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Admission to AIM 22 June 2005

Investors | RNS Announcements | Admission to AIM 22 June 2005

System C , a leading independent provider of IT implementation solutions for the healthcare sector in England, today announces the completion of its Initial Public Offering and placing of new and existing ordinary shares with institutional investors (the "Placing").

• Placing Price of 54p per ordinary share (the "Placing Price")

• Based on the above Placing Price per share, the market capitalisation of System C on completion of the Placing will be approximately £47.7 million

• Net proceeds of the Placing will be approximately £8.5 million for the Company

• Proceeds will be used primarily to accelerate System C's growth both organically and, should the opportunity arise, by selective acquisition

• The New Ordinary Shares to be issued pursuant to the Placing and Employee Offer will represent approximately 57.3 per cent of the enlarged issued share capital of the Company

• Existing Shareholders have agreed to sell 32,281,471 Existing Ordinary shares as part of the Placing. The largest single existing shareholder, Barclays Ventures, is selling its entire stake.

• Admission is expected to take place and dealings in the Ordinary Shares are expected to commence on AIM at 8.00 am on 28 June 2005.

• Collins Stewart is acting as nominated adviser and broker to the Company.

Ian Denley, CEO said: "We are delighted that System C has received such a positive reception from institutional investors. A quotation on AIM is a logical next step in the development of System C and provides funding for us to accelerate our growth both organically and through selective acquisition."

Contacts:

System C Healthcare                    01622 691616
Ian Denley

Maitland                                           020 7379 5151
Neil Bennett/Brian Hudspith

Collins Stewart                               020 7523 8350
Chris Wells/Mark Connelly


Legal disclaimers

The contents of this announcement, which have been prepared by and are the sole responsibility of System C Healthcare plc, have been approved by Collins Stewart Limited solely for the purposes of section 21 of the Financial Services and Markets Act 2000.

Collins Stewart Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting for System C Healthcare plc in relation to the proposed flotation and placing and for no one else, and will not be responsible to anyone other than System C Healthcare plc for providing the protections offered to their respective clients nor for providing advice in
relation to the proposed flotation and placing.

No offer or invitation to acquire shares in System C Healthcare plc is being made by or in connection with this announcement. Any such offer will be made solely by means of the admission document expected to be published later today and any acquisition of shares should be made solely on the basis of the information contained in such document and any supplements thereto.

The value of shares can go down as well as up. Past performance is not a guide to future performance. Persons needing advice should consult a professional adviser.

This announcement does not contain or constitute an offer of securities for sale in the United States. The Ordinary Shares have not been, and will not be, registered under the US Securities Act of 1933 or under the securities law of any state of the United States. Accordingly, subject to certain exceptions, the Ordinary Shares may not be offered or sold, directly or indirectly, within the United States. There will be no public offering of securities in the United States.

This announcement and the information contained herein are not for publication, distribution or release in, or into, the United States, Canada, Australia, Japan, the Republic of Ireland or South Africa.


Notes to Editors

About System C

Summary

System C is a leading independent provider of IT implementation solutions for the healthcare sector in England. It offers a range of design, implementation, project management, service delivery, training and support services. The Company has a long history of developing and providing healthcare related software applications to the UK healthcare sector including an integrated range of
clinically based and patient focused software applications to provide Electronic Patient Records.

System C operates in a rapidly expanding market. The Government has made the improvement of IT within the NHS a priority and in 2002 introduced the £6.2 billion National Programme for IT for the English NHS. This commitment is in addition to the annual NHS spend on healthcare IT which is expected to be
approximately £1.2 billion in 2005. The Company has secured significant contracts with two LSPs as part of the National Programme and the Directors believe that System C is well positioned to play an increasingly important role in the continuing development of IT within the UK healthcare sector.

System C's main office is in Maidstone and it has additional offices in Warrington and Swindon. As at 30 April 2005, System C had 200 employees, of which 165 were involved in the provision of IT design, development, implementation, project management and support services to the UK healthcare sector.

In the financial year ended 31 May 2005, the Directors estimate that System C generated sales and profits before taxation and exceptional items of not less than £18.0 million and £3.4 million respectively.


