16th Mar 2005 07:00
Ascribe plc16 March 2005 Press Release 16 March 2005 Ascribe Plc ("Ascribe" or "the Group") Interim Results for the six months ended 31 December 2004 Ascribe (AIM:ASP), the health IT group focusing on medicines management, reportsits maiden Interim Results for the six months ended 31 December 2004. Highlights - acquisition of Protechnic Exeter Limited- successful debut on AIM- turnover of £1.64 million (*Pro forma 6 months: £3.05 million)- EBITDA of £112k (*Pro forma 6 months: £428k)- profit before interest and tax of £23k (*Pro forma 6 months: £312k)- basic loss per share of 0.1 pence (*Pro forma 6 months: adjusted basic earnings per share 0.28 pence) *Pro forma information shows the results for the Group as if it had been trading in its current form for the full 6 month period. Commenting on the Interim Results, Stephen Critchlow, Chairman and ChiefExecutive of Ascribe plc, said: "I am extremely pleased with the progress ofthe Group since flotation. The Protechnic acquisition is integrating well intothe Ascribe business. Ascribe's strategy of building its position in themedicines management market through organic growth and through a number ofacquisitions of profitable companies, offering complementary established systemsto customers needing a medicines management solution, is taking shape. "The business has a good order book, a strong sales pipeline reinforced by anexcellent record of winning public tenders, a healthy record of providingfollow-on products to existing customers and a recurring maintenance contractincome level running at 59% of sales in the period. I remain confident aboutthe Group's prospects for 2005 and beyond." For further information:Ascribe plcStephen Critchlow, Chairman and Chief Executive Tel: +44(0) 161 280 [email protected] Lee, Group Finance [email protected] www.ascribe.com Seymour Pierce LimitedMark Percy Tel: +44(0) 20 7107 [email protected] www.seymourpierce.com Media enquiries:AbchurchPeter Curtain / Justin Heath Tel: +44 (0) 20 7398 [email protected] www.abchurch-group.com Chairman's Statement I am pleased to present our first interim results since the admission of Ascribeplc to AIM on 17 December 2004. Since flotation the Group has made goodprogress, winning several new contracts and extending existing licences and isperforming in line with the Board's expectations. The Group, which focuses on medicines management, currently comprises twolong-established health IT businesses. The majority of the Group's trading isin the UK and Eire although the Group has systems in 41 hospitals in South-EastAsia and Australasia. As part of the AIM flotation a new holding company, Ascribe plc, wasincorporated on 12 August 2004. Following a share exchange agreement theCompany acquired ASC Computer Software Limited ("ASC") on 23 November 2004 andon 17 December 2004 acquired Protechnic Exeter Limited ("Protechnic") for amaximum consideration of £5.8 million. Trading Results The reported results represent the trading of ASC for the six months to 31December 2004, and Protechnic for the two weeks since acquisition and theCompany since incorporation. These show turnover of £1.64 million and operatingprofit before goodwill amortisation of £34k. The operating profit for the sixmonths was £23k. In order to demonstrate the significant progress that trading subsidiaries havemade in the six months to 31 December 2004 compared to the same period in 2003we have produced a pro forma profit and loss statement, set out below, whichshows the results for the Group as if it had been trading in its current formfor the full six-month period with comparative information for the correspondingsix months in 2003. This pro forma information shows that the combinedbusinesses have grown their turnover 10.6 per cent in first half of thefinancial year over the same period in 2003 with operating profits growing by£650k. Pro forma six months Pro forma six ended 31 December months ended 31 2004 December 2003 (Unaudited) (Unaudited) £'000 £'000 TURNOVER 3,046 2,754 Cost of sales (351) (314) Gross profit 2,695 2,440 Administrative expenses (2,383) (2,780) ADJUSTED OPERATING PROFIT / (LOSS)* 312 (340) Interest receivable 57 38 PROFIT / (LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION 369 (302) Taxation (77) 86 PROFIT / (LOSS) ON ORDINARY ACTIVITIES AFTER TAXATION 292 (216) Adjusted earnings / (loss) per share - basic 0.28p (0.21p)Adjusted earnings / (loss) per share - diluted 0.26p (0.21p) * Operating profit before amortisation charges (see notes to the proforma results at the end of this statement). Balance Sheet The balance sheet at 31 December 2004 shows net assets of £4.2 million.Goodwill of £4.6 million is being written off over twenty years and arises fromthe acquisition of Protechnic on 17 December 2004. Cash in the bank amounted to £1.4 million and cashflow generation in the secondhalf is expected to be strong as many of the recurring annual maintenancecontracts are renewed during this period. Net current liabilities of £662k include £1.4 million deferred income, relatingto the maintenance contracts, and £800k of deferred consideration representingthe maximum payable in December 2005 to the vendors of Protechnic under an "earnout" agreement. Strategy and Operational Review Following the acquisition of Protechnic the Group now serves the MedicinesManagement market in primary, secondary and tertiary healthcare. It is theBoard's strategy to grow the business organically and through earnings