Pro Medicus Delivers Record Profit & Increased Dividend

Leading medical IT and e-health company, Pro Medicus Limited (ASX:PME), today announced its results for the financial year ending June 30, 2005.

• Record after tax profit of $5.49 million

• On a like for like basis, profit after tax (after expensing development costs) is a record $5.06 million, up 41% on the previous year

• Record revenue of $10.82 million

• Full year profit before tax of $7.7 million. Margins increased to 75%, up from 63.5% in previous year

• Result includes substantial one-off set-up costs for the North American Agfa contract. Revenue from this contract to commence in the 2006 financial year

• Final dividend of 2.75 cents per share fully franked

• Special dividend of 0.50 cents per share fully franked

• Total dividend for the year a record 4.75 cents per share (up 35.7%)

• Strong balance sheet with cash reserves of $10.4 million and no debt

• Signing a landmark $10 million three-year deal with Agfa-Gevaert to market Pro Medicus digital integration technology to the North American private radiology market. The first US validation site was installed in July 2005.

• Winning a $2.2 million contract with AltaPACS in Canada. The value of this contract has subsequently increased to $2.6 million.

• Reinforcing position as market leader for digital radiology in Australia with a total of 16 practices now using Pro Medicus digital integration technology.

• Continued growth of promedicus.net, the company's e-health offering. Over 19,000 doctors are now registered to use the network, which carried 2.7 million transactions for the year (up 13.2%).

"This has been the most successful result in the 23 year history of our company," said Dr Sam Hupert, Pro Medicus CEO. "All our financial indicators are at record levels including revenue, gross margin, after-tax profit and dividend. This is after expensing a number of one-off costs, particularly those related to establishing our Agfa US contract where we knew that revenue from this project would not commence until the first half of 2006."

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 past year has seen increased uptake of the company's leading edge digital integration products, which are now being used by a range of private and public radiology practices throughout Australia. Pro Medicus expects the rate of adoption of its digital imaging technology by Australian radiology providers to steadily increase in line with the overseas industry trend towards a fully digital environment. The company is currently pursuing a number of new contracts for these products, which it hopes to close in the 2006 financial year.

Promedicus.net, the company e-health offering again performed strongly in FY2005 growing in both numbers of doctors registered and transaction numbers. The company is looking for this growth to continue as increasing numbers of specialists and other non radiology providers look to use the network to deliver results to their referrers.

Pro Medicus expects the market penetration of its GP desktop product, ProMed Clinical, to increase steadily. The company has continued to invest in R&D on the product and feedback from users has been very positive. Corporate changes in the medical IT sector have also opened up additional opportunities for ProMed Clinical in the general practitioner and specialist clinical desktop markets.

Canada

This market is equal to or slightly larger than the Australian market and presents an excellent growth opportunity. During the past year the company made its first substantial sale in Canada to the AltaPACs group comprising 22 practices in the Calgary region. At year-end, over half of these 22 sites had been installed, with the balance completed in the first quarter of the new financial year. Approximately 70% of the $2.6 million contract licensing fee was realised in the 2004/05 year with the balance to be realised in the current year. The company will also receive ongoing service fees from AltaPACS, which will commence this financial year.

In July of this year, the Alberta government announced that it has allocated $189 million to facilitate the adoption of digital imaging in both the private and public radiology sectors throughout the province. It is anticipated that this will be a key driver for the rollout of digital technology to the private sector, which could present further significant opportunities for Pro Medicus in the province.

Afga North American Contract

Progress with the Agfa alliance in North America is on schedule with the first imaging centre site in the US successfully installed in July 2005. This site is now progressing through the clinical validation process, which the company expects will be completed shortly. Once validated, the product will be ready for nationwide release enabling Agfa's extensive sales and marketing network to aggressively pursue sales of the combined Agfa/Pro Medicus digital technology offering to the over 8,000 imaging centers and community hospital radiology practices in the US. To date, feedback from this market has been extremely positive

In light of this, the company expects revenue from the Agfa deal to commence in the first half of the 2006 financial year building in the second half of the year and into 2007 and 2008 as the product increases its penetration of this, the worlds largest digital imaging market.

Other Overseas Markets

Over the past few years, the company has demonstrated its capability of modifying, installing and supporting its software in overseas markets. With the experience it has gained from its successful entry into the UK, Canadian and US markets, Pro Medicus is looking at opportunities to migrate its other products into those markets. CEO Dr Sam Hupert described the growth opportunities available to Pro Medicus as significantly enhanced as a result of the company's expansion offshore. "While there is still plenty of growth available to us in Australia we have been able to also quickly establish positions in the huge North American radiology market," he said. "We now have 22 sites in Canada and have installed our first key US reference site as part of our North American contract with Agfa. With this base, we are extremely well positioned to make substantial inroads into these markets which by virtue of their size, have the potential to more than double our business within a few years."

"We have also gained an enormous amount of experience with customising and implementing our products in overseas markets, which will certainly help us with other offshore opportunities as they present," he added.

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 19,000 doctors are now connected to the company's ehealth 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 in the UK.

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 Australian health system - the public sector, existing and new private radiology practices.

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 centre 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.

For more information: