. The Dutch healthcare model has recently moved from a public funding model to a health insurance model, paid for by the individual, where patient choice and value for money will be key. Recognition of Beating the Blues by the Dutch insurance board as reimbursable creates a significant precedent. 

We have also seen early successes in patient outcomes in New Zealand, particularly in the Maori population, where Beating the Blues is being used in a project across a number of primary health organisations (PHOs). Due to these early successes we will be exploring ways to increase coverage and availability through other PHOs across New Zealand.

In the USA we seek to build on existing relationships and develop others. We are in preliminary discussions with a number of US based healthcare organisations, investigating opportunities at both primary and secondary care levels as well as in the retail market. A partnership has been established with "YourCity.md" in the USA, a health portal that spans over 500 US cities connecting physicians and patients on a single platform. The YourCity.md brand is increasingly recognised and the portal has recently added an online advertising network and the One-Click Relief CenterTM, medical search engine. 

Corporate

While cost contol remains a priority we have necessarily strengthened our team this year in both sales/account management and IT/software development to meet the demands of our rapidly growing business. We are pleased to report that, yet again, we have no leavers. We welcome Tony Knight, who joins the board as an independent Non Executive Director. Tony brings a wealth of experience to Ultrasis, having over 30 years in the pharmaceutical industry including board roles at Parke Davis UK and, more recently Meldex International plc where he was Non-Executive Chairman. An Advisory Board has been established, comprising senior figures from the healthcare sector and government, to ensure we remain at the forefront of technology solutions based on CBT principles and advise on ethical matters and regulatory compliance.

We would like to thank all members of the team for their continued commitment and support on behalf of the Group. 

Outlook

The Group continues to make progress, both in the UK and overseas. Sales continue to grow strongly and with the strengthened team we are confident we can continue to develop the business and capitalise further on recent initiatives. We expect 2009 to be a year of significant growth and cash generation. We look forward with confidence as our market continues to develop and Beating the Blues and Ultrasis' other products gain wider recognition.

Gerald Malone  Non-Executive Chairman 3 November 2008

Nigel Brabbins Chief Executive

  

CONSOLIDATED INCOME STATEMENT for the year ended 31 July 2008

				2008		2007
				£'000		£'000
Revenue				2,614		1,577
Cost of sales				(230)		(23)
Gross profit				2,384		1,554
Administrative expenses
- Share based payments				(566)		(495)
- Other				(2,188)		(1,743)
- Loss on the disposal of non-current assets				-		(12)
				(2,754)		(2,250)
Operating profit/(loss)
Before share based payments				196		(201)
Share based payments				(566)		(495)
				(370)		(696)
Finance costs				(6)		(9)
Finance income				33		16
				27		7
Loss before taxation				(343)		(689)
Taxation				-		4
Loss for the period				(343)		(685)
Loss per share
Basic and diluted loss per share (p)				(0.023)		(0.046)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 July 2008

	Share Capital	Share Premium	Share Option reserve	Capital reduction reserve	Merger reserve	Translation Reserve	Retained losses	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance brought forward	1,478	21,104	175	6,650	2,324	(17)	(28,972)	2,742
1 August 2006
Foreign exchange translation differences on foreign currency	-	-	-	-	-	(12)	-	(12)
net investment in subsidiaries
Retained loss for the year	-	-	-	-	-	-	(685)	(685)
Total recognised income & expense for the period	-	-	-	-	-	(12)	(685)	(697)
Movement on Share Option reserve	-	-	495	-	-	-	-	495
Balance carried forward	1,478	21,104	670	6,650	2,324	(29)	(29,657)	2,540
31 July 2007
	Share Capital	Share Premium	Share Option reserve	Capital reduction reserve	Merger reserve	Translation Reserve	Retained losses	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance brought forward	1,478	21,104	670	6,650	2,324	(29)	(29,657)	2,540
1 August 2007
Foreign exchange translation differences on foreign currency	-	-	-	-	-	4	-	4
net investment in subsidiaries
Retained loss for the year	-	-	-	-	-	-	(343)	(343)
Total recognised income & expense for the period	-	-	-	-	-	4	(343)	(339)
Movement on Share option reserve	-	-	566	-	-	-	-	566
Balance carried forward	1,478	21,104	1,236	6,650	2,324	(25)	(30,000)	2,767
31 July 2008

  

CONSOLIDATED BALANCE SHEET as at 31 July 2008

				31-Jul		31-Jul
				2008		2007
				£'000		£'000
Non-current assets
Intangible assets				2,717		2,565
Plant and equipment				45		37
Total non-current assets				2,762		2,602
Current assets
Inventories				19		27
Trade and other receivables				708		929
Cash and cash equivalents				2,036		879
Total current assets				2,763		1,835
Current liabilities
Trade and other payables				(2,758)		(1,897)
Total current liabilities				(2,758)		(1,897)
Net current assets/(liabilities)				5		(62)
Net assets				2,767		2,540
Equity
Share capital				1,478		1,478
Share premium				21,104		21,104
Share option reserve				1,236		670
Capital reduction reserve				6,650		6,650
Merger reserve				2,324		2,324
Translation reserve				(25)		(29)
Retained losses				(30,000)		(29,657)
				2,767		2,540

CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 July 2008

	2008			2007
	£'000		£'000
Cash generated from/(used in) operations
Operating loss	(370)		(696)
Share based payments	566		495
Depreciation charge	19		13
Loss on disposal of non-current assets	-		12
Amortisation of capitalised development costs	26		2
Decrease in inventories	8		1
Decrease /(increase) in receivables	221		(500)
Increase in payables	861		765
Tax received	-		4
Net cash generated from operating activities	1,331		96
Investing activities
Interest received	33		16
Purchases of intangible fixed asset	(178)		(82)
Purchases of plant and equipment	(27)		(8)
Net cash used in investing activities	(172)		(74)
Financing activities
Interest paid	(6)		(9)
Net cash used in financing activities	(6)		(9)
Net increase in cash and cash equivalents	1,153		13
Cash and cash equivalents at beginning of period	879		872
Effects of exchange rate changes on the balance of cash
held in foreign currencies	4		(6)
Cash and cash equivalents at end of period	2,036		879

  

Notes to the preliminary statement

 

(1) Nature of financial information

The financial information set out in the announcement does not constitute the Group's statutory accounts for the years ended 31 July 2008 or 31 July 2007. The auditors have reported on the statutory accounts for the years ended 31 July 2008 and 31 July 2007 and their audit reports were unqualified and did not include any statements under Article 243 (3) of the Companies (Northern Ireland) Order, 1986.

The accounts for the year ended 31 July 2007 were prepared under UK GAAP and have been filed with the Registrar of Companies. The full statutory accounts for the year ended 31 July 2008 will be posted to shareholders before the end of January 2009.

The accounts have been 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.

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 applicable as at 31 July 2008. The financial information has been prepared under the historical cost

convention. 

(2) Exceptional items - Share based payment

The charge to the income statement for the year in respect of share options issued to directors and staff was £566,000  (2007: £495,000).

Share options were granted to directors and staff as follows:

in March 2006 which vest in March 2009; and

in May 2007 which vest in May 2010.

All are contingent upon the achievement of the following criteria:

60% for continuous employment during the vesting period; and 

40% for achievement of annual profit targets.

	2008 Number of share options		Weighted average exercise price (p)
Outstanding at the beginning of the period	170,850,000		1.18p
Issued during the period	-		-
Outstanding at the end of the period	170,850,000		1.18p
Exercisable at the end of the period	-		-

The weighted average contractual life of the share options outstanding at year end was 8 years.

The value of the options is measured by the use of a binomial pricing model. The inputs into the binomial model were as follows:

	Options issued May 2007		Options issued March 2006
Share price at grant date	1.35p		2.14p
Exercise price	1.35p		1.09p
Volatility	45%		45%
Expected life	3 years		3 years
Risk free rate	5.25%		4.41%
Expected dividend yield	-		-

Expected volatility was determined by calculating the historical volatility of the Group's share price over the previous 3 years. The expected life used in the model has been adjusted, based on the directors' best estimate, for the effect of non-transferability, exercise restrictions and behavioural considerations.

  

(3) Earnings/(Loss) per share

	Pence per share
	2008	2007
Basic and diluted loss per share	(0.023)	(0.046)
Alternative earnings or (loss) per share	0.015	(0.013)
Alternative diluted earnings per share	0.014	(0.013)

Alternative basic earnings per share is calculated based on earnings after interest and tax but excludes the charge for share based payments which has a non-cash effect. 

The calculation of diluted alternative earnings per share assumes conversion of all potentially dilutive ordinary shares, all of which arise from share options.

The calculations of (loss)/earnings per share are based on the following loss and numbers of shares:

	Basic and diluted
	2008	2007
	£'000	£'000
Loss for the financial year	(343)	(685)
	____	____
Add: Share based payments	566	495
Alternative earnings / (loss) for the financial year	223	(190)
	____	____
	Number	Number
	of shares	of shares
	2008	2007
Weighted average number of shares for basic earnings/(loss) per share:	1,478,070,955	1,478,070,955
	____________	____________
Weighted average number of shares for diluted earnings per share:	1,648,920,955	1,478,070,955
	____________	____________

(4) Annual Report and Accounts

Copies of the annual report and accounts for the year ended 31 July 2008 will be posted to shareholders in due course and will be available to download from the Company's website www.ultrasis.com.

ENDFR ZXLFBVFBZFBL

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