Annual Financial Report
Announcement provided byDXS International plc · DXSP
DXS INTERNATIONAL PLC
for the year ended 30 April 2022
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 2022.
The company has had a challenging year. The principal contributing factors were a one-off EU order which, as anticipated, was not repeated in this year and the NHS restructuring the primary care system. The current 106 CCGs (Clinical Commissioning Groups) are being merged into 42 ICBs (Integrated Care Boards) which range from one to nine CCGs per ICB. During this change process, as the ICBs have rationalised their CCG groups and Digital Tools being used, some customers were lost. Equally an opportunity exists to gain new clients.
In the period, turnover, although generally robust, decreased by 8% to £3,285,050 (2021: £3,605,766). As a result of the reduced turnover, the Company produced an Operating Loss of £57,776 (2021: a profit of £288,016). However, the Company managed to produce a Profit after tax although this was reduced to £222,250 compared to £496,913 in the previous year. Cash at bank at the period end was £452,329 (2021: £792,318).
The drop in turnover is being addressed and has already been reduced by £60,000 p.a. after the period end as some clients have renewed their current agreements at an increased annual license fee.
The Covid-19 pandemic continues to place a huge strain on the NHS creating a massive backlog of usual care treatment. While the Covid-19 situation, as far as hospital admissions are concerned, has significantly eased, the number of recognised cases since March 2022, although now declining, have been at their highest levels ever, bringing new challenges for the NHS. Coupled with the restructuring in
On the positive side, both Covid and the ensuing health demand aftermath has spotlighted the importance of using digital and other technologies to drive greater health care delivery efficiency and effectiveness. We believe that after many years of lagging behind other industry sectors regarding the adopting of digital technologies, health care systems have finally come alive to the potential benefits digital solutions offerings to both providers and patients.
During the past 24-months, we have continued to significantly invest in development and innovation of our existing and new Digital AI solutions which strongly align with the NHS and global healthcare providers strategy of Digital First. Our development and marketing programs feature two key product lines:
- We are continuing with the improvement of our existing DXS Point of Care solution which will take this product to the cloud and ensure that it offers our existing and new customers super digital functionality in line with their needs. An exciting development is the conclusion of an agreement with an established AI middleware provider, a spinout company from Oxford University, University College London and Cancer Research
UKto help develop the Company’s AI offerings. Not only has this negated the need for DXS to build a complex AI layer within our new Point of Care Cloud Solution, this AI solution takes our future offer to a new level. This highly sophisticated AI-based platform and applications can be used in numerous clinical environments to bring significant clinical compliance benefits and ROI.
- With regards to the therapeutic management of long-term conditions, where a significant percent of healthcare costs are incurred, we continue with our sales and marketing efforts to GP Practices, Primary Care Networks and the newly formed ICB’s. Although the uptake is frustratingly slow, we are at varying stages of progress of getting our hypertension solution trials active across nine ICB’s (Integrated Care Boards) representing almost thirteen million registered patients. In parallel to this direct approach, we are actively engaged with various AHSN’s (Academic Health Science Networks) to help provide endorsement of the potential benefits of ExpertCare to the
UKhealthcare sector. Hypertension, which affects 16 million people in the UK, has been our first long term condition to be added to the engine which aligns with the NHS priority of better managing cardiovascular disease, particularly when, according to the Royal College of GPs, there is a backlog of two million untreated hypertensive patients – an iceberg under the water.
During the past year, we have increased our development and sales and marketing efforts into our digitally systemised AI solutions and we are on track to achieve the aggressive growth in the
Yet, while this market penetration has been slower than expected, the past two and a half years have changed the healthcare landscape for ever. It has changed the mindset of clinicians to the reality and potential benefits of collaborating remotely with patients. Now it is up to digital healthcare companies like DXS with world beating AI solutions to provide healthcare workers with the tools they so desperately need. Tools that will save lives, optimise clinician resource, and dramatically cut soaring healthcare costs.
According to Public Health England, the NHS, in
Our existing solution DXS Point of Care, coupled with new Aios cloud-based AI capability, and our new long term condition medicine management solution ExpertCare place us firmly in the health care AI domain and provides us with real world capabilities and market appeal.
Having accepted that the past thirty months have been challenging, we remain focused on growing our revenue and profits and believe that we are now well positioned to take our business to new heights with a range of advanced and highly competitive clinical decision support solutions that can deliver measurable ROI supported by an exceptional team of people, a winning formula.
