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Interim Results for the six months ended 30 November 2007

Investors | RNS Announcements | Interim Results for the six months ended 30 November 2007

System C Healthcare plc ("the group"), a leading independent provider of implementation solutions for the UK healthcare sector, announces its unaudited interim results for the six months ended 30 November 2007.

Financial Highlights
The financial highlights for the six months ended 30 November 2007 are:

Chief Executive's Statement
Commenting on these results, Chief Executive Ian Denley said: "The Group has turned in a strong all-round performance over the period, and I am very pleased to be able to announce significant growth, improved profitability and a robust cash balance.

We have continued to secure new clients and contracts in both public and private sector healthcare organisations, and have played a significant role in most of the major go-lives within the National Programme for IT throughout England.

In July we completed the acquisition of IQ Systems Services Ltd. This acquisition has enabled us to enter new markets in healthcare IT, as the company has a number of major clients in the Independent Sector Treatment Centre ("ISTC's") including Circle Health and Care UK.

In addition, the first stage of the Group's £7.5m IT project computerising the Isle of Man's healthcare services has gone live on time and within budget with over 1,300 users receiving training.

The Group's strong performance reflects our focus on delivering quality services in partnership with our clients, successfully adapting our business to our changing market place, and is a direct result of the hard work and effort of all our employees. We now aim to build on our current position through further organic growth, strategic acquisitions and continued investment in new products and services.

Trading has continued to progress well since the end of the interim period on both the services and products sides of the business. We look forward with confidence to a good performance for the full financial year and beyond."

For further information please contact

System C Healthcare plc
Dr Ian Denley, Chief Executive
Andrew Coll, Finance Director
Tel: 01622 691 616

Maitland
Emma Burdett
Richard Farnsworth
Tel: 020 7379 5151

Collins Stewart Europe Limited
Mark Connelly
Tel: 020 7523 8304

Notes to Editors
System C Healthcare plc (www.systemc.com), established in 1983, specialises in the provision of information systems and solutions to the healthcare sector. Its employees have an average of 15 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 is a specialist developer and supplier of Patient Administration and Electronic Patient Record Systems to the health service. The Group's MedWay product is successfully installed at a number of NHS hospitals including Noble's Hospital Isle of Man, University Hospitals Aintree, Swindon and Marlborough NHS Trust, Tameside Hospitals NHS Trust and the Christie, one of the UK's leading cancer hospitals.

System C has helped to install healthcare systems at over 150 NHS Trusts and offers a wide range of services to the NHS, other healthcare providers and third-part suppliers. Services include programme/project/change management, design, build and test, implementation, training, data migration, interfacing and helpdesk/support services. Within the National Programme for IT (NPfIT), System C people have been involved in 75% of secondary care go-lives to date as well as many GP, community, Single Assessment Programme and child health deployments

Chairman's Statement
I am pleased to report that System C has had a good first half of the year, making strong progress on all fronts. During the period, the company has diversified its client base, secured new contracts, contained costs and made significant progress with major product developments.

On the financial side we have achieved an increase of 29% in revenues to £8.4m, profit before income tax of £1.5m (2006: £0.3m) and an increase in cash net of borrowings to £11.4m (2006: £8.6m).

This performance reflects an increase in revenues in both our services and products divisions as well as a well-managed cost base.

Services
Sales of services were strong during the period. In addition to contracted services revenue the Group generated more than £4m through additional work within existing framework contracts or through entirely new business.

New business wins included a contract to build and deploy a patient booking and electronic X-ray system (PACS) for a client which has won a major procurement to provide diagnostic services to the NHS. Another is a deployment contract to install a third party community and mental health system in Guernsey. We have also been awarded significant amounts of deployment and support work by NHS Trusts across the country.

The Group has continued to enhance its hard-won reputation for deploying complex systems quickly and safely. On the basis of our track record, System C employees are now working extensively with NHS Connecting for Health (CFH) and Local Service Provider teams to support the majority of the go-lives across the country. The Group has successfully extended its support into most care settings, and is now working with acute, community and mental health hospitals as well as with Ambulance and Primary Care Trusts. In addition, the Group is moving into many areas of deployment support, including the Government's new Summary Care Record and clinical systems deployment. We are delighted to be involved in such a strategic project from the outset.

A notable achievement over the period was the deployment team's delivery of a complex patient management and imaging system to 28 static and mobile imaging facilities across London. This contract was awarded in support of the Government's Independent Sector Diagnostics Programme.

Products and Software Development
The operational performance within the products division has been strong.

