REG - Induction Healthcare - Unaudited Interim Results
02/12/2021 07:00
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RNS Number : 2976U Induction Healthcare Group PLC 02 December 2021
Induction Healthcare Group PLC
("Induction", the "Company", or the "Group")
Unaudited Interim Results
for the six months ended 30 September 2021
Induction Healthcare (AIM: INHC), a leading flexible care company, announces
its unaudited interim results for the six months ended 30 September 2021, a
period of substantial revenue growth driven by the Company's buy-and-build
strategy and the ongoing digital transformation of healthcare systems
worldwide.
Induction provides innovative technology solutions for providers across the
secondary and community healthcare markets to enhance communications and
connectivity for staff and patients while ensuring the highest standards of
clinical safety and information security. Post-period end, Induction solutions
have been contracted in other public sector environments, further diversifying
the Company's revenue base.
Outlook
· Inline with market expectations on revenue for FY22
· Expect to be ahead of market expectations for adjusted EBITDA,
reaching an adjusted EBITDA breakeven position for the full year ending March
2022 (FY21 : adjusted EBITDA loss £4.8m)
Financial Highlights
· Acquisition of Attend Anywhere Pty Ltd ("Induction Attend Anywhere")
in June
· Revenues of £4.6m (H1 FY21: £582K)
- Strong organic growth across all products
- Induction Attend Anywhere revenues of £3.6m (since acquisition 9
June 2021)
- Induction Zesty revenue £617K (H1 FY21: £306K)
- Induction Guidance revenue £322K (H1 FY21: £274K)
· Adjusted LBITDA of £0.7m (H1 FY21: £2.4m) ("Operating loss before
highlighted items")
· 929% Increase in annual recurring revenue ("ARR") to £14.4m (H1
FY21: £1.4m)
· Cash position at 30 September of £12.8m (H1 FY21: £5.0m)
- Successful £25.0m fundraise completed in June
Operational Highlights
· Three hospitals in South East England selected Induction Zesty to
deliver digital patient portals in contracts with a total value of £440K
· Induction Zesty selected as preferred supplier to South West London
integrated care system ("ICS"), one of the first ICS led procurements for
digital patient services in England
· Renewed contract for Induction Attend Anywhere with NHS Wales worth
£1.64m ARR, an increase of £400K on the prior year
· Continued strengthening of the senior management team
- Appointment of James Balmain as sole CEO (previously joint CEO
with Hugo Stephenson)
- Appointment of Dave Williams as Chief Technology Officer (in
September 2021)
- Appointment of Guy Mitchell as Chief Financial Officer (in
November 2021)
Post-period end Highlights
· Signed first non-healthcare contract with the Department for Work and
Pensions ("DWP"), in November 2021, which will deliver up to £1.3m in ARR
over a potential 4 year term
· £6.8m contracted revenue already secured for the final six months of
FY22
James Balmain, CEO of Induction, said: "We are delighted to have reported
such strong revenue growth, alongside a significant improvement in our
underlying profitability. We've seen strong user growth across our range of
products and are continuing to integrate and reduce costs at Attend Anywhere
which we bought after a successful fundraising in June. We've delivered a
record level of ARR at the period end which puts us on track to exceed market
expectations for EBITDA in FY22.
"A key focus for the Group is the renewal of Induction Attend Anywhere
contracts in England. The majority of these are one year contracts expiring in
March 2022. We currently expect to renew a very high proportion of all
existing Induction Attend Anywhere contracts in England, and with many for a
longer term of two years or more, although likely at a slightly lower contract
value than under the previous one year terms.
"We continue to build our management team, welcoming Dave Williams as group
CTO and Guy Mitchell as Chief Financial Officer. Their knowledge and expertise
will enhance our business greatly going forward."
Analyst Briefing
A briefing for equity analysts will take place today at 09:30 GMT. For further
details analysts should email induction@walbrookpr.com or call +44 (0)20 7933
8780.
Investor Briefing
James Balmain, Chief Executive Officer and Guy Mitchell, Chief Financial
Officer will be hosting a live online presentation relating to the interim
results via the Investor Meet Company platform at 15:00 GMT today. The
presentation is open to all existing and potential shareholders.
Investors can sign up to Investor Meet Company free and register for the
presentation here:
https://www.investormeetcompany.com/induction-healthcare-group-plc/register-investor
(https://www.investormeetcompany.com/induction-healthcare-group-plc/register-investor)
A recording of the presentation, a PDF of the slides used, and responses to
the Q&A session will be available on the Investor Meet Company platform
and the Company's investor website afterwards.
