TIDMAVIA
RNS Number : 0511S
Avia Health Informatics PLC
27 November 2012
Avia Health Informatics Plc
("Avia" or "the Company")
Unaudited Interim Results
27 November 2012
Avia (AIM: AVIA), the developer and provider of clinical
decision support systems internationally, announces its unaudited
interim results for the six months ended 30 September 2012.
Comparative figures relate to the six months ended 30 September
2011 unless otherwise stated.
Financial Highlights
-- Revenue of GBP0.9m (2011: GBP1.0m)
-- Gross profit of GBP101,000(2011: GBP141,000)
-- Overheads GBP579,000 (2011: GBP626,000)
-- Operating loss of GBP478,000 (2011: GBP485,000)
-- Net cash inflow GBP37,000 (2011: outflow GBP281,000)
-- Cash position of GBP137,000 as at 30 September 2012 (30 September 2011: GBP86,000)
Following the Board changes in August 2012, the group has
achieved significant cost reductions in senior and middle
management. This, together with other cost savings and
consolidation of office locations and functions, has achieved a
reduction in expenditure of about GBP400,000 per annum effective
from the middle of the second half of the current financial
year.
The Company continues to focus on sales activity and cost
control with the aim of achieving significantly reduced losses in
the second half of the current financial year and achieving
profitability in 2013/14 and beyond.
Enquiries:
+44 (0) 1494 618
Avia Health Informatics Plc 503
Roger Lane-Smith, Non-Executive Chairman
Jeremy Dale, Chief Executive
Allenby Capital (Nominated Adviser and
Broker) +44 (0) 20 3328 5656
Nick Naylor
Mark Connelly
Chairman's Statement
The Company's financial performance in the first 6 months of
2012 was unacceptable. It became clear during the first quarter of
the current financial year that the anticipated growth in the
Company's business was not materialising and that there was a need
for top-level change in direction and senior management. Upon the
appointment of Jeremy Dale as Chief Executive and myself as
Non-Executive Chairman, there was an immediate need for additional
funding and the board implemented a significant cost reduction
program and management change to ensure the business remained a
going concern. In addition on 4 September 2012, it was announced
that we had secured a convertible, interest-free, loan of
GBP350,000 from Advanced Computer Software Group PLC (AIM: ASW)
("ACS").
The Company has now been restructured in order to provide
efficiencies and all operational activity has been focussed in
Plain Healthcare, under the leadership of Tim Morris, Managing
Director of Plain Healthcare and Operations Director of Avia. All
staff in the Company are now concentrating on generating sales in
the second half of this financial year. The effective use of our
customer relationship management system and close monitoring of the
sales team has significantly improved the overall visibility of
future revenues.
Following several years of investment in product development
Plain Healthcare is focused on growth, taking to market products
that meet the needs of customers, perform in their sector and that
deliver the return on investment expected. Our future performance
will be measured on contract wins and an increasing user install
base. As we enter 2013 with the establishment of the new CCG
structures the business has a strong pipeline of medium term
opportunities.
As a result of the changes initiated in August/September, the
Company undertook a detailed analysis of its failure to achieve
profitability over the last 3 years. As a result, the sales and
product development strategies have become more focused on UK sales
and measures have been introduced to strengthen the governance of
the Company to ensure that the Board has greater transparency and
control over expenditure and strategy. The review of the Company's
cost base has enabled management and associated changes that will
result in savings of about GBP400,000 per annum, effective from the
middle of the second half of this financial year. This includes a
reduction in the previous level of investment in product
development, reflecting the board's strategy to focus activity on
generating sales of the current product portfolio. The reduction in
the Company's cost base is in addition to the savings initiated
during 2011 that were announced previously.
Financial Report
The consolidated results for the six month period to 30
September 2012 show revenues of GBP853,452 (2011:
GBP1,025,479).
The gross profit margin for the period declined moderately from
the 13.8% achieved in the first half of the financial year ended 31
March 2011 to 11.8%. Whilst sales decreased due to changes in the
provision of out of hours care and delays in the formation of the
Clinical Commissioning Groups (CCGs) our costs did not fall
proportionately as direct salaries remained largely static from the
previous year. Product development costs continue to be
capitalised, but only GBP11,000 was capitalised in the period, some
GBP24,000 less than the same period last year, as more developer
time was allocated to product support activities. Accordingly, a
higher proportion of developer salaries were allocated to direct
costs, with a consequent negative effect on the gross profit
margin.
