21st Apr 2005 17:49
Ultrasis PLC21 April 2005 Ultrasis PLCInterim results for the six months ended 31 January 2004 Statement from the Chairman and Chief Executive Business has continued to develop steadily for the first six months. Costmanagement has been stringent and we are pleased to report that the Group is ontarget to meet budgets this year. The 6 month result before exceptional costsand interest is promising, showing a loss of (£75,000). Order input for thefirst 3 months of 2005 has again been positive. The impact is not reflected inthe results to 31 January 2005. There has been success in penetrating newmarkets, principally the local authority sector. The Group's flagship product "Beating the Blues" has been successfully updatedand implemented in the US and Australia as well as the UK. Further productdevelopment is under consideration, which will improve the delivery options andextend the potential customer base. Driven largely by increasingly stringent regulation by the Health and SafetyExecutive (HSE) in the UK employers are increasingly concerned to monitor andcontain sickness absence costs and avoid potential litigation costs should theybe found negligent by failing to manage mental health issues such as stress inthe workplace. The HSE has published new standards of measurement and Ultrasisresponded, having been in consultations with the HSE with a new audit tool whichmatches their requirements. The first order has been received from BirminghamCity Council. Three NHS Primary Care Trusts now use the Relief Series in pilotsand in addition Kent County Council has just gone live with the system for alltheir staff. Due to this growing interest the Group invested in a hostingservice that enables a more speedy and cost effective delivery to its customers. The most significant long term market development is the preliminaryannouncement from the National Institute of Clinical Excellence (NICE) - the NHSbody that reports on the efficacy of innovative therapy - that Beating the Bluesbe recommended for use in the treatment of depression and anxiety. This, coupledwith the NICE guidelines issued in the autumn, that anti-depressantpharmaceuticals should not be prescribed as a first resort for people presentingwith mild to moderate depression, allows Ultrasis to make a strong case withinthe NHS for widespread adoption of Beating the Blues. Our strategy to develop partnerships will continue and it is our intention tostrengthen our sales capability, especially targeting emerging opportunitieswith the NHS and the public sector employment markets. In the US growth has continued, albeit slowly. Twenty five Beating the Blueslicenses purchased by Value Options are being implemented and existing users atEmory University continue to obtain good results from the tool. We havewitnessed a growing interest in Beating the Blues from the US following therelease of published data last autumn and the recent NICE evaluationrecommending its use. In the six months ended 31 January 2005, revenue recognised was £471,000including £78,000 from Mindtech (six months to 31st January 2004; £879,000,including £600,000 from Mindtech). The operating loss for the period is £75,000before exceptionals (which comprise losses on disposal of fixed assetsassociated with the relocation of the Group's head office), and interest. Thecost base has been maintained at approximately £1m on an annualised basis. As envisaged in the Annual Report the Board intends to make an application foradmission of the Group's Securities to AIM and to secure additional funding tostrengthen the Group's Sales function and position it to take advantage ofopportunities for strategic acquisitions that may emerge. Graham LewisChief Executive Gerald MaloneNon Executive Chairman Audit report to Ultrasis plc We have audited the interim report of Ultrasis plc for the period ended 31January 2005 which comprises the consolidated profit and loss account, theconsolidated balance sheet, the cash flow statement and the related notes 1 to9. We have read the other information contained in the interim report andconsidered whether it contains any apparent misstatements or other materialinconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by, the directors. The directorsare responsible for preparing the interim report in accordance with the ListingRules of the Financial Services Authority which require that the