2010 final results presentation 18 march 2011
TRANSCRIPT
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2010 Final Results Presentation
18 March 2011
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Financial Highlights
• Total Group revenue of £62.4m (2009: £57.7m), up 8%
• Adjusted Group operating profit(2) of £17.6m (2009: £15.8m), up 11%
• Core activities (EMIS / RX Systems):(1)
– total core revenue £61.9m (2009: £57.2m), up 8%– recurring revenue £50.8m (2009: £42.7m), up 19%– operating profit £19.6m (2009: £17.0m), up 15%
• Cash generated from operations £22.2m (2009: £19.9m)
• Net cash of £1.7m (2009: Net debt of £1.7m)
• Adjusted(2) EPS of 21.8p (2009: 19.9p)
• Total dividend of 11.2p including final dividend of 5.6p
(1) Excludes the Canadian operation discontinued post year end(2) Adjusted for flotation and other transaction costs
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Operational Highlights
• UK GP software market leading position strengthened further:– growth in UK market share to 53.8% (2009: 52.5%):
• growth in Scotland from 12.7% to 51.5%• total of 5,576 EMIS GP practices at year end (2009: 5,377)
• EMIS Web accredited in September 2010 and controlled roll-out commenced:– 44 GP practices installed with 433 further orders placed – 1,665 orders for the EMIS Web familiarisation service
• RX Systems integration on track:– high street pharmacy systems market share increased from 20.5% to 25.0%
• Progress made with EMIS Web in extended primary and community healthcare settings
• EMIS chosen to provide electronic healthcare records for the Australian Department of Defence under a five-year contract
• New independent Non-Executive Chairman appointed in March 2011
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Financial Review
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Profit and Loss
• Revenue increased by 8.1%:– includes £4.5m accredited
hosting
• Adjusted operating profit up 11.4%: – H1 42% / H2 58%
• 2010 tax rate 30%
• Adjusted EPS up 9.6%
£m Year ended 31 December
H1 2010
H2 2010
FY2010
FY 2009
%Change
Revenue 29.0 33.4 62.4 57.7 8.1%
Operating profit 6.9 9.5 16.4 15.8 3.8%
Adjusted operating profit* 8.3 9.3 17.6 15.8 11.4%
Profit before tax 6.7 9.4 16.1 14.4 11.8%
Adjusted profit before tax* 8.1 9.2 17.3 14.4 20.1%
Tax (2.40) (2.50) (4.90) (4.50) -
Profit after tax 4.3 6.9 11.2 9.9 13.1%
EPS 7.9p 11.9p 19.8p 19.9p (0.2)%
Adjusted EPS* - - 21.8p 19.9p 9.6%
*Adjusted for: Float/transaction cost: £1m in H1 2010, £0.2m in H2 2010 (£1.2m in FY 2010)Holiday pay accrual: (£0.4m) in H1 2010, £0.4m in H2 2010
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Core Business Analysis
£m Year ended 31 December
2010 2009
EMIS RX Systems
EMIS and RX Systems total
EMIS
Revenue 56.9 5.0 61.9 57.2
including:
Core recurring revenue 46.6 4.2 50.8 42.7
Core business operating profit : 19.4 0.2 19.6 17.0
- add back amortisation 2.1 0.3 2.4 2.1
- deduct capitalised development costs (3.8) - (3.8) (4.6)
Adjusted core business operating profit 17.7 0.5 18.2 14.5
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Core Operational Revenues (excludes Canada)
• Licences and software support, including Scotland, growth of 8.5%
• Recurring revenue growth 19%
£m Year ended 31 December
H1 2010
% of sales
H2 2010
% of sales
FY2010
% of sales
FY 2009
% of sales
Licenses and software support 13.1 46% 14.9 45% 28.0 45% 25.8 45%
Support services 7.2 25% 9.4 28% 16.6 27% 15.4 27%
Hosting 2.3 8% 2.9 9% 5.2 8% 3.3 6%
Hardware and training 4.8 17% 4.8 14% 9.6 16% 9.4 16%
Other 1.3 5% 1.2 4% 2.5 4% 3.3 6%
Total 28.7 100% 33.2 100% 61.9 100% 57.2 100%
Recurring 23.2 81% 27.6 83% 50.8 82% 42.7 75%
Non-recurring 5.5 19% 5.6 17% 10.9 18% 14.5 25%
Total 28.7 100% 33.2 100% 61.9 100% 57.2 100%
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Cash Flow
£mYear ended 31 December
FY2010
FY 2009
Cash from operations:
Generated 22.2 19.9
Less internal development costs capitalised (3.8) (4.6)
Adjusted cash from operations 18.4 15.3
Used for:
Acquisition of RX Systems (net of RX cash) (3.1) -
Net capex (5.3) (3.8)
Repayment of bank term loans (1.2) (6.6)
Share issues 24.0 -
Repayment of shareholder loans (23.0) -
Bank and other interest (0.4) (2.6)
Taxation (3.9) (3.1)
Interim dividend (3.3) -
16.2 16.1
Cash increase (decrease) in year 2.2 (0.8)
• Adjusted cash from operations increased by 20%
• Acquisition of RX Systems £3.1m net of RX cash
• Capex includes hosting assets of £3.9m
• Repayment of shareholder loans
• Positive cash movement in year
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Balance Sheet
• Fixed assets increased primarily with
RX acquisition
• Deferred income rising due to impact
of RX and growth of accredited
hosting
• Bank term loans reduced to £5.7m
• Deferred tax on intangibles of £8.5m
– no cash implications
£mYear ended 31 December
FY2010
FY 2009
Fixed assets 65.9 48.9
Cash 7.4 5.2
Other current assets 9.8 8.2
Total assets 83.1 62.3
Current liabilities (10.3) (6.9)
Deferred income (10.9) (7.6)
Bank term loans (5.7) (6.9)
RX contingent consideration (0.9) -
Deferred tax (8.5) (6.5)
Shareholder loans - (23.0)
Net assets 46.8 11.4
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Operational Review