ENQUIRIES
Induction Via Walbrook PR Ltd: induction@walbrookpr.com
(mailto:induction@walbrookpr.com)
James Balmain, Chief Executive Officer
Singer Capital Markets (Nominated Adviser and Broker) +44 (0) 20 7496 3000
Philip Davies / Kailey Aliyar
Walbrook PR Ltd induction@walbrookpr.com
Paul McManus / Alice Woodings / Megan Boxall Mob: +44(0)7980 541 893 / +44 (0)7407 804 654 / +44 (0)7788 151 967
About Induction - www.inductionhealthcare.com
(http://www.inductionhealthcare.com)
Induction (AIM: INHC) is a leading flexible care platform driving digital
transformation of healthcare systems worldwide. Induction solutions enhance
the investments hospitals have made and lay the foundation for their future.
Our products can enable information sharing between busy doctors, alleviate
operational burdens on hospitals or put patients in better control of their
care, all while ensuring the highest standards of clinical safety and
information security. We unchain staff and patients from the limitations of
paper-based and desktop systems, creating substantial time and cost
efficiencies.
More than 225,000 hospital doctors across multiple territories, including the
UK, Ireland, Australia and South Africa, as well as a rapidly growing number
of more than 300,000 UK patients, choose Induction solutions.
Induction Switch is the number one healthcare collaboration app in the UK,
used by the majority of hospital doctors within the NHS. The app helps to
increase productivity and enhance communication by securely sharing phone
numbers and bleeps, bookmarks, documents and messages in a clinical setting.
Induction Guidance provides medical organisations, including most hospital
trusts within the NHS, with the ability to collaboratively create, edit, and
publish their own local medical guidelines in a secure and locally
administrated environment. This increases knowledge of, and adherence to,
guidance.
Induction Zesty is a market-leading digital platform for patients visiting
hospitals. The platform allows patients to book and access their appointments,
read their clinical letters, store a copy of their clinical record and provide
data to their care teams remotely. It is not just a compelling patient
experience, but also delivers significant cost benefits to hospitals.
Induction Attend Anywhere is the UK market leader in secondary care video
consultations. It helps hospitals, health systems and other customers offer
video consultations to patients and service users as a normal part of
day-to-day clinical activity. Our vision is for video consultations to improve
lives and help address social, access, equity and sustainability challenges by
allowing healthcare providers to determine how and when they see a patient
based on each individual case: in-person, via video or on the telephone.
Induction HealthStream is a proprietary data integration platform that reads
and writes patient demographic, appointment and clinical record data between a
growing number of hospital EHR systems and the Induction platforms. This
connectivity between stakeholders and legacy IT systems adds substantial value
to pre-existing health IT investment and allows large-scale adoption of
Induction app-based services.
CEO REVIEW
Overview
On the heels of a successful fund raise of £25 million and the acquisition of
Induction Attend Anywhere in June, Induction has experienced a
transformational leap in ARR. This puts the Company firmly on the path towards
an adjusted EBITDA breakeven position and cash generation before the end of
FY23. As health systems around the world engage in their post-pandemic
recovery, digital platforms are playing a vital role and with Induction Attend
Anywhere, Induction is operating at scale on the ground floor of this
opportunity.
Our vision of a 'flexible care' platform - comprising a comprehensive and
integrated suite of telehealth applications - is rapidly becoming reality,
allowing health providers to capture data from patients remotely, provide
video consultations at scale, empower patients to self-manage their hospital
appointments, and distribute information to patients quickly and cost
effectively. As the NHS focuses on elective recovery, Induction's tried and
tested technologies come into their own.
The Induction Attend Anywhere platform was nationally contracted in multiple
markets before the outbreak of COVID19, however the pandemic has acted as a
'super-catalyst' to adoption, leading to delivery of more than 4.5 million
secondary care video consultations, covering more than 2,031,009 hours of
care.
A recent report by Edge Health, commissioned by NHS England and NHS
Improvement, found outpatient appointments delivered via video, using the
Induction Attend Anywhere platform, saved 4.64 million hours in patient travel
and wait times and £40 million in patient travel costs and parking charges
over the course of a year. Induction Attend Anywhere is now the embedded
system of choice across the British Isles, creating a compelling case for
upsell with our other Induction applications.
In the English market, where the focus lies on the formation of Integrated
Care Systems ("ICS"), Induction is strongly positioned in this evolving
landscape, having achieved preferred supplier status with the South West
London ICS for the Induction Zesty platform, alongside our partner the Cerner
Corporation, with whom we have a value-added reseller agreement.
NHS Wales renewed their contract with Induction Attend Anywhere in June,
increasing the annual value from £1.2 million to £1.6 million. More
recently, Induction won a landmark contract with the Department of Work and
Pensions, who will use Induction Attend Anywhere to selectively virtualise the
English benefits system. This is the first step to expanding Group revenue
generation beyond the NHS while taking our offer beyond secondary care.
