6PM Holdings plc - Interim Results

Friday, August 8th, 2014

On 7 August, 6pm Holdings plc published its half-year financial statements covering the six months ended 30 June 2014.

Performance Overview

6PM’s first half of 2014 was characterised by the re-organisation exercise undertaken by the Group in order to align its newly-formed business units to be able to better focus on its growth and financial targets set. Group revenue improved by a further 6.4% to GBP4.8 million, through additional investments in its iFIT flagship product followed by further development in its other clinical solutions, which allow the Group to increase its sales venues. During the 6 months under review, the Group secured a minority interest in Javali LLC in USA, for which 6PM is developing a revenue leakage product offered to hospitals. Additional venues for turnover have been established, with 6PM Ireland Ltd becoming an operational sales office in the country, while additional business opportunities in Scotland, Canada and Turkey were established to enable the Group to sustain its growth. Gross profit margins increased to 44.3% in the first 6 months of 2014, compared to 36.9% in 2013 as the Group continued to capitalise on cost efficiencies and reducing cost of sales.

Administrative costs increased by 24.6% to GBP1.7 million, although these were mainly one-off increases related to the establishment of the Irish company as well as the shift of operations to new office locations in Malta and Macedonia. Despite the increase in bank loans, net interest expense declined by 13.5% possibly as a result of more favourable interest rates on the Company’s overdrafts and loans.

After deducting a tax charge of GBP734, the Group made a profit of GBP384,529, which is 54% higher than that in the comparable period of 2013.

6PM’s balance sheet shows total assets of GBP11.3 million, reflecting a substantial 21% increase since the beginning of 2014 due to an amount of GBP0.89 million in financial assets. Financing of the Group’s expansion was substantially through bank borrowings, which increased more than two-fold during the first half of 2014, compared to the same period in 2013. Shareholders’ funds declined marginally to GBP5.3 million, largely attributable to foreign exchange translation differences.

Dividend  

The Directors did not declare the payment of an interim dividend since the Group requires the cash to fund other business opportunities currently being considered. Notwithstanding this, the Directors declared that if these positive results are maintained during the next 6 months of 2014, the Board will aim to recommend a final dividend at the next Annual General Meeting.

Outlook

The Directors explained that 6PM’s investment in Javali LLC is expected to start generating income as from the last quarter of this year, when the company will launch its revenue leakage product for hospitals, which 6PM is developing. This product will be commercialised in Europe through a new company that will be incorporated for this purpose, in which 6PM is expected to hold an associate shareholding.

6PM Ireland Ltd, established earlier on this year, is expected to take selling opportunities within the country, while additional business developments have been undertaken in Scotland, Canada and Turkey to increase the Group’s sales reach in the respective countries.

On the product development side, 6PM continues its commitment to further develop its iFIT flagship product, adding on new components to the main platform and thus providing additional solutions to the trusts. ConCERT-D and StrokePAD are another two products that are being developed in association with NHS clinicians, whilst another pathology solution is being developed with 3 London trusts. Low-margin high-volume non-health products are also being offered by the Group, with 2 new products having just been launched in the first half of 2014: QuickFocus SnapUp and Skype Sync.

6pm’s associate, emCare360 Ltd, is now fully operational, and servicing a substantial client base in the field of eMonitoring and eCare, with the company being expected to turn into financial profit over the coming period. 6PM is reportedly committed to increase its shareholding of the Group within the company.

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6pm Holdings plc – Interim Financial Report as at 30 June 2014

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