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• Strategy to join patient’s electronic healthcare record across the NHS
• EMIS Group well positioned:
– EMIS Web
– Healthcare Gateway
– RX Systems
A&E
Out of hours
DNHV
Diabetes
GP
Childhealth
PathologySpecialistservices
Hospitalpharmacy
Extendedservices
Long termconditions
Data stream
ing
EMIS GP Systems
GP GP GP
Maternity
ICU
Inpatient
EMIS Overview
Business intelligence
for GP Consortia
NHS Network
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EMIS Web Update
• Key milestone of EMIS Web accreditation achieved in September 2010
• Controlled roll out currently underway:
– 44 GP practice installations completed
– 433 further orders placed for EMIS Web
– 1,665 orders for the familiarisation service
– Since the year end, installation has been completed at a further33 GP practices
• Building up resources to deliver roll out
• In negotiation with a number of PCTs and GP Consortia regarding EMIS Web in extended primary and community healthcare settings
• Number of successes with contracts signed with the NHS in Tower Hamlets, Liverpool, Cheshire and Cumbria
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RX Systems
• RX Systems acquired for up to £10.1m in August 2010:
– Leading pharmacy software and services company
– On acquisition 2,500 high street pharmacy sites
– UK market share has now increased from 20% to 25%
– 80% recurring revenues
– Cash generative
– Growing strongly
– Experienced management team
• Combination of EMIS and Rx Systems will enable:
– Online connection between patient, GP and pharmacist
– More efficient prescription flows
– Improved links to Electronic Healthcare Record
– Cross-selling opportunities within EMIS
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• JV between EMIS and InPS:
– Covers 75% of GP practice data in UK
– Facilitates sharing and transfer of
patient data
• Benefits include potential to significantly
increase efficiency savings in the NHS
whilst improving patient care
• Enables real time interoperability between
GPs using EMIS or INPS software and
other healthcare professionals
• Product development and pilots underway
Formation of Healthcare Gateway Ltd
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Current Trading and Outlook
• Trading in-line with management expectations since the year-end
• Controlled roll-out of EMIS Web progressing as planned
• Strong revenue visibility continues:– GPSoC framework agreement expected to be further extended until 2013
• Anticipate stronger second half revenue performance in 2011:– Accelerated roll-out of EMIS Web– Increasing hosting revenues– Greater RX Systems contribution– Continued pressure on customers’ discretionary spend
• Contribution from NHS Scotland from 2011 onwards
• Canadian strategic review completed: – Managed exit underway– 2011 one-off charges of £2.5m (£0.9m cash cost and £1.6m asset write downs)
• Post year-end contract wins:– Provision of electronic healthcare record system to Australian Armed Forces– Shared care record for primary healthcare teams across Cheshire– Healthcare Gateway: pilot contracts in London and Cumbria
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Summary
• Key objective for 2010 achieved:
– EMIS Web accreditation
– New Chairman in place
• Delivery of cross-organisational healthcare strategy:
– Primary and community healthcare wins
– Healthcare Gateway
– RX Systems
• EMIS’ strategy aligned with new NHS White Paper
• Wider application beyond the NHS:
– Australian Armed Forces
• Solid foundations in place for future growth
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Appendix
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Primary Care – EMIS WebMessaging
and/or Viewing
OUR PATIENTS
eSAP
MentalHealth
Secondary Care - SUS (Qute)
A&E
In Patient
Out Patient Acu
te T
rust
District Nursing
PCT
Com
mis
sion
ed
Serv
ices
Out of Hours
Child Health (V&I)
Community Hospital
PAS & EMIS Web as clinical system
Hosted EMIS Web Hosted EMIS Web
Interfaces & SetupHospital clinicians read access to agreed parts of EMIS GP patient record. This is likely in the short term to be either via the MIG to EMIS Web.Single interface for pathology requesting and electronic transfer of data including correspondence
Interfaces OOH via Adastra utilising EMIS Web as the core clinical system
GP Surgeries Multiple data sharing agreements, local
pathways/templates, standardized document handling and label printing etc
within practices Single interface for Order-comms, paperless pathology requesting and electronic transfer of data including correspondence/discharge summaries –
sites
Interfaces & SetupThe Community hospitals will use EMIS web as their clinical system and admin system,. Clinical results will be accessed via a middleware package
SetupA network of “virtual services” with data sharing within/without the community service has developed, along with the business intelligence and reporting has been established
Podiatry Nursing
STINT
Independent GP Surgeries :
Patient access
Interfaces & SetupThe patient are be able to access their medical records via EMIS access
Community Pharmacy
Pharmacy
To be addressed through EPS2
CH In scope for EMIS Web deployment Interop with MH is under POC via MIG