DXS INTERNATIONAL PLC
Final Results for the year ended 30 April 2018
The Board of DXS International plc (“the Company”) is pleased to announce its audited Final Results for the year ended 30 April 2018.
Although the revenue for the year 2017-2018 was broadly in line with 2016-7, the profit, after writing off £445,000 of prior year’s R&D expenditure, was £148,821. Nevertheless, the company invested over £1 million into R&D. We believe this has been worthwhile as we are receiving extremely positive endorsement and, with the first pilots now live, are gearing up for an aggressive growth period over the next 3-4 years.
David Immelman (Chief Executive) commented:
“Based on the positive reception we are receiving for our new products now being tested in public, new revenue streams will begin to gain traction in the coming months and years. The calendar year ending 2018 is expected to see a time of consolidation with our new products followed by a fast growth of revenue and profits in 2019. Although we have not invested any resource abroad, the new products are drawing interest from further afield. However in the immediate term our focus remains the UK.
GPSoC2, the nationally funded framework where DXS is accredited, ends in 2019. DXS anticipates beginning the tendering process for GPSoC3 in October 2018. The NHS are committed to ensuring that GPSoC3 is more flexible with pricing and suppliers being able to modularise their product offerings. It is our intention to add the new DXS solutions to the GPSoC3 catalogue ensuring that they too will be centrally funded.
Our traditional offering, DXS Point of Care, is being enhanced with new features and functionality and we believe this too will give us a competitive edge and solid growth over the next 3-year period.”
The Directors accept responsibility for this announcement.
For further information please contact:
|David Immelman (Chief Executive)
DXS International plc
City & Merchant
|0207 101 7676
Level 17, Dashwood House
69 Old Broad Street,
Note to Editors:
DXS International presents up to date treatment guidelines and recommendations, from Clinical Commissioning Groups and other trusted NHS sources, to doctors, nurses and pharmacists in their workflow and during the patient consultation. This effective clinical decision support ultimately translates to improved healthcare outcomes delivered more cost effectively which should significantly contribute towards the NHS achieving its projected efficiency savings.
The following information has been extracted from the Company’s audited accounts for the year to 30 April 2018.The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland.
Although the revenue for the year 2017-2018 was broadly in line with 2017, the profit, after writing off £445,000 of prior year’s R&D expenditure, was £148,821. Revenues for the year were affected by Government cuts in spending and its effects on GPSoC2. GPSoC2, the nationally funded framework where DXS is accredited, ends in 2019. DXS anticipates beginning the tendering process for GPSoC3 in October 2018. The NHS are committed to ensuring that GPSoC3 is more flexible with pricing and suppliers being able to modularise their product offerings. It is our intention to add the new DXS solutions described above to the GPSoC3 catalogue ensuring that they too will be centrally funded.
Nevertheless, the group invested over £1 million into R&D in the year. As noted below, we believe this has been worthwhile as we are receiving extremely positive endorsement and, with the first pilots now live, are gearing up for an aggressive growth period over the next 3-4 years.
DXS is proud to announce that two of its key new products have finally gone live in August 2018. Although this is 12 months later than anticipated, initial customer response is good.
The DXS solutions comprise new clinician and patient facing modules. The patient facing module provides the patient with the DXS MyVytalCare app which facilitates remote updates to his / her personal health record on the GP system. When a patient is formally diagnosed, the clinician facing module enables nurses to prescribe in compliance with the correct guidelines
Our traditional offering, DXS Point of Care, is being enhanced with new features and functionality and we believe this too will give us a competitive edge and solid growth over the next 3-year period.
I take this opportunity to once again thank the DXS staff for their positive and pro-active contribution to the business. The company is well poised to exploit its significant developments and we look forward to one of the most exciting periods ahead.
23rd August 2018
Dr Robert Sutcliffe (69) – Non-Executive Chairman
Bob Sutcliffe is a Chartered Accountant who has strong financial and leadership skills, developed in both public and private sectors. His roles have included Finance Director, Commercial Director, Managing Director, Chief Executive and Chairman. More recently he has used his experience as an interim executive, managing change processes and turnaround.
David Immelman (62) – Founder & CEO
David is the founder of DXS. An entrepreneur by nature, David has initiated a number of businesses in the information, technology and communication sectors. He was a founding member of a diverse South African communication group with a range of media subsidiaries and holdings. For the past 11 years, David has dedicated himself to building DXS.
Steven Bauer (46) – Sales Director
Following his various Sales Management roles, Steven joined DXS at its inception. Steven trained in the life sciences, is a holder of the CIM Professional Postgraduate Diploma in Marketing and Pharma Mini-MBA, and manages the UK business. Steven has built DXS UK from inception to its position today, including managing relationships with clinical system suppliers, content providers and all UK customers. Steven brings significant experience in pharmaceutical promotion and electronic media to the DXS group.