Users continue to engage with the Company's other digital health tools with
another period of record user growth, up 68% year on year, with growth to more
than 250,000 clinical users on Induction Switch and 360,000 registered
patients on Induction Zesty. There continues to be significant user interest
in interoperability between Induction applications, creating an opportunity
for cross-selling within our existing client base, as well as expanding the
Company's presence outside the UK's secondary care market.
Financial Review
For the period ended 30 September 2021, reported revenues increased in line
with management expectations to £4.59 million (H1 FY21: £582K).
Reported revenue from Induction Guidance grew to £322K (H1 FY21: £274K) in
its first full period post-acquisition. Induction Zesty revenue more than
doubled to £617K (H1 FY21: £306K), reflecting the contracts signed with
three South East England hospitals worth £440K.
Induction Attend Anywhere delivered a total of £10.4 million in revenue and
£4.5 million in EBITDA in the full year to 30 June 2021. £3.6 million of
revenue was delivered from the date of its acquisition.
Induction Switch is in strong demand from its users but struggled to monetise
during the COVID19 pandemic. In the six months to September 2021, Switch
delivered £16K of revenues. Whilst the Board continues to focus the majority
of the Company's attention on more immediately valuable revenue streams,
monetisation efforts are currently underway within the English secondary care
market.
At the period end, the Group was reporting £14.4 million of annual recurring
revenue, up 929% year-on-year. Recurring revenue for the period accounted for
95% of the total revenue.
Costs have unsurprisingly increased alongside the enlarged customer base, but
management are working hard to keep administrative expenses in check while
directing expenditure into the continued growth of the business. Development
expenses rose to £2.71 million in the period (H1 FY21: £990K). As a result
of the higher expenditure following the acquisition of Induction Attend
Anywhere, operating losses rose to £5.59 million (H1 FY21: £3.19 million).
The adjusted loss before tax for the Group was £2.3 million (H1 FY21: £2.9
million). The adjustments relate to the unwinding of acquisition date fair
value adjustments to the contract liabilities of Induction Attend Anywhere
(made as part of the purchase price allocation calculations) of £1.7 million
(H1 FY21: nil); and acquisition costs of £1.6 million (H1 FY21: £0.3
million). The Group also capitalised software development expenditure of £1.2
million (H1 FY21: £0.7 million) during the period.
The Group ended the first half of FY22 in a strong cash position with £12.8
million on the balance sheet.
Board Committees
Andy Williams, non-executive Director, is joining each of the Group's board
committees (Audit, Remuneration and Nomination) with immediate effect and will
chair the Nomination Committee.
Outlook
When the Group joined AIM in May 2019, management set out its intention to
deliver care more effectively through a portfolio of digital applications
brought together through a buy-and-build strategy. At the time, the Group had
76,000 registered users, predominately in the UK, and no revenues. In less
than two years, strategic acquisitions and investment in organic growth have
resulted in a Group with four key digital applications providing healthcare
connectivity and communications in multiple geographies.
Induction ended the first half of the year with £11.4 million of contracted
revenue for the full year FY22. Since the period end, the Group has added its
first non-healthcare contract with the DWP. This contract is worth up to £2.6
million to the Group for the initial two years. There is also the potential to
deliver up to £5.2 million, in aggregate, if the contract is extended across
four years. The scope for further public sector contracts outside of the
healthcare space is an exciting new potential area of revenue growth.
A key focus for the Group is the renewal of Induction Attend Anywhere
contracts in England. The majority of these are one year contracts expiring in
March 2022. We currently expect to renew a very high proportion of all
existing Induction Attend Anywhere contracts in England, and with many for a
longer term of two years or more, although likely at a slightly lower contract
value than under the previous one year terms.
With £12.8million of cash on the balance sheet at 30 September 2021,
Induction is well placed to continue to deliver on its buy-and-build strategy
while maintaining investment in its existing businesses to drive organic
growth. The Group continues to have strong sales momentum, recurring revenues,
and a pipeline of orders with multi-year contracts. The Board intends to
maintain tight control of costs and is confident of exceeding market
expectations on EBITDA for the year ending 31 March 2022.
The Board continues to be very positive about the Group's prospects for
significant growth in the next 3-5 years as Induction expands its offering
globally and beyond secondary care.
