RNS Number:5254G
Ascribe plc
17 December 2004
Press Release 17 December 2004
Ascribe plc
("Ascribe" or "the Company")
First day of dealings on the AIM market
Ascribe, the health IT group focusing on medicines management, today announces
the commencement of dealings of its Ordinary Shares on the AIM market (AIM) of
the London Stock Exchange. Seymour Pierce is acting as Nominated Adviser and as
Broker to the Company. The stock market EPIC will be ASP.L.
Placing Statistics
Total number of New Ordinary Shares being placed on behalf of the Company 27,777,778
Number of Sale Shares being placed on behalf of Selling Shareholders 2,777,778
Total number of Ordinary Shares being placed 30,555,556
Issue Price 18p
Number of Ordinary Shares in issue immediately following Admission 103,441,732
Percentage of the Enlarged Share Capital being placed 29.5%
Market capitalisation at the Issue Price #18.6 million
Gross proceeds of the Placing receivable by the Company #5 million
Reasons for Admission to AIM and use of proceeds of the Placing
The proceeds of the Placing of the New Ordinary Shares, expected to amount to #5
million (before expenses) will be used by the Company, amongst other things, to
fund the acquisition of Protechnic Exeter Limited.
Stephen Critchlow, Chairman and Chief Executive of Ascribe, said: "We are
delighted that the flotation of the Company has been completed successfully.
The listing will enable us to take Ascribe to the next stage of its development
and maximise any acquisition opportunities for the Company within the
international healthcare market. Our strategy is to build on our position in
the medicines management market through organic growth and through a number of
acquisitions of profitable companies, such as Protechnic Exeter, which offer
complementary established systems to customers needing a medicines management
solution."
- Ends -
For further information:
Ascribe
Stephen Critchlow, Chief Executive Tel: +44 (0) 161 280 8080
stephen.critchlow@ascribe.com www.ascribe.com
Seymour Pierce Limited
Mark Percy, Corporate Finance Tel: +44 (0) 20 7107 8000
markpercy@seymourpierce.com
Stella Panu, Corporate Finance Tel: +44 (0) 20 7107 8030
stellapanu@seymourpierce.com www.seymourpierce.com
Media enquiries:
Abchurch
Henry Harrison-Topham / Alex Tweed Tel: +44 (0) 20 7398 7700
henry.ht@abchurch-group.com www.abchurch-group.com
INTRODUCTION
Ascribe is a health IT group focusing on medicines management through the
development and marketing of software solutions supporting patient, clinical and
business processes to the international healthcare market. The group will on
admission comprise of ASC Computer Software Limited ("ASC"), a software supplier
to hospital pharmacy departments internationally and Protechnic Exeter Limited,
a provider of software solutions to the primary healthcare market.
The Audit Commission in their report "A Spoonful of Sugar" published in 2001
identified potentially up to 1,200 lives and #500 million per year from certain
medication errors in UK hospitals alone which could be saved using clinical
information systems. This demonstrates the market that ASC is addressing.
Targets have now been given by the Government to local level hospital Chief
Executives and Chief Pharmacists to reduce the medication errors identified.
ASC has developed products to serve this market.
The software produced by ASC enables pharmacists to store information about the
patients they treat and use this information to assist in their decision-making.
The system also integrates with stock control procedures. The latest web
based product has further enabled technology to link the information between
customers building a solution where the risk of the above medication errors can
be reduced.
The founders of the business, Stephen Critchlow (Chairman and Chief Executive)
and Chris Jones (Technical Director of ASC) originally developed the software to
overcome difficulties in handling clinical information that they themselves
experienced as a pharmacist and doctor respectively in the NHS.
The Ascribe medicines management solution was developed from 2000 to 2004. The
latest web based product has now been delivered to customers and, in the second
half of the financial year ended June 2004, ASC has reported an operating profit
after a period of significant product development.
Over 120 hospitals in the UK (representing over 40 per cent. of the UK market)
and 41 hospitals overseas now use the Ascribe system. Over half of the 2004
financial year turnover of the Group of #2.8 million comprised recurring
maintenance contract revenue from these hospitals.
ASC's strategy is to build on its position in the medicines management market
through organic growth and through a number of acquisitions of profitable
companies offering complementary established systems to customers needing a
medicines management solution.
To this end the Company has entered into an agreement to acquire Protechnic
Exeter. The sale and purchase agreement was entered into on 26 November 2004
and completion is conditional on, inter alia, Admission.
Immediately following Admission, the aggregate annual turnover of the ASC and
Protechnic Exeter audited statutory accounts ending in 2004 was approximately
#6.4 million.
History
The founders had a desire to provide a centralised database of prescriptions
which could be available to healthcare professionals. They initially focussed
on the needs of hospital pharmacy departments.
