9th Sep 2005 11:05
Ultrasis PLC09 September 2005 Ultrasis Plc ("Ultrasis" or "the Company" or "the Group") Preliminary final results for the year ended 31 July 2005 Chairman and Chief Executive's Statement Since your Company's last Annual Report we are pleased to report that severalkey events have taken place which have transformed the prospects of your Companyand its perception by both its clients and investors. Overall, business is growing, the value of individual contracts increasing andpenetration of the key NHS market deepening. Recognition of Ultrasis' productsby the National Institute for Clinical Excellence (NICE) has improved theCompany's position, enabling it to achieve its strategic goals moreaggressively, and potentially holding a distinct advantage over competitors. Ultrasis' strong position as a provider of innovative clinical softwaresolutions is now being increasingly recognised by the market and healthcareprofessionals. Following the Board's decision, supported by shareholders, to move the Company'slisting to AIM, the closing mid-market share price of Ultrasis has risen to 2.35p per share as at 5 September 2005, raising your Company's market capitalisationto above £27m from £4.2m on 3 September 2004. Total sales orders for the year were in line with internal budgets. Overheadscontinue to be strictly controlled and the raising of new funds in June providedthe Company with additional working capital of £738,000 to strengthen its salesand marketing resources. Shareholders will recollect that this was anticipated in the last annual report. Initiating our plans to further strengthen our UK sales team, John Smith wasappointed as the new UK Director of Sales (non-statutory director) withresponsibility for harvesting our increasing market potential. This is a verypositive move for Ultrasis as John, who has extensive experience in mentalhealth, has already made inroads in developing the market both in NHS Trustskeen to use effective drug-free alternatives in the treatment of depression, aswell as employers who, in line with current legislation, wish to take proactivesteps to reduce stress in the workplace. The year saw the commencement of further investment in research and developmentinto the Group's flagship product "Beating the Blues" which will improve thedelivery options and extend the potential customer base. Our new distribution arrangement with HealthMedia Inc adds some excellent andvery complimentary products to our portfolio such as a proven weight managementprogramme and smoking cessation tool as well as chronic disease managementprogrammes that address priority issues identified by the Department of Health. HealthMedia shares a similar ethic with Ultrasis in that it provides strongevidence based products. Under the terms of this arrangement, John Hill,previously head of US business, has transferred to Healthmedia and now workingwithin a larger sales team will continue to develop Ultrasis business in NorthAmerica. We received our first Canadian order with the sale of licences toFamily Services Employee Assistance Programs (FSEAP) in Toronto to use both theUltrasis Relief Series and Beating the Blues programmes. In addition, a pilothas begun in New York State using Beating the Blues that will test thereimbursement of the treatment through the US health insurance system. Our strategy has not faltered in respect of the focus to professional andcorporate markets in the UK and US and we have improved our market opportunitieswith strengthened sales forces and wider product offerings. Results for the year to 31 July 2005 In the Year to 31 July 2005 the Group's recognised revenues from ordinaryoperating activities were £844,000 and £63,000 of exceptional income fromMindtech ( 2004: £812,000 from ordinary operating activities and £723,000 ofexceptional income from Mindtech) The operating loss for the period is£274,000 before exceptionals and one-off costs (which comprise losses on thedisposal of fixed assets associated with the relocation of the Group's headoffice and costs associated with the move to AIM) and interest. Gerald Malone Graham LewisNon-Executive Chairman Chief Executive Consolidated profit and loss account for the year ended 31 July 2005 Notes 2005 2004 £000 £000Turnover - software licensing and services 3 844 812- advance royalties and development work re: Mindtech Licence 4 63 723 ________ ________ 907 1,535Cost of sales (19) (20) ________ ________Gross profit 888 1,515 Administrative expenses (68) -costs associated with move to AIM (1,162) (1,602)other ________ ________ (1, 230) (1,602) ________ ________Operating loss (342) (87) - loss on the disposal of fixed assets (84) - ________ ________Loss on ordinary activities before interest (426) (87) Finance charges (net) (150) (277) ________ ________Loss on ordinary activities before taxation (576) (364)Tax on loss on ordinary activities 5 - 217 ________ ________Loss on ordinary activities after taxation (576) (147) ________ ________Retained loss for the year (576) (147) ________ ________Loss per share 6Basic (0.06) p (0.02) pDiluted (0.06) p (0.02) p * Results for both years all resulted from continuing operations. Consolidated balance sheet as at 31 July 2005 Notes 2005 2004 £000 £000Fixed assetsTangible assets 48 124 __________ __________ 48 124 __________ __________Current assetsDebtors - due within one year 206 407Cash at bank and in hand 440 194 __________ __________ 646 601Creditors: amounts falling due within one year (582) (872) __________ __________Net current assets/(liabilities) 64 (271) __________ __________Total assets less current liabilities 112 (147)Creditors: amounts falling due after more thanone year including convertible debt (738) (1,164) __________ __________Net liabilities (626) (1,311) __________ __________Capital and reservesCalled-up share capital 1,165 896Share premium account 20,085 19,093Capital reduction reserve 6,650 6,650Profit and loss account (28,526) (27,950) __________ __________Equity shareholders' deficit (626) (1,311) __________ __________ The financial statements were approved by the board of directors on 6 September2005 and were signed on its behalf by: G LewisDirector Consolidated cash flow statement for the year ended 31 July 2005 Notes 2005 2004 £000 £000Net cash outflow from operating activities 7 (399) (564)Returns on investments and servicing of 7 (53) (97)financeTaxation 7 - 206Capital expenditure 7 (40) (5) __________ __________Net cash outflow before management of liquidresources and financing (492) (460)Financing 7 738 109 __________ __________Increase/(Decrease) in cash in the year 246 (351) __________ __________ Notes to the preliminary statement 1. Nature of financial information The financial information set out in this announcement does not constitute thecompany's statutory accounts within the meaning of Article 243(3) of theCompanies (Northern Ireland) Order, 1986 for the years ended 31 July 2005 or2004. The financial information for the year ended 31 July 2004 is derived from thestatutory accounts for that year which have been delivered to the Registrar ofCompanies. The auditors reported on those accounts and their report wasunqualified. 2. Basis of preparation: The Group incurred losses during the year to 31 July 2005 and had netliabilities at 31 July 2005. In assessing the Group's going concern position,the directors have prepared working capital projections for the Group, which arebased on a number of assumptions including the growth of the Group's revenuestreams, the timing of those revenues, the level of costs and the potential forraising additional funding. Accordingly the directors have formed a judgementat the time of approving the financial statements that there is a reasonableexpectation that the Group has adequate resources to continue in operationalexistence for the foreseeable future. For this reason, they have adopted thegoing concern basis in preparing the financial statements. 3. Segment information The Company considers there to be only one class of business, interactivehealthcare. Geographical segments: United Kingdom Rest of World Group 2005 2004 2005 2004 2005 2004 £000 £000 £000 £000 £000 £000 Turnover bydestination: 542 *1,261 365 274 907 1,535 _______ _______ _______ _______ _______ _______Turnover byorigin: 542 *1,261 365 274 907 1,535 _______ _______ _______ _______ _______ _______ Loss on ordinaryactivities beforetaxation (198) (475) (378) 111 (576) (364) _______ _______ _______ _______ _______ _______Net (liabilities)/ assets 60 (1,372) (686) 61 (626) (1,311) _______ _______ _______ _______ _______ _______ *includes the turnover recognised in respect of advance royalties anddevelopment work re: Mindtech Licence. 4. Other exceptional items During the previous year a licence was granted to Mindtech Limited to exploitthe English speaking consumer market. The licence was granted in return for anon-refundable fee of £600,000 and a royalty stream. Additionally, Ultrasisassisted Mindtech to develop products and services in the defined market andthis assistance was provided with no additional cash burden to the Company. TheCompany received £63,000 for both these services and advance royalties duringthe year and £123,000 during the previous year. During the year the company transferred from the Official List to theAlternative Investment Market of the London Stock Exchange plc ("AIM"). In doingso it incurred one off costs of £68,000. 