James Balmain
Chief Executive Officer
Condensed Consolidated Statement of Comprehensive Income (Unaudited)
For the six months ended 30 September 2021
30 September 2021 30 September 2020
Unaudited Unaudited
Note £'000 £'000
Revenue from contracts with customers 2 4,593 582
Cost of sales (997) (304)
Gross Profit 3,596 278
Sales and marketing expenses 3 (514) (296)
Development expenses 3 (2,711) (991)
Administrative expenses 3 (5,959) (2,087)
Other operating expenses 3 - (91)
Operating loss before highlighted items (660) (2,408)
Highlighted items 4 (4,928) (779)
Operating loss (5,588) (3,187)
Finance Costs (12) (4)
Finance Income - 2
Loss before tax and highlighted items (672) (2,410)
Highlighted items 4 (4,928) (779)
Loss before tax (5,600) (3,189)
Taxation (404) 7
Loss for the financial period (6,004) (3,182)
Attributable to:
Equity holders of the parent (6,004) (3,182)
(6,004) (3,182)
Loss per share from operations
- Basic 5 (0.08) (0.09)
- Diluted 5 (0.08) (0.09)
Condensed Consolidated Statement of Comprehensive Income (Unaudited)
For the six months ended 30 September 2021
30 September 2021 30 September 2020
Unaudited Unaudited
Note £'000 £'000
Loss for the period (6,004) (3,182)
Other comprehensive income
Items that may be reclassified to profit or loss
Foreign currency translation differences (59) (4)
Reclassified to profit and loss during the period 9 (7)
Other comprehensive income for the financial period 50 (11)
Total comprehensive loss for the financial period (6,054) (3,193)
Attributable to:
Equity holders of the parent (6,054) (3,193)
(6,054) (3,193)
Loss per share:
Basic loss per share (£) 5 (0.08) (0.09)
Diluted loss per share (£) 5 (0.08) (0.09)
Condensed Consolidated Statement of Financial Position
As at 30 September 2021
30 September 2021 31 March 2021
Unaudited Audited
Note £'000 £'000
Non-current assets
Goodwill 8 18,603 9,373
Intangible Assets 8 20,298 5,884
Property, Plant and Equipment 11 15
Deferred tax assets 880 880
39,792 16,152
Current assets
Trade and other receivables 9 1,697 896
Contract Assets 2 399 155
Other current financial assets 239 447
Cash and cash equivalents 10 12,842 2,472
15,177 3,970
Total assets 54,969 20,122
Non-current liabilities
Contract liabilities 2 (147) (187)
Deferred tax liabilities (4,753) (1,048)
(4,900) (1,235)
Current liabilities
Trade and other payables 11 (2,816) (1,396)
Contract liabilities 2 (2,510) (1,027)
(5,326) (2,421)
Total liabilities (10,226) (3,656)
Net assets/(liabilities) 44,743 16,466
Equity attributable to equity holders of the parent
Share capital 12 460 210
Share premium 12 43,253 18,432
Translation reserve 12 (59) (9)
Other reserves 12 1,124 792
Merger reserve 12 19,807 10,879
Accumulated deficit (19,842) (13,838)
Total equity 44,743 16,466
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 September 2021
Share Share Translation Other Merger Accumulated Total
Capital Premium reserve reserve reserve deficit equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2021 210 18,432 (9) 792 10,879 (13,838) 16,466
Total comprehensive loss for the period
Loss for the period - - - - - (6,004) (6,004)
Other comprehensive loss for the period - - (50) - - - 37
Total comprehensive loss for the period - - (50) - - (6,004) (6,004)
Transactions with owners, in their capacity as owners
Issue of ordinary shares 179 24,821 - - - - 25,000
Issue of ordinary shares as consideration for a business combination 71 - - - 8,928 - 9,000
Equity-settled share-based payments - - - 332 - - 332
Total contributions by and distributions to owners 250 28,821 - 332 8,928 - 34,332
Balance at 30 September 2021 460 43,253 (59) 1,124 19,807 (19,842) 44,747
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 September 2020
Share Share Translation Other Merger Accumulated Total
Capital Premium reserve reserve reserve deficit equity
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2020 148 18,432 7 94 (10) (6,224) 12,447
Total comprehensive loss for the period
Loss for the period - - - - - (3,182) (3,182)
Other comprehensive loss for the period - - (11) - - - (11)
Total comprehensive loss for the period - - (11) - (3,182) (3,193)
Transactions with owners, in their capacity as owners
Issue of ordinary shares as consideration for a business combination 62 10,953 - - - - 11,015
Share-issue costs - (64) - - - - (64)
Equity-settled share-based payments - - - 262 - - 262
Total contributions by and distributions to owners 62 10,889 - 262 - - 11,213
Balance at 30 September 2020 210 29,321 (4) 356 (10) (9,405) 20,468
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 September 2021