ASC's first commercial sale of an integrated network version of the Ascribe
pharmacy software was in DOS, to Burnley NHS Trust in 1992. In 1996, the
windows compatible version of the software was launched.
ASC Australia was formed in 1996 and since then, four state-wide contracts have
been entered into. The first customer in New Zealand was Taranaki Healthcare
going live in 1997.
ASC's headquarters are near Manchester and ASC currently employs approximately
56 staff in the UK and Australasia.
Markets and Customers
The Company believes that demand for medicines management systems increased as a
result of the Audit Commission document "A Spoonful of Sugar" published in
December 2001. This document states that approximately 70 per cent. of certain
medical errors could be eliminated by the use of computerised prescribing and
clinical information systems. The report also states that 40 per cent. of
nursing time is spent administering medication and that approximately 10.8 per
cent. of patients suffer from an adverse event related to inappropriate
treatment, costing the NHS around #500 million each year.
The consequences of not responding to this report are potentially significant
for healthcare providers, many of which are under increasing pressure to reduce
the risks and numbers of such adverse events. This has led to a demand for
medicines management systems, in particular, robotic dispensing and electronic
prescribing. The trend is international with similar reports in America. With an
increasing number of medications becoming available to an aging population such
risks are likely to continue to increase.
ASC initially focussed on the needs of UK hospital pharmacy departments before
expanding into territories with hospital systems similar to the UK in
Australasia and South East Asia.
In January 2002, Silicon Bridge completed a market report estimating that over
40 per cent. of the UK Secondary Care market use an Ascribe system making it the
then largest supplier of pharmacy software to such market. Since then ASC has
won 25 out of 27 public tenders it has made for pharmacy software systems for
hospitals in the UK.
ASC has contracts with over 120 hospital pharmacy customers in the UK. Recurring
maintenance contracts with these and the Company's overseas customers comprised
57 per cent of its 2004 financial year sales.
ASC has supplied pharmacy systems to 41 sites in Australia, New Zealand,
Malaysia and Hong Kong. It has also identified sales opportunities in China and
Thailand. Nearly half of the world's population reside in these countries. The
Company believes through its local knowledge that there is a potential for
Ascribe software products to reach approximately 70,000 government and 3,000
private hospitals within this region and the healthcare professionals are
thought to have an understanding of and desire for such products.
Direct sales, marketing, support and operational staff for this region are
managed by ASC Australia based in Brisbane.
Competition
The Company believes that ASC is a market leader in the UK Secondary Care
pharmacy software market. The main competitors in this market include JAC, EDS,
Cortex, Northgate, Horis and Bedford.
Products and services
ASC develops and markets software solutions which support patient, clinical and
business processes to Secondary Care organisations predominately in the public
sector.
Originally focusing on software solutions for hospital pharmacy departments, ASC
progressed to develop an electronic prescribing solution which in turn led to
the latest product, an integrated clinical information system. This brings
together information from disparate systems within a hospital and presents it in
one common web based view.
There are four main Ascribe products all of which can be used alone or combined
to provide the appropriate medicines management solution:
Pharmacy - ASC's first product was developed as a software solution to assist
hospital pharmacies in dispensing medication. This is now a complete pharmacy
departmental solution incorporating stock control, dispensary labelling,
clinical checking of prescriptions, drug level monitoring, reporting of drug
utilisation, interfacing with robotic dispensing systems, control of pharmacy
manufacturing processes and specialist applications for cancer care. These
modules generally replace disparate software solutions used in a pharmacy
department and integrate them as one clinical information system for hospital
pharmacists.
Electronic Prescribing - The electronic prescribing module allows doctors to
enter prescriptions electronically, which are then printed or transmitted to
dispensing pharmacists, replacing handwritten systems. This also assists in the
sharing of information, e.g., discharge letters about a patient's medication,
with other healthcarers.
Clinical Decision Support ("CDS") - Originally developed for use in hospital
pharmacies, this system checks prescriptions with reference to a particular
patient, whether the patient has reported any allergies and whether the dose and
directions are appropriate for the patient's reported condition.
Integrated Clinical Workstation ("ICW") - The ICW is a clinical information
system which is capable of integrating legacy systems to offer a single clinical
view. This provides a solution suggested by the Audit Commission in the "A
Spoonful of Sugar" document. This product can also lead the health carer
through agreed medical procedures, suggesting for example appropriate orders,
tests and treatments based upon the patient information and by reference to a
clinical repository. The system can also be interfaced to and work in
conjunction with other clinical information systems.
All of the above systems are capable of being used in the Primary Care sector.
The products have been developed so that they interface with standard Microsoft
tools. ASC's solutions can be implemented on standard PC servers and terminals
running Internet Explorer and Microsoft Windows or via an application service
provider model using web technology. The system can also be delivered via radio
LAN to hand held devices.
