REG - Feedback PLC - Final Results
04/11/2024 07:00
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RNS Number : 7817K Feedback PLC 04 November 2024
Prior to publication, the information contained within this announcement was
deemed by the Company to constitute inside information as stipulated under the
Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of
this announcement, this information is now considered to be in the public
domain.
Feedback plc
Full Year Results to 31 May 2024
Feedback plc (AIM: FDBK, "Feedback" or the "Company"), the clinical
infrastructure specialist, announces its audited results for the 12 months to
31 May 2024 (the "Period").
Operational highlights
· £350k NHS England ("NHSE") central funding awards to continue
community diagnostic centre ("CDC") pathway development across
Buckinghamshire, Oxfordshire and Berkshire ICS ("BOB ICS") and Oldham CDC
· Medical Imaging Partnership ("MIP") pilot agreement to deliver
multiple clinical pathways to UK private healthcare sector
· New tuberculosis ("TB") partnership in India to deliver
community-based TB screening projects
o Received Gold Award - Digital Solution for Rural Healthcare at the
Integrated Health and Wellbeing Council of India's Digital Health Awards 2024
· Second paid contract extension with Queen Victoria Hospital
Foundation Trust ("QVH") / Sussex Integrated Care System ("Sussex ICS")
· All existing NHS customers renewed at a higher price
· All-Party Parliamentary Group ("APPG") for Diagnostics report on
future of CDCs used Bleepa® case study to highlight the need for the
integration of patient data and digital tools within CDCs, with the
recommendation of commitment to further digital investment
Financial highlights
· 15% increase in revenue to £1.18m (2023: £1.02m); Bleepa®
contributed 87%
· Sales 1 were £0.95m (2023: £1.27m); Bleepa® contributed 85%
· EBITDA loss increased to £2.73m (2023: £2.61m)
· Cash as at 31 May 2024 was £3.88m (31 May 2023: £7.32m)
Post period highlights
· Eligibility for Elective Recovery Fund ("ERF") funding mechanism
o ERF to reimburse expenditure by ICBs and hospitals on Bleepa
o Step change in commercial prospects
o Focus with implementation partner on converting near-term customer
contracts
o Indicative ICB contract could generate revenues of over £2m per ICB per
annum
· Collaboration with provider of primary care solutions focused on
creation of Neighbourhood Diagnostics Solution
o To provide a route to rapidly scale the Bleepa solution and pathway
approach
o Aligned with government vision of a digital-first, community centric
healthcare system
o Potential for over 190m annual tests to be redirected to pharmacies using
this platform
· Collaboration with Vertex In Healthcare ("Vertex") to broaden
product functionality and strengthen global reach
· Awarded contract by Queen Victoria Hospital NHS Foundation Trust
("QVH") as successful bidder to provide digital infrastructure
· Secured further funding to extend the delivery of its CDC pathway
pilot at the Northern Care Alliance NHS Foundation Trust ("NCA") site
in Oldham
· On 04 November 2024 the Company will announce a placing by way of
an accelerated bookbuild with closing of the placing expected on the same day
and a subscription of new ordinary shares, to raise approximately £5.2m
(before expenses). In addition, on 04 November 2024 the Company will announce
its intention to launch a retail offer to raise a further up to £1.0m (before
expenses).
Dr Tom Oakley, CEO of Feedback, said: "The shifted political landscape brings
exciting opportunities for healthcare reform and signals an increasing need
for solutions such as ours to enable the required structural changes. With
Labour emphasising the need to undergo the "biggest reimagining of the NHS,"
whilst embracing an "analogue to digital" approach that moves diagnostics from
primary care settings to the community, Bleepa is perfectly positioned to
underpin many of the operational requirements having proved this can be
delivered by our technology and the diagnostic pathway approach that we have
pioneered at QVH. Furthermore, creating a "Neighbourhood Health Service"
requires a new infrastructure to connect the community providers around the
patient which is exactly the infrastructure proposed through our recently
announced collaboration with a leading UK primary care record provider and
which was called for in a recent Tony Blair Institute paper 'Preparing the NHS
for the AI Era: A Digital Health Record for every Citizen*'.
"There are also signs of a shift in the NHS's financial landscape. Lord Ara
Darzi's review revealed that NHS technology lags about 15 years behind other
healthcare systems, with a £37bn capital investment shortfall that must be
addressed to support the NHS recovery plan. This indicates a push for renewed
technology investment, and the new administration acknowledges the vital role
of digital enablement in recovery. Proven technologies like Bleepa, with a
strong track record, are well-positioned to seize growth opportunities as
financial constraints ease. With our channel partner and ERF funding, we
believe we can scale quickly to meet emerging national demands.
"With a growing evidence base, a viable funding mechanism and a channel
partner who can help the company deliver national scale at pace, plus growing
visibility of international opportunity, we believe there has never been a
better time to invest in the Company. We look forward to delivering value to
our shareholders and transformation for our customers in the upcoming
financial year."
Further information on Feedback and its products can be found on the Company's
website: https://feedbackmedical.com/resources/resource-hub/
(https://feedbackmedical.com/resources/resource-hub/)
*https://institute.global/insights/public-services/preparing-the-nhs-for-the-ai-era-a-digital-health-record-for-every-citizen
-Ends-
Enquiries:
Feedback plc +44 (0)1954 718072
Tom Oakley, CEO IR@fbk.com (mailto:IR@fbk.com)
Anesh Patel, CFO
Panmure Liberum Limited (NOMAD and Broker) +44 (0)20 7886 2500
Emma Earl/Freddy Crossley/Mark Rogers (Corporate Finance)
Rupert Dearden (Corporate Broking)
Walbrook PR Ltd Tel: 020 7933 8780 or feedbackplc@walbrookpr.com
(mailto:feedbackplc@walbrookpr.com)
Nick Rome/Joe Walker 07748 325 236 or 07407 020 470
About Feedback
Feedback plc liberates the data and knowledge from multiple healthcare IT
systems and delivers better workflow to enable clinicians to communicate,
collaborate and provide the best healthcare for their patients. We connect
care settings with diagnostic and other relevant data to drive better, faster,
safer decisions that improve outcomes for patients.
By linking different clinical systems together into a seamless view of the
patient, we can streamline patient pathways and deliver a digital health and
diagnostics record across multiple care providers.
Bleepa® is our communication and collaboration platform that displays
clinical results at a certified and regulated quality, which enables
multi-disciplinary team working and diagnostic-enhanced advice and guidance.
CareLocker® is our patient-facing platform that gives patients access and
control over their diagnostic and other clinical data.
The Company has a number of growth opportunities domestically and
internationally across a range of public and private healthcare markets
including the NHS. Our highly scalable software-as-a-service (SaaS) based
model is expected to provide increasing levels of revenue visibility as the
Company grows its customer base.
Chairman's statement
Foundations for growth
In 2024 the Company consolidated its position as the preferred solution in
cross-provider care. We have built on the foundations of our pilot programme
with QVH, which, post period, resulted in Feedback being awarded the contract
to provide QVH it's Bleepa® CDC digital infrastructure solution. Our
foundations for growth were strengthened by the incredible outcome data
provided to the APPG for Diagnostics, igniting a national conversation that
resulted in the release of central funding to deliver a programme of several
new pilots for the Bleepa® technology across the country.
These pilots are being deployed in partnership with the NHS frontline and will
build on the existing evidence base for Bleepa®, positioning us as the
digital glue that is needed to connect care settings around patient journeys.
To move forward in such a way during what has been one of the most difficult
periods for the NHS, as it faces one of the largest funding shortfalls in its
history, is testament to the impact of our technology and the tireless efforts
of our team.
During the Period the Company has also opened opportunities in the UK private
healthcare sector through a pilot with Medical Imaging Partnership, where
private providers are starting to look at delivering the end-to-end pathways
Bleepa® has enabled in the NHS. The Company has also started to unlock its
international opportunity having succeeded in its application for an import
license of Bleepa® as a medical device to India, allowing our new in-country
managing director, Rohit Singh, to start to commercialise Bleepa® in India,
unlocking opportunities across hospital groups and TB screening.
The Company achieved revenue growth, despite the difficult trading environment
in our domestic market and notably benefitted from renewals at a higher price
by all of its existing NHS customers, building our confidence in a growing
base of annual recurring revenue (ARR). Developing and expanding a foundation
of ARR is a core strategy of the Company and key to our long-term success;
with sales cycles in UK healthcare being very long currently, it is essential
that companies can demonstrate recurring contract revenue, and a high lifetime
value of customers acquired; and Feedback is delivering this. Alongside
growing revenues, the Company continues to optimise its cost base, becoming
increasingly efficient in its operations. In combination these changes have
put the Company in a great position to build on its success and pursue a
leading position within the emerging markets for its products, especially the
CDC and cross-provider pathway initiatives.
During the Period, the Company has nurtured a deep pipeline of opportunities
which it will seek to convert through its new product functionality, which has
been released with version 1.6 of the Bleepa® platform. Foremost amongst the
product enhancements is the dashboard view that allows providers to see the
status of patients across their care journey, even between different care
settings, giving the NHS unprecedented control over the patient journey, a
capability that will be a key tool in their efforts to coordinate the
reduction in local waitlists and optimise patient journeys. This has already
generated significant interest from customers and builds on the successful
product positioning to date of Bleepa® as the digital pathway enabler for
regional commissioners.
Feedback has an established and growing record which it can build on. Our
unique product capabilities and proven evidence base create a compelling value
proposition for a growing number of customers both within the NHS, the UK
private healthcare market and internationally. The Company has pushed hard to
achieve growth, innovation and visibility at a time in which the healthcare
system has been consumed by operational pressures and funding shortfalls. The
appointment of a new government presents a huge opportunity domestically. As
the Government looks for quick, proven and ready-made solutions to some of the
biggest challenges facing the system, it need look no further than Feedback
and our product capabilities. Due to the breadth of our product capabilities
the Company now has a value proposition into almost every corner of healthcare
and we are poised and ready for growth, both domestically and internationally.
Rory Shaw
Non-executive Chairman
01 November 2024
CEO's statement
Established record to build on
In 2024, the Company set out to build the evidence base for its technologies
and to unlock customer opportunities both within and outside the NHS. This has
been delivered through sustained partnership with a key group of NHS customers
in order to generate that evidence and an expansive programme of stakeholder
engagement to build a national and international conversation around our
technology.
