DXS INTERNATIONAL PLC
(AQSE: DXSP)
ANNUAL RESULTS
for the year ended 30 April 2024
The Board of DXS International plc ("the Company” or "DXSP”), 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 2024.
Financial highlights:
Revenue decreased by 2.4% to £3,308,359 (2023: £3,391,219). Core recurring revenue model remains resilient.Agreed a 13.09% price increase on recurring revenue from the NHS effective November 2024.Available cash at the period end was £90,012 plus unutilised debtor drawdowns of £379,605 (2023 £371,978) . Change to Amortisation and Impairment creates headline loss
The loss for the year is £4,738,686 (2023: Profit of £225,191). The loss is a result of a combination of increased amortisation of £1,020,916 and impairment of £4,378,114. This loss should be viewed in the following context.
The Company has invested in, and completed, several innovative solutions specifically designed for use by the NHS. It is well-known that the NHS has undergone a decade and more of extreme austerity that led to a decline in both new investment and health service delivery. NHS budget constraints in health technology investment coupled with the disruption caused by Covid significantly slowed the adoption of new innovative technology solutions. It is against this background that, after discussions with our auditors, the Directors have decided that commencement of sales revenue from these products cannot be accurately predicted and accordingly has written off, as "impairment”, the development cost of these products.
However, the Directors remain confident that due to the fast growing awareness in the NHS about the power of digital technology to unlock productivity and improve patient outcomes, these solutions will, in future, become revenue producing.
Operational highlights:
Despite not meeting the financial growth targets we set for the past year the company has made significant progress in building a firm technology and operations foundation to fully exploit what the Directors believe to be fast maturing opportunities in the NHS. All indications are the new government, together with the NHS's high-level acknowledgement that digital health solutions and services are now essential for the system's survival, will drive rapid adoption of innovative solutions. During the past period, we have dedicated significant effort to building robust state-of-art solutions specifically designed to address urgent NHS digital health unmet needs. Our operational highlights include the following:
The completion of our cloud-based core Aios platform together with certified Interface integrations with England's main primary care clinical systems and importantly, with NHS England's electronic referrals system (ERS). Our new SMART Referral Cloud solution - several years in development - has now completed user acceptance testing and is being launched to existing customers. The solution streamlines the referral process between primary and secondary care and is designed to help resolve the known patient referral backlog and extend appeal and usability to attract new customers. We also achieved accreditation on the Crown Procurements G-Cloud 14 Framework, which provides existing and new customers with a second framework to procure our SMART Referral solution.ExpertCare, our new hypertension medicine review solution, is 11 months into an 18-month-long Innovate UK-funded evaluation. Initial project results show that the solution is highly effective in reducing blood pressure in the evaluation patient cohort, and we expect a positive clinical and economic evaluation outcome. Post-Period
As announced yesterday we have managed to secure our first commercial Expercare orderto conduct hypertensionreviews for a Primary Care Network (PCN)consisting of 7 GP practicesManagement share options expired and will be replaced with a suitable replacement scheme in due course. Outlook
The NHS is under significant pressure to overcome the current healthcare delivery crisis. In the recent past, DXS has focused its efforts on solutions that meaningfully address current NHS pressure points like the backlog in hospital referrals and the enormous human and financial cost of the rising incidents of cardiovascular disease.
The company's recently released SMART Referrals Solution is set to make an impact on speeding up referrals from primary to secondary care by improving the administrative and clinical referral workflow. Early real-world evaluations show the solution slashes referral rejections and reduces patient waiting times. This offering has recently been made even more compelling for our customers due to a recently completed integration with the NHS Electronic Referral System (ERS). This feature now allows primary care clinicians to select specific services with shorter waiting times and is a powerful benefit for patients awaiting urgent treatment.