We are slowly gaining ground and remain extremely positive about the real benefits our solutions, both existing and new, can provide to healthcare providers locally and internationally.
David Immelman, Chief Executive of DXS commented:
“Although the past two-and-a-half years have been challenging, we remain more optimistic than ever about the prospects of significant future growth for DXS, both in the
This enthusiasm is fuelled by the global healthcare sector having no alternative but to embrace new ways of working such as remote and virtual consultations and improving efficiencies to manage huge backlogs of patient care. The health care market is now showing unequivocal signs that healthcare organisations and clinicians have accepted that digital health solutions are essential to achieving improved healthcare delivery and outcomes. And that data is fast becoming a key driver of enhanced efficiencies.
DXS’ vision and belief in investing in SMART Expert digital solutions, that align with current market needs, puts us in a strong position to begin seeing the revenue growth we have been planning for and emphatically believe we will achieve. While access to healthcare decision makers, against the current backdrop of NHS restructuring and pandemic residual, remains challenging, we are making progress on the sales and marketing front.
All of this is supported by an amazing and enthusiastic team who have the vision and belief of our direction of travel and the competence to achieve the goals we have set for this business.”
The Directors of DXS International plc accept responsibility for this announcement.
David Immelman 01252 719800
DXS International plc
AQSE Corporate Broker
Hybridan LLP 020 3764 2341
Claire Louise Noyce
City & Merchant 020 7101 7676
Notes 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 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 2022.
REPORT OF THE DIRECTORS
The directors present their annual report and the audited financial statements for the year ended 30 April 2022. 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.
The directors for the year were:
- Bob Sutcliffe – Chairman
- David Immelman – CEO
- Steven Bauer – COO
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
The group continues to invest in research and development both locally and internationally and during this financial year has invested £1,284,961 into R&D for the introduction, continuation, and completion of a number of new DXS solutions. These are 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 £164,512 on bank and third-party loans.
The Directors believe that there is no material risk arising in respect of interest rates on loans, credit, and liquidity.
The Directors do not recommend a dividend.
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
UKaccounting 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.
As 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:
D A Immelman
8th August 2022
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 2022, 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 GROUPS BUSINESS
The Group Profit after Tax is £222,250 (2021 - £496,913). The Operating (loss)/Profit amounts to (£57,776) (2021 £288,016). There was a reduction in amortisation of £320,394 to £660,289. The Group has a credit of £320,985 for
The profit after tax for the year decreased by £274,663 after a significant investment into R&D of £1,284,961. Considering the overall impact of COVID-19, revenue remained robust with a decrease of 8% in revenue. Of this 3% was due to a one-off EU sale in the previous year. As an accredited NHS solutions provider, DXS has well-established business continuity and disaster recovery protocols in place. These ensured business continuity throughout the COVID-19 pandemic and at this point, staff, both in the
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 are now becoming effective after April 2022 and as a result £60,000 annual recurring revenue has been added. This is expected to continue over the coming months.
We have continued the development of our existing DXS Point of Care solution into our new Aios cloud-based system. Coupled with this has been the recent conclusion of a JV agreement with a leading AI middleware provider, enabling us to include this Oxford born AI module with Aios.
We have continued to use the delays in commercialisation caused by COVID to add certain enhancements to our ExpertCare hypertension solution which we believe will increase the attractiveness of our offering and pricing in our favour as the market slowly 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
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 NHS begins to normalise, even though current COVID levels are at their highest ever, we are beginning to engage on a commercial level – even if slowly.
Our plans for expansion outside of the
ANALYSIS OF BUSINESS DURING YEAR ENDING APRIL 2022
Revenue was 16% below market expectations, decreasing by £320,716 while Operating Profit decreased by £345,792. Decreased revenue was attributable to the one off EU sale of £110,000 in the previous year and a loss of two clients due to NHS restructuring.
- Group Revenue of £3,285,050 has decreased by 8%. 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 £222,250, a 55% decrease. This was mainly due to a reduction of turnover and increased costs. Definition: Underlying profit provides information on the underlying performance of the business.
- Depreciation and amortisation of deferred Research and Development expenditure and Goodwill in 2022 was £660,280 and in 2021 was £980,683.
- Earnings Per Share 2022 0.5p, 2021 1.0p. Definition: Earnings per share is the underlying profit divided by the weighted average number of ordinary shares in issue.
- ROE 2022 5 %, 2021 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.
