DXS INTERNATIONAL PLC
ANNUAL RESULTS
for the year ended 30 April 2021
The Board of DXS International plc (“the Company”), the AQSE Growth Market quoted healthcare information and digital clinical decision support systems provider, is pleased to announce its audited Final Results for the year ended 30 April 2021.
Financial Highlights
- Turnover increased by 10% to £3,605,766 (2020: £3,279,787). In spite of the unprecedented interruption to business during the financial year, revenue increased by £325,979. This is attributed to an increase in both NHS and Pharmaceutical sales revenue supplemented by a one off contribution of £100,323 for the EU Hypertension initiative.
- Operating Profit £288,016 (2020: £304,025).
- Profit after tax is £496,913, compared to £428,502 in the previous year, an increase of 16%.
- Cash at bank £792,318 (2020: £1,010,645).
- Over £1.5m invested in R&D during the period.
Operational Highlights
- We have completed 14 ExpertCare Hypertension pilots. Data from these pilots has reinforced the need for a solution such as ExpertCare which can significantly contribute towards a higher percentage of Hypertensive patients being treated in compliance with NICE, best evidence treatment guidelines, resulting in reduced incidents of heart attacks and strokes and saving the NHS and healthcare providers money.
- The Company received CE accreditation as a Class 1A device for the Hypertension solution and also ISO accreditation for the Company.
- Our CompleteCare Templates and Toolkits are generating positive interest among GP practices as a solution to helping to manage the significant backlog of “business as usual”.
- DXS is starting to look more internationally to other markets where our products could have a positive impact.
Post Period Highlights
- The ExpertCare Hypertension solution achieved accreditation for the new NHS Digital Framework, GPIT Futures. This provides the ability for potential ExpertCare customers to have the Hypertension solution funded from a central NHS fund.
- The CompleteCare team has reacted to the current enormous primary care backlog for care reviews and treatment and created specialised tools to help clinicians expedite the management of long term conditions such as cancer and learning disability.
- Trading for the first three months is on a par with the previous year but is expected to show growth as the COVID situation normalises and we are able to begin to realise revenue growth with our new solutions.
David Immelman, Chief Executive of DXS commented:
“Although the COVID situation has continued to delay commercial operations for our suite of new solutions, ExpertCare, MyVytalCare and CompleteCare, the time has been used to redirect resources into ongoing R&D. These initiatives are expected to begin reaping rewards early in 2022. We have also started looking at more of an overseas approach to our products and explore different healthcare systems in various countries to see how DXS’s solutions could be applied across the world.
We remain focused on our overall strategy of building significant revenue over the next 4-5 years through our Expert Long-Term Care solutions into which we have been heavily investing for the past 5 years. We remain confident and optimistic about the future growth of the business and this is supported by our own organic investment into increased development of £1,529,762 during the year.”
The Directors of DXS International plc accept responsibility for this announcement.
Contacts :
David Immelman 01252 719800
DXS International plc
www.dxs-systems.com
AQSE Corporate Broker
Hybridan LLP 020 3764 2341
Claire Louise Noyce
Corporate Advisor
City & Merchant 020 7101 7676
David Papworth
Notes to Editors
About DXS:
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 and which should significantly contribute towards the NHS achieving its projected efficiency savings.
The following information is extracted from the DXS International plc audited accounts for the year ended 30 April 2021.
Report of the Directors
The directors present their annual report and the audited financial statements for the year ended 30 April 2021. 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.
DIRECTORS
The directors for the year were:
- Bob Sutcliffe – Chairman
- David Immelman – CEO
- Steven Bauer – COO
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. The commercial side included the licensing of DXS to various Clinical Commissioning Groups (CCGs) and the sale of e-detailing opportunities to the Pharmaceutical Industry.
The group continues to invest in research and development both locally and internationally and during this financial year has invested £1,529,762 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 hypertension solution, ExpertCare, and the specialised template and toolkit solution, CompleteCare, while delayed due to COVID-19, are market ready.
During the period we repaid £117,164 on bank and personal loans.
FINANCIAL INSTRUMENTS
The Directors believe that there is no material risk arising in respect of interest rates on loans, credit and liquidity.
DIVIDEND
The Directors do not recommend a dividend.
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 adequate 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.
DIRECTORS’ RESPONSIBILITIES TO AUDITORS
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.
So far as the directors are aware, there is no relevant audit information of which the Company’s auditor is unaware.
Approved by the board and signed on its behalf by:
DA Immelman
Director
4 August 2021
Strategic Report
SECTION 172 REPORT
Section 172 of the Companies Act requires that a director of the Company is managing in the best interests of all stakeholders – Customers, Employees and Shareholders.