Product development
The technology platform created by ASC has evolved with the latest development
of its products. This evolution has taken the business from operating within
the DOS world of databases to that of Microsoft's tools and databases.
The latest version of the product suite employs web-based technology which
supports a greater range of solutions from hospital-wide to department-wide or
even single-user systems.
Following a period of heavy product development over the last four years, the
Company is now able and intends to focus future development on specific customer
requirements.
Intellectual Property Rights
The group owns copyright in its own software products by virtue of the fact that
such software has been created, in the main, by employees in the course of their
employment or has been acquired by or contracted for development through a
recognised independent contractor.
The source code to products is not released to any customer, but may be the
subject of an escrow agreement containing appropriate confidentiality
provisions.
Ascribe is satisfied that the steps taken by the group to protect its
intellectual property rights are sufficient.
Acquisition of Protechnic Exeter
The Company has entered into a conditional agreement to acquire Protechnic
Exeter, a health IT business supplying 35 Primary Care trusts with a community
and child health system and supporting 140 general practitioners. The agreement
to acquire Protechnic Exeter was entered into on 26 November 2004. The
consideration payable for the acquisition is up to #5,800,000 in total of which
#2,700,000 is to be satisfied in cash on completion, #2,300,000 is to be
satisfied by the issue of 12,777,778 New Ordinary Shares on completion and up to
a maximum of #800,000, subject to certain sales performance criteria, is to be
satisfied in cash 12 months after the date of completion.
ASC's acquisition of the Protechnic Exeter group will add significant turnover
and profit to the group. The acquisition supports the Company's medicines
management approach by providing access to Primary Care customers. The Company
believes that by combining the two companies' software, there will be the
potential for additional products to be brought to the market and that
Protechnic Exeter will have opportunities to sell its products into the
Australasian and South East Asian markets where the Company already has a market
presence. Protechnic Exeter was incorporated in 2001 and Protechnic Computers
Limited (one of its subsidiaries) was incorporated in 1966.
In the year ended 30 April 2004, Protechnic Exeter recorded sales of #3,535,550
and made an operating profit of #499,349. Protechnic Exeter employs
approximately 39 staff and is based in Cambridge and Halesowen.
Financial records
Set out in the AIM admission document is the financial record of ASC for the
three years ending on 30 June 2004 and of Protechnic Exeter for the two years
ending on 30 April 2004.
In order to make a proper assessment of the financial position of the Company,
investors should not rely solely on the summary information set out below but
should read the AIM admission document, including the accountants' reports.
Turnover for the ASC group increased by 39 per cent. to #2.82 million for the
year ending 30 June 2004. This revenue comprises software licence income,
project management fees and annual maintenance contract charges. Of the total
2004 financial year turnover, 57 per cent. related to recurring maintenance
contracts.
A significant investment has been made by ASC in research and development over
the last three years. Following the launch of the ASC group's latest web-based
product at the beginning of 2004, sales have continued to increase whilst
overhead expenditure has decreased. As a result ASC recorded a small operating
profit before interest and taxation for the six months ending on 30 June 2004.
Turnover for Protechnic Exeter comprises software licence income, project
management fees, hardware sales and annual maintenance contract charges. Of the
total 2004 financial year turnover approximately 67 per cent. related to
recurring maintenance contracts.
For the year ended 30 April 2004 Protechnic Exeter recorded an operating profit
before interest and taxation of around #499,000 representing a return on sales
before interest and taxation of approximately 14 per cent.
Current trading and prospects
Management accounts for the four months to 31 October 2004 show ASC and
Protechnic Exeter Limited to be ahead of their financial targets. The Company is
confident about prospects for the remainder of the year.
DIRECTORS
The Board comprises:
Anthony Stephen Critchlow, Chairman and Chief Executive, aged 44
Stephen is a member of the Royal Pharmaceutical Society of Great Britain. He
received his B.Sc. from Manchester University in 1982 and worked for the NHS as
a pharmacist post qualification rising to the position of Director of Pharmacy
in 1987 for the Royal Manchester Children's Hospital and Prestwich Hospital. He
founded the business and was joined by Chris Jones in 1989. He completed an MSc
in 1990 in Pharmacokinetics and has written software for pharmacy applications
for over ten years.
Jeremy Stephen William Lee, Finance Director, aged 44
Jeremy began his professional career as a Chartered Accountant for Coopers &
Lybrand. In 1987 he was recruited by Campbell Soup Co. Inc. before joining Life
Sciences International plc in 1992. He was appointed as Finance Director of the
AIM-listed biotechnology group, Tepnel Life Sciences plc, in 1998. In 2001 he
was recruited by OFEX listed technology company, FeONIC plc and in July 2004 he
joined ASC. Jeremy has considerable experience in acquisitions, public
fundraising activities and of managing early stage R&D companies.