Key strengths

System C's key strengths include:

• it operates within a market place in which substantial growth is predicted;
• an in-depth understanding of IT in the healthcare sector;
• predictability of revenue through its medium and long-term contracts;
• strong relationships with its customers;
• it employs a large dedicated team of healthcare IT specialists;
• good prospects for growth both organically and, should the opportunity arise, by selective acquisition; and
• a strong and experienced management team.

Financial Information

				Eleven month period ended
	Financial year ended 31 May			30 April
	2002	2003	2004	2005
	£m	£m	£m	£m
Turnover	3.1	4.1	5.6	16.2
Gross Profit	2.6	1.9	2.7	8.3
Operating (loss)/profit(1)	(0.1)	(1.1)	(1.0)	3.0
Profit/(loss) on ordinaryactivities before taxation and exceptional items	-	(1.0)	(1.3)	3.0
Exceptional items	-	-	(0.9)	(1.0)
Profit/(loss) on ordinary activities before taxation	-	(1.0)	(2.2)	2.0

Note: (1) Operating profits are stated before exceptional items

The Company's financial record for the three financial years and eleven months ended 30 April 2005 has been extracted, without material adjustment, from the Accountants' Report contained in the admission document. Investors should read the admission document in full and not just rely on summarised information.

Current trading and prospects

In the financial year ended 31 May 2005, System C performed strongly, with good growth in revenues and underlying profitability. System C continues to deploy its Services and Products in line with the Directors' expectations and to retain high quality staff, and has made strategic investments in its operational, technological and corporate capabilities.

Continuing investment and growth in the healthcare IT sector, combined with System C's market position and the scope for the development of further Services and Products, all support the Directors' belief that System C's prospects for growth in the current financial year and beyond are good.

Reasons for the Placing

The principal reasons for the Placing include:

• raising new funds through the issue of the New Ordinary Shares in order to accelerate growth both organically and, should the opportunity arise, by selective acquisition;
• raising the Company's corporate profile;
• facilitating the further incentivisation of key management and employees;
• securing a more diversified shareholder base; and
• allowing existing Shareholders to realise a proportion of their investments through participation in the Placing.

Strategy

System C has an established and well-defined Products and Services business with significant growth potential in both areas, together with an opportunity to use the Company's skill and experience as a platform to create additional revenue streams. The Company's strategy is to increase its range of Products, Services
and Productised Services to take in new high-value markets within the healthcare sector. Although it is intended that the Company will principally grow by organic means, the Company also intends, should the right opportunities arise, to make selective acquisitions of existing service or development teams and of complementary product and service businesses.

National Programme for Information Technology (NpfIT)

One of the key objectives of the NPfIT is to establish an NHS Care Records Service. This involves the integration of a mix of national and local IT systems and services to provide an NHS Care Record system that crosses all primary (e.g. GP), secondary (e.g. hospital) and social care (e.g. care of the elderly, community and homecare) organisations. It is estimated that the integrated systems will eventually have to keep track of a system that currently encompasses approximately 14 million patient interactions every week with over 30,000 GPs, almost 300 hospitals and approximately 1.2 million NHS staff (Source: NHS website).

By the end of January 2004, the Department of Health had appointed four Local Service Providers (LSPs) across five regional clusters to implement the new nationwide systems with an estimated total contract value of approximately £4.9 billion. The LSPs act as system integrators, supplier managers and programme managers for each of the five geographic areas or Clusters within the National
Programme. Their role is to ensure that there is appropriate integration between local and national systems by ensuring that local systems are compliant with national standards or by delivering upgrades or replacements where existing systems cannot be made compliant. During the first three years of the NPfIT (to December 2006) the Government has contracted for an initial £2.3 billion of
expenditure to the LSPs and National Application Service Providers.

Each of the LSPs has a number of sub-contractors, such as System C, providing a range of services. System C is one of the largest single independent suppliers of design, implementation, project management and support services for the healthcare IT marketplace in England. As at 30 April 2005, System C employed 165 healthcare IT specialists with an average of over 9 years' experience in the provision of IT design, development, implementation, project management and support services to the healthcare sector.

updates from System C