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:
8th August 2022
Year ended 30 April 2022
|Cost of Sales||(412,904)||(419,757)|
|Depreciation and Amortisation||(660,289)||(980,683)|
|Interest payable and similar expenses||(43,022)||(43,882)|
|Profit on ordinary activities before taxation||(98,645)||253,673|
|Tax on profit on ordinary activities||320,895||243,240|
|Profit for the year||222,250||496,913|
|Profit per share|
Statement of Other Comprehensive Income
Year ended 30 April 2022
|Profit for the year||222,250||496,913|
|Other comprehensive income||-||-|
|Tax on components of other comprehensive income||-||-|
|Total comprehensive income for the year||222,250||496,913|
Statement of Financial Position
Year ended 30 April 2022
|Group 2022||Group 2021||Company 2022||Company 2021|
|Debtors: amounts falling due within one year||693,702||850,258||32,762||43,471|
|Cash at bank and in hand||452,379||792,318||195,800||642,377|
|Creditors: amounts falling due within one year||(889,761)||(951,673)||(50,478)||(38,227)|
|Net current assets||256,320||690,903||178,084||647,621|
|Total assets less current liabilities||5,442,648||5,250,205||2,993,915||2,996,520|
|Amounts falling due after more than one year||(331,330)||(449,125)||-||-|
|Capital and reserves|
|Called up share capital||159,246||159,246||159,246||159,246|
|Share option reserve||173,808||173,808||173,808||173,808|
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 8th August 2022.
Company Registration number : 06311313
STATEMENT OF CASH FLOWS
Year ended 30 April 2022
|Cash flow from operating activities||907,862||1,088,409|
|R&D tax credit received||249,895||186,240|
|Net cash flow from operating activities||1,116,888||1,240,306|
|Cash flow from investing activities||-||-|
|Payments to acquire intangible fixed assets||1,284,961||(1,529,762)|
|Payments to acquire tangible fixed assets||(2,354)||(1,707)|
|Expense in respect of share issue in February 2020||(5,000)||-|
|Repayment of long term loans||(164,512)||(117,164)|
|Advance of long term loans||-||190,000|
|Net (decrease) in cash and cash equivalents||(339,939)||(218,327)|
|Cash and Cash equivalents at 1 May 2021||792,318||1,010,645|
|Cash and Cash equivalents at 30 April 2022||452,379||792,318|
|Cash and Cash equivalents consists of:|
|Cash at bank and in hand||452,379||792,318|
|Net Debt Reconciliation||Current Debt||Non Current Debt||Cash||Total|
|At 30 April 2020||(420,131)||(376,289)||1,010,645||214,225|
|At 30 April 2021||(207,139)||(449.125)||792,318||136,054|
|At 30 April 2022||(293,132)||(331,330)||452,379||(172,083)|
NOTES TO THE FINANCIAL STATEMENTS
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
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
The financial statements have been prepared in accordance with applicable accounting standards including Financial Reporting Standard 102 Applicable in the
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
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 from the date that the specific product is completed and available for distribution.||Period of time for benefit to be received|
Provisions 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 £550.
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. If an arrangement constitutes a finance transaction it is measured at present value
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.
A Grant received during the year has been recorded as other income where receivable
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 reporting 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 products and services to the pharmaceutical industry and the
(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.
Foreign exchange gains or losses are recognised in the Income Statement.
(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 under operating leases are charged to the income statement on a straight line basis over the period of the lease.
(l) Share option 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.
(m) Key judgements and Key accounting estimates
The Key judgements or Key Accounting estimates with a material effect on the carrying value of assets and liabilities are set out below -.
In regards to the going concern of the company, the directors have considered cash flow forecasts for the period to April 2024 which include estimates to be earned from the new Aios and Expertcare A1 solutions which are expected to be revenue generating from late 2022. Also included are increased costs which, if forecasted sales are slower than anticipated, can be reduced accordingly. In addition the forecast include the receipt of new financing for £500,000 which was agreed in July 2022 and is in the process of being drawn down. Given the additional funds received and the market potential for the new products, supported by trial results, the directors consider it appropriate to adopt the going concern basis of accounting and are satisfied that there is no material uncertainty.
The Research and Development tax credit received from HMRC is not a Government grant but a recognition of the costs incurred in respect of the company's research and development and is received through an adjustment to the taxable income of the company
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 including the estimated amount of time charged by employees.
(n) Reduced disclosure
DXS International PLC meets the definition of a qualifying entity under FRS 102 paragraph 1.12(b) and has therefore taken advantage of the disclosure exemption in relation to the parent cash flow statement.