DXS has also made significant progress in advancing its ExpertCare Hypertension Medicines review solution towards full-blown commercialisation. The solution strongly aligns with the NHS' stated objective of reducing the incidence of cardiovascular disease related events such as heart attack and stroke. Uncontrolled blood pressure is a known driver of cardiovascular disease and NHS England's objectives for 2024/25 includes increasing the percentage of patients with hypertension treated according to NICE guidance to 80% by March 2025. ExpertCare is well-positioned to help the NHS meet this objective.
David Immelman, Chief Executive of DXS, commented:
"Both management and staff at DXS are facing our market with increased confidence. The company has spent several years primarily inwardly focused on developing, testing and certifying its SMART digital platform and products. Concurrently, it has progressed with developing a body of evidence to support the effectiveness of its solutions. The evidence gathering (in the form of real-world evaluations overseen by reputable NHS-funded Health Innovation Networks) is designed to underpin its soon-to-be ramped-up marketing and sales initiatives.
We are hopeful that the new government's emerging strategy around strengthening primary care with a renewed focus on increased digitisation and disease prevention will come to fruition. Our solutions are now well-positioned to benefit from this direction of travel.
We recognise that to unlock true company value we need to dramatically increase our sales revenue and profitability. I wish to assure our shareholders that we remain singularly focused on this objective and to return value to stakeholders and our shareholders.”
The Directors of DXS International plc accept responsibility for this announcement. This announcement contains information which, prior to its disclosure, was inside information as stipulated under Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 (as amended).
Contacts :
David Immelman
DXS International plc
www.dxs-systems.com
01252 719800 AQSE Corporate Broker and Corporate Advisor
Hybridan LLP
Claire Louise Noyce
020 3764 2341 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 2024.
CHAIRMAN'S REPORT
The Board announces its results for the year ending 30 April 2024.
For the year ending 30 April 2024, the turnover decreased by 2.4% to £3,308,359 (2023: £3,391,219).
The loss for the year is £4,738,686 (2023: Profit of £225,191). The loss is a result of a combination of increased amortisation of £1,020,916 and impairment of £4,378,114. This Loss should be viewed in the following context.
The Company has invested in, and completed, several innovative solutions specifically designed for use by the NHS. It is well-known that the NHS has undergone a decade and more of extreme austerity that has led to a decline in both new investment and health service delivery. NHS budget constraints in health technology investment coupled with the disruption caused by Covid significantly slowed the adoption of new innovative technology solutions. It is against this background that the Directors have decided that commencement of sales revenue from these products cannot be accurately predicted and accordingly has written off, as impairment, the development cost of these products. However, the Directors remain positive that due to the growing awareness in the NHS about the power of digital technology to unlock productivity and improve patient outcomes, these solutions will ultimately become revenue producing in the near future.
There is huge pressure on the NHS to overcome the current crisis in health care delivery. In the recent past, DXS has focused its efforts on solutions that meaningfully address current NHS pressure points like the backlog in hospital referrals and the enormous human and financial cost of the rising incidents of cardiovascular disease.
The company's recently released Smart Referrals Solution is set to make an impact on speeding up referrals from primary to secondary care by improving the administrative and clinical referral workflow. Early real world evaluations show the solution slashes referral rejections and reduces patient waiting times. This offering has become even more compelling for our customers due to our recently completed integration with the NHS Electronic Referral System (ERS). This feature now allows primary care clinicians to select specific services with shorter waiting times and is a powerful benefit for patients awaiting urgent treatment.
Our SMART Referral Solution is built on a modern cloud-based technology stack that is currently being rolled-out as a replacement for our legacy Point-of-Care solution. This next generation solution will form the basis for our expansion into a wider NHS customer base and places us in a strong position to meet the requirements of the soon to be finalised NHS Digital Services for Integrated Care Framework (DSIC). The forthcoming Framework is like the now expired GPIT Futures Framework that enabled our primary care end-user customers to acquire our solution through central NHS funding.