An important milestone was reached in late 2007 when the product and services teams combined to deliver our own MedWay Electronic Patient Record system to Nobles and Ramsey Hospitals on the Isle of Man in just eight months. This was the first phase of the Group's 7 year £7.5m contract to computerise healthcare across the island. The deployment included a Patient Administration System (PAS), Accident and Emergency, maternity, and document tracking and reporting systems. Additional modules including ambulance, theatres and community and social services systems will be rolled out during the course of 2008.

This has also been a very good period for the System C software team, with significant progress on all of its software development programmes.

Our close relationship with Microsoft continues to bring benefits to software development, both in our use of new technologies from the .Net framework and the integration of standard Microsoft applications into our healthcare product set. We have also benefited from working with Microsoft in the NHS/Microsoft collaboration to produce a Common User Interface (CUI) for healthcare applications.

Medway Sigma, the Group's five year redevelopment of its Electronic Record and Patient Management systems to comply with Microsoft technologies, is now close to completion and will be launched in 2008. Customer reaction to early releases of the software has been positive, and we are expecting good take-up both in the UK and overseas. European partners are already translating Medway Sigma for use in their home markets.

The first Sigma module, the Microsoft version of the HealthData Manager reporting solution, was delivered in November 2007 to the Isle of Man. This was an important development milestone for the business. We have also secured two new contracts to supply HealthData Manager to English hospitals.

The Group has continued to develop and support the existing MedWay suite and has made over 100 major improvements in the year, including a new service to support the Government's 18 week Referral to Treatment Time (RTT) programme.

Acquisitions
Our ongoing acquisition strategy is to identify opportunities which provide System C with new clients in related markets and strategic related technologies for use within the Medway Sigma product range.

We acquired IQ Systems Services Ltd ("IQ") in July 2007. This company develops and markets the IQUtopia patient management and clinical system to independent treatment centres. The acquisition has furthered System C's expansion into the private healthcare market. We have successfully integrated IQ into the Group, and in the period IQ contributed revenues of £420k and PBT of £122k. We have been working closely with IQ clients such as Circle Health and Care UK to enhance product functionality and capability. The close synergies between IQ and the Group has also meant that System C staff are being contracted directly to IQ clients. Our focus on strengthening IQ's business development activities has led to considerable interest in the product range from private healthcare providers in the UK and overseas.

Market
In England, the National Programme for IT is gathering momentum with an increasing number of successful deployments. This has translated into work for the Group in a wide range of geographic and product areas. The deployment of patient management systems into acute hospitals, which is much more complex and resource intensive than the equivalent deployments in the mental health and community sectors, is now underway and a number of hospitals have gone live successfully over the past year.

The coming year is expected to see an increase in the installation of acute systems, the area of System C's greatest expertise, and this is expected to continue until 2010/11 and beyond. In parallel with the acute PAS activity, the LSPs are expected to begin the deployment and roll out of clinical systems this year and these programmes of work are likely to generate continued ongoing work for our teams.

Outside the National Programme, there is a growing enthusiasm for the next generation of healthcare systems and we are getting increased interest in our .Net Electronic Patient Record solutions from within the UK and overseas. The new applications integrate traditional healthcare software with the new Microsoft open architecture for its Office products and we believe this is becoming a clear direction of travel for the market as a whole. System C will be launching "ready to install" products into this market in 2008.

Staff
The improved performance could not have been achieved without the dedication and expertise of our employees, and I would like to thank all of them for their significant contribution throughout the period. We continue to develop our position as the employer of choice in healthcare IT, and have achieved our Investors in People reaccreditation this year. We are currently looking to increase our staff capacity to support the top-line growth we are achieving.

Earnings per Share and Dividends
The Board is pleased to declare a interim dividend of 0.18 pence per share, a 50% increase on prior year (2006: 0.12 pence per share). The dividend will be paid on 12 March 2008 to those shareholders on the register at the close of business on 15 February 2008.

Outlook and Current Trading
We have strengthened our competitive position within the healthcare IT market place as demonstrated in our improved operating performance, broader client base, strategic acquisition and strong cash generation. Our objective for 2008 is to further enhance this position through organic growth, continued investment in new products and services, and a programme of strategic acquisitions.

Trading has continued to progress well since the end of the interim period, with both the services and products sides of the business performing well, and continued strong cash generation. On this basis, and given the strong first half, the Board expects that profits for the full financial year will be at or around the top end of market expectations.

Jim Horsburgh, Chairman
System C Healthcare plc

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System C's implementation specialists are on-the-ground domain experts who work with end users to configure, implement, and support healthcare software.