In the spirit of above, the Directors of DXS International plc, strive to maintain a reputation for high but fair standards in the best interest of its stakeholders.
Our primary focus is on our customers and here we regard our relationships and channels of communications of paramount importance. We operate in a sensitive environment, healthcare, and as such ensure that we meet all the standards required by our customers, such as Information Governance and Clinical Safety. In addition, we comply with ISO standards which assures an overarching good governance approach to all operations.
The Board is focused on delivering value for Shareholders underpinned by motivated Employees delivering above average delivery of solutions and service to Customers. In achieving the foregoing, the Company focuses on continued innovation via a policy of research and development funded through organic investment plus capital raises, as agreed at shareholder meetings, noting it has not as a Company raised any external equity financing in the year to April 2021, and supported by clearly communicated vision and direction.
In our communication to Shareholders the Board is clear in terms of its short, medium and long-term strategy and maintains an open-door approach to Shareholders seeking additional clarity on any issue. The Board release notices on a regular basis informing Shareholders of developments in areas of business progress, non-confidential strategic decisions and any change to company policy. Risks and opportunities are set out in this strategic review.
The Group is small and while clear management structures are in place all Employees, if required, have direct access to the Executive Directors on a daily basis and, if necessary, to the Chairman. The group retains HR services to ensure the fair and equitable treatment of Employees. The Company promotes a policy of promoting from within supported by training and mentorship. We encourage diverse thinking and recognise strengths and contribution to the business.
REVIEW OF THE GROUP’S BUSINESS
The Group Profit after Tax is £496,913 (2020 - £428,502). The Operating Profit amounts to £288,016 (2020 - £304,025). This decrease was largely due to an increase in depreciation of £409,121. The Group has a credit of £243,240 for UK Corporation Tax (2020 credit- £189,195) for the year.
The profit after tax for the year increased by £68,411 after a significant investment into R&D of £1,529,762. Considering the overall impact of COVID-19, revenue remained robust with an increase of 16% in revenue.
Being an accredited NHS solutions provider, DXS has well-established business continuity and disaster recovery protocols in place. These were triggered during the early stages of the COVID-19 outbreak and at this point, all our staff with the exception of one, both in the United Kingdom and South Africa are successfully working from home and the Company remains fully operational.
The expected revenue increase due to increased pricing as a result of GPITF accreditation has not materialised as expected due to operational NHS delays. These may be expected to become effective in April 2022.
On the upside, one of our new solutions, ExpertCare Hypertension has received GPIT Futures accreditation.
We have utilised the delays in commercialisation caused by COVID to add certain enhancements to our Expert solutions namely ExpertCare and CompleteCare which we believe will increase the attractiveness of our offering and pricing in our favour once the market reopens for business as usual.
Our strategy remains aligned with both the new NHS Long Term Plan and opportunities abroad.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risk to the Company in the UK is that the NHS dramatically changes its plans or cuts its budgets. This seems unlikely, particularly with the current pandemic highlighting the need for clinicians to operate using digital technologies. We are also confident that our new Hypertension solution can play a significant role in assisting already overloaded clinicians to manage patient backlogs as the situation begins to normalise.
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 the launch of market ready new products once the current situation normalises.
While the country is moving to the easing of restrictions, the impact of COVID-19 on business going forward remains uncertain and can impact the GPIT Futures accreditation of our new solutions as well as a slower than anticipated access to market of our new Hypertension solution.
In addition, our plans for expansion outside of the UK mitigate this risk. Here we continue with our research and development plans to take our new Expert Hypertension solution into international markets where improved management of Hypertension and other long term conditions are a top priority.
ANALYSIS OF BUSINESS DURING YEAR ENDING APRIL 2021
Revenue was above expectations increasing by £325,979 while Operating Profit decreased marginally by £16,009. Increased revenue was attributable to increases in business-as-usual revenue supplemented by £110,323 from an EU hypertension sale.
FINANCIAL KPI
- Group Revenue of £3,605,766 has increased by 10%. Definition: Total Group sales including distribution of clinical decision support to General Practitioners and the licensing of DXS to CCGs and healthcare publishers. Group Revenue includes the sale of medicine education slots to the pharmaceutical industry.
- Underlying Group Profit after Tax was £496,913, a 16% increase. This was mainly due to an increased Tax credit realised by increased investment in R&D for the period. Definition: Underlying profit provides information on the underlying performance of the business.
- Depreciation and amortisation of deferred Research and Development expenditure in 2021 was £980,683 and in 2020 was £571,562.
- Earnings Per Share 2021 1.0p, 2020 1.1p. Definition: Earnings per share is the underlying profit divided by the weighted average number of ordinary shares in issue.
