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PRO MEDICUS LIMITED — Interim / Quarterly Report 2021
Feb 16, 2021
65579_rns_2021-02-16_3aeb7a00-a6dd-4e99-b190-58f9bbd3189b.pdf
Interim / Quarterly Report
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Pro Medicus Limited ABN 25 006 194 752
INTERIM FINANCIAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2020
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Pro Medicus Limited
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DIRECTORS’ REPORT
Your Directors of Pro Medicus Limited (the “Company”) and its subsidiaries (the “Group”) submit their report for the half-year ended 31 December 2020.
DIRECTORS
The names and details of the Company's directors in office during the half-year and until the date of this report:
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Peter Terence Kempen AM FCA, FAICD (Chairman)
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Dr Sam Aaron Hupert M.B.B.S. (Deputy Chairman and Chief Executive Officer)
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Anthony Barry Hall B.Sc. (Hons), M.Sc. (Executive Director and Technology Director)
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Anthony James Glenning B.Sc, B.Eng, M.EE (Non-Executive Director)
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Dr Leigh Bernard Farrell PhD, B.Sc. (Hons), FAICD (Non-Executive Director)
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Deena Robyn Shiff B.Sc. (Econ) Hons, B.A. Law (Hons), (Non-Executive Director)
REVIEW AND RESULTS OF OPERATIONS
The Company reported a first half after tax profit of $13.54m, an increase of $1.49m (up 12.4%) compared to the same period last year. Revenue from contracts with customers for the 6 month period of the Company increased from $29.29m to $31.59m, an increase of 7.8%.
Underlying profit before tax was $18.76m compared with $14.89m for the previous corresponding period, an increase of 25.9%. Underlying profit before tax for the half year ended 31 December 2020, comprises of reported profit before tax of $18.20m and adding back the pre-tax currency loss of $0.56m. The underlying profit for the half year ended 31 December 2019, comprises of reported profit before tax of $14.81m and adding back the pre-tax currency loss of $0.08m.
The currencies of the countries in which the Company has its activities have been volatile during the half year. On a constant currency basis, the revenue would have been $32.93m (up 12.4%) and the underlying profit before tax would have been $19.66m (up 29.0%) for the half year ended 31 December 2020.
Tax expense for the first half was $4.66m which represents a tax rate of 25.6%. This was due to the expense being reduced by the benefit of a tax deduction relating to the company’s purchase of shares for employees under the Long Term Incentive Scheme. This benefit will not be replicated in the second half and the tax rate will move closer to the statutory rate for the full year. The tax expense for the first half in 2019 was $2.76m which represents a tax rate of 18.6% as the benefit received under the employee share trust during the first half 2019 was greater due to a larger than normal delta between the share price at the date of granting and the date the shares vested.
During the period the Company continued to make strong inroads into the North American market winning key contracts with New York University Langone (A$25.0m – 7 year deal), a tier 1 academic institution in New York, and Medstar Health (A$18.0m – 5 year deal), a large multi-disciplinary academic medical center in Washington D.C and Maryland. The Company also signed a renewal with Zwanger-Pesiri (A$8.5m – 5 year deal) in Long Island, New York. The Company continued to make significant progress with all key implementations being on or ahead of schedule.
The Company is looking to further build on its presence in North America and is actively pursuing a growing number of opportunities within the enterprise imaging/large teaching hospital and corporate/private imaging centre markets. Since 31 December 2020 the Company has announced the signing of a 7 year contract with Intermountain Healthcare ($A40m) and a 7 year contract with a major US health system ($A31m). The Company has also received FDA approval of its breast imaging algorithm which is a significant milestone in the quest for providing further enhancements to its suite of products.
The Company’s European business continued to grow, with a new contract announced with Ludwig-Maximilians University (A$10.0m – 7 year deal) in Munich, Germany.
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Pro Medicus Limited
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The Company’s Australian business increased revenue by 22.8% compared to the same period last year, with the rollout of the Healius (formerly Primary Health) contract and extension of the contract with I-MED being the main contributors to the increased revenue.
The Company maintained its significant investment in research and development (“R&D”), both in Australia as well as overseas.
During the period, examination volumes in North American have steadily increased to that of the months prior to COVID-19 and in some instances are at greater levels as hospital groups catch back screening and elective surgery examinations. It is anticipated, subject to no further major COVID outbreaks, that this trend back to normal volumes will continue.
The Company's cash reserves increased by $7.52m despite an increase of $1.57m in dividend payout and greater investment in R&D for the 6 month period. Cash reserves were $50.93m at the end of December 2020 and the company remains debt free.
The Board is of the view that there are sufficient cash reserves to fund the anticipated growth of the business from internal sources. As a result, the Company has announced a fully franked interim dividend of 7.0c per share payable on 19 March 2021.
ROUNDING
The amounts contained in this report have been rounded to the nearest $1,000 (where rounding is applicable) under the option available to the company under ASIC Corporations (Rounding in Financial/Directors Reports) Instrument 2016/191. The Company is an entity to which the Legislative Instrument applies.
AUDITORS' INDEPENDENCE DECLARATION
In accordance with section 307C of the Corporations Act 2001, we have obtained a declaration of independence from our auditors Ernst & Young, a copy of which is attached.
Signed in accordance with a resolution of the directors.
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P T Kempen AM Chairman Melbourne 17 February 2021
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Ernst & Young 8 Exhibition Street Melbourne VIC 3000 Australia GPO Box 67 Melbourne VIC 3001
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Tel: +61 3 9288 8000 Fax: +61 3 8650 7777 ey.com/au
Auditor’s Independence Declaration to the Directors of Pro Medicus Limited
As lead auditor for the review of Pro Medicus Limited for the half-year ended 31 December 2020, I declare to the best of my knowledge and belief, there have been:
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(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review ; and
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(b) no contraventions of any applicable code of professional conduct in relation to the review.
This declaration is in respect of Pro Medicus Limited and the entities it controlled during the financial period.
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Ernst & Young
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Tony Morse Partner
17 February 2021
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation
Pro Medicus Limited
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INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2020
| Notes Revenue from contracts with customers 3 Interest revenue Revenue Cost of sales Gross profit Net foreign currency losses 4a Accounting and secretarial fees Advertising and public relations Depreciation and amortisation 4b Insurance Legal costs Other expense Salaries and employee benefits expense 4b Travel and accommodation Profit before income tax Income tax expense 10 Profit for the period Other comprehensive Income Items that may be reclassified subsequent to profit and loss Foreign currency translation Other comprehensive income for the period Total comprehensive income for the period, net of tax Earnings per share (cents per share) Basic Diluted |
Consolidated 31 Dec 2020 31 Dec 2019 $’000 $’000 31,587 29,288 100 110 31,687 29,398 (244) (163) 31,443 29,235 (557) (85) (567) (533) (211) (1,166) (3,677) (3,785) (412) (370) (526) (222) (463) (821) (6,822) (6,754) (6) (689) 18,202 14,810 (4,661) (2,759) 13,541 12,051 1,379 (56) 1,379 (56) 14,920 11,995 13.00¢ 11.60¢ 12.95¢ 11.54¢ |
Consolidated 31 Dec 2020 31 Dec 2019 $’000 $’000 31,587 29,288 100 110 31,687 29,398 (244) (163) 31,443 29,235 (557) (85) (567) (533) (211) (1,166) (3,677) (3,785) (412) (370) (526) (222) (463) (821) (6,822) (6,754) (6) (689) 18,202 14,810 (4,661) (2,759) 13,541 12,051 1,379 (56) 1,379 (56) 14,920 11,995 13.00¢ 11.60¢ 12.95¢ 11.54¢ |
|---|---|---|
| 29,398 | ||
| (163) | ||
| 29,235 | ||
| (85) | ||
| (533) | ||
| (1,166) | ||
| (3,785) | ||
| (370) | ||
| (222) | ||
| (821) | ||
| (6,754) | ||
| (689) | ||
| 14,810 | ||
| (2,759) | ||
| 12,051 | ||
| (56) | ||
| (56) | ||
| 11,995 | ||
| 11.60¢ 11.54¢ |
The accompanying notes form an integral part of these consolidated financial statements
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Pro Medicus Limited
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INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| AS AT 31 DECEMBER 2020 Notes ASSETS Current assets Cash and cash equivalents 7 Trade and other receivables 8 Accrued revenue Contract assets Other current financial assets Income tax receivable Inventories Prepayments Total current assets Non-current assets Deferred tax asset 10 Plant and equipment Intangible assets 9 Contract assets Right-of-use lease asset Prepayments Total non-current Assets TOTAL ASSETS LIABILITITES Current Liabilities Trade and other payables 11 Deferred revenue 12 Lease liabilities Provisions Total current liabilities Non-current liabilities Deferred tax liabilities 10 Deferred revenue 12 Lease liabilities Provisions Total non-current liabilities TOTAL LIABILITIES NET ASSETS Shareholders’ equity Contributed equity Share buyback reserve Share reserve Foreign currency translation reserve Retained earnings Total shareholders’ equity |
Consolidated 31 Dec 2020 30 Jun 2020 $’000 $’000 50,930 43,413 13,815 13,844 2,660 781 268 245 526 45 2,958 2,139 27 35 970 981 72,154 61,483 11,834 11,482 521 622 19,110 18,839 994 756 2,749 2,226 120 237 35,328 34,162 107,482 95,645 3,806 2,637 6,225 7,225 572 522 2,459 2,332 13,062 12,716 6,609 6,518 14,715 14,422 2,243 1,754 65 52 23,632 22,746 36,694 35,462 70,788 60,183 1,962 1,962 (915) (915) 12,113 10,175 720 (659) 56,908 49,620 70,788 60,183 |
Consolidated 31 Dec 2020 30 Jun 2020 $’000 $’000 50,930 43,413 13,815 13,844 2,660 781 268 245 526 45 2,958 2,139 27 35 970 981 72,154 61,483 11,834 11,482 521 622 19,110 18,839 994 756 2,749 2,226 120 237 35,328 34,162 107,482 95,645 3,806 2,637 6,225 7,225 572 522 2,459 2,332 13,062 12,716 6,609 6,518 14,715 14,422 2,243 1,754 65 52 23,632 22,746 36,694 35,462 70,788 60,183 1,962 1,962 (915) (915) 12,113 10,175 720 (659) 56,908 49,620 70,788 60,183 |
|---|---|---|
| 61,483 | ||
| 11,482 622 18,839 756 2,226 237 |
||
| 34,162 | ||
| 95,645 | ||
| 2,637 7,225 522 2,332 |
||
| 12,716 | ||
| 6,518 14,422 1,754 52 |
||
| 22,746 | ||
| 35,462 | ||
| 60,183 | ||
| 1,962 (915) 10,175 (659) 49,620 |
||
| 60,183 |
The accompanying notes form an integral part of these consolidated financial statements
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Pro Medicus Limited
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INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2020
| Balance at 1 July 2020 Profit for the period Other comprehensive Income Total comprehensive Income Transactions with owners in their capacity as owners Share based payment Tax effect of share based payments Dividends Balance at 31 December 2020 Balance at 1 July 2019 Profit for the period Other comprehensive Income Total comprehensive Income Transactions with owners in their capacity as owners Share based payment Share buyback Tax effect of share based payments Dividends Balance at 31 December 2019 |