In recognition of a change in NHS commissioning behaviors towards more
regional-based procurement, the Company has sought to position its products to
pursue larger regional and national contracts and has reflected the additional
needs of regional commissioners in its product offering.
Today, in the NHS and other international health systems, there is a growing
level of digital maturity within individual care providers, especially as they
embrace electronic care records and other associated technologies. However
there is very little capability to share digital information between
providers, despite care becoming increasingly cross-provider with patients
having to attend multiple care settings. The Company has invested in its
products, guided by customer feedback, to hone the value proposition and
increase its attractiveness to a wider customer audience. Key developments
were released in v1.6 of Bleepa® during the year and include upgrades to its
messaging and referral capabilities and the ability to display a dashboard of
patient progress along care pathways which enables care navigators to better
manage patient flow. These enhancements have enabled the Company to capture
the attention of regional commissioners who have the added requirement to be
able to coordinate care across multiple providers and therefore benefit from
the ability to see patient progress across multiple pathways and provider
sites.
During the period we were invited to provide evidence generated by our pilot
with QVH in Sussex to the APPG for Diagnostics, a participation that raised
our national profile and opened conversations with the NHSE CDC team,
culminating in the award of central funding to support a series of pilot
projects with different providers. Our pilot with QVH was extended during the
period and has subsequently converted to a £495k annual contract post period
end. Through these pilots we have demonstrated a 63% reduction in wait times
compared to national targets and an 88% reduction in outpatient appointment
requirements, which we estimate could save in the order of £295 per patient
episode through a reduction in outpatient appointments. This is a strong
evidence base of impact against the key system challenges currently facing the
NHS - namely waitlists, staff shortages and finance. Our ability to
demonstrate success is unlocking further national conversations and also
generating interest from regional commissioners.
Outside of the NHS, the Company successfully secured an opportunity for its
technology and pathway approach within the UK private sector in partnership
with MIP. This paid pilot will seek to develop a pathway approach across
screening and traditional private service models and is essentially a
translation of our NHS approach into the private sector. The Company expects
that this service will go live later this calendar year and will start to
generate clinical impact data early in calendar year 2025. It is our intention
to use this evidence both to secure a longer-term agreement with MIP but also
to translate this into sales to other UK private providers.
In India we have seen increasing recognition of our products since being
awarded our import license for Bleepa® as a medical device. During the period
the Company was the recipient of a number of national awards including the
Gold Award as the best Digital Solution for Rural Healthcare at the Integrated
Health and Wellbeing (IHW) Council of India's Digital Health Awards 2024. This
recognition has led to significant interest in Bleepa® and has already
resulted in a number of pilot agreements across TB screening and hospital care
settings, which we are currently in the process of setting up. The Company
looks forward to delivering these pilots and converting these opportunities
into contracts. In order to support the TB screening programme, we have
further invested in Feedback Connect (re-branded from BleepaBox) to remove
some of the manual steps in the image/clinical data upload, improving the user
experience and automation of data transfer which will allow the TB screening
to be delivered more quickly and at greater scale.
Following the theme of international opportunity, during the period the
Company evaluated a series of technologies and partnerships which could
augment the Bleepa® proposition and open new market opportunities. The
Company announced a collaboration with Vertex In Healthcare post period end, a
collaboration which leverages some of the Company's legacy Cadran technology
to create a new, potential royalty revenue stream. In addition, this has
enabled the incorporation of MedDream, an FDA-approved Image Viewer into
Bleepa®, allowing the Company to move more rapidly into other international
markets in the future, avoiding a number of the challenges experienced with
launching a medical device in India. This partnership paves the way for new
growth opportunities in international markets.
Business strategy
Due to the long sale cycle of our target customers and, in some cases, their
shifting priorities and financial position, the business strategy has been to
deliver a broad value proposition to multiple customer segments so that we are
positioned to progress multiple sales channels simultaneously and, where
necessary, pivot to capture emerging opportunities. The long sales cycle is
offset by the long customer lifetime value of individual contracts, which
typically renew annually for multiple years following the initial sale as
demonstrated during the Period whereby the Company received renewals for the
third year running from two of its early customers, additionally benefiting
from enlarged values.
This strategy has served us well to date, initially allowing us to land early
contracts for our technology in an inpatient setting as a WhatsApp replacement
then enabling the Company to move rapidly to capture the emerging opportunity
around CDCs and position itself as the preferred solution provider. The
Company has pursued parallel and emerging markets to its core product
capabilities rather than trying to break into established/traditional markets.
Whilst this strategy does extend the sales cycle in some cases, and raises the
bar for evidence required, it provides better long-term growth potential into
uncontested markets, with the ability to establish a market leading position,
healthier margins, and avoid unnecessary competition and the traditional race
to the bottom on price that is seen widely across other sectors. In
healthcare, this strategy is further supported by the fact that most
incumbents enjoy a long contract term with healthcare customers making it very
difficult to disrupt established companies within an established market,
especially part way through an existing contract term.
The agility required to deliver this strategy has necessitated tight
discipline within the team and continued development in our product
capabilities to keep pace with the customer opportunity. In Bleepa®,
CareLocker® and Feedback Connect, the Company has developed a wide toolkit of
capabilities that allows it to address the needs of a wide range of customers.
Feedback now has a value proposition to offer almost every part of the
healthcare system.
The Company is well positioned for success with evidenced value propositions
against the three key areas of challenge facing every healthcare system,
namely:
1) Staffing - Bleepa® enables existing staff to work more efficiently and
flexibly; evidenced to deliver a 74% reduction in referral response time and
an 89% reduction in outpatient appointment requirements.
2) Waitlists - Bleepa® enables cross-provider care pathways that deliver
a 63% reduction in wait times.
3) Finance - Bleepa® saves on average, an estimated £295 per patient net
of the costs of the platform.
Although felt at the individual provider level, these three pain points are
more strongly reflected by regional and national commissioners and the
Company's strategy is to pursue larger regional contracts where possible, due
to the length of typical sales cycle and the potential upside of enlarged
contract sizes. Our average contract size with an individual hospital trust is
currently in the order of £120k - although future contracts are expected to
be higher. Our target contract size for a CDC is currently in the order of
£450k-£600k, which we achieved in the post period with our contract at QVH.
As outlined above, the strategy to maintain a diverse pool of opportunity
extends to the UK private and international markets. Whilst these markets have
similar needs, they also have important differences, most notably around
regulation. In India, the Company took the decision to establish an in-country
subsidiary and license its technology to this entity in order to protect its
intellectual property and achieve regulatory approval to trade in India
however, this approach may not be necessary in other markets due to
developments to Bleepa® undertaken during the Period, that allow us to
incorporate other technologies with pre-existing regulatory approval in key
market areas such as the MedDream viewer, with integration achieved post
period.
A key focus for the period was to raise the profile of the Company and its
products with customers and wider stakeholders. This was achieved through a
series of engagements to NHS stakeholders including speaking on a HSJ panel
for diagnostics alongside the national head of the CDC programme and the
national director for diagnostics and participating in a number of award
programmes such as the Prix Galien award in the UK and the IHW award for Best
Digital Solution for Rural Care in India.
Increasingly the Company is entering go-to-market partnerships either to
enable us to pursue new international markets (collaboration with Vertex) or
to co-create entirely new market opportunities (collaboration with a primary
care solutions provider). These decisions are based on total addressable
market, technological fit and customer footprint. Post period, the Company
announced a collaboration agreement with Vertex, a specialist clinical IT firm
with offices in the UK, UAE and South Africa, to combine key technologies and
resell each other's products with a view to driving commercial opportunities
in multiple markets. The collaboration enables the MedDream viewer to be
incorporated into Bleepa®, so it can be sold directly to radiologists for
primary diagnostic reporting services, strengthening our teleradiology
offering and expanding the reach of the product to new territories such as the
USA. In addition, Vertex will licence the database capabilities of Feedback's
legacy picture archiving communication system Cadran PACS, now with the
MedDream Viewer, which will allow it to build a PACS proposition that will
initially be sold in South Africa and other international markets including
the UK, where it sells PACS. This is another example of the Company's strategy
to generate licencing royalties from its legacy products.
Post period events
The recent announcement that Diagnostic Enhanced Advice and Guidance ("DEAG")
diversions achieved through the Bleepa® platform are now eligible for
reimbursement under the ERF could be highly significant for the Company. As a
result, any Integrated Care Board ("ICB") or hospital in England can now
utilise this funding, by local agreement, to reimburse expenditure on the
Bleepa® technology.
Based on the Company's existing programme at QVH, the Company believes
that diversion away from outpatient appointments could be achieved in up to
90% of referrals using the DEAG approach, which would result in a
significant revenue uplift for the participating ICB/Trust whilst
simultaneously driving material efficiencies in service delivery and most
importantly benefits for their patients. Based on expected patient volumes
once fully rolled out the Company believes that an indicative ICB contract
could generate over c. £2 million 2 per ICB per annum for Feedback under the
ERF mechanism (assuming the ERF rolls forward on an un-capped basis
annually). ERF currently runs until 31st March 2025 but the Company believes,
following central conversations, that the funding may be renewed in subsequent
financial years to continue to support waitlist reduction.
On 04 November 2024 the Company will announce a placing by way of an
accelerated bookbuild with closing of the placing expected on the same day and
a subscription of new ordinary shares, to raise approximately £5.2m (before
expenses). In addition, on 04 November 2024 the Company will announce its
intention to launch a retail offer to qualifying retail investors in the UK to
raise a further up to £1.0m (before expenses). Subject to closing, the
placing, subscription and retail offer is conditional on shareholder approval
at the forthcoming Annual General Meeting. This funding will enable the
Company to focus investment on sales, product development and provide
additional working capital.
Post period we have also gone through a rebranding exercise and launched a new
website to improve our messaging, product positioning and customer engagement.
For shareholders who have not seen the new website please visit:
www.feedbackmedical.com (http://www.feedbackmedical.com) .