5. Taxation i) Current year tax chargeThere was a tax credit in the prior year of £213,000 that was received inrespect of research and development tax credits relating to previous years. Afurther tax credit of £11,000 for the year ended 31 July 2004 related to aresearch & development tax credit claim made by the Company. There is no currentyear tax charge as the Group reported taxable losses during the year. ii) Factors Affecting Tax charge for the Current YearThe tax assessed for the year is lower than that resulting from applying thestandard rate of corporation tax (30%). The differences are explained below: 2005 2004 % % Loss on ordinary activities before tax (30) (30) __________ __________ Effect of: Adjustments to tax charge in respect of previous - (58) periods Expenses not deductible for tax purposes 3 (1) Tax losses not recognised 8 25 Capital allowances for period greater than depreciation (1) (6) Research and Development tax adjustments - (12) Utilisation of US tax losses 20 22 __________ __________ Current tax credit rate for the year as a percentage - (60) of losses __________ __________ 5. Taxation continued iii) Factors that may affect the future tax chargeAmounts of unprovided deferred tax assets are as follows: 2005 2004 £000 £000Trading Losses and other losses 5,047 4,572Capital Losses 2,049 2,049Depreciation in excess of capital allowances 84 86 -------- --------- 7,180 6,707 -------- --------- Deferred tax assets have not been recognised, as there is currently insufficientevidence that they will be recovered in the foreseeable future. Deferred tax assets in relation to trading losses will be recognised whentaxable trading profits are considered more likely than not to arise in thecompanies that have such losses available for future offset. Capital losses areavailable only to offset future capital gains realised by the relevantcompanies. 6. Loss per share The calculations of loss per share are based on the following loss and numbersof shares. Basic and diluted 2005 2004 £000 £000Loss for the financial year (576) (147) ___________ ___________ Number Number of shares of shares 2005 2004Weighted average number of shares: For basic and diluted loss per share 964,721,626 764,409,421 ____________ ____________ 7. Reconciliation of operating loss to net cash outflow from operatingactivities 2005 2004 £000 £000Operating loss (342) (87)Depreciation charge 34 47Decrease/(Increase) in debtors 200 (107)(Decrease) in creditors (291) (417) __________ __________Net cash outflow from operating activities (399) (564) __________ __________ Analysis of cash flows 2005 2004 £000 £000Returns on investments and servicing of financeInterest received 8 10Interest paid (61) (107) __________ __________Net cash outflow (53) (97) __________ __________TaxationTaxation Paid - (7)Tax Credit Received - 213 __________ __________Net cash inflow - 206 __________ __________Capital expenditure and financial investmentPurchase of tangible fixed assets (40) (5) __________ __________Net cash outflow (40) (5) __________ __________ __________ __________FinancingIssue of share capital 738 148Repayment of bank loan - (39) __________ __________Net cash inflow 738 109 __________ __________ 8. Analysis and reconciliation of net debt 1 August Non-cash 31 July 2004 Cash flow movement 2005 £000 £000 £000 £000Cash in hand and at bank 194 246 - 440 __________ __________ __________ __________ 194 246 - 440Debt due after one year (1,164) - 426 (738) __________ __________ __________ __________Net debt (970) 246 426 (298) _________ _________ _________ _________ 2005 2004 £000 £000Increase/(Decrease) in cash in the year 246 (351)Cash outflow / (inflow) from decrease / (increase)in debt financing - 39 __________ __________Change in net funds/(debt) resulting from cash flows 246 (312)Other non-cash changes 426 829 __________ __________Movement in net funds in year 672 517Net debt at 1 August (970) (1,487) __________ __________Net debt at 31 July (298) (970) __________ __________ During the year the Company allotted 104,594,400 ordinary shares with a nominalvalue of 0.1p in connection with the conversion of £522,972 nominal of 6%convertible unsecured loan stock 2008. The non cash movement of £426,000 relatesto the amount of convertible loan stock converted to shares during the year andthe amortisation of debt issue costs. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Ultrasis Plc