DXS International plc : Final Results

DXS INTERNATIONAL Plc

ANNOUNCEMENT OF FINAL RESULTS 

The Directors of DXS International plc are pleased to announce the Company's Final Results for the year ending 30^th April 2012 and the following information has been extracted form the Company's audited accounts for the year to 30^th April 2012.

BUSINESS REVIEW

Following four years of steadily growing the DXS business with revenues generated primarily from the pharmaceutical sector DXS is making a significant entry into the Primary Care sector of the UK healthcare market. This has been a long stated objective.  DXS has seized the initiative to support the NHS proposals to transfer health service commissioning to newly formed and GP run Clinical Commissioning Groups, which are tasked with the responsibility of finding £20 billion of efficiency savings by 2015, by developing the DXS Point of Care solution. This is a very exciting development that offers the opportunity to significantly grow the DXS revenue.

A number of milestones have been reached towards this goal, not least the signing of an integration agreement with EMIS, the largest supplier of clinical systems in the UK. This means that DXS has access to almost 90% of GP practices throughout the UK. In addition the extensive research and development components undertaken during the past three years have been consolidated  to deliver the specific solutions required by the Clinical Commissioning Groups. There are five key areas where DXS is able to provide CCG's with cost saving and quality enhancing solutions:

• Improved utilisation of care pathways.  This is crucial if the aims of cutting costs while continuing to deliver a high standard of healthcare are to be achieved. Care pathways are the accepted gold standard for delivering medicine based on the best known evidence at any given time. The problem is that busy doctors simply do not have the time to find and refer to appropriate care pathways for the patient's condition. DXS automatically presents an appropriate care pathway to the clinician during the patient consultation. Proper utilisation of care pathways has been shown to save as much as 30% of costs, which, for diabetes, could equate to billions of pounds.  
• Improved education for both provider and patient. There is no doubt as to the benefits of educating both providers and patients. For example, a patient who has been educated about his problem is more likely to change bad habits and be more compliant with treatment programs.
• Improved quality of referring. Poor quality and unwarranted referring cost the country billions of  wasted of pounds. DXS now offers CCG's a service where the quality of the referral information and the service provider are enhanced; one of the NHS' key objectives.
• Better prescribing of medicines. More must be done to curb NHS spending on prescription drugs which is almost £10 billion per annum. DXS provides CCG's with a method of providing clinicians with prescribing guidance at the point of prescription which again translates to improved prescribing more cost effectively..
• Improved diagnosing. Incorrect diagnosis accounts for many unnecessary deaths each year. DXS has integrated ISABEL, the foremost differential diagnosis tool and is able to offer this as one of our bouquet of products.

The CCG's that are currently using DXS' solutions are hugely impressed with the product and we already have many DXS "disciples".

At year ending April 2012 the group is again profitable even after expenditure of over £350,000 on research and development into the new CCG products.

To secure the future of the business the decision was taken during the year to exercise the option to purchase IPR which it had previously used under licence.

With the US healthcare market changing from ICD9 to ICD10 for billing purposes, the DXS Synergy coding initiative is showing promise. DXS is currently negotiating with a US coding company to integrate the Synergy product with theirs, which will provide a marketing and sales outlet for this product. We hope to have this work completed with sales beginning early in 2013.

Once again a special thanks to all DXS management, staff and professionals for finally making the breakthrough to GP Clinical Commissioning Groups.

Robert Sutcliffe
Chairman

REPORT OF THE DIRECTORS

The directors present their annual report and the audited financial statements for the year ended 30^th April 2012. The Chairman's statement which is included in this report includes a review of the achievements of the company, the trading performance, financial position and trading prospects.

PRINCIPAL ACTIVITIES

The group's principal activities during the period were the development and distribution of clinical decision support to General Practitioners, Nurses and Retail Pharmacies in the United Kingdom and South Africa. The commercial side included the sale of e-detailing opportunities to the pharmaceutical industry, the UK Primary Care sector and the licensing of DXS technology to healthcare publishers.

PRINCIPAL RISKS

Failure to achieve predicted quantities of DXS contracts and slower development of additional revenue streams may result in revenues growing more slowly than anticipated. At this stage the company cannot with certainty say that it will penetrate the overseas markets to the extent it anticipates.  

FINANCIAL INSTRUMENTS   

At this stage the Group is not faced with risk relating to interest rates on loans, credit and liquidity. The company does outsource a certain part of its research and development to South Africa and therefore, assuming a considerable strengthening of the ZAR could be faced with foreign exchange risks. Alternatively a weakening ZAR currency could be to the Groups benefit. The Groups principal debtors are "blue chip" pharmaceuticals and thus this is not deemed to be a major risk.

PAYMENT OF CREDITORS

While the Group does not follow any standard payment practice, the Group has agreed terms of payment with the majority of its creditors of 58 days.

DIVIDEND 

The Directors do not recommend a dividend.