Operational review
Bleepa®
Bleepa® now accounts for 87% of revenue compared to 74% in the preceding year
as the Company continued to move away from its legacy products. This is due to
rising contract values with renewing customers such as the NCA and Royal
Berkshire Hospital in Reading, building a growing base of ARR, in addition to
new customer opportunities such as the CDC pilots at Amersham, BOB and NCA -
Oldham which were nationally sponsored through to the end of the NHS financial
year-end of 31(st) March 2024. Bleepa® was installed at the sites during this
initial pilot period term, however we expect that the sites will seek a
second-stage pilot study to operationalise and put patients through the
pathway. Once patient throughput is underway the Company expects these pilots
to reinforce the evidence generated by QVH and build the business case for
further expansion in collaboration with the national team. Post period,
Feedback was awarded further funding by NCA - Oldham to extend the delivery of
its pilot. This further funding is for £69,000 with an initial 50% paid
from the NHSE H1 budget to 30 September 2024, with the balance expected from
the NHSE H2 budget to continue the pilot to 31 March 2025.
The new features released in version 1.6 of Bleepa® have ignited interest
from a wider group of customers, both domestically in the UK private sector
with MIP but also in India where our digital screening solution has been taken
up by the NGO Heal Foundation as a digital enabler of its CSR funded screening
programmes. The dashboard view developed for v1.6 gives unprecedented
visibility of patients across multiple care settings and journeys, information
that is not currently available to providers; today some customers can see
patient status within their organisation but they do not have the ability to
track patient status across organisations, which appeals to both regional
customers such as ICBs and also to organisations such as Heal Foundation which
have to track patients across multiple screening programmes and geographies.
Building on the success to date and growing national/regional interest in
Bleepa®, our product development has also become focused on preparing to
scale. Behind the scenes, our product team has been building integrations with
the national infrastructure team to be able to utilise existing and widely
adopted back-end integrations into primary care systems that enable a seamless
experience for GPs, and allow us to push the Bleepa® solution to primary care
at scale without undertaking a bespoke integration into individual practices
or systems. This work is extremely complex but once completed will enable us
to expand to multiple GP practices instantly allowing us to focus on
integration with secondary care systems when we come to undertake new
deployments, which both accelerates new customer onboarding and reduces the
cost of scaling.
CareLocker®
Following initial success with CareLocker®, as a patient-facing interface for
Sampurna patients' medical data during the prior period, the Company moved
away from pursuing active commercialisation of this in India due to the
prevalence of diagnostic centres using WhatsApp to insecurely share medical
information in metropolitan centres such as Mumbai, a practice which
undermined the value proposition and commercial opportunity. The view we
commonly encountered was that, although patients recognised the benefit and
were prepared to pay for it at our pilot site, it would be difficult to
achieve the necessary scale due to the use of WhatsApp as a free alternative.
Therefore we decided to pause trading until new legislation, the Digital
Personal Data Protection (DPDP) Act, came into effect. The DPDP Act is an
India equivalent legislation of GDPR and places requirements on data
providers, such as diagnostic centres, to ensure the security and protection
of data which would prevent the use of WhatsApp by diagnostic centres for
sharing clinical information with patients. The DPDP Act has now been passed
in India and we are actively evaluating how it will be applied in practice and
whether this will lead to an opportunity to revisit this customer opportunity.
Domestically, we are seeing increasing interest in being able to share
clinical information with patients, as demonstrated by our pilot contract with
MIP. The NHS wants this to occur through the NHS App, however this does not
currently have these capabilities and it would be very complex and expensive
for the NHS to build from scratch. There may therefore be an opportunity to
position CareLocker® as a back-end enabler to provide patients with their
clinical results through the NHS App, which the Company is actively exploring.
It will depend ultimately on political will and the ability to reach
meaningful commercial terms that justify the development required to embed
CareLocker® into the NHS app.
India
During the period the Company was successful in its application to import
Bleepa® as a medical device into India, which was a dependency that needed to
be delivered before we could sell Bleepa® in India. This approach required
the Company to establish a wholly owned, in-country subsidiary as a vehicle
which could then import Bleepa® from the Company and which was necessary to
protect our intellectual property, which would have been exposed if we had
pursued the faster alternative strategy of exporting the product to a
third-party Indian wholesaler. Receiving the import license has enabled our
newly appointed in-country Managing Director, Rohit Singh, to start
commercialising Bleepa® and begin to address the enormous market opportunity
for our technology in India, targeted at sales to hospital groups and to
enable national TB screening programmes, with a potential estimated TAM of
£8bn.
Rohit Singh, Managing Director of India, has successfully engaged a number of
customers both on the use of Bleepa® as a communication tool within
hospitals, and as a health corridor between hospitals and for the facilitation
of TB screening in remote communities across India. The typical commercial
journey in India is to establish a short 3-6-month free pilot with individual
customers and then convert to a rolling multi-year contract. In addition to
contracts with commercial hospital groups the Company is also pursuing
contracts with regional and state governments that typically have to go
through competitive procurement, as in the UK, procurement that is typically
informed by pilots and therefore the same approach of pilot-contract will be
adopted across both public and private sectors.
The contract size potential of individual state contracts however is extremely
large, with many states being of an equivalent size to the entire UK
population or larger. Based on Rohit's early success we hope to soon be in a
position to announce meaningful pilot contracts across multiple healthcare
sectors with a view to converting these to paid contracts as soon as possible.
TB screening will be funded through corporate social responsibility (CSR)
sponsored programmes initially, before hopefully being adopted by regional and
national screening programmes. CSR funding is a robust mechanism in India as
we believe that companies above a certain threshold have to spend 1% of their
annual profits on CSR activity, creating a large capital resource to drive
programs such as TB screening. Rohit, in partnership with the Heal Foundation,
is actively pursuing CSR sponsors to drive the screening programmes in several
states.
Financial review
2024 2023
Key performance indicators £m £m
Revenue 1.18 1.02
Gross margin 93% 92%
Sales (non IFRS) 0.95 1.27
Operating expenses (4.79) (4.36)
Operating loss (3.69) (3.42)
EBITDA loss (non IFRS) (2.73) (2.61)
Cash outflows from operating activities (2.22) (1.79)
Cash outflows from investing activities (1.22) (1.20)
Cash & cash equivalents end of period 3.88 7.32
Intangible assets 4.07 3.71
Contract liabilities (deferred income) 0.22 0.44
Net assets 7.64 10.87
Revenue for the year ended 31 May 2024 increased 15% to £1.18m (2023:
£1.02m), driven by the CDC pilot contracts win of £0.35m, offsetting the
ongoing decline in legacy product sales (Cadran support and TexRad). Bleepa®
contributed 87% (2023: 77%). In addition, all existing NHS customers renewed
in the period with inflationary uplifts. Gross margin remained steady at 93%
(2023: 92%).
Sales, a non IFRS measure representing the total customer contract value
invoiced in a period, decreased 26% reflecting lower NHS contract wins in the
Period. Bleepa® contributed 85% (2023: 73%) of Sales and Image Engineering
license fees 12% (2023: 20%). Sales are recognised as revenue monthly across
the life of a customer contract (typically 12 months), with any amount not
recognised as revenue in the current financial year remaining on the balance
sheet as contract liabilities (deferred income) and recognised as revenue in
the forthcoming financial year. Contract liabilities (or deferred income) as
at period end was £0.22m (2023: £0.44m).
Operating expenses increased 10% to £4.79m (2023: £4.36m), primarily due to
higher staff costs arising from headcount expansion and cost-of-living wage
increases, a portion, £0.13m (2024: £0.03m), of outsourced software
development costs being recognised as maintenance (operating) expense rather
than capital given the ongoing maturity of Bleepa®, increased
contractor/consultancy costs for business development activities and higher
amortisation charges (non-cash). Operating loss increased to £3.69m (2023:
£3.42m). EBITDA loss, excluding depreciation and amortisation charges of
£0.96m (2023: £0.81m), widened 5% to £2.73m (2023: £2.61m).
Cash outflows from operating activities increased 24% to £2.22m (2023:
£1.79m) primarily due to higher operating expenses offsetting higher
revenues, and more favourable working capital movements in the prior period.
Cash outflows from investing activities remained broadly flat at £1.22m
(2023: £1.20m), primarily being capitalised software development expenditures
with Graylight Imaging related to product enhancements and new features. The
Group's cash position as at 31 May 2024 was £3.88m (31 May 2023: £7.32m), a
decrease of £3.44m over the prior year.
Intangible assets increased to £4.07m (2023: £3.71m), primarily representing
capitalised software development expenditures of £1.30m (2023: £1.23m),
offset by amortisation charges of £0.94m (2023: £0.80m). Net assets
decreased to £7.64m (2023: £10.87m) as at 31 May 2024.
Outlook
A change in the UK government brings with it exciting opportunities. The Prime
Minister has talked to 'the biggest reimagining of the NHS' with the new
Secretary of State for Health and Social care, Wes Streeting, stating that the
NHS needs urgent reform, with a focus on moving care away from hospitals into
the community and transitioning from analogue to digital; both of which can
delivered by our technology and the diagnostic pathway approach that we have
pioneered at QVH. The government's call for a 'Neighbourhood Health Service'
requires a new infrastructure to connect the community providers around the
patient which is exactly the infrastructure proposed through our recently
announced collaboration with a leading UK primary care record provider and
which was called for in a recent Tony Blair Institute paper 'Preparing the NHS
for the AI Era: A Digital Health Record for every Citizen'.
Importantly there are indications of a change to the financial landscape of
the NHS. Lord Ara Darzi's review of the NHS found that the NHS technology
landscape was approximately 15 years behind other comparable healthcare
systems and that there had been a historic shortfall of approximately £37bn
in capital investment which would need to be closed in order to underwrite the
NHS recovery programme. These are all indicators that the NHS is seeking to
reinvigorate investment in technology and that the new administration
recognises the importance of digital enablement in the NHS recovery plan.
Proven technology such as Bleepa, with a track record for patient impact, is
well positioned to capture the growth opportunities should the financial
constraints on the system ease. With the support of our recently announced
channel partner, our solution can scale rapidly to capture a national
opportunity as it emerges.
We are delighted that DEAG diversions achieved through the Bleepa platform are
now eligible for reimbursement under the ERF. This will enable straight to
diagnostic, multidisciplinary pathways between care settings, reducing the
need for traditional outpatient and multidisciplinary team models. As a
result, the ERF will pay ICBs and hospitals for activity, including diversions
away from traditional care pathways, at a payment of £206 3 per diversion
(based on the median outpatient attendance unit price). ERF is a clinical
fund, designed to stimulate clinical activity by linking payment to additional
activity delivered. We believe clinical funding is much more likely to be
maintained across financial years and is less likely to be re-deployed or
withdrawn in the way that we have seen with capital funding for technology in
recent years, such as the approximate £800m that was re-deployed from the
frontline digitisation fund to meet the increased pay demands of the various
staff strike settlements.
Aligning to clinical funds means that our solution would be a component of a
clinical service rather than a direct technology cost. This would enable a
higher per price per patient as we are able to incorporate the value created
from clinical service redesign delivered by our solution, rather than only a
technology license fee, thereby achieving higher margins. The funding would
scale with patient throughput, with payment both linked to success and
uncapped in terms of value delivered - the more activity that the product
drives, the more that the Company would be paid and the more that the system
and patients would benefit. An indicative ICB contract could generate over £2
million per annum per ICB, assuming the ERF rolls forward on an un-capped
basis beyond 31 March 2025.
With a proven value proposition and a growing UK market presence the Company
has also started to consider its international options for expansion. Our
journey into the Indian market took longer than planned due to complexities
around local medical device certification and therefore the Company has looked
at how we can circumvent similar difficulties in other markets such as the USA
and Middle East. Incorporating the MedDream viewer in the post period allows
the Company to consider wider international markets that previously we were
prevented from exploring due to the different regulatory environments. The use
cases and evidence base generated from our existing deployments provide a
compelling proposition to international providers who typical struggle broadly
with the same issue facing UK and Indian healthcare providers. Our ability to
provide a shorter patient journey, with the same or fewer staff and with
visibility of patient status across entire clinical journeys represents an
unparalleled value proposition to commissioners, insurers and providers across
many international markets; the success demonstrated in the NHS additionally
gives the Company international credibility.
With a growing evidence base, viable funding mechanism and a channel partner
who can help the company deliver national scale at pace, plus growing
visibility of international opportunity, there has never been a better time to
invest in the Company. We look forward to delivering value to our shareholders
and transformation for our customers in the upcoming financial year.
Dr Tom Oakley
Chief Executive Officer
October 2024
Consolidated Statement of Comprehensive Income
for the year ended 31 May 2024
Note 2024 2023
£ £
Revenue 4 1,181,544 1,024,997
Cost of sales (79,129) (84,276)
Gross profit 1,102,415 940,721
Other operating expenses 5 (4,792,548) (4,362,675)
Operating loss 6 (3,690,133) (3,421,954)
Net finance income 7 93,135 47,868
Loss before taxation (3,596,998) (3,374,086)
Tax credit 9 298,631 455,909
Loss after tax attributable to the equity shareholders of the Company (3,298,367) (2,918,177)
Other comprehensive income/(losses)
Items that are or may be reclassified subsequently to profit or loss
Translation difference on overseas operation (241) (2,243)
Total comprehensive loss for the year (3,298,608) (2,920,420)
Loss per share (pence)
Basic and diluted* 11 (24.74) (21.88)
The notes below form part of these financial statements
Consolidated Statement of Changes in Equity
for the year ended 31 May 2024
GROUP Share Capital Share Premium Capital Reserve Retained Earnings Translation Reserve Share option Reserve Total
£ £ £ £ £ £ £
At 31 May 2022 6,667,330 15,351,071 299,900 (8,849,069) (209,996) 450,038 13,709,274
Loss of the year - - - (2,918,177) - - (2,918,177)
Other comprehensive loss for the year (2,243) (2,243)
Total Comprehensive Loss for the year - - - (2,918,177) (2,243) (2,920,420)
Costs of new shares issued - (830) - - - - (830)
Share-based payments - - - - - 80,859 80,859
Total transactions with owners - (830) - - - 80,859 80,029
At 31 May 2023 6,667,330 15,350,241 299,900 (11,767,246) (212,239) 530,897 10,868,883
Loss of the year - - - (3,298,367) - - (3,298,367)
Other comprehensive loss for the year - - - - (241) - (241)
Total Comprehensive Loss for the year (3,298,367) (241) (3,298,608)
Share-based payments - - - - - 74,462 74,462
Total transactions with owners - - - - 74,462 74,462
At 31 May 2024 6,667,330 15,350,241 299,900 (15,065,613) (212,480) 605,359 7,644,737
Company Statement of Changes in Equity
for the year ended 31 May 2024
COMPANY Share Capital Share Premium Retained Earnings Share option Reserve Total
£ £ £ £ £
At 31 May 2022 6,667,330 15,351,071 (7,415,266) 450,038 15,053,173
Profit for the year and Total comprehensive income for the year - - 1,703,482 - 1,703,482
New shares issued
Costs of new shares issued - (830) - - (830)
Share-based payments - - 80,859 80,859
Total transactions with owners - (830) - 80,859 80,029
At 31 May 2023 6,667,330 15,350,241 (5,711,784) 530,897 16,836,684
Loss of the year and Total comprehensive loss for the year - - (1,488,345) - (1,488,345)
Costs of new shares issued - - - - -
Share-based payments - - - 74,462 74,462
Total transactions with owners - - 74,462 74,462
At 31 May 2024 6,667,330 15,350,241 (7,200,129) 605,359 15,422,801
The notes below form part of these financial statements
Consolidated Balance Sheet
for the year ended 31 May 2024
2024 2023
Notes £ £
Assets
Non-current assets
Property, plant and equipment 13 12,993 14,909
Intangible assets 14 4,068,136 3,710,946
4,081,129 3,725,855
Current assets
Trade and other receivables 15 81,641 225,302
Corporation tax receivable 298,644 455,641
Cash and cash equivalents 3,877,503 7,317,534
4,257,788 7,998,477
Total assets 8,338,917 11,724,332
Equity
Capital and reserves attributable to the Company's equity shareholders
Called up share capital 18 6,667,330 6,667,330
Share premium account 18 15,350,241 15,350,241
Capital reserve 18 299,900 299,900
Translation reserve 18 (212,480) (212,239)
Share option expense reserve 18 605,359 530,897
Retained earnings 18 (15,065,613) (11,767,246)
Total equity 7,644,737 10,868,883
Liabilities
Current liabilities
Trade and other payables 16 694,180 855,449
694,180 855,449
Total liabilities 694,180 855,449
Total equity and liabilities 8,338,917 11,724,332
The notes below form part of these financial statements
Consolidated Cash Flow Statement
for the year ended 31 May 2024
2024 2023
£ £
Cash flows from operating activities
Loss before tax (3,596,998) (3,374,086)
Adjustments for:
Net finance income (93,135) (47,868)
Depreciation and amortisation 957,549 809,333
Impairment of intangible assets - 6,695
Translation difference in overseas operation (241) (2,243)
Share based payment expense 74,469 80,859
Decrease/(Increase) in trade receivables 129,714 94,876
Decrease/(Increase) in other receivables 13,947 (11,885)
Increase/(Decrease) in trade payables 116,085 (103,570)
Increase/(Decrease) in other payables (277,361) 364,891
Corporation tax received 455,628 392,619
Total adjustments 1,376,655 1,583,707
Net cash used in operating activities (2,220,343) (1,790,379)
Cash flows from investing activities
Purchase of tangible fixed assets (12,506) (19,083)
Purchase of intangible assets (1,300,318) (1,225,619)
Interest Income 93,135 47,868
Net cash used in investing activities (1,219,689) (1,196,834)
Cash flows from financing activities
Net proceeds of share issue - (830)
Net cash generated from financing activities - (830)
Net increase/(decrease) in cash and cash equivalents (3,440,031) (2,988,043)
Cash and cash equivalents at beginning of year 7,317,534 10,305,577
Cash and cash equivalents at end of year 3,877,503 7,317,534
The notes below form part of these financial statements
Notes to the Financial Statements
1. General information
The Company is a public limited company limited by shares, domiciled in the
United Kingdom and incorporated under registered number 00598696 in England
and Wales. The Company's registered office is 201 Temple Chambers, 3-7 Temple
Avenue, London, England, United Kingdom, EC4Y 0DT.
The Company is quoted on AIM, a market operated by the London Stock Exchange.
These Financial Statements were authorised for issue by the Board of Directors
on 01 November 2024.
2. Adoption of the new and revised International Financial Reporting
Standards
The Company has adopted all of the new or amended Accounting Standards and
Interpretations issued by the International Accounting Standards Board (IASB)
that are mandatory for the current reporting period.
The following new and revised Standards and Interpretations are relevant to
the Company, but the Company has not early adopted these new standards. The
Directors do not anticipate that the adoption of these standards will have a
material impact on the reported results of the Company:
- IFRS 1 - First-time adoption of International Financial
Reporting standards - amendments resulting from annual improvements to IFRS
accounting standards - Volume 11 (hedge accounting by first-time adopter)
- IFRS 7 - Financial Instruments: Disclosures; amendments
regarding classification and measurement of financial instruments, amendments
regarding annual improvements Accounting Standards - Volume 11 (Gain or loss
on derecognition, deferred difference between fair value and transaction price
and credit risk disclosures). Amendments regarding the supplier finance
arrangements.
- IFRS 9 - Financial Instruments: amendments regarding
classification and measurement of financial instruments, amendments regarding
annual improvements Accounting Standards - Volume 11 (Lessee derecognition of
lease liabilities and Transaction price)
- IFRS 10 - Consolidated Financial Statements - Amendments
resulting from Annual Improvements to IFRS Accounting Standards - Volume 11
(Determination of a 'de facto agent')
- IFRS16 - Leases - amendments to clarify how a seller-lessee
subsequently measures sale and leaseback transactions
- IFRS 18 - Presentation and Disclosures in Financial Statements
- IFRS 19 - Subsidiaries without Public Accountability:
Disclosures
- IAS 1 - Presentation of financial statements - amendments
regarding the classification of liabilities as current or non-current.