enhancingacquisitions to access hospital, clinic and community-based customers who canutilise Ascribe's solutions. In secondary and tertiary care the performance of the Hospital MedicinesManagement division has improved significantly through the period. Aftercompleting the development of its web-based software product, the business focusis on growing market share in its core pharmacy sector which has resulted inseveral new contract wins. During the period 13 hospital pharmacy systems wentlive and the business won a further seven pharmacy and three electronicprescribing orders to add to those in progress. Typically these orders includerecurring maintenance contracts spanning a five year period. The business hascontinued its excellent record of securing new business, winning approximately90 per cent of the tenders it has competed for since 2003. I am also pleased toreport that the new web-based product providing electronic prescribing andward-based pharmacy solutions is selling into the existing customer base. In primary care the Group serves the mental health, child care and GP markets.Protechnic's ePEX systems are used by over 100 primary care trusts and I amdelighted to report that an earlier focus on electronic care management moduleshas enabled the system to be used by more mental health and child careclinicians in the field in addition to office-based administrators. Thedevelopment of remotely accessible web pages has also increased both systemusage and the demand for additional user licences. Protechnic also providessoftware solutions to approximately 140 GP practices throughout the UK.Following its acquisition, Protechnic has performed in line with managementexpectations. Outlook The results for the period represent a very pleasing start to life as a publiccompany. Both divisions in the Group are trading ahead of last year and theprospects for the second half, which coincides with the NHS year end, areextremely good. The business has a healthy order book, a strong sales pipeline reinforced by anexcellent record of winning public tenders, a good record of providing follow-onproducts to existing customers and a recurring maintenance contract income levelrunning at 59 per cent of sales in the period. I remain confident about theGroup's prospects for 2005 and beyond. I would like to thank all our staff for their hard work during a period ofsignificant growth and all of our customers and business partners for theirsupport. Stephen Critchlow, Chairman and Chief Executive Officer 16 March 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNTfor the six months ended 31 December 2004 Six months ended Six months ended Year ended 31 31 30 June December 2004 December 2003 2004 (Unaudited) (Unaudited) (Unaudited) Notes £'000 £'000 £'000TURNOVER 2 Existing operations 1,526 1,262 2,826 Acquisitions 118 - - Continuing operations 1,644 1,262 2,826 Cost of sales (61) (23) (50) Gross profit 1,583 1,239 2,776 Administrative expenses (1,549) (1,710) (3,214) OPERATING PROFIT / (LOSS) BEFORE GOODWILL 34 (471) (438)AMORTISATION Goodwill amortisation 3 (11) - - OPERATING PROFIT / (LOSS) Existing operations 2 (471) (438) Acquisitions 21 - - Continuing operations 23 (471) (438) Interest receivable 11 12 17 PROFIT / (LOSS) ON ORDINARY ACTIVITIESBEFORE TAXATION 34 (459) (421) Tax on profit/(loss) on ordinary activities (7) 120 118 PROFIT / (LOSS) ON ORDINARY ACTIVITIES AFTERTAXATION 27 (339) (303) Dividends and appropriations 4 (92) (108) (216) RETAINED LOSS FOR THE PERIOD (65) (447) (519) Pence Pence Pence Basic and fully diluted loss per share 5 (0.10) (0.71) (0.82) There are no recognised gains or losses other than as stated in the profit andloss account. CONSOLIDATED BALANCE SHEET as at 31 December 2004 Unaudited Unaudited Unaudited 31 December 2004 31 December 2003 30 June 2004 £'000 £'000 £'000FIXED ASSETSGoodwill 4,658 - -Tangible fixed assets 296 315 239 4,954 315 239CURRENT ASSETSStocks 5 - -Debtors 1,129 1,016 716Cash at bank 1,376 210 613 2,510 1,226 1,329 CREDITORS: Amounts falling due within (3,172) (1,316) (1,254)one year NET CURRENT (LIABILITIES) / ASSETS (662) (90) 75 TOTAL ASSETS LESS CURRENT LIABILITIES 4,292 225 314 PROVISIONS FOR LIABILITIES AND (100) - -CHARGES NET ASSETS 4,192 225 314 CAPITAL AND RESERVESCalled up share capital 1,034 2,926 2,929Share premium account 6,192 408 468Merger reserve 574 - -Profit and loss account (3,608) (3,109) (3,083) 4,192 225 314 SHAREHOLDERS' FUNDSEquity shareholders' funds 4,192 (2,421) (2,440)Non-equity shareholders' funds - 2,646 2,754 4,192 225 314 CONSOLIDATED CASH FLOW STATEMENT for the six months ended 31 December 2004 Six months ended Six months ended Year ended 31 December 2004 31 December 2003 30 June 2004 (Unaudited) (Unaudited) (Unaudited) £'000 £'000 £'000 NET CASH FLOW FROM OPERATING ACTIVITIES (193) (485) (284) RETURNS ON INVESTMENT AND SERVICING OF FINANCEInterest received 11 12 15 (182) (473) (269) TAXATION 7 120 269 CAPITAL EXPENDITUREPurchase of tangible fixed assets (19) (7) (7) ACQUISITIONSNet cash acquired with subsidiary 2,202 - -Consideration and expenses (2,789) - - (606) (7) (7) CASH FLOW BEFORE FINANCING (781) (360) (7) FINANCINGIssue of ordinary shares 5,000 - 50Fundraising expenses (702) - -Repayment of preference shares (2,300) - -Preference shares redemption payment (454) - - 1,544 - 50 INCREASE / (DECREASE) IN CASH 763 (360) 43 NOTES TO THE FINANCIAL STATEMENTSfor the six months ended 31 December 2004 1 Accounting policies The interim results for the six months ended 31 December 2004 are unaudited and do not constitute statutory accounts within the meaning of s.240 of the Companies Act 1985. They have been prepared in accordance with accounting policies adopted in the admission document issued in relation to the admission of Ascribe plc to the AIM market on 17 December 2004. The results for the year ended 30 June 2004 have been extracted from the statutory financial statements of ASC Computer Software Limited and its overseas subsidiaries. The statutory financial statements of ASC Computer Software Limited, on which an unqualified auditors' report has been received, have been filed with the Registrar of Companies. 