RESEARCH AND DEVELOPMENT 

The company continues to invest into research and development both local and internationally. With the rapid emergence of Clinical Commissioning Groups in the UK healthcare sector and their requirement to achieve £20 billion of savings by 2015, the demands of CCG's for DXS to design and create new solutions to achieve this is on-going. Each newly developed product represents additional revenue streams for the company.

DIRECTORS' RESPONSIBILITIES 

The Directors are responsible for preparing the financial statements for each financial year. The directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless

they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

• Select suitable accounting policies and apply them consistently.
• Make judgments and accounting estimates that are reasonable and prudent.
• State whether UK accounting principles have been followed subject to any material departures disclosed and explained in the financial statements and,
• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in the business.

The directors are responsible for keeping proper accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

So far as the directors are aware, there is no relevant audit information of which the company's auditors are unaware. Additionally the directors have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company's auditors are aware of that information.

Approved by the board and signed on its behalf by:

DA Immelman
Director

CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 APRIL 2012

All amounts relate to continuing activities

All recognised gains and losses are included in the profit and loss account

BALANCE SHEET
AS AT 30 APRIL 2012

Approved by the Board for issue on 28^th September 2012

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2012

1.        Accounting policies

1.1.        Accounting convention
The financial statements are prepared under the historical cost convention.

1.2.        Compliance with accounting standards
The financial statements are prepared in accordance with applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) which have been applied consistently (except as otherwise stated).

1.3.        Going concern
At 30 April 2012, the Group had net current liabilities totalling £(282,253)  (2011 - liabilities of £(63,300). The directors have reviewed the current 2012/13 management accounts as well as preparing a financial forecast for 2013 on the basis of various trading and working capital assumptions to determine the Group's funding requirements.

The Group is reliant on the continued support of certain creditors and shareholders to enable it to continue as a going concern. These creditors have given confirmations that they will not call for payment of these debts for a period of at least twelve month from the date of approval of these financial statements.

The directors are actively sourcing additional funding lines to ensure that the development required can be financed during the next year.

On the basis of the above, the forecasting exercise and the continued availability of debtor finance the directors have concluded that the Group will be able to operate for a period of at least twelve months from the date of approval of these financial statements.

There can be no certainty that the outcome of all the matters discussed above will be as forecast by the directors, however there are no matters or events known by the directors which would preclude the adoption of the going concern basis in the preparation of these financial statements. The financial statements do not include any adjustments to the value of balance sheet assets or liabilities which would result should the going concern not be valid.

1.4.        Basis of consolidation
The group financial statements consolidate those of the company and of its subsidiaries using the acquisition method of accounting. All companies within the group make up their accounts to the same date.

Results of subsidiary undertakings acquired during the financial period are included from the effective date on which control is acquired. The separate net assets of newly acquired subsidiary undertakings are incorporated into the financial statements on the basis of the fair value to the group as at the effective date.

Goodwill on consolidation is being amortised in equal instalments over its estimated useful economic life of 20 years.

1.5.        Turnover
Turnover represents amounts receivable under advertising contracts and is recognised on a straight line over the life of the contract in accordance with the substantial risks and rewards of the contract.  Turnover invoiced in advance is deferred and included with current liabilities.

1.6.        Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation is provided to write off the cost less estimated residual value of each asset over its expected useful life, as follows:

Equipment  and computer software        3-4 years straight line.

1.7.        Foreign Currency Translation
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rates ruling at the date of the transaction. All differences are taken to profit and loss account.

1.8.        Taxation
The taxation charge in the profit and loss account is based on the taxable profits for the period at current rates of taxation and takes into account any provision for deferred taxation.

1.9.        Deferred taxation
Deferred taxation is provided in full on timing differences arising from the different treatment of items for accounting and taxation purposes which are expected to reverse in the future, calculated at current tax rates, where deemed material. Deferred tax assets and liabilities are not discounted.

1.10.        Research and Development
Research expenditure is written off to the profit and loss account in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit.

1.11.        Operating leases
Rentals payable under operating leases are charged against income on a straight line basis over the lease term.

1.12.        Company Profit and Loss Account
The company has taken advantage of the exemption permitted under Section 406 of the Companies Act 2006 and has not presented its own profit and loss account in these financial statements. The company's profit after tax for the year was £60,405 (2011 - £1,219).

1.13.        Fixed Asset Investments
Fixed asset investments are stated at cost less provision for permanent diminution in value.

1.14.        Intangible fixed Assets
The IPR, purchased during the year, is the basis for the software development of the company. The software is continually updated and improved. . The cost of the IPR is being amortised in equal instalments over its estimated useful economic life of 39 years.

The Directors of DXS International plc accept responsibility for this announcement.

Contact Information:

David Immelman
Unit 6a, Abbey Business Park,
Monks Walk, Farnham
Surrey
GU9 8HT

Tel: 01252 719800
Website: www.dxs-systems.com

Corporate Adviser:

David Papworth
City & Merchant Limited,
Salisbury House,
29 Finsbury Circus,
London EC2M 5QQ

Tel: 020 7101 7676