Amendments regarding the classification of debt with covenants
- IAS 7 - Statement of Cash Flows - Amendments resulting from
Annual Improvements to IFRS Accounting Standards - Volume 11 (Cost method) and
amendments regarding supplier finance arrangements
- IAS 21 - The effects of changes in foreign exchange rates - lack
of exchangeability
3. Significant accounting policies
(a) Basis of preparation
These financial statements have been prepared in accordance with UK adopted
international accounting standards. The policies set out below have been
consistently applied to all the years presented.
No separate income statement is presented for the parent Company as provided
by Section 408, Companies Act 2006.
(b) Basis of consolidation
The Group financial statements consolidate the financial statements of
Feedback plc and its subsidiaries (the "Group") for the years ended 31 May
2024 and 2023 using the acquisition method.
The financial statements of subsidiaries are prepared for the same reporting
year as the parent company, using consistent accounting policies. All
inter-company balances and transactions, including unrealised profits arising
from them, are eliminated.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group and cease to be consolidated from the date on which
control is transferred out of the Group.
Investments in subsidiary companies are held at cost less any impairment.
Impairment reviews are performed annually or more frequently if events or
changes in circumstances indicate a potential impairment.
The impairment review compares the carrying value to the recoverable amount,
which is calculated as the higher of the value in use and the fair value less
costs to sell.
(c) Going Concern
The Group incurred a net loss of £3,298,608 for the year ended 31 May 2024
however it had net assets of £7,644,737 inclusive of £3,877,503 of cash and
cash equivalents at 31 May 2024.
On 04 November 2024 the Company will announce a placing by way of an
accelerated bookbuild with closing of the placing expected on the same day and
a subscription of new ordinary shares to raise approximately £5.2m (before
expenses). In addition, on 04 November 2024 the Company will announce its
intention to launch a retail offer to qualifying retail investors in the UK to
raise a further up to £1.0m (before expenses), the placing, subscription and
retail offer together the "Fundraise". Subject to closing, the Fundraise is
conditional on shareholder approval at the forthcoming annual general meeting.
Prior to announcement, having made relevant enquiries, the Directors were
satisfied that the Company's brokers had received sufficient non-binding
indications for the placing and subscription to provide the Company with
adequate cash resources for at least the next twelve months to November 2025.
The Directors believe that all resolutions required to execute the Fundraise
will be successfully approved at the annual general meeting as a matter of
course, with proceeds to be received shortly thereafter. The Directors updated
and reviewed the Group's business plan and cash flow forecasts on the basis
that the Fundraise is approved at the annual general meeting. These cash
resources will be used to provide working capital, enable continued product
development and to generate sales. If further resources are required, the
directors consider, that although future equity fundraising can never be
guaranteed, the group's recent history of successful fundraising means it
likely that the group will be able to raise further finance through future
equity issues. Accordingly, the Directors believe that the Group and Company
are a going concern and have therefore prepared the financial statements on a
going concern basis.
(d) Intangible assets
Intangible assets are carried at cost less accumulated amortisation and
accumulated impairment losses. An intangible asset acquired as part of a
business combination is recognised outside goodwill if the asset is separable
or arises from contractual or other legal rights and its fair value can be
reliably measured.
The significant intangible asset cost related to external software
development of products which are integral to the trade of the Group's medical
imaging products.
Amortisation and impairment charges are recognised in other operating expenses
in the income and expenditure account. Internal development costs are not
capitalised but written off during the year in which the expenditure is
incurred. The carrying value of intangible assets which are not yet being
amortised because they are not yet available for use are reviewed for
impairment annually. The carrying value of intangible assets which are
currently being amortised are reviewed for impairment when there is an
indication that they may be impaired. Impairment losses are recognised in
other operating expenses in the income and expenditure account.
Costs incurred on development projects (relating to the design and testing of
new or improved products) are recognised as intangible assets when it is
probable that the project will be a success, considering its commercial and
technological feasibility, and costs can be measured reliably. Only external
software development expenditure is capitalised. Internal research expenditure
is written off in the year in which it is incurred.
Other development expenditure is recognised as an expense as incurred.
Intangible assets that have a finite useful life and that have been
capitalised are amortised on a straight-line basis as follows:
Intangible asset Useful economic life
Intellectual Property 5 - 10 years
Customer relationships 4 years
Software development 5 years
Intellectual Property primarily relates to patent and trademark application
costs. Software development costs capitalised in the year relate to products
and product improvements which are yet to be ready for use.
(e) Valuation of Investments
Investments held as non-current assets are stated at cost less provision for
impairment.
(f) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with
banks, other short-term highly liquid investments with original maturities of
three months or less, and bank overdrafts. When used, bank overdrafts are
shown within borrowings in current liabilities on the balance sheet.
(g) Goodwill
Business combinations on or after 1 April 2006 are accounted for under IFRS 3
using the acquisition method. Any excess of the cost of business combinations
over the Group's interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities is recognised in the balance sheet as
goodwill and is not amortised.
After initial recognition, goodwill is not amortised but is stated at cost
less accumulated impairment loss, with the carrying value being reviewed for
impairment, at least annually and whenever events or changes in circumstance
indicate that the carrying value may be impaired.
For the purposes of impairment testing, goodwill is allocated to the related
cash generating units monitored by management. Where the recoverable amount of
the cash generating unit is less than its carrying amount, including goodwill,
an impairment loss is recognised in the statement of comprehensive income.
(h) Property, plant and equipment
All property, plant and equipment is stated at historical cost less
depreciation. Depreciation on other assets is provided on cost or valuation
less estimated residual value in equal annual instalments over the estimated
lives of the assets. The rates of depreciation are as follows:
Computer and office equipment 10 - 50% p.a.
Gains and losses on disposals are determined by comparing the proceeds with
the carrying amount and are recognised in the income statement.
(i) Foreign currency
Transactions denominated in foreign currencies are translated into sterling at
the rates ruling at the date of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the balance sheet date are
translated at the rates ruling at that date. These translation differences are
dealt with in the income statement.
Translation to presentation currency: The results and financial position of
Group entities (none of which has the currency of a hyper‐inflationary
economy) that have a functional currency different from the presentation
currency (GBP) are translated into the presentational currency as follows:
· assets and liabilities presented are translated at the closing
rate at the date of that reporting period;
· income and expenses are translated at average exchange rates; and
· all resulting exchange differences are recognised in other
comprehensive income.
On consolidation, exchange differences arising from the translation of the net
investment in foreign operations are taken to other comprehensive income.
(j) Revenue recognition
Sales transactions include software installation, software licenses,
scientific and software support and consultancy. Revenue is measured at the
fair value of the contractually agreed consideration received or receivable
and represents amounts receivable for services provided in the normal course
of business, net of VAT.
The Group recognises revenue on the basis of following IFRS15 whereby revenue
is recognised on the promise of goods and services to the customer at the
transaction price contractually agreed and once the performance obligations
have been met. Revenue relating to software consultancy and similar services
is recognised as the services are performed and completed. The invoice is
recognised on a linear basis over the duration of the contract. Revenue
relating to the sale of software licences such as Bleepa or associated support
services is recognised over the contractual period to which the licence
relates or the duration of the support contract.
Revenue recognised from the sale of TexRAD software and related scientific
support services are recognised over the estimated duration of the Group's
involvement in a customer's project which is considered to represent its
performance obligation. This is that the Group will provide the support
required as agreed when the sale was made.
The difference between the amount of revenue from contracts with customers
recognised and the amount invoiced on a particular contract is included in the
statement of financial position as contract liabilities. Normally, the full
contract value is invoiced when the customer's purchase order is received.
Cash payments received as a result of this advance billing are not
representative of revenue earned on the contract as revenues are recognised
over the duration of the contract (typically twelve months). Contract
liabilities which are expected to be recognised within one year are included
within current liabilities. Contract liabilities which are expected to be
recognised after one year are included within non-current liabilities.
(k) Pension Costs
The Group operated a defined contribution pension scheme during the year. The
pension charge represents the amounts payable by the Group to the scheme in
respect of that year.
(l) Taxation
The tax credit represents the sum of the current tax credit and deferred tax
credit.
The tax currently payable is based on taxable profit for the period. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated by using tax rates that have
been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amount of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the balance sheet liability method. Deferred
tax liabilities are recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from the initial recognition of goodwill or
from the initial recognition (other than in business combination) of other
assets and liabilities in a transaction which affects neither the tax profit
nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries, except where the Group is able to
control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred tax is calculated at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled based upon tax
rates that have been enacted or substantively enacted by the balance sheet
date.
Deferred tax is charged or credited in the income statement, except when it
relates to items credited or charged directly to equity, in which case the
deferred tax is also dealt with in equity.
(m) Financial instruments
Financial assets
Financial assets are measured at amortised cost, fair value through other
comprehensive income (FVTOCI) or fair value through profit or loss (FVTPL).
The measurement basis is determined by reference to both the business model
for managing the financial asset and the contractual cash flow characteristics
of the financial asset. The group's financial assets comprise of trade and
other receivables and cash and cash equivalents.
Trade receivables
Trade receivables are initially recognised at transaction price and
subsequently measured at amortised cost, carried at the original invoice
amount less allowances for expected credit losses. Expected credit losses are
calculated in accordance with the simplified approach permitted by IFRS 9,
using a provision matrix applying lifetime historical credit loss experience
to the trade receivables. The expected credit loss rate varies depending on
whether, and the extent to which, settlement of the trade receivables is
overdue and it is also adjusted as appropriate to reflect current economic
conditions and estimates of future conditions.
For the purposes of determining credit loss rates, customers are classified
into groupings that have similar loss patterns. The key drivers of the loss
rate are the aging of the debtor, the geographic location and the customer
type (public vs private).
When a trade receivable is determined to have no reasonable expectation of
recovery it is written off, firstly against any expected credit loss allowance
available and then to the income statement.
For trade receivables, which are reported net, such provisions are recorded in
a separate provision account with the loss being recognised in the
consolidated statement of comprehensive income.
Subsequent recoveries of amounts previously provided for or written off are
credited to the income statement.
Cash and cash equivalents
Cash and cash equivalents comprise cash at hand and deposits with maturities
of three months or less.
Financial liabilities
The Group's financial liabilities consist of trade payables and other
financial liabilities. Financial liabilities are classified as measured at
amortised cost or FVTPL. A financial liability is classified as FVTPL if it is
held-for trading, it is a derivative or it is designated as such on initial
recognition. Other financial liabilities are subsequently measured at
amortised cost using the effective interest method. Interest expense is
recognised in profit or loss.
