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Interim Results for the six months ended 30 November 2006

Investors | RNS Announcements | Interim Results for the six months ended 30 November 2006

System C Healthcare plc ("the company"), a leading independent provider of IT implementation solutions for the UK healthcare sector, announces its unaudited interim results for the six months ended 30 November 2006.

Financial Summary
For the first time we are reporting our interim financial statements under International Financial Reporting Standards ("IFRS"), and comparative results for the six month period ended 30 November 2005 have also been restated in accordance with IFRS. The financial highlights for the six months ended 30 November 2006 are:


A reconciliation of the changes arising from the adoption of IFRS on the income statement and on equity are given in notes (r) and (s). Ian Denley, Chief Executive said:

"Within System C we have expertise gained over twelve years' successful development and delivery of IT solutions to the NHS. Despite the recent hiatus in deployments within the National Programme caused by the changes in Local Service Providers ("LSP's") responsibilities, we have continued to develop and diversify our business and remain well placed, both organisationally and financially, to take advantage of the strong future we believe lies ahead for healthcare informatics."

For further information please contact

System C Healthcare plc
Jim Horsburgh, Chairman
Dr Ian Denley, Chief Executive
Andrew Coll, Finance Director Tel: 01622 691 616
Maitland
Emma Burdett
Brian Hudspith Tel: 020 7379 5151

Notes to Editors
System C Healthcare plc, established in 1983, specialises in the provision of information systems and solutions to the healthcare sector. Its team of professionals has an average of 14 years healthcare experience and can provide all aspects of systems design, development and deployment services. System C is founded upon the belief that IT solutions, when effectively implemented, can significantly contribute towards improving patient care.

System C has installed patient-focused IT systems at over 30 NHS Trusts. The company also offers a wide range of services to Local Service Providers, the NHS and third-party suppliers.

These include programme/project/change management, design, build and test, implementation, training, data migration, interfacing and helpdesk/support services.
System C employs around 180 staff who are divided between the company's offices in
Maidstone, Warrington and Bristol as well as being located throughout the UK at customer sites. System C was recently voted 60th in the Sunday Times 100 best SMEs to work for in 2006. The company has ISO 9001 quality accreditation and encourages staff development through the National Standard, Investors in People, and has accreditation from the Institute of IT Training. System C is a member of Health Level Seven UK (HL7 UK), a group of leading suppliers promoting effective and consistent implementation of healthcare information standards in the UK.

Chairman's Statement
Introduction
System C has been operating in challenging conditions in our core UK market, and as a result revenues fell by £2.1m. However, through implementation of a targeted cost control programme we have minimised the impact to our bottom line, resulting in only a small operating loss for the period of less than £0.1m. This combined with interest income resulted in PBT of £0.3m, a marginal fall from the same period in the prior year. In addition, we have generated operating cash inflows of £0.6m in the six month period thereby strengthening our cash and balance sheet position.

As well as managing our costs, the Company has been focusing on diversification of our customer base within Healthcare IT. We have announced significant new contract wins, and have broadened the scope of our business into the private sector. In addition we are in advanced contract negotiations that, once successfully completed, will provide an order book that secures a significant proportion of revenue in the next financial year and beyond.

Services
Within the NHS National Programme for IT ("the National Programme"), Accenture's
announcement in September 2006 of their withdrawal from the National Programme, and the final transfer of LSP responsibilities from Accenture to CSC in the North East and East clusters on January 8 2007, led to a hiatus in deployments during this period. This resulted in a £2m decline in our Services revenues from the prior year.

We believe that the restructuring of the LSP situation has been largely resolved, and that deployment progress on the National Programme is beginning to improve. Although it is now clear that the ramp-up will be more gradual than the rapid acceleration we had previously expected, the total market potential in the medium to long term remains substantial.

Products
Products revenues fell marginally year-on-year, this was due to the knock-on effect of the slow down within the National Programme. However a focus on achieving more profitable sale opportunities resulted in an increase in the PBT margin to 25% (19% in the prior year).

We are very pleased to announce that we have secured a major 7 year framework contract win to supply our MedWay Patient Management system to an independent healthcare community which I refer to in our Contract Wins/Prospects section. We are also investing in a growing partnership with Microsoft to further develop our Electronic Patient Record products.

Cost Base
We have reduced our cost base by in excess of £2.5m through the implementation of a cost control programme. However we continue to invest in research and development, as well as maintaining the capability and strength of our Services workforce which will generate future revenue opportunities.

Earnings per Share and Dividends
Basic earnings per share for the six months ended 30 November 2006 of 0.25 pence per share (0.77 pence in the prior period) is explained in note (g) below.
Reflecting the Board's confidence in the company's prospects, an interim dividend of 0.12 pence per ordinary share is declared. This will be paid on 13 March 2007 to those shareholders on the register at the close of business on 16 February 2007.

Contract Wins/Prospects
Our prospects within the National Programme remain strong. System C is currently concluding contract details with a number of clients, and we are confident that, once these negotiations have been successfully completed, we will have an order book that secures a significant proportion of our Services revenue in future years. Our specialist expertise and excellent reputation in our marketplace puts us in a good position to secure additional work and expand upon the contracted minimum order book.

In addition, we have continued to diversify into the private sector and have secured a new contract to provide specialist IT healthcare support services to a major player in diagnostic services.

We recently announced that we have signed a framework agreement for a major multi-million pound contract to supply our MedWay Patient Management and Electronic Patient Record system and various ancillary products and services to an independent healthcare community.

This is the first large-scale system procurement of its type for some time, and it is very
encouraging that we were able to win it against competition from major global product
suppliers. This success demonstrates the strength of our MedWay product suite and
significantly strengthens our Product order book.

Outlook
The Board continues to believe that healthcare informatics has a strong future, and despite these turbulent times, we continue to focus on securing opportunities, expanding the client base and controlling our cost base so as to maintain and grow our strong cash position. We are ensuring that we retain flexibility in our business to support long term opportunities and will be placing increasing focus on the creation of new products for both the UK and international healthcare markets.

Jim Horsburgh
Chairman

 

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System C is a an Institute of IT Training accredited supplier.