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Ultrasis plc ('Ultrasis' or the 'Company')

Interim results for the six months ended 31 January 2009

 Highlights

• Revenue of £1,933,000, representing growth of 86% for the period.

• Profit before tax of £400,000, the first in the Group's history.

• Deferred revenue of £3,135,000 an increase of 60% over the position last year (2008: £1,955,000).

• Debt free with cash at bank of £1,646,000 (2008: £1,002,000).

Commenting, Nigel Brabbins, Chief Executive, said:

These results reaffirm Ultrasis' position as the leading provider of CCBT (computer delivered cognitive behavioural therapy) to the healthcare market and continue to demonstrate the company's potential for strong, profitable and sustainable growth based on a robust, renewable income stream. These results vindicate the strategy of dedicating key resource to ensure successful implementation of Beating the Blues (BTB), Ultrasis' NICE (National Institute for Health and Clinical Excellence) approved treatment for mild and moderate depression with NHS customers. While continuing to focus on utilisation of BTB across the NHS and widening its applications, we will further extend our retail offering with additional products and services through The Wellness Shop portal. We will also focus increasingly on growing the market internationally for these and our core product, Beating the Blues.

Further information:

Ultrasis plc:

Nigel Brabbins, Chief Executive Gerald Malone, Chairman	+44 (0) 20 7566 3900
nbrabbins@ultrasis.com	www.ultrasis.com

JBP Public Relations

Karen White/Sarah Rice

+44 (0) 117 907 3400

FinnCap, Nominated Adviser and Joint Broker

Geoff Nash	+44 (0) 20 7600 1658
	www.jmfinncapitalmarkets.com

Marshall Securities, Joint Broker:

John Webb

+44 (0) 20 7490 3788

ULTRASIS PLC

Interim report for the six months ended 31 January 2009

Statement from Chairman and Chief Executive

We are pleased to report a maiden profit before tax of £400,000, the first in the Group's history, confirmation of the Company's continued positive progress. Revenue growth remains strong at 86% with deferred revenue of £3,135,000 (2008: £1,955,000), reflecting sustained high renewal levels and increased new business for our core product, Beating the Blues (BTB). BTB is demonstrating clearly its effectiveness as the leading CCBT treatment for mild to moderate depression. These results have particular significance given the current severe economic climate, highlighting the strength of and growing need for the company's products in a recessionary market. 

The relationship between physical and mental wellbeing is increasingly acknowledged by the medical profession. We took the opportunity on 18th December 2008 to enhance our product and service offering by acquiring GetFit Technologies and adding its award winning range of physical wellness programmes to our market leading emotional wellbeing products, providing enhanced opportunities to further penetrate existing markets and address new ones.

Beating the Blues

As can be seen by viewing the Primary Care Trust (PCT) map of England on www.Ultrasis.com, an increasing number of PCTs are taking up Beating the Blues. Increasing numbers of PCTs are complying with national policy to make BTB available for all patients who require it and implementing BTB for the treatment of their population. The level of uptake in many PCTs, however, falls well below the need identified by the National Institute for Health and Clinical Excellence (NICE) resulting in a 'postcode lottery'. Norman Lamb MP has recently tabled an Early Day Motion (EDM) in the House of Commons to raise this issue with other parliamentarians in an effort to ensure Government compliance with its own stated policy - to provide CCBT to all patients who need it.  

Financial highlights 

We are pleased to report a profit before tax of £400,000 (2008: loss of £200,000), the first in the Group's history.

In the six months ended 31 January, 2009, recognised revenue from ordinary operating activities grew 86% to £1,933,000 from £1,038,000, in the same period last year. At 31 January 2009 deferred income, comprising invoiced amounts for services to be rendered in future periods, totalled £3,135,000 (31 January 2008: £1,955,000). 

Receivables stand at £2,882,000 compared to £1,373,000 in 2008, a result of several large contracts with payment terms spanning the 31 January 2009 balance sheet date.

During the period operating expenses increased by 49% on the same period last year, driven primarily by increased sales and marketing efforts and the costs associated with ensuring effective implementation. During the period unbudgeted costs of £70,000 were incurred in connection with an Extraordinary General Meeting of the company called by a minority shareholder group.

On 18 December 2008 we acquired all of the share capital of GetFit Technologies. Since acquisition GetFit Technologies has contributed £46,000 of revenue and £23,000 of profit before tax to the Group's results for the period. 

Having moved into profitability the Directors have reviewed the recoverability of the Group's deferred tax assets relating to past tax losses as required by International Financial Reporting Standard Guidance. Having assessed the position carefully, taken stock of the Group's current trading position and sought external professional advice, the directors have concluded there is now evidence that sufficient profits will be earned in future to set against these losses. Accordingly, deferred tax assets of £2,567,000 have been recognised in the accounts in respect of tax losses recoverable in future years. The effect of this is a one-off credit to the Income Statement for the period and an increase in the net assets of the Group. The Group's net assets at 31 January 2009 were £6,179,000 (2008: £2,624,000).  

Outlook

Ultrasis has now established a firm platform in the UK's NHS market on which it will continue to build. The Group's offering, 'Beating the Blues', having confirmed its effectiveness in the UK, is increasingly recognised in other markets. The Group's strategy of penetrating the broader 'Wellness' sector, in which BTB plays a significant role, is now delivering revenue in UK and non UK markets. Ultrasis is following a consistent positive upward trend and, with no debt and significant cash reserves, is well positioned to capitalise on new opportunities in the domestic and international markets. There is a growing need for the Group's products, particularly in a recessionary climate where stress, anxiety and depression are increasingly common conditions and the need to address them is accepted as a policy priority. We are confident that 2009 will be another year of significant growth.

Nigel Brabbins  Chief Executive

Gerald Malone Non executive Chairman

23 February 2009

  CONSOLIDATED INCOME STATEMENT for the six months ended 31 January 2009

		Six months ended 31 Jan		Six months ended 31 Jan		Year ended  31 Jul
	Notes	2009		2008		2008
		(unaudited)		(unaudited)		(audited)
		£'000		£'000		£'000
Revenue	2	1,933		1,038		2,614
Cost of sales		(30)		(73)		(230)
Gross profit		1,903		965		2,384
Administrative expenses
- Share based payments		(195)		(283)		(566)
- Other		(1,328)		(891)		(2,188)
		(1,523)		(1,174)		(2,754)
Operating profit/(loss)
Before share based payments		575		74		196
Share based payments		(195)		(283)		(566)
		380		(209)		(370)
Finance costs		(2)		(4)		(6)
Finance income		22		13		33
		20		9		27
Profit/(loss) before taxation	2	400		(200)		(343)
Taxation	4	2,567		-		-
Profit/(loss) for the period		2,967		(200)		(343)
Profit/(loss) per share
Basic profit/(loss) per share (p)	3	0.198		(0.013)		(0.023)
Diluted profit/(loss) per share (p)	3	0.178		(0.013)		(0.023)

CONSOLIDATED BALANCE SHEET as at 31 January 2009

		31 Jan		31 Jan		31 Jul
	Notes	2009		2008		2008
		(unaudited)		(unaudited)		(audited)
		£'000		£'000		£'000
Non-current assets
Intangible assets		2,923		2,563		2,717
Plant and equipment		40		52		45
Deferred tax assets		2,567		-		-
Total non-current assets		5,530		2,615		2,762
Current assets
Inventories		19		27		19
Trade and other receivables		2,882		1,373		708
Cash and cash equivalents		1,646		1,002		2,036
Total current assets		4,547		2,402		2,763
Current liabilities
Trade and other payables		(763)		(438)		(616)
Deferred revenue		(3,135)		(1,955)		(2,142)
Total current liabilities		(3,898)		(2,393)		(2,758)
Net current assets		649		9		5
Net assets	2	6,179		2,624		2,767
Equity
Share capital		1,505		1,478		1,478
Share premium account		21,282		21,104		21,104
Share option reserve		1,431		953		1,236
Other reserves		6,650		6,650		6,650
Merger reserve		2,324		2,324		2,324
Foreign exchange reserve		20		(28)		(25)
Retained losses		(27,033)		(29,857)		(30,000)
		6,179		2,624		2,767