accountingpolicies and presentation applied to the interim figures should be consistentwith those applied in preparing the preceding annual accounts except where anychanges, and the reasons for them, are disclosed. Our responsibilities, as independent auditors, are established in the UnitedKingdom by the Auditing Practices Board, our profession's ethical guidance andthe terms of our engagement. Under the terms of our engagement we are required to report to you our opinionas to whether the interim report has been properly prepared, in all materialrespects, in accordance with the basis of preparation set out in note 1 to theinterim report. Basis of audit opinion We conducted our audit in accordance with United Kingdom Auditing Standardsissued by the Auditing Practices Board. An audit includes examination, on a testbasis, of evidence relevant to the amounts and disclosures in the accounts. Italso includes an assessment of the significant estimates and judgements made bythe directors in the preparation of the accounts, and of whether the accountingpolicies are appropriate to the company's circumstances and consistentlyapplied. We planned and performed our audit so as to obtain all the information andexplanations which we considered necessary in order to provide us withsufficient evidence to give reasonable assurance that the interim report is freefrom material misstatement, whether caused by fraud or other irregularity orerror. In forming our opinion we also evaluated the overall adequacy of thepresentation of information in the accounts. Opinion In our opinion the interim report fairly presents the results of the group forthe six months ended 31 January 2005 and the financial position of the group asat that date and has been prepared, in all material respects, in accordance withthe basis of preparation set out in note 1 to the interim report. Nexia Audit Limited Chartered Accountants Registered Auditors1 Riding House StreetLondonW1A 3AS Consolidated Profit and Loss AccountFor the six months ended 31 January 2005 Six months Six months Year ended ended ended 31 January 31 January 31 July Notes 2005 2004 2004 (audited) (unaudited) (audited) £'000 £'000 £'000 Turnover 3 471 879 1,535Cost of sales (15) (9) (20) ------------- ---------- ----------Gross profit 456 870 1,515 ------------- ---------- ---------- Administration expenses (531) (906) (1,602) ------------- ---------- ---------- (531) (906) (1,602) ------------- ---------- ----------Operating loss (75) (36) (87) ------------- ---------- ---------- Loss on the disposal of fixed 4 (77) - -assets ------------- ---------- ----------Loss on ordinary activities before (152) (36) (87)interestNet interest payable and other charges (85) (165) (277) ------------- ---------- ----------Loss on ordinary activities before (237) (201) (364)taxationTax on loss on ordinary 5 1 213 217activities ------------- ---------- ----------(Loss)/profit on ordinaryactivities 3 (236) 12 (147)after taxation ------------- ---------- ----------(Loss)/profit for the period (236) 12 (147)Basic (loss)/profit per share (p) 7 (0.026)p 0.002p (0.02)pDiluted (loss)/profit per share 7 (0.026)p 0.001p (0.02)p(p) Results for the period all resulted from continuing operations Consolidated Balance SheetAt 31 January 2005 31 January 31 January 31 July Notes 2005 2004 2004 (audited) (unaudited) (audited) £'000 £'000 £'000Fixed assetsTangible assets 61 141 124 --------- --------- --------- 61 141 124 --------- --------- ---------Current assetsDebtors - due within one year 175 851 407Cash at bank in hand 73 86 194 --------- --------- --------- 248 937 601Creditors: amounts falling due withinone year (639) (1,123) (872) --------- --------- ---------Net current liabilities (391) (186) (271) --------- --------- --------- Total assets less current (330) (45) (147)liabilitiesCreditors : amounts falling dueafter more than one yearConvertible loan stock (935) (1,544) (1,164) --------- --------- --------- (935) (1,544) (1,164) --------- --------- --------- --------- --------- ---------Net liabilities 3 (1,265) (1,589) (1,311) ========= ========= =========Capital and reservesCalled up share capital 953 808 896Share premium account 7 19,320 18,737 19,093Other reserves 7 6,650 6,650 6,650Profit and loss account 7 (28,188) (27,784) (27,950) --------- --------- ---------Shareholders' deficit (1,265) (1,589) (1,311) ========= ========= ========= Consolidated Cash Flow StatementFor the six months ended 31 January 2005 Six months Six months Year ended ended Ended 31 January 31 January 31 July 2005 2004 2004 (audited) (unaudited) (audited) Notes £'000 £'000 £'000Net cash outflow from operatingactivities (59) (535) (564) Returns on investments and servicingof finance 9 (28) (47) (97)Capital expenditure and financialinvestment 9 (34) - (5)Taxation - - 206 --------- --------- --------Net cash outflow before management ofliquid resources and financing (121) (582) (460) --------- --------- --------Financing - increase in ordinaryshare capital - 148 148- decrease in short term borrowing - (31) (39) --------- --------- --------Decrease in cash in the period (121) (465) (351) ========= ========= ======== Reconciliation of net cash flow to movementin net debtDecrease in cash in the period (121) (465) (351)Cash outflow from decrease in debtfinancing - 31 39 -------- --------- --------Movement in net debt in period (121) (434) (312)Non-cash changes arising onconversion of loan stock 229 449 829Net debt at beginning of period 8 (970) (1,487) (1,487) -------- --------- --------Net debt at end of period 8 (862) (1,472) (970) ======== ========= ======== Reconciliation of operating loss to cash flow fromoperating activitiesOperating loss on ordinary activities (75) (36) (87)Depreciation charge 19 27 47Decrease/(Increase) in debtors 230 (355) (107)Decrease in creditors (233) (171) (417) -------- --------- --------Net cash flow from operatingactivities (59) (535) (564) ======== ========= ======== Interim results for the six months ended 31 January 2004 Notes 1. Nature of financial information The financial information contained in this interim report does not constitutestatutory accounts as defined by Article 248(3) (c) in Part VIII of theCompanies (Northern Ireland) Order 1986. Statutory accounts for the year ended31 July 2004 have been reported on by the Company's auditors and delivered tothe Registrar of Companies in Northern Ireland. The report of the auditors wasunqualified and did not contain a statement under Article 245(4) of theCompanies (Northern Ireland) Order 1986. The results for the six months ended 31January 2004 are neither audited nor reviewed by the Company's auditors. The interim financial information has been prepared on the basis of theaccounting policies set out in the Group's statutory accounts for the year ended31 July 2004. 2. Basis of preparation: The Group incurred losses during the six months to 31 January 2005 and had netliabilities and net current liabilities at 31 January 2005. The directors aretherefore considering raising additional funding both for the Group's currentworking capital requirements and for the future development of the Group'sbusiness. In assessing the Group's going concern position, the directors have preparedworking capital projections for the Group, which are based on a number ofassumptions including the growth of the Group's revenue streams, the timing ofthose revenues, the level of costs and the potential for raising additionalfunding. Accordingly the directors have formed a judgement at the time ofapproving the financial statements that there is a reasonable expectation thatthe Group has adequate resources to continue in operational existence for theforeseeable future. For this reason, they have adopted the going concern basisin preparing the financial statements. 3. Segment information The Company considers there to be only one class of business, interactivehealthcare. Geographical United Kingdom Rest of the World GroupSegments --------------- --------------- ---------------- Jan 2005 Jul 2004 Jan 2005 Jul 2004 Jan 2005 Jul 2004 £'000 £'000 £'000 £'000 £'000 £'000 (audited) (audited) (audited) (audited) (audited) (audited) Turnover by 293 1,261 178 274 471 1,535destination: ======== ======== ======= ======= ======== ======== Turnover byorigin: 293 1,261 178 274 471 1,535 ======== ======== ======= ======= ======== ========(Loss)/profiton ordinary (125) (475) (112) 111 (237) (364)activities ======== ======== ======= ======= ======== ========beforetaxationNet(liabilities) (844) (1,372) (421) 61 (1,265) (1,311)/assets ======== ======== ======= ======= ======== ======== 4. Relocation Costs In November 2004 the Group relocated its Head Office. In doing so it incurredone-off costs of £88,000, this included disposing of £77,000 worth of FixedAssets at net book value. 