The loss per share for the period was 7.46p (2011 loss: 7.57p).
The cash balance in the group stood at GBP137,000 at the end of the
period (2011: GBP86,000). Save for the GBP350,000 interest free
convertible loan from ACS, Avia has no borrowings.
Current Trading, Going Concern and Outlook
Resulting from the actions taken in August and September, the
Directors anticipate an improved trading performance, although the
challenging market conditions in our core UK markets may continue
to restrain growth in the near term. Delays in the government
health policy on CCGs have impacted the expected growth in sales of
the PathFinderRF product, which has represented the major
investment both in clinical and software development over the
previous 12 months. With CCGs currently completing the process of
gaining NHS authorisation and budgetary control, we anticipate that
we should see the market improving in 2013. Following the recent
CCG authorisation process, the Directors are confident that the
Company is well-placed to capitalise on new opportunities as they
present themselves in the future.
Unaudited Financial Results for the Six Month Period Ended 30
September 2012
The reader is reminded that these are unaudited and, as such,
may be subject to material change. Both the audited results for the
financial year ended 31 March 2012 and the unaudited results for
the first half of the current financial year are prepared on the
going concern basis, which assumes the Group will have sufficient
resources to enable it to continue trading for the foreseeable
future. The results for the year ended 31 March 2012 however did
contain an emphasis of matter from Avia's auditors over the Group's
ability to continue as a going concern.
Unaudited Financial Results for the six month period ended 30
September 2012
Consolidated Statement of Total Comprehensive Income
for the six month period ended 30
September 2012
Unaudited Unaudited Audited
Period ended Period ended Year ended
30 September 30 September 31 March
2012 2011 2012
GBP GBP GBP
Revenue 853,452 1,025,479 2,275,607
Cost of sales (752,861) (884,100) (1,601,775)
-------------- -------------- ------------
Gross Profit 100,591 141,379 673,852
Administrative Expenses (578,512) (626,261) (1,339,709)
-------------- -------------- ------------
Operating Loss (477,921) (484,882) (665,857)
Finance Income - - 159
Loss before corporation tax (477,921) (484,882) (665,698)
Corporation Tax - - -
-------------- -------------- ------------
Loss for the period and total comprehensive
income (477,921) (484,882) (665,698)
-------------- -------------- ------------
Loss per share expressed in pence
per share
Basic and diluted (7.46) (7.57) (10.40)
-------------- -------------- ------------
Consolidated Statement of Financial Position
As at 30 September 2012
Unaudited Unaudited Audited
As at 30 As at 30 As at
September September 31 March
2012 2011 2012
GBP GBP GBP
Assets
Non-Current Assets
Intangible Assets 520,218 574,452 568,070
Property, Plant and Equipment 27,485 44,256 39,665
547,703 618,708 607,735
Current Assets
Trade and other receivables 270,484 340,050 425,806
Cash and cash equivalents 136,967 85,654 99,853
------------ ------------ ------------
407,451 425,704 525,659
Liabilities
Current Liabilities
Trade and other payables 721,888 463,016 632,138
Deferred Income 250,243 289,636 390,312
Loan 350,000 - -
------------ ------------ ------------
1,322,131 752,652 1,022,450
Net Current Assets/(Liabilities) (914,680) (326,948) (496,791)
------------ ------------ ------------
Net Assets/(Liabilities) (366,977) 291,760 110,944
------------ ------------ ------------
Shareholders' Equity
Called Up Share Capital 124,185 124,185 124,185
Share Premium 2,069,837 2,069,837 2,069,837
Reverse Acquisition Reserve (1,795,277) (1,795,277) (1,795,277)
Merger Reserve 1,488,489 1,488,489 1,488,489
Retained Earnings (2,254,211) (1,595,474) (1,776,290)
Total Equity (366,977) 291,760 110,944
------------ ------------ ------------
Consolidated Statement of Cash
Flow
For the six month period ended
30 September 2012
Unaudited Unaudited Audited
Period ended Period ended Year ended
30 September 30 September 31 March
2012 2011 2012
GBP GBP GBP
Cash Flows from Operating Activities
Cash absorbed by operations (301,360) (234,088) (103,831)
Cash flows from investing activities
Purchase of intangible assets (11,256) (35,328) (145,485)
Purchase of property, plant and
equipment (270) (11,353) (17,413)
Interest received - - 159
Net cash absorbed by investing
activities (11,526) (46,681) (162,739)