- ROE 2021 12 %, 2020 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 which include share capital, share premium, provision for costs of share option awards and retained earnings
CORPORATE GOVERNANCE
We are committed to establish, maintain, and continually improve an Integrated Management System (IMS) that conforms to ISO 22301:2012, ISO 20000-1:2018 and ISO 27001:2013 requirements.
To achieve this objective, we commit to:
- continual improvement in our performance and services to our stakeholders.
- Identify, assess, reduce, and eliminate hazards and risks pertaining to our business.
- Setting risk-based objectives and targets to meet applicable statutory, business, information security and service level obligations.
- Comply with mutually agreed quality and service level requirements of our customers
- Develop our people and provide sufficient resources to meet our objectives and targets.
We communicate the IMS Policy to all personnel working for or on behalf of DXS to ensure that they are made aware of their individual IMS obligations.
Approved by the board and signed on its behalf by:
D Immelman
Director
4 August 2021
FINANCIAL STATEMENTS
INCOME STATEMENT
Year ended 30 April 2021
| 2021 Continuing Operations | 2020 Continuing Operations | |||
| £ | £ | |||
| Turnover | 3,605,766 | 3,279,787 | ||
| Cost of Sales | (419,757) | (318,424) | ||
| _________ | _________ | |||
| Gross Profit | 3,186,009 | 2,961,363 | ||
| Administration Costs | (1,917,310) | (2,085,776) | ||
| Depreciation and Amortisation | (980,683) | (571,562) | ||
| _________ | _________ | |||
| Operating profit | 288,016 | 304,025 | ||
| Interest received and similar income | - | 4,398 | ||
| Sundry income | 9,539 | - | ||
| _________ | _________ | |||
| 297,555 | 308,423 | |||
| Interest payable and similar expenses | (43,882) | (69,116) | ||
| _________ | _________ | |||
| Profit on ordinary activities before taxation | 253,673 | 239,307 | ||
| Tax on profit on ordinary activities | 243,240 | 189,195 | ||
| _________ | _________ | |||
| Profit for the year | 496,913 | 428,502 | ||
| ========= | ========= | |||
| Profit per share | ||||
| 1.0p | 1.1p | ||
| 1.0p | 1.1p | ||
| ========= | ========= |
Statement of Other Comprehensive Income
Year ended 30 April 2021
| 2021 £ | 2020 £ | |||
| Profit for the year | 496,913 | 428,502 | ||
| Other comprehensive income | - | - | ||
| Tax on components of other comprehensive income | - | - | ||
| _________ | _________ | |||
| Total comprehensive income for the year | 496,913 | 428,502 | ||
| ========= | ========= | |||
Statement of Financial Position
Year ended 30 April 2021
| Group 2021 | Group 2020 | Company 2021 | Company 2020 | |
| £ | £ | £ | ||
| Fixed Assets | ||||
| Intangible Assets | 4,557,969 | 4,007,411 | - | - |
| Tangible Assets | 1,333 | 1,105 | - | - |
| Investments | - | - | 2,348,899 | 2,010,500 |
| _________ | _________ | _________ | _________ | |
| 4,559,302 | 4,008,516 | 2,348,899 | 2,010,500 | |
| _________ | _________ | _________ | _________ | |
| Current assets | ||||
| Debtors: amounts falling due within one year | 850,258 | 759,405 | 43,471 | 91,051 |
| Cash at bank and in hand | 792,318 | 1,010,645 | 642,377 | 911,854 |
| _________ | _________ | _________ | _________ | |
| 1,642,576 | 1,770,050 | 685,848 | 1,002,905 | |
| Creditors: amounts falling due within one year | (951,673) | (1,180,704) | (38,227) | (37,360) |
| _________ | _________ | _________ | _________ | |
| Net current assets | 690,903 | 589,346 | 647,621 | 965,545 |
| _________ | _________ | _________ | _________ | |
| Total assets less current liabilities | 5,250,205 | 4,597,862 | 2,996,520 | 2,976,045 |
| Creditors: | ||||
| Amounts falling due after more than one year | (449,125) | (376,289) | - | - |
| Deferred income | (653,688) | (571,094) | - | - |
| _________ | _________ | _________ | _________ | |
| 4,147,392 | 3,650,479 | 2,996,520 | 2,976,045 | |
| ========= | ========= | ========= | ========= | |
| Capital and reserves | ||||
| Called up share capital | 159,246 | 159,246 | 159,246 | 159,246 |
| Share Premium | 2,676,321 | 2,676,321 | 2,676,321 | 2,676,321 |
| Share option reserve | 173,808 | 173,808 | 173,808 | 173,808 |
| Retained earnings | 1,138,017 | 641,104 | (12,855) | (33,330) |
| _________ | _________ | _________ | _________ | |
| Shareholders’ funds | 4,147,392 | 3,650,479 | 2,996,520 | 2,976,045 |
| ========= | ========= | ========= | ========= | |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. The Company made a profit of £20,475 (2020 - £80,099) for the year.
