Pro Medicus Half-Year Results

Leading medical IT and e-health company, Pro Medicus Limited (ASX:PME), today announced its results for the six months ending December 31, 2004.

• Revenue of $4.49 million, up 40.7% from previous corresponding period. (Note that 2003 half year result included the reversal of $1.2 million in accrued income from a deferred contract with Mayne)

• Profit after tax of $1.80 million, up 70.5% from previous corresponding period

• Average margin (profit before tax on operating revenue) of 60.2%, up from 50.2% in previous corresponding period

• Result is after expensing non-recurring costs associated with setting up the Agfa North American deal and other one-off costs

• Interim dividend of 1.50 cents per share fully franked, up from 1.25 cents per share in previous corresponding period

• Cash reserves of $10.4 million

• Operationally debt free

• Landmark digital radiology deal with Agfa-Gevaert to market to the North American private imaging center market. The deal is expected to generate a minimum of $10 million revenue to Pro Medicus over three years.

• A $2.2 million digital technology sale to AltaPacs in Canada

• Continued growth in Australian market interest in and uptake of digital radiology, with Pro Medicus technology now installed in 10 sites, which include private, large corporate and public radiology providers. Installation at an 11th site, a flagship practice, was announced last week.

• Continued rapid growth of promedicus.net, the company's e-health offering. Over 17,000 doctors are now registered to use the network to send or receive diagnostic results. The network carried 1.3 million transactions for the six months, a 12% increase on the previous corresponding period.

Pro Medicus managing director Dr Sam Hupert said, "The first half was a tremendously productive period for Pro Medicus. We have expanded the horizons of our business in both a geographical and business sense. Our Australian business continues to perform well with plenty of growth prospects, and through the Agfa North American deal, we now also have a strong position from which to grow in the world's largest market."

"The reported profit after tax for the half of $1.80 million was slightly ahead of our internal budget," Dr Hupert said. "Whilst we have always had a strong second half bias, we knew this would be accentuated this year. We have incurred the bulk of the one-off costs in setting up the Agfa North American deal in the first half with revenue from the North American and Canadian projects to come on stream in the second half."

Outlook

Pro Medicus expects its second-half earnings bias to be more pronounced this year as recently established deals in Canada, the US and Australia start to generate revenue in the coming months. The key factors driving this outcome include the following:

Australia

The second half result will be positively impacted by income from new Australian digital imaging sales including the recently announced local sale of the company's digital imaging integration products to a state-of-the-art flagship site. The company is also pursuing a number of other digital imaging contracts which it hopes to convert into sales in this period.

Pro Medicus also expects growth of promedicus.net to continue and for the market take-up of the GP desktop product, ProMed Clinical, to steadily increase.

Canada

The first AltaPacs site in Canada, installed in December 2004 is ahead of schedule and the company reasonably expects to receive formal acceptance for the site in the near future. Based on successful acceptance of this first sight, the company will be in a position to install the remaining 22 sites, which are scheduled to be completed prior to 30th June 2005. This would result in the bulk of the upfront licensing fees for this project being realised in the second half.

Afga North American Contract

The company launched its US-based products at the Radiological Society of North American Meeting (RSNA) in Chicago in December 2004 and recently followed this up by exhibiting at the Healthcare Information and Management Systems Society (HIMMS) conference, one of the world's largest health conferences, in Dallas. Initial feedback from both Agfa customers and others has been exceptionally positive.

The company, in combination with Agfa, is in the process of establishing key reference sites in the US. Successful implementation of these sites will result in revenue commencing from these projects in the second half and with anticipated sales ramping up in the first half of FY 2006.

About Pro Medicus

Pro Medicus Limited [ASX: PME] is Australia's leading medical IT and e-health provider. Founded in 1983, the company provides a full range of integrated software products and services to individual, corporate and public health providers. Over 17,000 doctors are now connected to the company's e-health service, promedicus.net, with the number of transactions across the network between GPs and specialists growing strongly.

During 2003, Pro Medicus implemented its first overseas contract and now has seventeen sites in the UK with opportunities for further overseas expansion.

Digital radiology, a key growth area for the company, has started to deliver strong results. Over the past year, several important digital radiology contracts have been won, significantly across different parts of the health system - the public sector, existing and new private radiology practices and with Mayne, one of the largest corporate radiology groups in the country.

Late last year, Pro Medicus signed a watershed three-year $10 million deal with Agfa to exclusively license the Pro Medicus Practice Management and digital radiology software products for the large and rapidly growing private imaging center market in the US and Canada. It subsequently announced a $2.2 million contract with a large Canadian radiology group.

Early last year, the company entered the local GP clinical desktop market with the acquisition of software technology, which is being marketed as ProMed Clinical.

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