(n) Employee share options and warrants
The Group has applied the requirements of IFRS 2 Share-based Payments.
The Group has issued equity-settled share-based payment transactions to
certain employees and previously issued warrants to the vendors of the
acquired subsidiary, TexRAD Limited. Equity-settled share-based payment
transactions are measured at fair value at the date of grant. The fair value
determined at the grant date of equity-settled share-based payments is
expensed on a straight-line basis over the vesting period, based on the
Group's estimate of shares that will eventually vest.
Fair value is measured by use of the Black Scholes option pricing model for
share options without performance obligations and the Monte Carlo option
pricing model for share options with performance obligations. The expected
life used in the model has been adjusted, based on management's best estimate,
for the effect of non-transferability, exercise restrictions, and behavioural
considerations.
(o) Key areas of judgement
The preparation of financial statements requires the Board of Directors to
make estimates and judgments that affect reported amounts of assets,
liabilities, revenues and expenses. These estimates and judgements are based
on historical experience and various other assumptions that management and the
Board of Directors believe are reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying value of
assets and liabilities that are not readily apparent from other sources.
The key areas of judgement are:
· Intangible assets - Patent and trademark applications are
included at cost less amortisation and impairment. Other intangible assets
including development costs are recognised only when it is probable that a
project will be a success. There is a risk therefore that a project previously
assessed as likely to be successful fails to reach the desired level of
commercial or technological feasibility. Where there is no probable income to
be generated from these assets an estimation of the carrying value and the
impairment of the intangible assets and development costs, including goodwill,
has been made.
· Impairment review of intangible assets - The Group conducts an
annual impairment review of its intangible assets (which total £4,068,136 at
the 31 May 2024 year-end, 2023: £3,710,946), or more frequently if
indicators of impairment are identified. In performing this review the Group
takes into consideration various factors, including the inherent uncertainty
around winning new contracts, the timing of those contracts, and the cash
flows expected to be generated. The impairment review has been conducted using
both a base case and a risk case scenario, applying a 5-year net present value
(NPV) value-in-use model, which compares the estimated recoverable amount of
the intangible assets to their carrying value. For both models, management has
applied the following key assumptions:
o a discount rate of 14.4%
o a growth rate set to nil post FY27
o Income only based on internal expected forecasted contract wins
Given the inherent uncertainty in these assumptions, the carrying value of the
intangible assets is sensitive to changes in key estimates. The most
significant risks to the carrying amount are:
o Discount rate sensitivity in that an increase would reduce the recoverable
amount
o Contract wins and timing, lower or slower conversion of expected sales
forecast impacting future cash flow projections
o Growth rates affected due to market conditions, impacting future cash
flows
A reasonable possible change in any of these key assumptions could result in
an impairment loss. The Group and management continue to monitor these
assumptions when reassessing the intangible assets.
· Fair value measurement - share options and warrants issued
included in the Group's and Company's financial statements require measurement
at fair value. The calculation of fair values requires the use of estimates
and judgements, details of the valuation can be found in Note 18 of this
report.
· Revenue recognition - revenue on the sale of software and
provision of related scientific support services is recognised over the
expected duration of the group's involvement in customer's projects as the
group's staff contribute significant support, analysis and input to those
customers using our software for research purposes. Judgement based on past
experience is used to determine the expected duration of involvement over
which income should be deferred and recognised however the duration of the
group's involvement may vary from expectations.
4. Segmental reporting
The Directors have determined that the operating segments based on the
management reports which are used to make strategic decisions are medical
imaging and head office. The trading activities of the Company solely relate
to Medical Imaging and the Head Office covers the costs of running the parent
company, Feedback PLC.
Year ended 31 May 2024 Medical Imaging Head Office Total
£ £ £
Revenue
External 1,181,544 - 1,181,544
Expenditure
Total (excluding depreciation and amortisation) (2,829,839) (991,154) (3,820,993)
Depreciation and amortisation (957,549) - (957,549)
Loss before tax (2,605,844) (991,154) (3,596,998)
Tax credit 298,631 - 298,631
Balance sheet
Total assets 4,467,243 3,871,674 8,338,917
Total liabilities (608,888) (85,292) (694,180)
3,858,355 3,786,382 7,644,737
Capital expenditure (all located in the UK) (1,312,824) - (1,312,824)
The revenues from external customers in 2024 are comprised of the following
products Bleepa: £1,022,536, Image Engineering license fees: £121,566 and
legacy products Cadran PACS: £37,442.
Year ended 31 May 2023 Medical Imaging Head Office Total
£ £ £
Revenue
External 1,024,997 - 1,024,997
Expenditure
Total (excluding depreciation and amortisation) (2,613,702) (976,048) (3,589,750)
Depreciation and amortisation (809,333) (809,333)
Loss before tax (2,398,038) (976,048) (3,374,086)
Tax credit 455,909 - 455,909
Balance sheet
Total assets 4,693,140 7,031,192 11,724,332
Total liabilities (767,656) (87,793) (855,449)
3,925,484 6,943,399 10,868,883
Capital expenditure (all located in the UK) (1,244,702) - (1,244,702)
Reported segments' assets are reconciled to total assets as follows:
External revenue by Non-current assets by
location of customer location of assets
2024 2023 2024 2023
£ £ £ £
United Kingdom 1,058,956 873,597 4,081,129 3,725,855
Europe 2,208 - -
Rest of the world 122,588 149,135 - -
Total 1,181,544 1,024,940 4,081,129 3,725,855
£441,048 of revenue recognised in the current year was recorded in contract
liabilities in the prior year (2023: £203,674).
Major customers
During the year ended 31 May 2024, the Group generated £450,000 of revenue
from one customer in the United Kingdom, which is equal to 38% of total Group
revenues in the year. Major customer from the rest of the world is located in
USA and accounts for £121,566 of group revenue generated.
5. Other operating expenses
2024 2023
£ £
Administrative costs:
Employment and other costs 3,834,999 3,553,342
Amortisation and depreciation costs 957,549 809,333
4,792,548 4,362,675
6. Operating loss
2024 2023
£ £
This is stated after charging
Depreciation and amortisation
Owned assets 14,422 12,541
Amortisation of intangible assets 943,128 796,789
Provision for doubtful debts (320) 15,401
Foreign exchange differences 26,122 21,805
Auditors' remuneration
Audit of parent company and group financial statements 22,170 20,700
Audit of subsidiaries 14,780 13,800
7. Net finance income
2024 2023
£ £
Interest received 93,135 47,868
93,135 47,868
8. Directors and employees
2024 2023 2024 2023
Average Average Year-end FTE Year-end FTE
Number of employees
Selling and distribution 2 2 3 1
Administration 17 15 17 15
Research and development 7 6 7 8
26 23 27 24
2024 2023
£ £
Staff costs
Wages and salaries 2,138,863 1,877,036
Social security costs 250,428 231,303
Payments to defined contribution pension scheme 225,800 179,160
Share based payment expense 74,469 80,859
2,689,560 2,368,358
Details of Directors' remuneration for the year ended 31 May 2024 and the
prior year ended 31 May 2024 are set out in the Remuneration Committee report.
9. Taxation on loss
2024 2023
£ £
(a) The tax credit for the year:
UK Corporation tax (298,631) (455,909)
Current tax credit (298,631) (455,909)
(298,631) (455,909)
(b) Tax reconciliation
Loss before tax (4,507,137) (1,132,957)
Loss at the standard rate of corporation tax in the UK of 25% (2023 - 20%) (1,126,784) (226,623)
Fixed asset differences (1,665) -
Expenses non-deductible for tax purposes 270,884 16,593
Other permanent differences 164 -
Other income - (447,489)
Additional deduction for R&D expenditure (345,517) (362,633)
Surrender of tax losses for R & D tax credit refund 448,368 203,611
Deferred tax not recognised 455,637 450,728
Foreign tax credits 282 -
Remeasurement of deferred tax for change in tax rates - (90,096)
Tax charge for the year (298,631) (455,909)
(c) Factors which may affect future tax
charges
In view of the tax losses
carried forward there is a deferred tax amount of approximately £1,966,621
(2023: £1,510,984) which has not been recognised in these Financial
Statements. This contingent asset will be realised when the Group makes
sufficient taxable profits in the relevant company.
(d) Deferred tax - Company
In view of the tax losses
carried forward there is a deferred tax amount of approximately £1,179,468
(2023: £1,075,668 ) which has not been recognised in the Company Financial
Statements. This contingent asset will be realised when the Company makes
sufficient taxable profits.
10. Results of Feedback Plc
As permitted by Section 408 of the Companies Act 2006, the income and
expenditure account of the parent company is not presented as part of these
financial statements. The Company's loss for the financial year is £1,488,345
(2023 profit: £1,703,482). The loss for the financial year 2024 arises from
impairment of investment in its subsidiary Feedback Medical Ltd of
£1,004,649.
11. Loss per share
Basic loss per share is calculated by reference to the loss on ordinary
activities after taxation of £3,298,367 (2023: £2,918,177) and on the
weighted average of 13,334,659 (2023: 13,334,659) shares in issue.
2024 2023
£ £
Net loss attributable to ordinary equity holders (3,298,367) (2,918,177)
2024 2023
Weighted average number of ordinary shares for basic earnings per share 13,334,659 13,334,659
Effect of dilution:
Share Options - -
Warrants - -
Weighted average number of ordinary shares adjusted for the effect of dilution 13,334,659 13,334,659
Loss per share (pence)
Basic (24.74) (21.88)
Diluted (24.74) (21.88)
There is no dilutive effect of the share options and warrants as the dilution
would be negative for the periods presented. There are 1,077,490 share options
outstanding as at 31 May 2024 which could potentially dilute basic earnings
per share in the future, but were not included in the calculation of diluted
earnings per share because they are anti-dilutive for the periods presented.
