Trading Update
23 January 2007 – ClinPhone plc, the largest specialist supplier of technology solutions to the clinical trials industry, today provides an update on trading in advance of an analyst and institutional investor visit to the Company’s operations in Nottingham tomorrow.
Core business
Trading in the core ClinPhone business has continued strongly, although profitability is expected to be impacted by the weak US$ during the period. In addition, the recruitment of a large number of people during the second half is expected to adversely affect margins until they become fully trained and productive.
• Underlying revenues (at constant exchange rates) are expected to grow by over 25% compared to last year, despite an unusually large number of projects being delayed or aborted by pharmaceutical companies at short notice. There is continuing strong momentum in the forward order book.
• Recruitment is back on plan in the second half and in line with expected revenue growth. However, appropriately skilled people remain difficult to source in this market.
• Weakness in the US$ is expected to reduce operating profit in the year by approximately £700,000, after hedging, by comparison to 2006.
Datalabs
Integration of the Datalabs business, completed in November 2006, has progressed according to plan in the two months since its acquisition and the company is already benefiting from being part of a larger organisation. Reaction from ClinPhone’s current customers to the acquisition has been overwhelmingly positive and many of these customers represent an incremental opportunity into which to sell Datalabs’ products and services.
It is still too early to judge the likely outcome for Datalabs for the year ending 28 February 2007 as the nature of the business currently involves a small number of high value software licence sales. Whilst current sales prospects are healthy, the Company believes it is prudent to expect no significant income from Datalabs to be recognised before the end of the financial year. The one–off costs of integrating the Datalabs business are expected to impact profits this year by approximately £300,000.
The Directors remain confident that the acquisition of Datalabs will be earnings enhancing in its first full year of ownership, being the year ending 28th February 2008.
Steve Kent, Chief Executive Officer of ClinPhone, said:
“Demand for clinical technology services in our core business continues to outstrip the ability of the market to supply. We will accelerate the investment in our software platform and in our people during the next financial year to improve ClinPhone’s ability to meet that demand. We also look forward to deriving the benefits from the Datalabs acquisition during 2007.”
The Company expects to announce its preliminary results for the year ending 28 February 2007 on 26 April 2007.