Share capital Share Buyback Reserve Share Reserve $’000 $’000 $’000 1,962 (915) 10,175 |
Foreign Currency Translation Reserve $’000 (659) |
Retained Earnings $’000 49,620 |
Total Equity $’000 60,183 |
|---|---|---|---|---|
| - - - - - - |
- | 13,541 | 13,541 | |
| 1,379 | - | 1,379 | ||
| 1,962 (915) 10,175 |
720 | 63,161 | 75,103 | |
| - - 338 - - 1,600 - - - |
||||
| - | - | 338 | ||
| - | - | 1,600 | ||
| - | (6,253) | (6,253) | ||
| 1,962 (915) 12,113 |
720 | 56,908 | 70,788 | |
| Share capital Share Buyback Reserve Share Reserve $’000 $’000 $’000 1,962 (73) 10,290 |
Foreign Currency Translation Reserve $’000 (351) |
Retained Earnings $’000 37,460 |
Total Equity $’000 49,288 |
|
| - - - - - - |
- | 12,051 | 12,051 | |
| (56) | - | (56) | ||
| 1,962 (73) 10,290 |
(407) | 49,511 | 61,283 | |
| - - 450 - (842) - - - (3,811) - - - |
||||
| - | - | 450 | ||
| - | - | (842) | ||
| - | - | (3,811) | ||
| - | (4,680) | (4,680) | ||
| 1,962 (915) 6,929 |
(407) | 44,831 | 52,400 |
The accompanying notes form an integral part of these consolidated financial statements
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Pro Medicus Limited
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INTERIM CONSOLIDATED STATEMENT OF CASH FLOW FOR THE HALF-YEAR ENDED 31 DECEMBER 2020
| Notes Cash flows from operating activities Receipts from customers Payments made to suppliers and employees Income tax paid Interest paid Net cash flows from operating activities Cash flows used in investing activities Payments for development costs 9 Payments for property, plant and equipment Interest received Net cash flows used in investing activities Cash flows from financing activities Payments of dividends on ordinary shares 5b Payments for share buyback Payments for lease liabilities Net cash flows used in financing activities Net increase in cash and cash equivalents held Net foreign exchange differences Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period 7 |
Consolidated 31 Dec 2020 31 Dec 2019 $’000 $’000 27,992 32,425 (6,864) (10,719) (4,141) (5,505) (53) (62) 16,934 16,139 (3,534) (3,721) (836) (98) 100 110 (4,270) (3,709) (6,253) (4,679) - (842) (273) (240) |
Consolidated 31 Dec 2020 31 Dec 2019 $’000 $’000 27,992 32,425 (6,864) (10,719) (4,141) (5,505) (53) (62) 16,934 16,139 (3,534) (3,721) (836) (98) 100 110 (4,270) (3,709) (6,253) (4,679) - (842) (273) (240) |
|---|---|---|
| 32,425 | ||
| (10,719) | ||
| (5,505) | ||
| (62) | ||
| 16,139 | ||
| (3,721) | ||
| (98) | ||
| 110 | ||
| (3,709) | ||
| (4,679) (842) (240) |
||
| (6,526) 6,138 1,379 43,413 50,930 |
(5,761) | |
| 6,669 (140) |
||
| 32,315 | ||
| 38,844 |
The accompanying notes form an integral part of these consolidated financial statements
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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2020
Pro Medicus Limited
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1. CORPORATE INFORMATION
The interim consolidated financial statements of the Group for the half-year ended 31 December 2020 were authorised for issue in accordance with a resolution of directors on 17 February 2021.
The Company is a for profit company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian Securities Exchange.
2. BASIS OF PREPARATION AND CHANGES TO THE GROUP'S ACCOUNTING POLICIES
(a) Basis of preparation
The interim consolidated financial statements for the half-year ended 31 December 2020 have been prepared in accordance with AASB 134 Interim Financial Reporting .
The interim consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements for the year ended 30 June 2020, together with any public announcements made by the Company during the half-year ended 31 December 2020.