12. Investments
Share in Group undertakings Total
Company £ £
Cost
At 31 May 2022 2,459,804 2,459,804
Addition (see note below) 9,857,991 9,857,991
At 31 May 2023 12,317,795 12,317,795
Addition (see note below) 8,080 8,080
As at 31 May 2024 12,325,875 12,325,875
Provision for impairment
At 31 May 2022 2,459,804 2,459,804
Additional impairment included in operating expenses 357,889 357,889
At 31 May 2023 2,817,693 2,817,693
Additional impairment included in operating expenses (see note below) 1,004,649 1,004,649
At 31 May 2024 3,822,342 3,822,342
Net Book Value
At 31 May 2024 8,503,533 8,503,533
At 31 May 2023 9,500,102 9,500,102
All of the above investments are unlisted.
The cost additions in 2024 are comprised of £8,080 related to options in
Feedback Medical Limited which would be satisfied with Feedback Plc shares
if/when they are exercised.
The impairment loss in 2024 by the Company (Head Office segment) relates to a
£1,004,649 impairment against the cost of investment in the principal
operating subsidiary of the Group, Feedback Medical Limited.
The carrying value of the Company's investment in Feedback Medical Limited was
£9,508,182 prior to an impairment review. The impairment review, which is
performed annually or more frequently if events or changes in circumstances
indicate a potential impairment, compares the carrying value to the
recoverable amount, being the higher of value in use and fair value less costs
to sell.
Feedback Medical Limited is the principal operating entity of the Feedback Plc
Group therefore, consistent with prior years, management has used the Group's
market capitalisation as at 31 May 2024 (Level 1 of the fair value hierarchy),
on an adjusted basis, as a proxy for the fair value less costs to sell of
Feedback Medical Limited. Based on the Group's market capitalisation using a
three-month volume weighted average share price as at 31 May 2024 and
adjusting out the Feedback Plc holding entity cost centre valuation (further
details provided below) and cash held by Feedback Plc at this date (Level 1 of
the fair value hierarchy), management has determined the fair value less costs
to sell of Feedback Medical Limited as being £8,503,533. On this basis, the
recoverable amount has a shortfall of the carrying value and therefore an
impairment has been recognised this year for £1,004,649, bringing the
carrying value to £8,503,533.
The Feedback Plc holding entity cost centre valuation was based on a five-year
discounted cashflow model based on historical recurring costs as the basis for
future costs (Level 3 of the fair value hierarchy) and the discount rate used
in the calculation of net present value was 14.4% (Level 3 of the fair value
hierarchy).
Particulars of principal subsidiary companies during the year, all the shares
of which being beneficially held by Feedback Plc, were as follows:
Company Activity Country of incorporation and operation Proportion of Shares held
Brickshield Limited Dormant England 100%
Ordinary £1
Bleepa Limited Dormant England 100%
Ordinary £2
Feedback Medical Limited Medical Imaging England 100%
A Ordinary £1
100% B Ordinary 1p
Feedback Medical India Private Limited Medical Imaging India Direct 0.1% and Indirect 99.9% Ownership 100%
Ordinary INR 10
TexRAD Limited Medical Imaging England 100%
Ordinary 1p
All the subsidiary companies have been included in these consolidated
financial statements.
TexRAD Limited is owned 100% by virtue of a direct holding by Feedback plc of
91% and an indirect holding via Feedback Medical Ltd of 9%.
Feedback Medical India Private Limited is owned 100% by virtue of a direct
holding by Feedback Plc of 0.1% and an indirect holding via Feedback Medical
Ltd of 99.9%. Its registered office address is Shop G 183, Ground Floor,
Raghuleela, Mega Mall, SV Road, Kandivali West, Mumbai, Mumbai City,
Maharashtra, India, 400067. The statutory year end for Feedback Medical India
Private Limited is 31 March.
Each of the other subsidiary's registered office address is 201 Temple
Chambers, 3-7 Temple Avenue, London, England, United Kingdom, EC4Y 0DT.
In accordance with section 394A of the Companies Act 2006, a company is exempt
from preparing individual accounts for a financial year. This section 394A of
the Companies Act 2006 applies to Brickshield Limited (company registration
number 06514313) and Bleepa Limited (company registration number 12118570).
13. Property, plant and equipment
Computer Total
Equipment
Group £ £
Cost
At 31 May 2022 51,955 51,955
Additions 19,083 19,083
At 31 May 2023 71,038 71,038
Additions 12,506 12,506
As 31 May 2024 83,544 83,544
As 31 May 2024 83,544 83,544
Depreciation
At 31 May 2022 43,588 43,588
Charge for the year 12,541 12,541
At 31 May 2023 56,129 56,129
Charge for the year 14,422 14,422
At 31 May 2024 70,551 70,551
Net Book Value
At 31 May 2024 12,993 12,993
At 31 May 2022 14,909 14,909
14. Intangible assets
Software Customer relationships Intellectual Property Goodwill Total
development
£ £ £ £ £
Cost
At 31 May 2022 4,405,073 100,000 197,852 271,415 4,974,340
Additions 1,225,619 - - - 1,225,619
At 31 May 2023 5,630,692 100,000 197,852 271,415 6,199,959
Additions 1,293,342 - 6,976 - 1,300,318
At 31 May 2024 6,924,034 100,000 204,828 271,415 7,500,277
At 31 May 2022 1,170,729 100,000 143,385 271,415 1,685,529
Amortisation charge for year 781,394 - 15,395 - 796,789
Impairment - 6,695 6,695
At 31 May 2023 1,952,123 100,000 165,475 271,415 2,489,013
Amortisation charge for year 932,383 - 10,745 - 943,128
At 31 May 2024 2,884,506 100,000 176,220 271,415 3,432,141
Net Book Value
At 31 May 2024 4,039,528 - 28,608 - 4,068,136
At 31 May 2023 3,678,569 - 32,377 - 3,710,946
15. Trade and other receivables
Group Company
2024 2023 2024 2023
£ £ £ £
Amounts falling due within one year
Trade receivables 1,110 130,824 - -
Other receivables 10,601 12,795 9,868 12,563
Prepayments 59,720 81,683 33,715 44,601
Accrued Revenue 10,210 - - -
81,641 225,302 43,583 57,164
16. Trade and other payables
Group Company
2024 2023 2024 2023
£ £ £ £
Amounts falling due within one year
Trade payables 179,755 63,670 9,654 17,494
Other payables 21,412 18,073 - -
Other taxes and social security 98,394 146,745 18,503 17,011
Accruals 178,163 185,913 57,123 53,275
Contract liabilities 216,456 441,048 - -
694,180 855,449 85,280 87,780
Neither the Group or the Company have any borrowings and so there are no
changes in liabilities arising from external financing
activities.
17. Financial instruments
The Group's overall risk management programme seeks to minimise potential
adverse effects on the Group's financial performance.
The Group's financial instruments comprise cash and cash equivalents and
various items such as trade payables and receivables that arise directly from
its operations. The Group is exposed through its operations to the following
financial risks:
· Credit risk
· Foreign currency risk
· Liquidity risk
· Cash flow interest rate risk
· Reliance on one major customer
Fair value Hierarchy
The Group uses the following hierarchy for determining and disclosing the fair
value of financial instruments by valuation technique:
· Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities
· Level 2: other techniques for which all inputs that have a
significant effect on the recorded fair value are observable, either directly
or indirectly
· Level 3: techniques that use inputs that have a significant
effect on the recorded fair value that are not based on observable market data
The share options and warrants issued by the group during prior years were
valued under level three above as noted in note 18 below.
In common with all other businesses, the Group is exposed to risks that arise
from its use of financial instruments. This note describes the Group's
objectives, policies and processes for managing those risks. Further
quantitative information in respect of these risks is presented throughout
these financial statements. There have been no substantive changes in the
Group's exposure to financial instrument risks and consequently the
objectives, policies and processes are unchanged from the previous period.
The Board has overall responsibility for the determination of the Group's risk
management policies. The objective of the Board is to set policies that seek
to reduce the risk as far as possible without unduly affecting the Group's
competitiveness and effectiveness. Further details of these policies are set
out below:
Credit risk
The Group is exposed to credit risk primarily on its trade receivables, which
are spread over a range of countries, a factor that helps to dilute the
concentration of the risk. Group policy, implemented locally, is to assess the
credit risk of each new customer before entering into binding contracts. Each
customer account is then reviewed on an ongoing basis (at least once a year)
based on available information and payment history.
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses which uses a lifetime expected credit loss allowance for all trade
receivables. The provision for credit losses on trade receivables is based on
an expected credit loss model that calculates the expected loss applicable to
the receivable balance over its lifetime.
Expected credit losses are calculated in accordance with the simplified
approach permitted by IFRS 9, using a provision matrix applying lifetime
historical credit loss experience to the trade receivables. An additional
provision for credit loss of £Nil has been recognised during the year (2023:
£15,401) for trade receivables measured at an amount equal to lifetime
expected credit losses.
The Group holds no collateral. It has a minimal risk policy with funds held
following fund raises so it holds the vast majority of its cash with
mainstream UK banks.
The Group's customers were primarily the NHS in 2024, for which the risk of
default has been assessed to be immaterial.
The carrying amount of financial assets represents the maximum credit
exposure. The maximum exposure to credit risk at the reporting date is:
2024 2023 2024 2023
£ £ £ £
Trade and other receivables 81,641 225,302 43,583 57,164
Loans to subsidiary companies - - 3,132,873 393,170
Cash and cash equivalents 3,877,503 7,317,534 3,828,092 6,974,028
3,959,144 7,542,836 7,004,548 7,424,362
All financial assets mention in the above table are measured at amortised
cost.
The measurement basis is determined by reference to both the business model
for managing the financial asset and the contractual cash flow characteristics
of the financial asset. The group's financial assets comprise of trade and
other receivables and cash and cash equivalents. Trade receivables are
measured at amortised cost and are carried at the original invoice amount less
allowances for expected credit losses.
Analysis of trade receivables
30 days past due 60 days past due 90 days past due
Total Current
£ £ £ £ £
Group
2024 1,110 - 1,110 - -
2023 130,824 2,640 - 128,184 -
Company
2024 - - - - -
2023 - - - - -
Foreign currency risk
Foreign exchange transaction risk arises when the Group enters into
transactions denominated in a currency other than the functional currency.
Foreign currency amounts generated from trading are converted back to sterling
and required foreign currency amounts for suppliers will be converted from
sterling and the use of forward currency contracts is considered. However, the
Group does not currently use any forward contracts.