REPORT OF THE DIRECTORS
The directors present their annual report and the audited financial statements for the year ended 30 April 2018.
The directors for the year were:
D Immelman – CEO
S Bauer – Sales Director
B Sutcliffe – Chair
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 licensing of DXS to various CCG’s, the sale of e-detailing opportunities to the pharmaceutical industry, the UK Primary Care sector and the licensing of DXS technology to healthcare publishers.
Failure to achieve predicted quantities of DXS contracts, and slower development of additional revenue streams may result in revenues growing more slowly than anticipated. These may be mitigated due to a more price and budget flexible GPSoC3 (new centrally funded supplier contract) anticipated to be implemented in 3-4th QTR of 2019.
At this stage the group is not faced with risk relating to interest rates on loans, credit and liquidity.
The Directors do not recommend a dividend.
Research and Development
The group continues to invest in research and development both locally and internationally and during this financial year has invested £1,039,687 into R&D for the introduction, continuation and completion of a number of new DXS solutions. These are mainly targeted at providing clinicians and patients with solutions to long term conditions. These products are aligned with the NHS strategy of “Connected Care” and the first turnkey hypertension solution is live.
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.
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:
D A Immelman
23rd August 2018
Review of the company’s business
The company’s profit after tax is £148,821. The pre-tax Loss (2017- Profit) before tax amounts to £46,152 (2017- £38,832) . The company has a credit of £194,973 for UK Corporation Tax (2017 – £185,290) for the year.
The results for the year were as anticipated due to the significant level of investment in R&D during the year of over £1,000,000. The decrease of turnover by 0.6% over that in 2017 was mainly due to market changes within the healthcare sector.
While pursuing our growth strategy during the past year we continued investing in R&D to ensure that momentum on our Long Term Care solutions has been maintained. With some of these key projects recently gone live, the forecast sales for 2018/19 are higher than those for the current year.
It is clear that our vision and development goal established more than five years ago is proving to be aligned with the ever changing healthcare landscape in the UK and globally.
Principal risks and uncertainties‘
The principal risk to the company is that the NHS dramatically changes its plans or cuts its budgets. However this seems unlikely as the NHS is moving to the centrally funded GPSoC3, (DXS is currently an approved supplier on GPSoC 2) and the NHS are committed to see this new initiative resolve previous problems. This includes improved budgets and pricing with far more flexibility for suppliers to operate within the framework.
Analysis of Business during Year Ending April 2018
Revenue was marginally below expectations largely due to NHS changes and budget cuts. The NHS finally agreed that DXS is no longer required to pay royalties to the Clinical System Suppliers in respect of NHS revenue. This will equate to a saving of 10% of revenue generated through the EMIS clinical system. The staff headcount, including outside contractors is approximately 81 and this is considered sufficient for current requirements.
- Group Revenue £3,406,976 has decreased 0.6%. Definition: Total Group sales including distribution of clinical decision support to General Practitioners and the licensing of DXS to CCGs and healthcare publishers.
- Underlying Group Profit After Tax has declined slightly. Definition: Underlying profit provides information on the underlying performance of the business adjusting for either income or charges which are both one off or significant.
- Amortisation of deferred Research and Development expenditure in 2018 was £445,267 and in 2017 was £364,426.
- Earnings Per Share 2018 0.4p, 2017 0.7p. Definition: Earnings per share is the underlying profit divided by the average number of ordinary shares in issue.
- ROE 2018 7%, 2017 12%. Definition: Return on Equity (ROE) is the ratio of net profit of a company to its shareholders funds. It measures the profitability of a company by expressing its net profit as a percentage of its shareholders funds.
Approved by the board and signed on its behalf by:
23rd August 2018
Year Ended 30 April 2018
|Cost of sales||(470,824)||(468,092)|
|Depreciation and Amortisation||(445,267)||(364,426)|
|Interest received and similar income||9,329||2,642|
|Interest payable and similar expenses||(39,791)||20,682|
|Profit on ordinary activities before taxation||(46,152)||38,832|
|Tax on Profit on ordinary activities||194,973||185,290|
|Profit for the year||148,821||224,122|
|Profit per share –|
Statement of Financial Position
Year ended 30 April 2018
|amounts falling due within one year||1,484,870||1,298,045||40,550||48,934|
|amounts falling due after one year||58,500||96,550||–||27,783|
|Cash at Bank and in hand||140,012||165,736||1,728||2,091|
|Creditors: amounts falling due|
|within one year||(997,441)||(1,044,809)||(18,219)||(17,872)|
|Net current assets||685,941||515,522||24,059||55,936|
|Total assets less current liabilities||3,748,251||2,978,860||1,405,360||1,420,754|
|amounts falling due after more than one year||(539,251)||(97,849)||–||–|
|Accruals and Deferred Income||(1,169,217)||(990,049)||–||–|
|Capital and reserves|
|Called up share capital||110,174||110,174||110,174||110,174|
|Provision for costs of share option awards||162,580||162,580||162,580||162,580|
The Financial Statements were approved and authorised for issue by the Board on 29th August 2018.