DXS has also made significant progress in advancing its ExpertCare Hypertension Medicines optimisation solution towards full-blown commercialisation. The solution strongly aligns with the NHS' stated objective of reducing the incidence of cardiovascular disease related events such as heart attack and stroke. Uncontrolled blood pressure is a known driver of cardiovascular disease and NHS England's objectives for 2024/25 includes increasing the percentage of patients with hypertension treated according to NICE guidance to 80% by March 2025. Our innovative rules based AI hypertension digital solution is currently close to completing a 12-month Innovate UK funded real-world evaluation. The evaluations' interim results are highly encouraging and show strong evidence that ExpertCare could be highly effective in helping the NHS meet its blood pressure control targets. As a direct result of this evidence we have secured our first commercial order with additional prospects in our sales pipeline.
We are positive that the NHS austerity tide is beginning to turn and that soon new funding - especially in the realm of technology and AI - will become more readily available. Our view is reinforced by a recent statement by Amanda Pritchard the Chief Executive Officer (CEO) of NHS England who in a recent statement said: "Despite the challenges we face, there are real reasons for optimism. We are already putting in place the building blocks for a better future. The £3.4 billon investment of capital in data and technology - from 2025/26 onwards - announced in the Spring Budget will allow us to rollout technology and digital services to improve access, waiting times and outcomes”.
As we have previously stated, we are of the conviction, supported by evidence and enthusiastic clinician support, that our revenue will grow as adoption of our solutions gain momentum.
We remain committed to growing the revenue and profitability for our shareholders and thank you for your continued support.
Yours sincerely,
Bob Sutcliffe
Chairman
REPORT OF THE DIRECTORS
The directors present their annual report and the audited financial statements for the year ended 30 April 2024. 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 - CEOSteven 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 ICBs (Integrated Care Boards) 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 £992,828 into R&D for the introduction, continuation, and completion of new DXS solutions. These are targeted at providing clinicians with solutions to improve referring and the therapeutic management of long-term conditions. These products are aligned with the NHS strategy of Digital First and Empowering the Wider Workforce.
During the period we have repaid £457,451 on bank and third-party 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 annual report and 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 Group and Company and of the profit or loss of the Group 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 Group and 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
Director
29 October 2024
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 raised external equity financing in the year to April 2024, as set out in Note 18 in the Financial Statements.
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 releases 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 loss for the year is £4,738,686 (2023: Profit of £225,191). The loss is a result of a combination of increased amortisation of £1,020,916 and impairment of £4,378,114. Refer to the Chairman's statement for an explanation of why the directors took the decision for this impairment.
As an accredited NHS solutions provider, DXS has well-established business continuity and disaster recovery protocols in place.
We have continued the development of our new Aios cloud-based system and are in the process of piloting this new version. In addition, we completed our IM1 integration for EMIS which has now been NHS accredited and an Innovate UK grant funded trial for our ExpertCare hypertension solution is underway.
Although the NHS remains notoriously slow in adopting new technology, our sustained efforts are seeing gained awareness of our new SMART referral and Hypertension solution which we believe will begin generating revenue in the new financial year.
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 NHS' stated objective for clinicians to operate using digital technologies with which our new Aios and ExpertCare solutions are aligned.
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 as the current situation normalises plus the first ExpertCare commercial sale.
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 2024
Revenue was marginally down with market expectations, decreasing by 2.4%. The group showed a loss of (£4,738,686). The loss is a result of a combination of increased amortisation of £1,020,916 and impairment of £4,378,114. Refer to the Chairman's statement for an explanation of why the directors took the decision for this impairment.
FINANCIAL METRICS
Group Revenue of £3,308,359 (2023: £3,391,219) has decreased by 2.4%. 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 loss after Tax was (£4,738,686). This was as a result of a combination of increased amortisation of £1,020,916 and impairment of £4,378,114. The rationale is explained under Analysis above.Depreciation and amortisation of deferred Research and Development expenditure and Goodwill in 2024 was £1,020,916 and in 2023 was £704,091.Earnings Per Share 2024 (0.7p), 2023 0.5p. Definition: Earnings per share is the underlying profit divided by the weighted average number of ordinary shares in issue.ROE 2024 (103%) 2023 5%. 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. This drop in the ratio is mainly due to the one-off impairment charge, which rationale is explained in the Chairman's report.