David Michael Hughes, Non-Executive Director, aged 62
David joined the IT industry in 1968 working for IBM (UK) for six years,
initially as a Systems Engineer and then as a Mainframe Salesman. The next
fourteen years were with McDonnell Douglas Information Systems (UK), eventually
taking on the role of Director of European Marketing. In 1985, he was appointed
Managing Director for McAuto (UK), a subsidiary of McDonnell Douglas.
David joined Apricot Computers plc in the middle of 1987 as Managing Director
for its International Division. Following the takeover by Mitsubishi Electric of
the Hardware Division of Apricot, he became Group Deputy Managing Director. In
1993, David joined Misys plc as Managing Director of TIS Software Ltd and was
appointed Chief Executive Officer of ACT Financial Systems Ltd in 1995.
He has been managing software houses since 1985 and has experience of acquiring
and integrating acquired businesses both in the UK and overseas.
SENIOR MANAGEMENT
The members of senior management include:
Chris Jones, Technical Director, ASC, aged 44
Chris gained a degree in Medicine and Surgery in 1983 and held House Officer and
Senior House Officer posts across numerous hospitals until 1986, when he joined
Ferranti as a Medical System Design Consultant. He was involved in the design
and implementation of department, clinical, AI and HIS projects. Chris joined
ASC full time in 1991 where he has continued his involvement in system design,
programming and data conversions.
Stephen Freeborn, Director of Clinical Development, ASC, aged 54
Stephen graduated from Manchester University 1974 with a B.Sc. Pharmacy degree
with a speciality in Pharmacology and he has an MSc in Hospital Pharmacy. Prior
to joining ASC, Stephen worked in various senior pharmacy positions in hospitals
across the North West. He developed his IT experience whilst managing a
hospital wide resource management initiative at Bolton Hospital. Stephen joined
ASC in August 2002.
Tony White, Commercial Manager, ASC, aged 48
Tony has over 30 years experience in the provision of IT solutions to the NHS.
He was involved in the original Patient Administration System project with the
West Midlands Regional Health Authority before moving into a National Accounts
Manager role with ACT Medisys in 1991. He has enjoyed notable success in the
sales arena with both Medisys and later, following acquisition, iSOFT. Tony has
built up an excellent contacts base within the NHS and understands the key
business and technical drivers within this sector as well as the current
regulatory and legislative background (which is a key driver for the sector).
Bruce Laird, Operations Director, ASC Australia, aged 54
Bruce is a registered Pharmacist commencing his career in 1972 as a hospital
pharmacist moving on to establish and manage his own "Dispensing Only"
Pharmacies in New Zealand during the period 1978 to 1995. During this time he
was also a director of a pharmaceutical wholesale company, Wicksteed Wholesale
Ltd. From 1995 to 1997 Bruce acted in a consulting role to various aged care
facilities and conducted hospital pharmacy service management reviews. Bruce
joined ASC in May 1997 as the ASC New Zealand General Manager and moved to
Australia to head the Australasian operation in July 2000.
REASONS FOR ADMISSION TO AIM AND USE OF PROCEEDS OF THE PLACING
Use of Proceeds
The net proceeds of the Placing will be used by the Company to redeem the A and
B cumulative redeemable preference shares in the capital of the Company in the
aggregate principal sum of #2,300,000 and pay the cash element of the
consideration in respect of the acquisition of Protechnic Exeter.
Assist Growth and Profile
The Company believes that the strengthening of its balance sheet as a result of
the Placing and the ability to issue shares publicly traded on AIM will put the
Company in a much stronger position to make acquisitions of complementary
businesses. Ascribe intends to target software businesses providing similar
products or complimentary products to those currently offered by the Company.
Further, Ascribe believes that an AIM listing will significantly enhance the
Company's profile within its target markets and among its industry peers.
Vendors
Additionally, certain of the current shareholders will realise a partial return
on their investment by way of the Placing of the Sale Shares.
ADMISSION, SETTLEMENT AND DEALINGS
Application has been made for admission of the enlarged share capital to trading
on AIM. It is expected that Admission will become effective and that dealings in
the Ordinary Shares will commence on 17 December 2004.
The Company's Articles of Association permit it to issue shares in
uncertificated form in accordance with the Uncertificated Securities Regulations
2001. CREST is a computerised share transfer and settlement system. The system
allows shares and other securities to be held in electronic form, although a
shareholder can continue dealing based on share certificates and stock transfer
forms. Application has been made for all of the issued and to be issued Ordinary
Shares to be eligible for admission to CREST with effect from Admission.
Accordingly, settlement of transactions in the Ordinary Shares following
Admission may take place in CREST.
Pending the dispatch of definitive share certificates (as applicable),
instruments of transfer will be certified against the register.
For more information concerning CREST, shareholders should contact their brokers
or CRESTCo Limited at 33 Cannon Street, London, EC4M 5SB.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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