(b) New accounting standards and interpretations
The accounting policies adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 30 June 2020. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
Several amendments and interpretations apply for the first time in 2021, but do not have an impact on the interim condensed consolidated financial statements of the Group.
Amendments to IFRS 3: Definition of a Business
The amendment to IFRS 3 clarifies that to be considered a business, an integrated set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. Furthermore, it clarified that a business can exist without including all of the inputs and processes needed to create outputs. These amendments had no impact on the consolidated financial statements of the Group but may impact future periods should the Group enter into any business combinations.
Amendments to IAS 1 and IAS 8: Definition of Material
The amendments provide a new definition of material that states “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.”
The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users. These amendments had no impact on the consolidated financial statements of, nor is there expected to be any future impact to the Group.
Conceptual Framework for Financial Reporting issued on 29 March 2018
The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts of requirements in any standard. The purpose of the Conceptual Framework is to assist the IASB in developing standards, to help preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to understand and interpret the standards.
The revised Conceptual Framework includes some new concepts, provides updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts. These amendments had no impact on the consolidated financial statements of the Group.
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Pro Medicus Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2020
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3. SEGMENT INFORMATION
The Group has identified its operating segments based on the internal reports that are reviewed and used by the executive management team (the chief operating decision makers) in assessing performance and in determining the allocation of resources.
The operating segments are identified by management based on country of origin. Discrete financial information is reported to the executive management team on at least a monthly basis.
Impairment is not monitored at a segment level.
Types of products and services
The Group produces integrated software applications for the health care industry. In addition the Group provides services in the form of installation and support.
Accounting policies and inter-segment transactions
The accounting policies used by the Group in reporting segments internally are the same as those used in preparing the financial statements in prior periods.
Inter-entity sales
Inter-entity sales are recognised based on an internally set transfer price. The price aims to reflect what the business operation could achieve if they sold their output and services to external parties at arm's length.
| Operating segments | Operating segments | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Australia | Europe | North America | Total Operations | |||||||||||
| Half-year | 31 Dec | 31 Dec | 31 Dec | 31 Dec | 31 Dec | 31 Dec | 31 Dec | 31 Dec | ||||||
| ended | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||
| $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | |||||||
| Revenue from contracts with customers |
||||||||||||||
| Sales to external customers - software | 6,554 | 5,335 | 2,467 | 1,658 | 22,566 | 22,295 | 31,587 | 29,288 | ||||||
| Inter-segment sales | 22,466 | 21,644 | 6,371 | 7,803 | - | - | 28,837 | 29,447 | ||||||
| Total segment revenue | 29,020 | 26,979 | 8,838 | 9,461 | 22,566 | 22,295 | 60,424 | 58,735 | ||||||
| Inter-segment elimination | (28,837) | (29,447) | ||||||||||||