CORPORATE GOVERNANCE
We are committed to establish, maintain, and continually improve an Integrated Management System (IMS) that conforms to relevant ISO 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.Set 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
29 October 2024
FINANCIAL STATEMENTS
INCOME STATEMENT
Year ended 30 April 2024
2024
Continuing Operations 2023
Continuing Operations £ £ Turnover 3,308,359 3,391,219 Cost of Sales (428,212) (466,722)) _________ _________ Gross Profit 2,880,147 2,924,497 Grant income 136,570 - Administration Costs 92,494,510) (2,261,897) Depreciation and Amortisation and impairment (1,020,916) (705,253) Depreciation and amortisation (1,020,916) (705,253) Impairment (4,378,114) - _________ _________ 5,399,030 (705,253) _________ _________ Operating Loss (4,876,823) (42,653) Sundry income 15 5 _________ _________ (4,876,808) (42,648) Interest payable and similar expenses (74,842) (55,058) _________ _________ Loss on ordinary activities before taxation (4,951,650) (97,706)) Tax on loss on ordinary activities 222,964 322,897 _________ _________ (Loss) / Profit for the year (4,738,686 225,191 ========= ========= Earnings per share basic (7.4p) 0.5p fully diluted (7.4p) 0.5p ========= ========= Statement of Other Comprehensive Income
Year ended 30 April 2024
2024
£ 2023
£ (Loss) / Profit for the year (4,738,686) 225,191 Other comprehensive income - - Tax on components of other comprehensive income - - _________ _________ Total comprehensive income for the year (4,738,686) 225,191 ========= ========= Statement of Financial Position
Year ended 30 April 2024
Group 2024 Group 2023 Company 2024 Company 2023 £ £ £ £ Fixed Assets Intangible Assets 1,455,000 5,860,210 - - Tangible Assets 1,038 1,122 - - Investments - 507,954 3,486,478 _________ _________ _________ _________ 1,456,038 5,861,332 507,954 3,486,478 _________ _________ _________ _________ Current assets Debtors: amounts falling due within one year 1,115,272 791,321 196,024 18,393 Cash at bank and in hand 90,012 371,977 4,094 200,929 _________ _________ _________ _________ 1,205,284 1,163,299 200,118 219,322 Creditors: amounts falling due within one year (811,205) (865,475) (161,124) (239,518) _________ _________ _________ _________ Net current assets 394,079 297,823 38,994 (20,196) _________ _________ _________ _________ Total assets less current liabilities 1,850,117 6,159,155 546,948 3,466,282 Creditors: Amounts falling due after more than one year (345,455) (720,446) (99,562) (470,042) Deferred income (1,057,276) (848,876) - - _________ _________ _________ _________ 447,385 4,589,833 447,386 2,996,240 ========= ========= ========= ========= Capital and reserves Called up share capital 211,273 159,246 211,273 159,246 Share Premium 3,213,395 2,671,321 3,213,395 2,671,321 Share option reserve 11,589 21,382 11,589 21,382 Retained earnings (2,988,871) 1,737,884 (2,988,871) 144,291 _________ _________ _________ _________ Shareholders' funds 447,386 4,589,833 447,386 2,996,240 ========= ========= ========= ========= 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 £2,325 (2022 - £2,395) for the year.
The financial statements were approved and authorized for issue by the Board on 29 October 2024.
Signed on behalf of the Board of directors
D Immelman
Director R Sutcliffe
Director Company Registration number : 06311313
STATEMENT OF CASH FLOWS
Year ended 30 April 2024
Group
2024 Group
2023
£ £ Cash flow from operating activities 323,384 549,803 Interest paid (74,842) (55,058) Sundry Income 15 5 R&D tax credit received