-------------- -------------- ------------
Cash flows from financing activities
Loan Received 350,000 - -
Net cash generated from financing
activities 350,000 - -
-------------- -------------- ------------
Decrease in cash and cash equivalents 37,114 (280,769) (266,570)
Cash and cash equivalents at beginning
of period 99,853 366,423 366,423
Cash and cash equivalents at end
of period 136,967 85,654 99,853
-------------- -------------- ------------
Note:
1) Reconciliation of loss before income tax to cash generated from
operations
Loss before income tax (477,921) (484,882) (665,698)
Depreciation Charge 71,558 10,884 138,074
Finance Income - - (159)
-------------- -------------- ------------
(406,363) (473,998) (527,783)
Decrease/(Increase) in trade and
other receivables 155,322 302,482 216,726
(Decrease)/Increase in trade, other
payables and deferred income (50,319) (65,572) 207,226
(301,360) (234,088) (103,831)
-------------- -------------- ------------
Notes to Interim Report
1. Interim report
This report was approved by the directors on 26 November
2012.
The information relating to the six month periods to 30
September 2012 and 30 September 2011 is unaudited. The reader's
attention is drawn to the text above under the heading beginning
"Unaudited Financial Results".
The information relating to the year ended 31 March 2012 is
extracted from the audited Financial Statements of the Company
which were published on 18 October 2012.
2. Accounting policies
Basis of accounting
These financial statements have been prepared in accordance with
International Financial Reporting Standards and IFRIC
interpretations and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS. The financial
statements have been prepared under the historical cost
convention.
Basis of consolidation and reverse acquisition
On 16 November 2009 following the admission of its shares to
trading on AIM, a market operated by the London Stock Exchange, the
Company became the legal parent of Plain Healthcare Limited.
The combination has been accounted for as a reverse acquisition
as if Plain Healthcare Limited acquired Avia Health Informatics
plc. Although these Group financial statements have been issued in
the name of the legal parent, the Group's activity is in substance
a continuation of that of the legal subsidiary, Plain Healthcare
Limited, because after the transaction the former owners of Plain
Healthcare Limited gained control of the Group and of the legal
parent. The following accounting treatment has been applied in
respect of the reverse acquisition:
a) the assets and liabilities of the legal subsidiary are
recognised and measured in the Group financial statements at the
pre-combination carrying amounts;
b) the retained losses and other equity balances recognised in
the Group financial statements to the date of the reverse
acquisition reflect the retained loss and other equity balances of
Plain Healthcare Limited immediately before the reverse
acquisition, and its results for the period from 1 April 2009 to
the date of the reverse acquisition. However, the equity structure
appearing in the Group financial statements reflects the equity
structure of the legal parent, including the equity instruments
issued under the share for share exchange to effect the business
combination on 16 November 2009. The effect of using the equity
structure of the legal parent gives rise to the reverse acquisition
reserve;
c) comparative amounts presented in the Group financial
statements are those reported in the financial statements of the
legal subsidiary, Plain Healthcare Limited, for the period ended 31
March 2009; and
d) no goodwill or fair value adjustments are reflected in the
consolidated financial statements because the parent company had
not traded prior to the acquisition and did not meet the definition
of a business in accordance with IFRS3. A business combination as
defined by this standard was not therefore considered to have taken
place. All differences arising on consolidation are hence taken to
the reverse acquisition reserve.
Revenue recognition
The Group sells rights to use its software products under an
inclusive licence and maintenance agreement. The fee received from
the customer entitles the user to use the software for a limited
period of time (typically one year) together with office hours
software support and maintenance and ongoing updates to the
technical content of the software and any upgrades made to the
software functionality. An additional fee is rendered to those
customers requiring out of office hours support services.