  CONSOLIDATED CASH FLOW STATEMENT for the six months ended 31 January 2009

		Six months ended 31 Jan		Six months ended 31 Jan				Year ended 31 Jul
		2009		2008				2008
		(unaudited)		(unaudited)				(audited)
		£'000		£'000			£'000
Cash generated from/(used in) operations
Operating profit/(loss)		380		(209)			(370)
Share based payments		195		283			566
Depreciation charge		10		12			19
Amortisation of capitalised development costs		68		2			26
Decrease in inventories		-		-			8
(Increase)/decrease in receivables		(2,174)		(444)			221
Increase in payables		1,140		495			861
Net cash generated from/(used in) operating activities		(381)		139			1,331
Investing activities
Interest received		22		13			33
Investment in subsidiary		(26)		-			-
Development expenditure		-		(1)			-
Purchases of intangible fixed assets		-		-			(178)
Purchases of plant and equipment		(6)		(24)			(27)
Net cash used in investing activities		(10)		(12)			(172)
Financing activities
Interest paid		(2)		(4)			(6)
Net cash used in financing activities		(2)		(4)			(6)
Net (decrease)/increase in cash and cash equivalents		(393)		123			1,153
Cash and cash equivalents at beginning of period		2,036		879			879
Effects of exchange rate changes on the balance of cash held in foreign currencies		3		-			4
Cash and cash equivalents at end of period		1,646		1,002			2,036

  

NOTES TO THE FINANCIAL INFORMATION for the six months ended 31 January 2009

1.   Accounting policies

     i   Basis of preparation

The annual financial statements of Ultrasis plc (the 'Company') are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the EU, applied in accordance with the provisions of the Companies (Northern Ireland) Order 1986. The interim financial information has been prepared on a basis consistent with the accounting policies disclosed in the Annual Report and Accounts for the year ended 31 July 2008. 

IFRS is subject to amendment and interpretation by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) and there is an ongoing process of review and endorsement by the European Commission. The financial information has been prepared on the basis of IFRS that the Directors expect to be applicable as at 31 July 2009. 

       ii  Non-statutory accounts

The financial information for the year end 31 July 2008 set out in this interim report does not comprise the Company's statutory accounts as defined by Article 248(3) (c) in Part VIII of the Companies (Northern Ireland) Order 1986. 

The statutory accounts for the year ended 31 July 2008, which were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the EU, applied in accordance with the provisions of the Companies (Northern Ireland) Order 1986, have been delivered to the Registrar of Companies in Northern Ireland. The auditors reported on those accounts; their report was unqualified and did not contain a statement under Article 245(4) of the Companies (Northern Ireland) Order 1986. 

The financial information for the 6 months ended 31 January 2009 and 31 January 2008 is unaudited. 

2.   Segment information

The Company considers there to be only one class of business, interactive healthcare.

 

Geographical Segments
			United Kingdom					Rest of the World						Group
		Jan 2009			Jan 2008			Jan 2009		Jan 2008				Jan 2009			Jan 2008
			(unaudited)		(unaudited)			(unaudited)		(unaudited)				(unaudited)			(unaudited)
			£'000		£'000			£'000		£'000				£'000			£'000
Revenue by destination:			1,833		961			100		77				1,933			1,038
Profit / (loss) on ordinary activities before taxation:			419		(188)			(19)		(12)				400			(200)
Assets			9,930		185			147		4,832				10,077			5,017
Liabilities			(2,617)		(1,108)			(1,281)		(1,285)				(3,898)			(2,393)
Capital additions			6		24			-		-				6			24
Depreciation			(10)		(12)			-		-				(10)			(12)
Amortisation			(68)		(2)			-		-				(68)			(2)
Share based payments			(195)		(283)			-		-				(195)			(283)

  

3.   Basic and Diluted earnings per share

 

		Six months ended 31 Jan		Six months ended 31 Jan		Year ended  31 Jul
		2009   £'000		2008 £'000		2008 £'000
		(unaudited)		(unaudited)		(audited)
	Profit/(loss)
	Profit/(loss) for the purposes of basic profit/(loss) per share being profit/(loss) for the period attributable to equity shareholders	2,967		(200)		(343)
	Number of shares
	Weighted average number of ordinary shares for the purposes of basic profit/(loss) per share	1,496,668,641		1,478,070,955		1,478,070,955
	Weighted average number of ordinary shares for the purposes of diluted profit/(loss) per share	1,670,871,655		1,478,070,955		1,478,070,955

The calculation of diluted alternative earnings per share assumes conversion of all potentially dilutive ordinary shares, all of which arise from share options.  

  

 

4.    Taxation:

       

       i   Tax credit

The tax credit for the period comprises:

	Six months ended  31 Jan 2009		Six months ended  31 Jan 2008		Year ended  31 Jul 2008
	(unaudited) £'000		(unaudited) £'000		(audited) £'000
Deferred tax	2,567		-		-

           ii  Factors affecting tax charge for the current period

The tax assessed for the period is lower than that resulting from applying the standard rate of corporation tax.

The differences are explained below:

	Six months ended  31 Jan 2009		Six months ended  31 Jan 2008		Year ended  31 Jul 2008
	(unaudited)		(unaudited)		(audited)
	%		%		%
Standard tax rate for period as a percentage of profit / (loss)	28		(29)		(29)
Effect of:
Expenses not deductible for tax purposes	15		44		51
Tax losses not recognised	22		28		46
Capital allowances for period greater than depreciation	1		(8)		(8)
Utilisation of tax losses	(66)		(34)		(59)
Net effect of overseas business	-		(1)		(1)
Total tax credit rate for the year as a percentage of losses	-		-		-

Deferred tax assets of £2,567,000 have been recognised during the period (2008: £nil).  £2,505,000 relates to accumulated tax losses in relation to previous trading losses and £62,000 relates to depreciation in excess of capital allowances, both of which are available for offset in future periods. Now that the Group has moved into profit the Directors consider it more likely than not that in the foreseeable future there will be suitable taxable profits against which the tax losses can be offset. Hence, in line with IFRS guidance, they are now being recognised as an asset in the accounts.

    iii    Factors that may affect the future tax charge 

Amounts of unprovided deferred tax assets are as follows:

	Six months ended 31 Jan 2009		Six months ended  31 Jan 2008		Year ended  31 Jul 2008
	£'000		£'000		£'000
	(unaudited)		(unaudited)		(audited)
Applicable tax rate	28%		28%		28%
	£'000		£'000		£'000
Trading Losses and other losses	2,117		4,533		4,589
Capital Losses	1,912		1,912		1,912
Depreciation in excess of capital allowances	2		92		79
Fair value adjustments	(470)		(487)		(487)
	3,561		6,050		6,093

Deferred tax assets in relation to trading losses are only recognised when taxable trading profits are considered more likely than not to arise in the companies that have such losses available for future offset. Capital losses are available only to offset future capital gains realised by the relevant companies. 

 

 

5.     Acquisition of Getfit Technologies Ltd

On 18 December 2008 Ultrasis acquired 100% of the share capital of Getfit Technologies Ltd for a consideration of £204,925 satisfied by the issue of 26,832,303 ordinary shares in the capital of Ultrasis at 0.76 pence per share. In addition the Company incurred costs of £26,000 in relation to the acquisition.

At the date of acquisition, Getfit Technologies had net liabilities of £44,000. In line IFRS 3 requirements, the Company reviewed the fair value of Getfit Technologies' intangible assets on acquisition and considers it prudent to separately recognise £275,000 in respect of the Intellectual Property relating to Getfit Technologies' products in the accounts.

Since acquisition Getfit Technologies Ltd has contributed £46,000 of revenue and £23,000 of profit before tax to the Group's consolidated results for the period.

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