The Group's main foreign currency risk is the short-term risk associated with
accounts receivable and payable denominated in currencies that are not the
subsidiaries' functional currency. The risk arises on the difference in the
exchange rate between the time invoices were raised/received and the time
invoices were settled/paid.
The following table shows the net assets, stated in pounds sterling, exposed
to exchange rate risk that the Group and Company had at 31 May 2024.
2024 2023 2024 2023
£ £ £ £
Trade Receivables - - - -
As at 31 May 2024 £Nil (2023: £Nil) of Feedback Medical's net trade
receivables are denominated in foreign currency. A 5% increase/fall in
exchange rates would lead to a profit/loss of £Nil (2023: £Nil).
The Directors do generally consider it necessary to enter into derivative
financial instruments to manage the exchange risk arising from its
operations. However, from time to time where the Directors consider foreign
currencies are weak and it is known that there would be a requirement to
purchase those currencies, forward arrangements may be entered into. There
were no outstanding forward currency arrangements as at 31 May 2024 or as at
31 May 2023.
Liquidity risk
Cash flow forecasting is performed for both the Group and in the operating
entities of the Group. Rolling forecasts of the Group's liquidity requirements
are monitored to ensure it has sufficient cash to meet operational needs.
Financial liabilities measured at amortised cost
Group Company
2024 2023 2024 2023
£ £
Trade and other payables 201,167 81,743 9,654 17,494
The following are maturities of financial liabilities, including estimated
contracted interest payments.
Carrying amount Contractual cash flow 6 months or less
£ £ £
Group
2024 201,167 201,167 201,167
2023 81,743 81,743 81,743
Company
2024 9,654 9,654 9,654
2023 17,494 17,494 17,494
Cash flow interest rate risk
The Group presently has no substantial interest rate risk exposure.
Capital under management
The Group considers its capital to comprise its ordinary share capital, share
premium, capital reserve, and accumulated retained earnings.
The Group's objectives when managing the capital are:
● To safeguard the Group's ability to remain a going concern.
● To maximise returns for shareholders in order to meet capital
requirements and appropriately adjust the capital structure, the Group may
issue new shares, dispose of assets to pay down debt, return capital to
shareholders and vary dividend payments.
There have been no changes to the group's capital management objectives in the
year, and there have been no changes to the group's exposure to financial
instrument risk in the year.
18. Share capital and reserves
Allotted, called up and fully paid ordinary shares: 2024 2023
Number Number
As at start of period (01 June) 13,334,659 2,666,931,677
200:1 Share consolidation (see note below) - (2,653,597,018)
As at end of period (31 May) 13,334,659 13,334,659
During 2023, a 200:1 share consolidation occurred whereby existing ordinary
shares of £0.0025 nominal value each were consolidated into new ordinary
shares of £0.50 nominal value each.
Share Options
Share options are granted to directors and employees. Options are conditional
on the employee completing a specific length of service (the vesting period).
The options are exercisable from the end of the vesting period and lapse after
ten years after the grant date. The Group has no legal or constructive
obligation to repurchase or settle the options in cash.
During the year, the Company had the following share options in issue:
Grant Date No. options as at 31 May 2023 Granted in year Lapsed in year No. options as at 31 May 2024 Exercise price (pence) Exercisable period
21 May 14((1)) 12,000 - 12,000 - 250 21 May 15 - 19 May 24
21 May 14((1)) 20,000 - 20,000 - 600 21 May 15 - 19 May 24
21 May 14((1)) 20,000 - 20,000 - 1,000 21 May 15 - 19 May 24
26 June 18((3)) 14,000 - - 14,000 372 01 March 19 - 26 June 28
09 April 19((2)) 46,660 - - 46,660 218 09 April 19 - 09 April 29
23 April 20((4)) 75,000 - - 75,000 240 01 June 20 - 24 April 30
06 August 20((5)) 67,493 - - 67,493 240 06 August 20 - 06 August 30
23 February 22((6)) 726,184 - 2,432 723,752 140 31 May 22 - 31 May 30
23 February 22((7)) 83,859 - - 83,859 140 23 February 23 - 23 February 32
28 May 24((8)) - 49,188 - 49,188 140 31 May 25 - 31 May 32
28 May 24((9)) - 17,538 - 17,538 140 31 May 25 - 31 May 32
1,065,196 66,726 54,432 1,077,490
1. Options vest in full on the anniversary of the date of grant
2. Options vest immediately upon date of grant.
3. Options vest in full on 01 March 19.
4. Options vest over three years as to one-third on 01 June 20, one-third on
01 June 21, and one-third on 01 June 22
5. Options vest over three years as to one-third on 06 August 20, one-third
on 06 August 21, and one-third on 06 August 22
6. Options vest based on share price performance conditions as to one- third
when the 60 day weighted average share price reaches 240p at any time during
the period from 31 May 2022 to 31 May 2025, one- third when the 60 day
weighted average share price reaches 372p at any time during the period from
31 May 2023 to 31 May 2025, and one- third when the 60 day weighted average
share price reaches 600p at any time during the period from 31 May 2024 to 31
May 2025
7. Options vest over three years as to one-third on the first anniversary of
the date of grant, one-third on the second anniversary of the date of grant,
and one-third on the third anniversary of the date of grant
8. Options vest based on share price performance conditions - first third
when SP hits 240p (from 31/05/25 onwards), 2nd third when share price hits
372p (from 31/05/26 onwards) and final third when share price hits 600p (from
31/05/27 onwards)
9. 50% of Options vest based on share price performance conditions - first
third when SP hits 240p (from 31/05/25 onwards), 2nd third when share price
hits 372p (from 31/05/26 onwards) and final third when share price hits 600p
(from 31/05/27 onwards). 50% of Options vest over three years - of which:
one-third in May 2025, one-third in May 2026 and one-third in May 2027.
For the options granted by the parent company to directors and employees on 28
May 2024 with no performance conditions, the following assumptions were made
for valuation purposes using the Black-Scholes option pricing model:
· Risk-free rate: 4.54% based on the five-year UK gilt
· Expected volatility: 60% based on Medical Services sector as
published in the Risk Measurement Service, London Business School manual (65%)
and Feedback's volatility over the last three years before the grant date
(58%)
· Expected life: Four years
· Share price at time of grant: £0.69
· Estimated fair value of each option at measurement date: £0.21
For the options granted by the parent company to directors and employees on 28
May 2024 with share price performance conditions, the following assumptions
were made for valuation purposes using the Monte Carlo option Pricing Model:
· Risk-free rate: 4.54% based on the five-year UK gilt
· Expected volatility: 60% based on Medical Services sector as
published in the Risk Measurement Service, London Business School manual (65%)
and Feedback's volatility over the last three years before the grant date
(58%)
· Expected life: 4.5 years
· Estimated fair value of each option at measurement date: £0.10
The following table illustrates the number and weighted average exercise
prices of, and movements in, share options during the year:
Number Weighted average exercise price
2024 2023 2024 2023
Pence Pence
Outstanding at 01 June 1,065,196 1,086,696 186 189
Granted in year 66,726 - - -
Lapsed in year 54,432 21,500 649 326
Outstanding at 31 May 1,077,490 1,065,196 160 186
Warrants
Warrants were issued to the vendors of TexRAD Limited at the time of
acquisition. The warrants are exercisable from the end of the vesting period
and lapse ten years after the grant date. The Group has no legal or
constructive obligation to repurchase or settle the warrants in cash.
At 31 May 2023 Granted Expired At 31 May 2024 Exercise price (pence) Exercisable period
21,000 - 21,000 - 250 19/05/16 to 19/05/24
91,000 - 91,000 - 600 19/05/17 to 19/05/24
112,000 - 112,000 -
There are no outstanding warrants at the end of 31 May 2024 with opening
outstanding warrants expiring on the 19(th) May 2024.
Reserves
The nature and purpose of each reserve within equity is as follows:
Share premium · Amount subscribed for share capital in excess of nominal value
Capital reserve · Reserve on consolidation of subsidiaries
Translation reserve · Gains and losses on the translation of overseas operations into
GBP
Retained earnings · All other net gains and losses and transactions with owners not
recognised elsewhere
Share Option Reserve · Fair value of share options issued
19. Pensions
The Company operated a defined contribution scheme during the year and the
assets of the scheme are held separately from those of the Group in an
independently administered fund. The pension cost represents contributions
payable and amounted to £225,800 (2023: £179,160). A balance of £20,986
(2023: £17,084) was payable at the year end.
20. Related party transactions
Key management personnel
Details of Directors' remuneration for the year ended 31 May 2024 and the
prior year ended 31 May 2023 are set out in the Remuneration Committee report.
Management fee from Company to subsidiaries
Feedback Plc invoiced Feedback Medical Limited £401,282 for the management
fee related to 2024 (2023: £359,716), with a balance of £3,123,497 being
receivable as at the year end. Feedback Plc invoiced Texrad Limited £6,888
for the management fee related to 2024 (2023: £34,806), with a balance of
£10,846 being receivable as at the year end.
The Directors interests in shares of the Company are contained in the
Directors' Report.
21. Post balance sheet events
On 04 November 2024 the Company will announce a placing by way of an
accelerated bookbuild with closing of the placing expected on the same day and
a subscription of new ordinary shares to raise approximately £5.2m (before
expenses). In addition, on 04 November 2024 the Company will announce its
intention to launch a retail offer to qualifying retail investors in the UK to
raise a further up to £1.0m (before expenses). Subject to closing, the
placing, subscription and retail offer is conditional on shareholder approval
at the forthcoming annual general meeting.
22. Ultimate controlling party
There is no ultimate controlling party.
1 "Sales" is non-IFRS metric representing the total customer contract value
invoiced in a period. The figure does not take account of accrued or deferred
income adjustments that are required to comply with accounting standards for
revenue recognition across the life of a customer contract (typically 12
months).
2 Based on 66,000 patients per year per ICB (which assumes a 30% conversion
rate of an indicative ICB) and a target payment share to Feedback of £34 per
patient.
3 Based on the median first outpatient attendance unit price from the
2023/25 NHS Payment Scheme.
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. END FR BXLLBZFLFFBDRecent news on Feedback
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