The financial statements were approved and authorized for issue by the Board on 4 August 2021.
| D Immelman Director | R Sutcliffe Director |
Company Registration number : 06311313
STATEMENT OF CASH FLOWS
Year ended 30 April 2021
| Group 2021 | Group 2020 | |||
| £ | £ | |||
| Cash flow from operating activities | 1,088,409 | 777,709 | ||
| Interest paid | (43,882) | (69,116) | ||
| Interest received | - | 4,398 | ||
| Sundry Income | 9,539 | - | ||
| R&D tax credit received | 186,240 | 257,195 | ||
| _________ | _________ | |||
| Net cash flow from operating activities | 1,240,306 | 970,186 | ||
| _________ | _________ | |||
| Cash flow from investing activities | ||||
| Payments to acquire intangible fixed assets | (1,529,762) | (904,503) | ||
| Payments to acquire tangible fixed assets | (1,707) | - | ||
| Disposal of fixed tangible assets | - | 626 | ||
| _________ | _________ | |||
| (1,531,469) _________ | (903,877) _________ | |||
| Financing Activities | - | |||
| Net Proceeds on issue of shares | - | 978,397 | ||
| Repayment of long term loans | (117,164) | (89,303) | ||
| Advance of long term loans | 190,000 | - | ||
| _________ | _________ | |||
| 72,836 | 889,094 | |||
| _________ | _________ | |||
| Net (decrease)/ increase in cash and cash equivalents | (218,327) | 955,403 | ||
| Cash and Cash equivalents at 1 May 2020 | 1,010,645 | 55,242 | ||
| _________ | _________ | |||
| Cash and Cash equivalents at 30 April 2021 | 792,318 | 1,010,645 | ||
| ========= | ========= | |||
| Cash and Cash equivalents consists of: Cash at bank and in hand | 792,318 | 1,010,645 | ||
| ========= | ========= |
| Net Debt Reconciliation | Current Debt | Non Current Debt | Cash | Total |
| £ | £ | £ | £ | |
| At 30 April 2019 | (665,212) | (464,951) | 55,242 | (1,074,921) |
| Cash Flow | 244,440 | 89,303 | 955,403 | 1,289,146 |
| Transfer from Current to Non Current Debt | 641 | (641) | - | - |
| _________ | _________ | ________ | _________ | |
| At 30 April 2020 | (207,139) | (449.125) | 792,318 | 136,054 |
| ========= | ========= | ========= | ========= |
Notes to the Financial Statements
Year ended 30 April 2021
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 CCG’s (Central Commissioning Groups), 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.
In the opinion of the Directors the group has sufficient funding to continue as a going concern for at least twelve months from the date of approval of the financial statements.
Should the group be unable to continue trading, adjustments would have to be made to reduce the value of assets to their recoverable amounts and to provide for any further liabilities that might arise. The financial statements do not reflect any such adjustments.
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, other than specific identifiable 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. Developed products are for use within the NHS and other medical institutions within both the UK and internationally. The Group is already a supplier of services to the NHS.
Goodwill arising on business combinations is capitalised, classed as an asset on the balance sheet and amortised over its useful life. The period originally chosen for writing off the current goodwill was 20 years because the directors believed that this was the period of time for the benefit to be received. The Directors reviewed the anticipated future life of the goodwill during 2020. It was considered that the anticipated future life of the goodwill would not exceed 3 years from 1 May 2020.
Accordingly the Net Book Value of the goodwill at 30 April 2020 is being amortised over 3 years. Intangible assets are amortised over a straight line basis over their useful lives. The useful lives of intangible assets are as follows:
| Intangible type | Useful life | Reasons |
| Development expenditure | 5 years form 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.
(f) Grants
Government Grants, including non - monetary grants, shall not be recognised until there is reasonable assurance that :
(a) the entity will comply with the conditions attached to them; and
(b) the grants will be received.
An entity shall recognise grants either based on the performance model or the accrual model. This policy choice shall be applied on a class-by-class basis.
(g) Tax
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.
(k) Leases
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 reserve 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.
The Group has used a level of judgement around key assumptions on the technical feasibility of products under development, the consideration of the estimated useful lives of these products and a degree of estimate in respect of the capitalised attributable cost.
(n) Reduced disclosure
DXS International PLC meets the definition of a qualifying under FRS 102 paragraph 1.12(b) and has therefore taken advantage of the disclosure exemption in relation to the parent cash flow statement.