2 Basis of preparation Ascribe plc was incorporated on 12 August 2004 and, following a share exchange agreement effected on 23 November 2004, it acquired 100% of ASC Computer Software Limited and its subsidiaries. In the above financial information, ASC Computer Software Limited and its subsidiaries are treated, under merger accounting, as if they had always been a member of the Group, with their results being included for the full accounting period. The corresponding figures for the previous periods include their results for that period, the assets and liabilities at the period end dates and the shares issued by the Company as consideration as if they had always been in issue. The Group now comprises the following active companies: Ascribe plc, the ultimate holding company; ASC Computer Software Limited; ASC Computer Software Pty Limited (Australia); ASC Computer Software (NZ) Limited (New Zealand); and Protechnic Exeter Limited. The Group profit and loss account for the six months ended 31 December 2004 comprises the results of Ascribe plc since its incorporation on 12 August 2004, the three ASC companies for the six months ended 31 December 2004 and the results of Protechnic Exeter Limited since its acquisition. The comparative 2003 results relate to the ASC companies only. 3 Goodwill The goodwill arose on the acquisition of Protechnic Exeter Limited. A number of provisional fair value adjustments have been made in arriving at this figure. These will be reassessed as at 30 June 2005. Goodwill is being written off over twenty years. 4 Dividends 150,000 Class A cumulative preference shares, 2,150,000 Class B cumulativepreference shares and 9,356,426 Class B ordinary shares issued by ASC ComputerSoftware Ltd in 2002 were exchanged with identical shares issued by Ascribe plcas part of the share exchange agreement dated 23 November 2004. These lattershares were redeemed on the flotation of the Company when a sum equal to thetotal dividends accruable of £453,622 was paid to the shareholders. The dividendcharge in the six months to 31 December 2004 represents the release ofunamortised issue costs in respect of the non-equity shares which were beingwritten off by ASC Computer Software Ltd on a time apportioned basis but whichcrystallised on redemption. On flotation, all of the issued share capital of the Company was reclassifiedinto ordinary shares of 1p each, on which no dividends have been paid. 5 Loss per ordinary share of the Company The calculation of basic loss per share of the Company is based on losses of: Six months ended Six months ended Year ended 31 December 2004 31 December 2003 30 June 2004 (Unaudited) (Unaudited) (Unaudited) £'000 £'000 £'000 Loss for the period attributable to ordinary (65) (447) (519)shareholders and on the weighted average number of shares of the Company in issue of: Six months ended Six months ended Year ended 31 December 2004 31 December 2003 30 June 2004 (Unaudited) (Unaudited) (Unaudited) No. No. No. Weighted average number of shares 65,971,925 62,866,176 63,136,176 The weighted average number of ordinary shares of the Company has been adjustedto take account of merger accounting. The loss attributable to ordinary shareholders and weighted average number ofordinary shares for the purpose of calculating the diluted loss per ordinaryshare are identical to those used for basic loss per ordinary share. This isbecause the exercise of share options would have the effect of reducing the lossper ordinary share and is therefore not dilutive under the terms of FRS 14 'Earnings Per Share'. NOTES TO THE PRO FORMA (UNAUDITED) RESULTS A The pro forma results for the six months ended 31 December 2004 comprise the aggregation of the actual results of Ascribe plc since its incorporation on 12 August 2004; ASC Computer Software Limited; ASC Computer Software Pty Limited (Australia); ASC Computer Software (NZ) Limited (New Zealand); and Protechnic Exeter Limited for the full period, on the basis of the current accounting policies. B The pro forma results for the six months ended 31 December 2003 comprise the actual results of ASC Computer Software Limited; ASC Computer Software Pty Limited (Australia); ASC Computer Software (NZ) Limited (New Zealand); and Protechnic Exeter Limited for the full period, on the basis of the current accounting policies, before goodwill amortisation. C Adjusted earnings per share on a pro forma basis have also been included as the Directors consider that this figure is helpful for a better understanding of the underlying business. It has been assumed that 103,441,732 (basic) and 110,236,232 (diluted) 1p ordinary shares were in issue during the pro forma period to 31 December 2004 (31 December 2003: 103,441,732 - basic and diluted). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
ASP.L