For the period ended For the period ended
Note 30 September 2021 30 September 2020
£'000 £'000
Cash flows from operating activities
Loss for the financial period (6,004) (3,182)
Adjustments for:
Depreciation of property, plant and equipment 4 -
Amortisation and impairment of intangible assets 1,569 561
Finance costs 12 4
Finance income - (2)
Share-based payment expense 332 262
Net foreign exchange differences 49 (10)
Fair value adjustment of contingent consideration - 91
Net loss arising on fair value adjustments of deferred income 1,742 -
Taxation 404 (7)
(1,892) (2,283)
Decrease / (Increase) in trade and other receivables and contract assets 3,911 (75)
(Decrease) / Increase in trade and other payables and contract liabilities (1,491) (79)
Interest received - 2
Interest paid (12) (4)
Income taxes paid (404) -
Net cash generated from / (used in) operating activities 112 (2,439)
Cash flows from investing activities
Payments for acquiring businesses, net of cash acquired (13,486) (1,987)
Payment of software development costs (1,207) (687)
Acquisitions of property, plant and equipment - (3)
Net cash from investing activities (14,693) (2,677)
Cash flow from financial activities
Repayments of loans and borrowings - (514)
Share issue costs - (64)
Share issue proceeds 25,000 -
Net cash from financing activities 25,000 (578)
Net increase in cash equivalents 10,419 (5,694)
Cash and cash equivalents at the beginning of the financial period 2,472 10,718
Effects of exchange rate changes on cash and cash equivalents (49) (10)
Cash and cash equivalents at the end of the financial period 12,842 5,014
Notes to the Condensed Consolidated Interim Financial Statements
1. Accounting Policies
1.1. Reporting entity
Induction Healthcare Group PLC ("Induction", the "Group" or the "Company") is
publicly quoted on the AIM market of the London Stock Exchange ("LSE"), and
incorporated, domiciled and registered in the United Kingdom. The registered
number is 11852026 and the registered address is 20 St. Dunstan's Hill,
London, United Kingdom, EC3R 8HL. Induction is a leading healthcare technology
company helping to streamline delivery of care by providing software to
healthcare professionals.
As of 30 September 2021, Induction Healthcare Group PLC comprised of nine
legal subsidiaries, that are majority owned and controlled, and therefore
fully consolidated in the Company's consolidated financial statements. Details
of the Company's subsidiaries are included in note 6.
1.2. Basis of preparation
These interim financial statements have been prepared and approved by the
directors in accordance with International Financial Reporting Standards
("Adopted IFRSs"). They do not include all the information required for a
complete set of IFRS financial statements. However, selected explanatory notes
are included to explain events and transactions that are significant to an
understanding of the changes in the Group's financial position and performance
since the most recent annual consolidated financial information included in
the annual report and accounts as of and for the year ended 31 March 2020.
The accounting policies applied are consistent with those applied in the most
recent consolidated annual report and accounts for the year ended 31 March
2021, which are available on the Company's website at
www.inductionhealthcare.com under "Investors - Financial reports &
publications"
Subsidiaries are fully consolidated from the date of acquisition, being the
date on which the Group obtained control and continue to be consolidated until
the date when such control ceases. The financial information of the
subsidiaries is prepared for the same reporting period as the Group, using
consistent accounting policies. All intra-group balances, transactions,
unrealised gains and losses resulting from intra-group transactions are
eliminated in full.
Changes in the Group's interest in a subsidiary that do not result in a loss
of control are accounted for as equity transactions.
When the Group loses control over a subsidiary, the assets and liabilities are
derecognised along with any related non-controlling interest and other
components of equity. Any resulting gain or loss is recognised in profit or
loss. Any interest retained in the former subsidiary is measured at fair
value when control is lost.
These interim condensed consolidated financial statements are unaudited and
were approved by the Board of Directors and authorised for issue on 1 December
2021 and are available on the Company's website at www.inductionhealthcare.com
under "Investors - Financial reports & publications".
2. Revenue
2.1 Revenue by performance obligations
Period to 30 September 2021 Period to 30 September
2020
£'000 £'000
Provision of software 4,382 582
Post-contract support and maintenance 76 -
Set-up services 3 -
Text message revenue 132 -
Total Revenue from contracts with customers 4,593 582
2.2 Revenue by geographical location
Period to 30 September 2021 Period to 30 September
2020
£'000 £'000
United Kingdom 4,528 529
Europe 6 4
United States 8 13
Rest of World 51 37
Total Revenue from contracts with customers 4,593 582
2.3 Revenue by product line
Period to 30 September 2021 Period to 30 September
2020
£'000 £'000
Induction Anywhere 3,638 -
Induction Zesty 617 306
Induction Guidance 322 274
Induction Switch 16 2
Total Revenue from contracts with customers 4,593 582
2.4 Timing of revenue recognition
Period to 30 September 2021 Period to 30 September
2020
£'000 £'000
Services transferred over time 4,451 582
Services transferred at a point in time 142 -
Total Revenue from contracts with customers 4,593 582
2.5 Contract balances
30 September 2021 31 March
2021
£'000 £'000
Trade receivables 1,039 723
Contract assets 399 155
Contract liabilities (2,657) (1,214)
2.6 Performance obligations
The following represents the performance obligations that are expected to be
fulfilled within one year, and after more than one year. Performance
obligations to be fulfilled within one year include performance obligations
for which a contract is in existence, but where the full amount related to the
contract has not yet been invoiced and therefore has not yet been recognised
in contract liabilities.
Period to 30 September 2021 Period to 30 September
2020
£'000 £'000
Within one year 6,146 298
More than one year 147 274
6,292 572
3. Expenses by nature
Period to 31 September 2021 Period to 30 September 2020
£'000 £'000
Employee benefit expense 3,444 1,963
Contractors 1,520 370
Fundraise and acquisition related transaction costs 1,613 218
Amortisation of intangible assets 1,568 557
Depreciation of property, plant and equipment 4 3
Professional and legal fees 56 234
Research and development expense capitalised (1,207) (687)
Remeasurement of contingent consideration - 92
Fair value adjustments on contract liabilities 1,742 -
Fundraise and acquisition related transaction costs for the period ended 30
September 2021 include the legal, tax, accounting and other professional fees
incurred as a result of the £25.0 million fundraise (refer note 11), and the
acquisition of Attend Anywhere (refer Note 5). Fundraise and acquisition
related transaction costs for the period ended 30 September 2020 include
amounts for the acquisition of Zesty Limited, as well as further costs related
to the valuation of Horizon Strategic Partners Limited.
Fair value adjustments on contract liabilities represent the unwinding of the
acquisition date fair value adjustment to the contract liabilities of Attend
Anywhere, made as part of the purchase price allocation and valuation of
identifiable net assets and liabilities. The fair value adjustment is reversed
through profit and loss, in the same pattern as the derecognition of the
contract liability (ie as the revenue is recognised).
4. Highlighted items
30 September 2021 30 September 2020
£'000 £'000
Non-recurring fundraise & acquisition related transaction costs 1,613 218
Fair value adjustments on contract liabilities 1,742 -
Other highlighted items 3,355 218
Amortisation and depreciation 1,573 561
Total highlighted items 4,928 779
Highlighted items charge to operating profit comprise significant non-cash
charges and major one-off costs, which are highlighted in the income statement
because, in the opinion of the Directors, separate disclosure is helpful in
understanding the underlying performance and future profitability of the
business.
5. Earnings per share
Basic EPS is calculated by dividing the profit for the year attributable to
ordinary equity holders of the parent by the weighted average number of
ordinary shares outstanding during the year.
Diluted EPS is calculated by dividing the profit attributable to ordinary
equity holders of the parent (after adjusting for interest on the convertible
preference shares) by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of ordinary
shares that would be issued on conversion of all the dilutive potential
ordinary shares into ordinary shares.
The following table reflects the income and share data used in the basic and
diluted EPS calculations:
Loss attributable to ordinary shares (basic and diluted)
30 September 30 September
2021 2020
£'000 £'000
Loss attributable to ordinary shares (basic and diluted) (6,004) (3,182)
(6,004) (3,182)
Weighted average number of ordinary shares (basic and diluted)
Period to 30 September 2021 Period to 30 September 2020
Shares in issue on 1 April 42,050,728 29,626,201
Shares issued 35,714,285 -
Shares issued in a business combination 14,285,714 12,424,527
Issued ordinary shares as at the end of the period 92,050,727 42,050,728
Weighted-average number of ordinary shares (basic and diluted) 72,925,044 37,366,070
Basic loss per share (0.08) (0.09)
Diluted loss per share (0.08) (0.09)
Business Combinations
6.1 Subsidiaries acquired
On 9 June 2021, Induction Healthcare Group plc acquired 83.5% of the share
capital of Attend Anywhere Pty Limited ("AA") and 100% of the share capital of
A.C.N. 167 231 307 PTY Ltd ("A.C.N."), which owns 16.5% of the share capital
of Attend Anywhere, thereby obtaining 100% control over Attend Anywhere.
Attend Anywhere Pty Limited owns 100% of the share capital of Attend Anywhere
Limited, a UK subsidiary.