The Group estimates the value of software sales attributable to
ongoing support and upgrades by calculating the direct costs of
providing these services and adding a reasonable profit margin of
25 per cent. This proportion of the fee received from the customer
is recognised on a straight line basis over the period covered by
the invoice to the customer with appropriate amounts being
recognised as deferred income. The balance of the fee received is
recognised immediately in income. Fees generated for separate out
of hours support contracts are recognised on a straight line basis
over the period covered by the amounts invoiced to the
customer.
Intangible assets - Research and development
The Group has incurred substantial sums in developing and
upgrading the Group's products in the period since incorporation
and over the period covered by this financial information. One of
the criteria for the recognition of development expenditure as an
asset is that is must be possible to measure development costs
reliably.
In common with many companies of a similar size and which have
previously applied UK Generally Accepted Accounting Practice, all
development costs incurred up to 31 December 2008 were charged as
an expense against profit because the Group had not maintained
records which would enable it to retrospectively measure, on a
reliable basis, those costs relating to development expenditure,
which might otherwise have met the criteria for recognition as an
intangible asset in accordance with International Accounting
Standard 18.
Since 1 January 2009 the Group has maintained records which
identify costs attributable to individual development projects.
Costs are capitalised as intangible assets when they meet the
criteria specified below.
Development activities involve a plan or design for the
production of new or substantially improved computer software.
Development expenditure is capitalised only if development costs
can be measured reliably, the software programme is technically and
commercially feasible, future economic benefits are probable and
the Group intends to have sufficient resources to complete the
development and to use, lease or sell the asset. The expenditure
capitalised includes only the cost of gross direct labour costs
that are directly attributable to preparing the asset for its
intended use. Other development expenditure is recognised in profit
or loss as incurred.
Subsequent expenditure is capitalised only when it increases the
future economic benefits embodied in the specific asset to which it
relates. All other expenditure, or internally generated goodwill
and brands, is recognised in profit or loss as incurred.
Expenditure on research activities is recognised as an expense
in the period in which it is incurred.
Expenditure is accounted for over the period it is anticipated
that revenues will be generated from the products produced. This is
estimated to be five years from the date the product is complete
and available for sale.
Impairment
At each balance sheet date, the Group reviews the carrying
amounts of its tangible assets to determine whether there is any
indication that those assets have suffered any impairment loss. If
any such indications exist, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss
(if any). Where the asset does not generate cash flows that are
independent from other assets, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an expense
immediately, unless the relevant asset is carried at a revalued
amount in which case the impairment loss is treated as a
revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior years. A reversal of
an impairment loss is recognised as income immediately, unless the
relevant asset is carried at a revalued amount, in which case the
reversal of the impairment is recognised in equity.
Taxation
The tax expense as a charge or credit to profit or loss
represents the sum of the tax currently payable and deferred tax.
Tax is recognised to the extent that it relates to items recognised
directly in equity, in which case it is recognised in the statement
of comprehensive income.
Current tax is based on taxable profit for the period, using tax
rates enacted or substantively enacted at the balance sheet date,
and any adjustment to tax payable in respect of previous years.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the tax
profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised. Deferred tax is charged or credited in the income
statement, except when it related to items charged or credited
directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Company intends to settle
its current tax assets and liabilities on a net basis.
3. Earnings per share
The earnings per share for the six months ended 30 September
2012 have been calculated based on the profit on ordinary
activities after taxation by the weighted average number of shares
in issue during the period. As there are no dilutive factors,
earnings per share is equivalent to the basis loss per share.
4. Segmental Information
A segment is a distinguishable component of the Group that is
engaged in providing services in a particular economic environment
which have different potentials for future development. The Group
operates in only one segment and though there is export revenue
this is all within Europe and the Company classifies its operations
as a single segment.
5. Statement of Compliance
The financial information set out above does not constitute the
Company's statutory report and accounts for the year ended 31 March
2012. Statutory Accounts for 2012 have been delivered to the
registrar of companies. The auditor's report in respect of the 2012
accounts was unqualified and did not contain a statement under
section 489(2) or 498(3) of the Companies Act 2006. It did,
however, indicate the existence of a material uncertainty which may
cast significant doubt about the Group's ability to continue as a
going concern, which the auditor drew attention by way of an
emphasis of matter.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGGUGGUPPGBQ
Cientifica (LSE:CTFA)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Cientifica (LSE:CTFA)
Historical Stock Chart
Von Jul 2023 bis Jul 2024