Signed on behalf of the board of directors
D Immelman S Bauer
Notes to the Financial Statements
Year ended 30 April 2018
1 Summary of significant accounting policies
(a) General information and basis of preparation.
DXS International plc is a public company limited by shares incorporated in England and Wales. The address of the registered office is given in the company information on Page 1 of these financial statements
The group’s principal activities during the year 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 includes the licensing of DXS products to various CCGs, the sale of e- detailing opportunities to the pharmaceutical industry, the UK Primary Care sector and the licencing of DXS technology to healthcare publishers.
The financial statements have been prepared in accordance with applicable accounting standards including Financial Reporting Standard 102 Applicable in the UK and Republic of Ireland (FRS 102) and the Companies Act 2006. The financial statements have been prepared on a going concern basis under the historical cost convention. The financial statements are prepared in sterling which is the functional currency of the company.
The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.
(b) Intangible assets
Intangible assets acquired separately from a business are capitalised at cost.
Research and development expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
Goodwill arising on business combinations is capitalised, classed as an asset on the balance sheet and amortised over its useful life. The period chosen for writing off goodwill is 20 years. The reason for choosing this period is because the directors believe that this is the period of time for the benefit to be received.
Intangible assets are amortised over a straight line basis over their useful lives. The useful lives of intangible assets are as follows:
|Development expenditure||5 years from the date that the specific product is completed and available for distribution||Period of time for benefit to be received|
Provision is made for any impairment.
(c) Tangible fixed assets
The company capitalises items purchased as Tangible Fixed Assets which have a cost in excess of £500.
Tangible fixed assets are stated at cost less accumulated depreciation.
Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost, less estimated residual value, of each asset on a systematic basis over its expected useful life as follows:
Plant and equipment 3-4 years straight line
(d) Debtors and creditors receivable/ payable within one year
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in other administration expenses
(e) Loans and borrowings
Loans and borrowings are initially recognised at the transaction price including transaction costs. Subsequently they are measured at amortised cost using an effective interest rate method, less impairment. If an arrangement constitutes a finance transaction it is measured at present value.
Provisions are recognised when the company has an obligation at the balance sheet date as a result of a past event. It is probable that an outflow of economic benefit will be required in settlement and the amount can be reliably estimated.
Current tax represents the amount of tax payable or receivable in respect of the taxable profit for the current or past reporting periods. It is measured at the amount expected to be paid or recovered using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
(h) Turnover and other income
Turnover is measured at the fair value of the consideration received or receivable net of VAT and trade discounts. The policy adopted for the recognition of turnover is as follows –
Sale of services
Turnover is from the sale of opportunities to the pharmaceutical industry and the UK Primary Care sector and is recognised over the term of service contract and is apportioned on a time basis representing the delivery of the service.
(i) Foreign currency
Foreign currency transactions are initially recognised by applying to the foreign currency amount the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Monetary assets and liabilities denominated in a foreign currency at the balance sheet date are translated using the closing rate
(j) Employee benefits
When employees have rendered service to the company, short term employee benefits to which the employees are entitled are recognised at the undiscounted amount expected to be paid in exchange for that service. The company operates a defined contribution plan for the benefit of its employees. Contributions are expensed as they become payable.
Rentals payable and receivable under operating leases are charged to the profit and loss account on a straight-line basis over the period of the lease.
(l) Share Option Scheme Accounting Policy
The company recognised as an expense, the fair value of share options granted over their vesting period. The fair value is calculated by applying an option pricing model.
Factors affecting the model are: expected volatility, exercise price, weighted average share price, option life and risk free interest rate. In respect of options granted by the company –
– use of the Black Scholes calculator as the option pricing model,
– calculated volatility using the Adam Greene Volatility method using an average share price over the previous 104 weeks,
– the directors base their calculations on an option life of 2 years.
(m) Key judgements and Key accounting estimates
There are no Key judgements or Key Accounting estimates with a material effect on the carrying value of assets and liabilities.