The consideration included payments of £838k in cash for the purchase of net
assets at the completion date, cash consideration of £15,560k, plus the issue
of 14,285,714 New Ordinary Shares which had a fair value of £9,000k. This
brings the total consideration to £25,398k prior to transaction costs.
Attend Anywhere is a leading provider of video consultations in the UK
secondary care market, holding national contracts with NHS Scotland, NHS Wales
and the HSE in Ireland, alongside a number of regional contracts in England.
Attend Anywhere's proprietary technology, allows users to easily access and
use the video service via a common browser, without the need for plug-ins or
downloading a native app.
The Group's strategy is to build a leading and future-forward integrated
virtual care platform, incorporating patient onboarding, clinical guidelines,
digital communications, online appointment management and, via the acquisition
of Attend Anywhere, video consultations. While the current focus is on
secondary care, there is scope to migrate into allied care settings, such as
primary care, mental health and community care.
Attend Anywhere is a clear strategic fit with Induction and the acquisition
will provide a number of commercial, operational and financial benefits, which
are expected to create value for shareholders.
Name Principal activity Date of acquisition Proportion of voting equity interest acquired Consideration transferred
£000
Attend Anywhere Pty Limited Provision of video consulting software 09/06/2021 83.5% 21,207
A.C.N. 167 231 307 PTY Ltd Investment holding company 09/06/2021 100% 4,191
Attend Anywhere Limited Provision of support services to group entities 09/06/2021 100% -
The valuation of separately identifiable assets and liabilities acquired and
the determination of goodwill recognised, as disclosed in this note, is
presented on a provisional basis and is unaudited.
6.2 Consideration transferred
The following represents the consideration transferred to the owners of Attend
Anywhere Pty Limited and A.C.N. 167 231 307 PTY Ltd.
£000
Share consideration 9,000
Cash consideration 16,398
Total consideration transferred 25,398
The fair value of cash consideration equals its carrying value. The fair value
of the equity consideration has been determined with references to the market
value of the shares of Induction Healthcare Group plc immediately prior to the
issue of the consideration shares, adjusted for the impact of a lack of
marketability discount of 10%.
6.3 Assets acquired and liabilities recognised at the date of acquisition
The following represents assets acquired and liabilities recognised on
acquisition.
Note Fair Value recognised on acquisition
£'000
Non-current assets
Intangible Assets 7 14,825
Current assets
Cash and cash equivalents 2,912
Other current assets 4,751
Non-current liabilities
Deferred tax liability (3,706)
Other non-current liabilities (85)
Current liabilities
Deferred revenue (1,782)
Other current liabilities (746)
Total identifiable net assets at fair value 16,168
The separately identifiable intangible assets and valuation techniques used to
measure the fair value of these material assets acquired were as follows:
Customer contracts and relationships Income Approach: With and without method. This method estimates the value of
customer related assets by quantifying the impact on cash flows under a
scenario in which the customer-related assets must be replaced. The projected
revenues, operating expenses, and cash flows are calculated in a "With" and
"Without" scenario, and the differential between the cash flows from the two
scenarios serve as the basis for estimating the fair value of the
customer-related asset.
Technology Excess Earnings Method: a stream of revenue and expenses are identified with a
particular group of assets that are necessary to support the earnings
associated with the subject intangible asset. By identifying and subtracting
contributory assets, the residual earnings are estimated to be attributable to
the subject intangible asset and are discounted to present value at an
appropriate discount rate.
Replacement cost method. This method establishes value based on the cost of
reproducing or replacing the asset, less depreciation from functional or
economic obsolescence. A corroborating analysis was performed using the
multi-period excess earnings method. The multi-period excess earnings method
considers the present value of net cash flows expected to be generated by the
customer relationships, by excluding any cash flows related to contributory
assets.
6.4 Goodwill arising on acquisition
£'000
Consideration transferred
25,398
Total identifiable net assets at fair value
16,168
Goodwill arising on acquisition
9,230
6.5 Net cash outflow on acquisition
£'000
Consideration paid in cash (16,398)
Transaction costs of the acquisition (included in cash flows from operating (707)
activities)
Transaction costs attributable to the issuance of shares (included in cash -
flows from financing activities, net of tax)
Less: cash and cash equivalent balances acquired 2,912
Net cash flow on acquisition (14,193)
6.6 Impact of acquisition on the results of the Group
From the date of acquisition, Attend Anywhere Pty Limited and A.C.N. 167 231
307 PTY Ltd contributed £3,638k to the revenue of the group and net profits
of £1,993k to the loss before tax from continuing operations of the Group. If
the acquisition had taken place at the beginning of the year, contribution to
revenue from continuing operations would have been £5,886k and contribution
of profits to loss before tax from continuing operations for the Group would
have been £2,765k.