| Total consolidation rev | enue | 31,587 | 29,288 | |||||||||||
| Results | ||||||||||||||
| Segment Result | 15,164 | 14,799 | 2,344 | (675) | 594 | 576 | 18,102 | 14,700 | ||||||
| Interest Revenue | 100 | 110 | ||||||||||||
| Non segment expenses | ||||||||||||||
| Income tax expense | (4,661) | (2,759) | ||||||||||||
| Profit for theperiod | 13,541 | 12,051 |
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Pro Medicus Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2020
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3. SEGMENT INFORMATION (CONTINUED)
Product information
| Product information | |||
|---|---|---|---|
| Consolidated | |||
| 31 Dec 2020 $’000 |
31 Dec 2019 $’000 |
||
| Revenue from external customers | |||
| RadiologyInformation Systems(RIS) | 6,073 | 4,768 | |
| Picture ArchivingCommunications Systems(Visage | 7/PACS) | 25,358 | 24,434 |
| Other income | 156 | 86 | |
| 31,587 | 29,288 |
4. EXPENSES
| 4. EXPENSES | ||
|---|---|---|
| Consolidated | ||
| 31 Dec 2020 $’000 |
31 Dec 2019 $’000 |
|
| (a) Net foreign currency gains / (losses) | ||
| Currency gains | 3,701 | 2,551 |
| Currency (loss) | (4,258) | (2,636) |
| (557) | (85) | |
| (b) Expenses | ||
| Depreciation and amortisation | ||
| Propertyimprovements | 1 | 1 |
| Motor vehicles | 3 | 3 |
| Office equipment | 125 | 97 |
| Furniture and fittings | 1 | 3 |
| Right-of-use lease assets | 284 | 296 |
| Amortisationonsoftwarelicences | - | 1 |
| Amortisation on capitalised development costs | 3,263 | 3,384 |
| Total depreciation and amortisation expenses | 3,677 | 3,785 |
| Salaries and employee benefits expense | ||
| Grosswages and salaries | 8,567 | 8,991 |
| Capitalised wages and salaries(i) | (2,771) | (3,300) |
| Long serviceleave provision | 42 | (13) |
| Share-basedpayments expense(ii) | 338 | 450 |
| Defined contributionplan expense | 646 | 626 |
| Total salaries and employee benefits expenses | 6,822 | 6,754 |
i. The Group's total wages and salaries incurred was $8,567,000 (2019: $8,991,000) of which $2,771,000 (2019:$3,300,000) of these costs have been capitalised as development costs within intangible assets.
ii. 105,671 performance rights were granted on 17 September 2020 under the Group’s long term incentive plan. The performance rights vest in accordance with performance conditions related to earnings per share (“EPS”) and total shareholder returns (“TSR”) after completion of a service condition being 4 years from the grant date. The total fair value of the performance rights at grant date was $914,000 ($3.28 to $12.23 per performance right). The amount of share-based payment expense for the half-year ended 31 December 2020 takes into consideration the probability of certain performance conditions vesting.
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Pro Medicus Limited
NOTES TO THE FINANCIAL STATEMENTS
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FOR THE HALF YEAR ENDED 31 DECEMBER 2020
5. DIVIDENDS PAID OR PROVIDED FOR ON ORDINARY SHARES
| Consolidated | Consolidated | |
|---|---|---|
| 31 Dec 2020 $’000 |
31 Dec 2019 $’000 |
|
| (a) Dividends proposed and recognised as a liability | ||
| Franked dividend | - | - |
| (b) Dividends paid during the half-year | ||
| Franked dividend | 6,253 | 4,680 |
| Unfranked dividend | - | - |
| (c) Dividends proposed and not recognised as a liability | ||
| Interim franked dividend | 7,295 | 6,237 |
| Interim unfranked dividend | - | - |
| Dividendsper share(centsper share) | ||
| - Franked dividendsper share | 7.00¢ | 6.00¢ |
| - Interim dividendper share | 7.00¢ | 6.00¢ |
6. EVENTS AFTER THE BALANCE SHEET DATE
On 17 February 2021, the directors of Pro Medicus Limited declared a fully franked interim dividend of 7.0 cents per share amounting to $7,295,000. These dividends have not been provided for in the 31 December 2020 interim financial statements.
