Final Results
30/10/2024 07:00
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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 practices
* Management 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 – 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 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 326,564 323,897
_________ _________
Net cash flow from operating activities 575,121 818,647
_________ _________
Cash flow from investing activities - -
Payments to acquire intangible fixed assets (992,828) (1,380,617)
Receipts / (Payments) to acquire tangible fixed assets (908) 361
_________ _________
(993,736) _________ (1,380,256) _________
Financing Activities -
Share issue proceeds 630,628 -
Share Issue costs (36,527)
Repayment of long term loans (457,451) (268,792)
Advance of long term loans - 750,000
_________ _________
136,650 481,208
_________ _________
Net (decrease) in cash and cash equivalents (281,965) (80,401)
Cash and Cash equivalents at 1 May 2021 371,977 452,378
_________ _________
Cash and Cash equivalents at 30 April 2022 90,012 371,977
========= =========
Cash and Cash equivalents consists of:
Cash at bank and in hand 90,012 371,977
========= =========
Net Debt Reconciliation Current Debt Non Current Debt Cash Total
£ £ £ £
At 30 April 2022 (293,132) (331,330) 452,379 (172,083)
Cash Flow (20,354) - (80,401) (100,755)
Non cash flow - (389,116) - (389,116)
________ ________ ________ ________
At 30 April 2023 (313,486) (720,446) 371,978 (661,954)
Non – cash flow - 374,991 - 374,991
Cash Flow 26,857 - (281,966) (255,109)
_________ _________ ________ _________
At 30 April 2024 (286,629) (345,455) 90,012 (542,072)
========= ========= ========= =========
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
Year ended 30 April 2023
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 4 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 ICBs, 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, the Financial
Reporting Standard 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. Details supporting opinion are set out in Note 1(m)
below.
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 was 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.
Provision is made for any impairment if the recoverable amount of the asset is
less than its carrying amount, based on Directors judgement of the future
revenue to be derived from each product.
The company has completed a number of projects specifically for use by the
NHS. Due to NHS Budget restraints, the often unavailability of senior NHS
staff numbers with the authority to make decisions, the continuing changing
structure of the NHS, the directors have decided that commencement of sales
revenue from these products cannot be accurately predicted and accordingly
have written off as impairment the net book value of these products. However,
with the potential restructuring of the NHS, the Directors believe that these
products will be revenue producing in the future.
(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.
(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. In the current year, the Grant has been accounted for on the
accrual basis over the period in which the Group recognised the related costs
for which the grant is intended to compensate.
(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 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 and products
Turnover is from the sale of products and services 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.
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.
(k) Leases
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 -.
Going concern
In regards to the going concern of the group, the directors have considered
cash flow forecasts for the period to April 2026 which included a price
increase. To date only a portion of this increase has been received with the
remaining increase expected in the first quarter of 2025. Should this price
increase be delayed as mitigation there are the new SMART Referral pipeline
sales that are not included in the current cashflow. In addition to the SMART
Referral sales are new potential Expertcare solution sales which are expected
to be revenue generating from late 2024. The first Expertcare contract with a
third party has been signed and will start generating income during December
2024. Also included are costs which, if forecasted sales are slower than
anticipated, can be reduced accordingly.
Given 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.
Research and Development Tax credit
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.
Impairment
As per the NHS mandate requiring NHS accredited suppliers to continue a
process of innovation, the Group has invested heavily into developing new
innovative solutions to meet the NHS unmet needs. However, while there is no
doubt as to the potential benefits will realise for the NHS, the slow pace at
which the NHS has been, and continues to operate is frustrating. This
lethargic pace has come about for a number of reasons, such as the post COVID
restructuring, delays in funding renewals and more recently the GP Collective
Actions which are adversely affecting times to market.
The directors have decided that commencement of sales revenue from these
products cannot be accurately predicted and accordingly have written off as
impairment a large portion of the cost of these products. The Directors
emphatically believe that these products will be revenue producing in future
years and evidence of this, although slow, exists.
(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
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