5. Taxation There is a tax credit in the year to 31 July 2004 of £213,000 which was receivedin respect 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 being made by the Company. There was nocurrent year tax charge as the Group utilised tax losses from prior years andcarried the remainder forward to offset against future taxation liabilities.However, payments totalling an amount equivalent to £7,000 were made in the USAduring the year ended 31 July 2004 in respect of various ancillary taxes. i) Factors Affecting Tax charge for the Current Period The tax assessed for the period is lower than that resulting from applying thestandard rate of corporation tax (30%). The differences are explained below: Six months ended Year Ended 31 January 2005 31 July 2004 (audited) (audited) % % Loss on ordinary activities before tax (30) (30) __________ __________Effect of:Adjustments to tax charge in respect ofprevious periods - (58)Expenses not deductible for tax purposes 4 (1)Tax losses not recognised 23 47Capital allowances for period less /(greater) than depreciation 3 (6)Research and Development tax adjustments - (12) __________ __________Current tax credit rate for the year as apercentage of losses (0) (60) __________ __________ ii) Factors that may affect the future tax chargeAmounts of unrecognised deferred tax assets are as follows: 31 January 2005 31 July 2004 (audited) (audited) £'000 £'000 Trading Losses and other losses 4,644 4,572Capital Losses 2,049 2,049Depreciation in excess of capital allowances 84 86 ------------ ----------- 6,777 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)/profit per share The calculations of (loss)/profit per share are based on the following (loss)/profit and numbers of shares. Basic and diluted ------------ ----------- ---------- Six months Six months Year ended ended ended 31 January 2005 31 January 2004 31 July 2004 £'000 £'000 £'000 (audited) (unaudited) (audited)(Loss)/profit for theperiod (236) 12 (147) ============ =========== ==========Weighted average number ofshares:For basic (loss)/profit pershare 905,735,838 732,621,042 764,409,421 ============ =========== ==========For diluted (loss)/profitper share 905,735,838 1,031,578,226 764,409,421 ============ =========== ========== 7. Reserves Share Capital Profit and Premium reduction Loss Account reserve account Total £'000 £'000 £'000 £'000At 31 July 2004 19,093 6,650 (27,950) (2,207)Share issues 227 - - 227Foreign exchangetranslation differences onforeign currency netinvestment in subsidiaries - - (2) (2)Retained loss for the year - - (236) (236) __________ __________ __________ __________At 31 January 2005 19,320 6,650 (28,188) (2,218) __________ __________ __________ __________ 8. Analysis and reconciliation of net debt 1 August 2004 Cash flow Non-cash flow 31 January 2005 £'000 £'000 £'000 £'000Cash at bank andin hand 194 (121) - 73Convertible loanstock (1,164) - 229 (935) ----------- -------- ---------- ----------- (970) (121) 229 (862) =========== ======== ========== =========== During the period the company allotted 56,880,000 ordinary shares with a nominalvalue of 0.1p in connection with the conversion of £284,400 nominal of 6%convertible unsecured loan stock 2008. The non cash movement of £229,000 relatesto the amount of convertible loan stock converted to shares during the year andthe amortisation of debt issue costs. 9. Analysis of cash flows Six months Six months Year ended ended ended 31 January 2005 31 January 2004 31 July 2004 (audited) (unaudited) (audited) £'000 £'000 £'000Returns on investments andservicing of financeInterest received 6 6 10Interest paid (34) (53) (107) __________ __________ __________Net cash outflow (28) (47) (97) __________ __________ __________ TaxationTaxation Paid - - (7)Tax Credit Received - - 213 __________ __________ __________Net cash inflow - - 206 __________ __________ __________ Capital expenditure and financialinvestmentPurchase of tangible fixedassets (34) - (5) __________ __________ __________Net cash outflow (34) - (5) __________ __________ __________ FinancingIssue of convertible unsecured - - -loan stockIssue costs of convertible - - -unsecured loan stockIssue of share capital - 148 148Repayment of bank loan - (31) (39) __________ __________ __________Net cash inflow - 117 109 __________ __________ __________ This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Ultrasis Plc