7. CASH AND CASH EQUIVALENTS
Reconciliation of cash
For the purposes of the Statement of Cash Flow, cash and cash equivalents comprise the following:
| Consolidated | Consolidated | |
|---|---|---|
| 31 Dec 2020 $’000 |
30 Jun 2020 $’000 |
|
| Cash at bank and in hand | 36,852 | 29,392 |
| Short-term deposits | 14,078 | 14,021 |
| 50,930 | 43,413 |
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Pro Medicus Limited
NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2020
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8. TRADE AND OTHER RECEIVABLES
| 8. TRADE AND OTHER RECEIVABLES | ||
|---|---|---|
| Consolidated | ||
| 31 Dec 2020 $’000 |
30 Jun 2020 $’000 |
|
| Current | ||
| Trade receivables | 13,606 | 13,324 |
| Less: Allowance for expected credit loss | - | - |
| 13,606 | 13,324 | |
| Other receivables | 209 | 520 |
| 13,815 | 13,844 | |
| Non-current | ||
| Tradereceivables | - | - |
| - | - |
9. INTANGIBLE ASSETS
| 9. INTANGIBLE ASSETS | ||||
|---|---|---|---|---|
| Consolidated | ||||
| Intellectual Property |
Development Costs |
Software Licenses |
Total | |
| $’000 | $’000 | $’000 | $’000 | |
| Half-year ended 31 December 2020 | ||||
| At 1 July 2020, net of accumulated amortisation and impairment |
- | 18,839 | - | 18,839 |
| Additions - internal development | - | 3,534 | - | 3,534 |
| Amortisationchargeforthe period | - | (3,263) | - | (3,263) |
| At 31 December 2020, net of accumulated amortisation and impairment |
- | 19,110 | - | 19,110 |
| At 31 December 2020 | ||||
| Cost | 1,848 | 57,921 | 316 | 60,085 |
| Accumulated amortisation and impairment | (1,848) | (38,811) | (316) | (40,975) |
| Net carryingamount | - | 19,110 | - | 19,110 |
| Year ended 30 June 2020 | ||||
| At 1 July 2019, net of accumulated amortisation and impairment |
- | 18,167 | 1 | 18,168 |
| Additions - internal development | - | 7,508 | - | 7,508 |
| Exchange differences | - | 1 | - | 1 |
| Amortisationchargeforthe year | - | (6,837) | (1) | (6,838) |
| At 30 June 2020, net of accumulated amortisation and impairment |
- | 18,839 | - | 18,839 |
| At 30 June 2020 | ||||
| Cost | 1,848 | 54,388 | 324 | 56,560 |
| Accumulated amortisation and impairment | (1,848) | (35,549) | (324) | (37,721) |
| Net carryingamount | - | 18,839 | - | 18,839 |
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Pro Medicus Limited
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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2020
9. INTANGIBLE ASSETS (CONTINUED)
In accordance with the Group's accounting policies and process, the Group evaluated each cash generating unit ('CGU') at 31 December 2020, to determine whether there were any indications of impairment. Where an indicator of impairment exists a formal estimate of the recoverable amount is performed.
After consideration of potential indicators which could impact the valuation of the CGU's at 31 December, the Group concluded there are no impairment indicators for the Group's CGU's as at 31 December 2020.
Impact of judgements and estimates on valuation outcomes
It should be noted that significant judgement and assumptions are required in making estimates of an asset's recoverable amount. This is particularly so in the assessment of long life assets. The projected cash flows used in the recoverable amount valuation are subject to variability in key assumptions, including, but not limited to revenue forecasts. A change in the revenue forecasts used in the estimates could result in a change in an asset's recoverable amount as outlined in the 30 June 2020 annual financial report.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2020
Pro Medicus Limited
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10. INCOME TAX
The Group calculates the period income tax expense using the tax rate that would be applicable to expected total annual earnings (i.e. the estimated average annual effective income tax rate applied to the pre-tax income of the interim period).