7. Investments in subsidiaries
Company Registered number Principal activities Country of incorporation Ownership
30 Sept 2021 31 March 2020
Induction Healthcare Limited 11232772 Investment Holding Company United Kingdom 100% -
Induction Healthcare (UK) Limited 11237890 Provision of software to healthcare providers United Kingdom 100% 100%
Induction Healthcare Pty Ltd 625119397 Provision of software to healthcare providers Australia 100% 100%
Podmedics Limited 6840040 Dormant United Kingdom 100% 100%
Horizon Strategic Partners Limited 6285278 Provision of software to healthcare providers United Kingdom 100% 100%
Zesty Limited 08294659 Provision of software to healthcare providers United Kingdom 100% 100%
Attend Anywhere Pty Ltd 081211707 Provision of software to healthcare providers Australia 100% -
Attend Anywhere Limited 11883931 Provision of software to healthcare providers United Kingdom 100% -
A.C.N. 167 231 307 Pty Ltd 167231307 Investment Holding Company Australia 100% -
8. Goodwill and intangible assets
Goodwill Technology Users Tradename Development costs Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost
Balance at 31 March 2021 9,790 2,518 1,426 633 3,928 18,295
Recognised on acquisitions 9,230 5,835 6,618 - 2,373 24,056
Internally developed - - - - 1,207 1,207
Translation differences - - - - (48) (48)
At 30 September 2021 19,020 8,353 8,044 633 7,460 43,510
Amortisation
Balance at 31 March 2021 417 283 265 83 1,990 3,038
Recognised on acquisitions - - - - - -
Provided during the year - 494 433 31 611 1,569
Translation differences - - - - 2 2
At 30 September 2021 417 777 698 114 2,603 4,609
Net book value
At 31 March 2021 9,373 2,234 1,161 550 1,939 15,257
At 30 September 2021 18,603 7,576 7,346 519 4,857 38,901
9. Trade and other receivables
30 September 2021 31 March
2021
£'000 £'000
Receivables from third-party customers 1,038 723
Other receivables 20 22
Prepayments 224 151
Social security and other taxes receivable 415 0
1,697 896
Allowance for credit losses - -
1,697 896
Trade receivables are non-interest bearing and are generally on terms of 30
days. Included within trade and other receivables is £nil expected to be
recovered in more than 12 months.
10. Cash and cash equivalents
30 September 2021 31 March
2021
£'000 £'000
Cash at banks and on hand 8,242 872
Short-term deposits 4,600 1,600
Cash and cash equivalents per the statement of financial position and cash 12,842 2,472
flow statement
Cash at banks earns interest at floating rates based on daily bank deposit
rates. Short-term deposits are made on a weekly basis, depending on the
immediate cash requirements of the Group, and earn interest at the respective
short-term deposit rates.
11. Trade and other payables
30 September 2021 31 March
2021
£'000 £'000
Trade payables 1,217 289
Accruals 1,021 760
Social security and other taxes 193 277
Other payables 66 70
Current tax payable 319 -
2,816 1,396
Included within trade and other payables is £nil expected to be settled in
more than 12 months
All trade and other payables are non-interest bearing and are normally settled
on 30 day terms.
12. Capital and Reserves
12.1 Share Capital
2021 2020
No. of shares ('000) £'000 No. of shares ('000) £'000
In issue at 1 April 42,051 210 29,627 148
Issue of ordinary shares as consideration for a business combination 14,286 71 12,425 62
Issue of ordinary shares 35,714 179 - -
In issue at 30 September 92,051 460 42,052 210
12.2 Share Premium
2021 2020
£'000 £'000
(Restated)
At 1 April 18,432 18,432
Issue of ordinary shares as consideration for a business combination 24,821 -
At 30 September 43,253 18,432
12.3 Merger Reserve
2021 2020
£'000 £'000
(Restated)
At 1 April 10,879 (10)
Issue of ordinary shares as consideration for a business combination 8,928 10,953
Transaction costs on issue of shares - (64)
At 30 September 19,807 10,879
During the completion of the annual report and accounts for 31 March 2021,
amounts recognised in share premium that related to the issuance of ordinary
shares as consideration for a business combination were reclassified to the
merger reserve. Management have therefore restated the amounts presented for
the merger reserve and for the share premium for the 6 months ended 30
September 2020 to reflect this.
13. Related Parties
Transactions with key management personnel
The compensation of key management personnel (directors) is as follows:
30 September 2021 30 September 2020
£'000 £'000
Short-term employee benefits 384 431
Post-employment pension and other benefits 6 25
Termination benefits - -
Share based payment transactions 123 148
Key management remuneration including social security costs 513 605
Total compensation paid to key management personnel 513 605
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