Avia Health Informatics Plc Final Results 31 March 2011

The Board announces its audited results for the year to 31 March 2011. Investors should note that this announcement supersedes the RNS announcement issued by the Company on 24 October 2011 (Unaudited Preliminary Report 31 March 2011).

Highlights

• Revenue of £2.1m (2010:  £1.8m)
• Operating loss of £540k (2010:  £318k)
• Cash position at year end of £366k (2010:  £475k)

Suspension

The reason for suspension was a revenue shortfall impacting on the Company’s financial position due principally to:

• Exclusion from NHS 111 project
• Rescheduling of the Prison project due to funding delays owing to Ministry of Justice cutbacks and technical issues in the prison operating environment

Actions taken

• Strengthened sales delivery structure
• PathFinderRF sales now commenced
• Concentrating on short term sales growth
• Reduced cost by £350k in 2011
• Further contracted cost reduction of £100k from March 2012
• Creditor management including salary deferment of £200k in 2011, now reduced to less that £75k, forecast to reduce to zero by March 2012

Achievements in 2010/2011

• Redevelopment of Odyssey software onto the following platforms:
  Web deployed .NET/Silverlight
  3G
  Cloud
• Improved integration of Odyssey into partner software
• Touchscreen/tablet technology incorporated in software range
• International resellers and sales, including America, Australia, Africa, India and Europe
• First sales of PathFinderRF
• Launch of:
  Odyssey Mobile hosted range
  International Partner Programme

Strategy
The Company’s focus continues to be on achieving international and new market sales for the Company’s products and services by delivering clinical content and other services in the UK and international markets.  The delivery of the Company’s products and services is via web-deployed, cloud-enabled, mobile and PC technologies. Sales growth is being targeted through a direct sales force and the engagement of resellers and strategic partners, the latter particularly being pursued to increase penetration in new international markets.

The Board continues its review of its strategic options, including a fundraising, sale of its principal operating subsidiary or sale of the Company.

Outlook
The challenging market conditions experienced in our core UK markets in 2010/11 remained and continued through into the current year, restraining UK growth. However, we are now experiencing new sales from PathFinderRF in the final quarter of the year and anticipate interest from the Care Home sector with our recent announcement of CareAssess via the cloud as a service. In addition we also anticipate interest from the GP market for Odyssey PatientAssess and Odyssey Reception.

The Board is encouraged by the strength of interest shown from international markets in our core technology software, which can now be deployed on touch-screen PCs, laptops and mobile tablet devices, including iPad, operated in many instances by lay personnel. It is anticipated that as new applications for our base clinical technology continue to emerge it will also be capable of being delivered on new generations of mobile platforms.

The Board continues to believe in the significant potential for the Company in overseas markets whilst at the same time remaining cautiously optimistic about seeing growth in its new customer base within the UK market during the next financial year.

Funding
As detailed above the Company has taken steps to reduce its outgoings and to maintain its sales, marketing and development activity within the Company’s current cashflow.  This, together with the encouraging levels of interest in and new orders for PathFinderRF and the levels of renewals in the Odyssey range, have led the Board to seek a lower target fundraising compared to that thought last year. 

The Board has reviewed the funding position of the Company andbelieves no new funds are required for the sole purpose of securing the business. Based on the current cash position and management forecasts the Company will seek to raise at least £0.5 million net of costs in the near term to support the development of new products and services for existing and new markets.The expenditure of £0.5 million for development would likely not be spent instantaneously, but would be spread over the year. The Directors note that the current cash resources of the business are highly constrained and the business does remain vulnerable to adverse trading swings. Cash at 31 December was £0.22million and the Directors forecast that cash headroom levels will remain tight going forward in 2012. Therefore if trading does fall short of the Board’s expectations and the Company is successful in raising funds, the Company could maintain a proportion of the £0.5million as a working capital buffer during this period.  The directors are also identifying partner funding for partner specific product, service and/or market projects.