The major components of income tax expense in the interim consolidated income statements are:
| Consolidated | |||
| 31 Dec 2020 | 31 Dec 2019 | ||
| $’000 | $’000 | ||
| Current income tax expense | (5,707) | (1,798) | |
| Prioryear adjustment | 438 | (22) | |
| Origination and reversal of deferred taxes | 608 | (939) | |
| Income tax expense | (4,661) | (2,759) | |
| Income tax recognised in other comprehensive income | - | - | |
| Total income tax expense | (4,661) | (2,759) |
| Interim Consolidated Statement of Financial Position |
Interim Consolidated Statement of Comprehensive Income Direct to Equity |
|---|---|
| 31 Dec 2020 30 Jun 2020 |
31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019 |
| Deferred tax liabilities $'000 $'000 |
$’000 $'000 $'000 $'000 |
| Foreign currency exchange gain (232) (65) |
(167) 74 - - |
| Capitalised development expenses 5,733 5,652 |
81 (127) - - |
| Prepayments 2 - |
2 - - - |
| Contract assets 306 242 |
64 (65) - - |
| Right-of-use lease asset 780 666 |
114 77 - - |
| Depreciation expenses 20 23 |
(3) 21 - - |
| 6,609 6,518 |
91 (20) - - |
| Deferred tax assets | |
| Employment entitlements 787 577 |
210 (20) - - |
| Intellectual property expenses 243 252 |
(9) (9) - - |
| Audit fee accrual 39 22 |
17 (13) - - |
| Deferred revenue 5,193 4,914 |
279 (701) - - |
| Lease liabilities 801 681 |
120 (68) - - |
| Employee share trust - unvested share based payments 4,764 5,032 |
(103) (104) (165) 520 |
| Other 7 4 |
3 (4) - - |
| 11,834 11,482 |
517 (919) (165) 520 |
| Deferred tax movement | 608 (939) (165) 520 |
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Pro Medicus Limited
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NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2020
11. TRADE AND OTHER PAYABLES
| 11. TRADE AND OTHER PAYABLES | ||
|---|---|---|
| Consolidated | ||
| 31 Dec 2020 $’000 |
30 Jun 2020 $’000 |
|
| Current | ||
| Tradepayables | 322 | 835 |
| Otherpayables and accruals | 3,484 | 1,802 |
| 3,806 | 2,637 |
12. DEFERRED REVENUE
| 12. DEFERRED REVENUE | ||
|---|---|---|
| Consolidated | ||
| 31 Dec 2020 $’000 |
30 Jun 2020 $’000 |
|
| Current | ||
| Deferred revenue from contracts with customers | 6,225 | 7,225 |
| 6,225 | 7,225 | |
| Non-current | ||
| Deferredrevenuefromcontractswithcustomers | 14,715 | 14,422 |
| 14,715 | 14,422 |
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Pro Medicus Limited
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DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Pro Medicus Limited, I state that: In the opinion of the Directors:
-
(a) The Financial Statements and notes of the consolidated entity are in accordance with the Corporations Act 2001 , including:
-
(i) giving a true and fair view of the consolidated entity's financial position as at 31 December 2020 and of its performance for the half-year ended on that date; and
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(ii) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001
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(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
On behalf board
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P T Kempen AM Chairman Melbourne 17 February 2021
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Ernst & Young Tel: +61 3 9288 8000 8 Exhibition Street Fax: +61 3 8650 7777 Melbourne VIC 3000 Australia ey.com/au GPO Box 67 Melbourne VIC 3001
Independent Auditor's Review Report to the Members of Pro Medicus Limited
Report on the Half-Year Financial Report
Conclusion
We have reviewed the accompanying half-year financial report of Pro Medicus Limited (the Company) and its subsidiaries (collectively the Group), which comprises the condensed statement of financial position as at 31 December 2020, the condensed statement of comprehensive income, condensed statement of changes in equity and condensed statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration.
Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the half-year financial report of the Group is not in accordance with the Corporations Act 2001 , including:
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(a) giving a true and fair view of the consolidated financial position of the Group as at 31 December 2020 and of its consolidated financial performance for the half-year ended on that date; and
-
(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .
Directors’ Responsibility for the Half-Year Financial Report
The directors of the Company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, anything has come to our attention that causes us to believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group’s consolidated financial position as at 31 December 2020 and its consolidated financial performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of the Group, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation
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A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Independence
In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 .
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Ernst & Young
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Tony Morse Partner
Melbourne 17 February 2021
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation