REG - Inspiration Health - Half-year Report
02/10/2024 07:00
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RNS Number : 5495G Inspiration Healthcare Group PLC 02 October 2024
2 October 2024
Inspiration Healthcare Group plc
("Inspiration Healthcare", the "Company" or the "Group")
Interim Results
New 'back to basics' strategy to position the business for future growth
Inspiration Healthcare Group plc (AIM: IHC), the global medical technology
company, announces its unaudited interim results for the six months ended 31
July 2024.
Financial highlights
· Revenue £17.0 million (H1 2024: £20.4 million)
o Neonatal product revenues £12.0 million (H1 2024: £16.1 million)
o Infusion product revenues were £5.0 million (H1 2024: £4.3 million)
· Gross Margin of 43.5% (H1 2024: 48.6%) with adverse impact from sales
mix and lower capital sales
· Adjusted EBITDA(1) loss of £0.9 million (H1 2024: profit of £1.8
million)
· Operating Loss before non-recurring items £2.0 million (H1 2024:
£0.6 million)
· Cash outflow from operating activities of £2.3 million (H1 2024: cash
inflow of £3.5 million)
· Oversubscribed fundraise completed on 22 July 2024, raising gross
proceeds of £3.0 million to strengthen the balance sheet
· Net debt(2) (excluding IFRS16 lease liabilities) £6.8 million (31
January 2024: £6.0 million)
(1) Earnings before interest, tax, depreciation, amortisation, share based
payments and non-recurring items
(2) Cash and cash equivalents, short term investments, less revolving credit
facility and invoice finance borrowings
Operational highlights (including post period)
· Roy Davis appointed Executive Chair and Interim CEO
· Largest single order placed with a value of $4.3 million for the
SLE6000 ventilator
· Airon sales outperforming initial expectations, more than double vs H1
in the prior year, pre-acquisition
· Launched new Micrel infusion pump in Q2, which will help drive sales
growth
· Appointed Chief Commercial Officer and restructured UK sales team
· Closed Hailsham site, realising annualised savings of £0.5 million
· Meeting with the US FDA in August 2024, providing clarity on
requirements for SLE6000 510k filing
Roy Davis, Executive Chair and Interim CEO of Inspiration Healthcare
commented: "Although the first half has been challenging, we have seen
encouraging signs of recovery from our Neonatal business and remain positive
about current market opportunities. As previously announced, we expect
revenues for FY25 to be H2 weighted and have a strong orderbook and pipeline
for the rest of the year. However, the sales mix will continue to impact gross
margins and consequently earnings expectations for the full year.
We have a clear strategy to return the business to growth, focused on driving
sales, increasing profitability and reducing costs, whilst developing a clear
US commercial plan and R&D roadmap to expand our portfolio of
best-in-class products. We remain well positioned in a stable long term growth
sector and I am confident we are taking the right actions to position the
Company for the future."
The information contained within this announcement is deemed by the Company to
constitute inside information stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as amended by the Market Abuse (Amendment) (EU Exit)
Regulations 2019. Upon the publication of this announcement via the Regulatory
Information Service, this inside information is now considered to be in the
public domain.
Investor presentation
The Company will provide a live presentation to investors via the Investor
Meet Company platform on Monday, 7 October 2024 at 11am BST. The presentation
will give an update on the Company and an overview of the Group's interim
results. To register for the presentation, please use this link:
https://www.investormeetcompany.com/inspiration-healthcare-group-plc/register-investor
(https://www.investormeetcompany.com/inspiration-healthcare-group-plc/register-investor)
Enquiries:
Inspiration Healthcare Group plc Tel: 0330 175 0000
Roy Davis, Executive Chair and Interim Chief Executive Officer
Alan Olby, Chief Financial Officer
Panmure Liberum Limited (Nominated Adviser & Broker) Tel: +44(0)20 3100 2000
Richard Lindley
Will King
Joshua Borlant
Walbrook PR Ltd (Media and Investor Relations) Tel: +44(0)20 7933 8780 or inspirationhealthcare@walbrookpr.com
(mailto:inspirationhealthcare@walbrookpr.com)
Mob: +44(0) 7876 741 001
Anna Dunphy
Mob: +44(0) 7796 794 663
Stephanie Cuthbert
Mob: +44(0) 7747 515 393
Louis Ashe-Jepson
About Inspiration Healthcare
Inspiration Healthcare (AIM: IHC) designs, manufactures and markets pioneering
medical technology. Based in the UK, the Company specialises in neonatal
intensive care medical devices, which are addressing a critical need to help
to save the lives and improve the outcomes of patients, starting with the very
first breaths of life.
The Company has a broad portfolio of its own products and complementary
distributed products, for use in neonatal intensive care designed to support
even the most premature babies throughout their hospital stay. Its own branded
products range from highly sophisticated capital equipment such as ventilators
for life support through to single-use disposables.
The Company sells its products directly to hospitals and healthcare providers
in the UK and Ireland, where it also distributes a range of advanced medical
technologies for infusion therapy. In the rest of the world the Company has
an established network of distribution partners around the world giving access
to more than 75 countries.
The Company operates from its Manufacturing and Technology Centre in Croydon,
South London and from its facility in Melbourne, Florida.
Further information on Inspiration Healthcare can be found at
www.inspirationhealthcaregroup.com (http://www.inspirationhealthcaregroup.com)
Chairman's Statement
The Group experienced a number of challenges during the first half, however we
have implemented several organisational changes and a 'back to basics'
approach. This focusses on driving sales, increasing profitability, reducing
costs and improving working capital, whilst developing a clear plan for the US
and an R&D roadmap to expand our portfolio of best-in-class products and I
am confident we are taking the right actions to put the business on a sound
footing for the future.
As previously announced, we expect revenues for FY25 to be H2 weighted.
Revenues for the period were £17.0 million, a 17% decline compared with the
same period last year. Although our infusion therapy products returned to
growth, we saw some pressure on sales of our Neonatal products during the
first half.
Unaudited Unaudited
6 months 6 months
Ended Ended
31 July 31 July
2024 2023
Revenue £'000 £'000
Neonatal products 12,000 16,125 -26%
Infusion Therapy products 5,039 4,245 +19%
Total 17,039 20,370 -16%
Neonatal products:
Capital 6,473 11,734 -45%
Consumables 4,312 4,391 -2%
Airon 1,215 - -
12,000 16,125 -26%
Neonatal products by Geography:
UK/Ireland 4,310 5,398 -20%
International 6,475 10,727 -40%
Airon 1,215 - -
12,000 16,125 -26%
Neonatal Key Brands:
SLE6000 3,672 5,156 -29%
SLE1000&5000 (discontinued) 578 2,600 -78%
Other 6,535 8,369 -22%
Airon 1,215 -
12,000 16,125 -26%
Historically, capital items have been the main driver of neonatal product
sales, accounting for 73% of neonatal revenues in H1 FY24. We have seen a 45%
decline in capital sales to £6.5 million in the first half of FY25, partly
caused by the timing of orders but also due to the discontinuation of older
ventilator products and slower sales in our international business.
Sales from neonatal products in the UK/Ireland decreased by 20% to £4.3
million, which was partially caused by the timing of capital orders with
strong capital sales in H1 FY24, followed by a weaker H2. This pattern is
expected to be reversed in the current year, with capital sales low during H1
but we are expecting a much stronger H2. Following a restructure of the UK
sales team during the first quarter, we have seen increased activity levels
and improved customer engagement. The business is performing as expected and
we have a pipeline of opportunities in H2, which are expected to deliver full
year sales in line with the prior year.
International sales (excluding Airon) were £6.5 million, down 40% from £10.7
million in H1 2024, following the discontinuation of older ventilators
(SLE1000 and SLE5000). Increasing international sales activity is a key
focus for the commercial team who are working to more proactively manage our
distributors to drive demand.
Revenues from discontinued/end of life products (SLE5000 and SLE1000) declined
to £0.6 million in the period (H1 2024: £2.6 million). These products have
been discontinued due to key components becoming unavailable and the
prohibitive cost associated with re-engineering to meet the requirements of
the EU's new Medical Device Regulations. Sales of new variants of the SLE6000
are expected to compensate for the loss of revenue from these products, with
UK NHS tenders and international orders expected in H2.
Increasing recurring revenues from consumables and service is a strategic
priority for the Group. Revenue from consumables and service of neonatal
products was £4.3 million in H1, broadly in line with the prior year. Within
this, service revenues reported 8% growth versus last year. To support growth
in this area, the Group has created a new role to lead the service function,
focussed on commercial delivery. An external candidate has been identified and
is expected to join during the second half of the year. This is a cost neutral
appointment with funding created by savings elsewhere in the headcount budget.
On 25 July 2024, the Group announced that it had received a $4.3 million order
for its SLE6000 ventilators and accessories. This is the single largest order
that the Group has received. Bank guarantees have now been issued to support
delivery of the contract and the Group awaits receipt of the agreed letter of
credit before delivery of the goods will be made. This is expected to happen
during the second half and provides support for the anticipated H2 weighting
to revenues.
Sales of the Infusion Therapies products (distributed products sold only in
the UK) grew by 19% to £5.0 million in the period representing a record half
year performance. This was driven by increasing sales in the homecare market
where the combination of our product offer, clinical and service support has
enabled us to continue to gain market share. The Q2 launch of the new pump
from partner Micrel has been well received and presents an opportunity to
further grow revenues in the homecare segment as well as the NHS where a
number of trials are ongoing. Our revenue pipeline for the Infusion products
provides confidence that the rate of growth seen in H1 can be maintained for
the full year.
Fund raise and strengthening the balance sheet
On 26 June 2024, the Group announced a Placing, Subscription and Retail Offer
("Capital Raising") to raise £3.0 million gross to be utilised to reduce net
debt and provide additional headroom against the Group's borrowing facilities.
The Capital Raising which was oversubscribed and completed on 22 July 2024
realised net proceeds of £2.7 million. We are very grateful to shareholders
for their continued support.
The Group has a Revolving Credit Facility of £10.0 million and Invoice
Discounting facility of up to £5.0 million. With net debt (excluding IFRS16
lease liabilities) of £6.8 million as at 31 July 2024 the Group has
significant liquidity headroom available.
North America strategy
Airon has performed well during its first period within the Group. Sales for
the six months ended 31 July 2024 were £1.2 million, which is more than
double the same period last year (pre acquisition), following a strong
performance from Airon's newly appointed national distributor, USME. There is
also considerable interest in the Airon products from the Group's
international distribution partners and we expect this to translate into
further revenue growth opportunities for Airon in the future.
Post period end, the Group had a meeting with the FDA which provided clarity
over various issues relating to our 510k application for the SLE6000
ventilator, and we are now assessing the next steps and timelines for a
resubmission.
Following receipt of MDSAP certification in January 2024, the Group filed for
registration of its products in Canada in H1. We expect approval to be
granted shortly, and our local distributor is ready to launch the products as
soon as local certification is received.
Operational and Board structure
During the period, Laura Edwards was appointed Chief Commercial Officer, a new
role within the Group reporting directly to the CEO. Laura has been with the
Group for three years and has significant commercial experience. This is a
critical role designed to bring all commercial activities of the Group into
one structure to ensure alignment of strategy and has already shown early
results with increased engagement from sales teams and improved visibility of
commercial operations.
In May 2024, Neil Campbell stepped down as Chief Executive Officer and has
become a Non-executive Director and Global Advocate. As a result, I have taken
on the role of Executive Chair and Interim CEO while the process to appoint a
permanent CEO is undertaken.
In June 2024, we announced the closure of our Hailsham facility. All
activities undertaken at Hailsham have now either been outsourced to a
long-standing supplier or moved to the Croydon site and several employees have
also moved to Croydon. This completes the rationalisation of the Group's UK
based operations into a single site and is anticipated to realise annualised
savings of approximately £0.5 million.
Outlook
As previously announced, we expect revenues for FY25 to be H2 weighted.
Following the restructure of our commercial team in H1 we have seen
encouraging signs of recovery from our Neonatal business, with a large
pipeline of opportunities and a strong orderbook for the rest of the year.
However, margin pressures are expected to remain due to the sales mix, and
delivery of the delayed Middle East order and this will impact earnings
expectations for the year.
As we work towards returning the business to growth, we have implemented a
'back-to-basics' approach, focused on driving sales, particularly in more
stable markets, increasing profitability, and improving working capital as
well as developing a clear US product and commercial strategy and R&D
roadmap to expand our portfolio of best-in-class products.
Whilst we have experienced challenges over the last 12 months, I am confident
we are taking the right actions to put the business on a sound footing for the
future. We remain robustly positioned, with a solid portfolio of life-saving
neonatal technologies and infusion products that are addressing a critical
need and are well placed to deliver significant long-term sustainable growth
in a stable global long term growth sector.
Roy Davis
Executive Chair and Interim CEO
2 October 2024
Financial Review
Revenue for the six months to 31 July 2024 totalled £17.0 million (H1 2024:
£20.4 million) a decline of 17% resulting from the lower sales of neonatal
products, partially compensated for by growth in Infusion Therapies products
and revenues of £1.2 million from the recently acquired Airon business in the
USA.
Gross margin for the period was 43.5% (H1 2024: 48.6%). This has been
adversely impacted by a number of factors with an increase in the proportion
of revenues from distributed products (particularly Infusion Therapies
products) combined with lower sales of capital items, largely ventilators.
Operating expenses (pre non-recurring items) totalled £9.4 million in the
period (H1 2024: £9.3 million) an increase of less than 2%. A reconciliation
of operating loss to Adjusted EBITDA is set out below:
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 July 31 July 31 January
2024 2023 2024
£'000 £'000 £'000
Operating (loss)/profit (3,175) 150 (4,927)
Non-recurring items 1,203 406 4,527
Adjusted operating (loss)/profit (1,972) 556 (400)
Depreciation 564 653 1,293
Amortisation 434 462 1,144
Share based payment 61 89 (52)
Adjusted EBITDA (loss)/profit (913) 1,760 1,985
Adjusted EBITDA(1) amounted to a loss of £0.9 million, compared with a profit
of £1.8 million in H1 2024 and results from the lower sales and gross margin
achieved in the period. Operating loss for the period was £3.2 million after
the inclusion of non-recurring charges of £1.2 million. Non-recurring charges
include restructuring expenses of £0.4 million resulting from the closure of
the Hailsham facility, the CEO change and changes implemented within the
commercial team as well as a provision of £0.8 million for the contingent
consideration due for the acquisition of Airon Corporation, following the
strong sales delivered to date putting us on track to make the maximum earn
out payment.
Finance costs increased to £0.5 million in the period (H1 2024 £0.3 million)
as a result of the higher average net debt compared to the prior period.
Loss before tax is £3.7 million (H1 2024: £0.1 million) and loss per share
5.46p (H1 2024: 0.08p).
Cash flow and working capital
There was a net cash outflow from operations of £2.3 million for the period
(H1 2024: inflow of £3.5 million) resulting from the EBITDA loss, increases
in working capital and non-recurring expenses and tax.
Working capital increased by £0.1 million in the period as a £0.4 million
increase in inventory and increases in receivables caused by the timing of
revenues was offset by increases in payables, arising mainly from the
provision for the Airon earn out. Inventory of £14.1 million as at 31 July
remains elevated as we continue to hold finished goods to fulfil the delayed
Middle Eastern contract. A number of long-term purchase commitments made in
prior years have also continued to result in increases in raw material
holdings. New controls over purchasing have been implemented which are
expected to help in achieving reductions in inventory over H2 and into 2025.
Net Debt as at 31 July 2024 was £6.8 million, including net proceeds from the
Capital Raise received at the end of the period.
Dividend
In view of the results for the period and the Group's current financial
position, the Board retains the suspension of dividend payments announced at
the time of the full year results and will keep the dividend policy under
review.
(1)Earnings before interest, tax, depreciation, amortisation, share based
payments and non-recurring items
Unaudited Consolidated Income Statement
For the six months ended 31 July 2024
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 July 31 July 31 January
2024 2023 2024
Notes £'000 £'000 £'000
Revenue 17,039 20,370 37,630
Cost of sales (9,634) (10,472) (19,743)
Gross profit 7,405 9,898 17,887
Operating expenses (9,377) (9,342) (18,287)
Operating (loss)/profit (before non-recurring costs) (1,972) 556 (400)
Non-recurring costs 4 (1,203) (406) (4,527)
Operating (loss)/profit (after non-recurring costs) (3,175) 150 (4,927)
Finance income 24 30 61
Finance cost (552) (320) (810)
Loss before tax (3,703) (140) (5,676)
Income tax (82) 84 (358)
Loss attributable to the owners of the parent company (3,785) (56) (6,034)
Loss per share, attributable to owners of the parent company
Basic expressed in pence per share 5 (5.46p) (0.08p) (8.85p)
Diluted expressed in pence per share 5 n/a (0.08p) n/a
Unaudited Consolidated Statement of Comprehensive Income
For the six months ended 31 July 2024
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 July 31 July 31 January
2024 2023 2024
£'000 £'000 £'000
Loss for the period/year (3,785) (56) (6,034)
Other comprehensive expense
Currency translation differences (5) - -
Total other comprehensive expense (5) - -
Total comprehensive loss for the period/year attributable to the owners of the (3,790) (56) (6,034)
parent
Unaudited Consolidated Statement of Financial Position
As at 31 July 2024
(Registered Number: 03587944)
Unaudited Unaudited Audited
As at As at As at
31 July 31 July 31 January
2024 2023 2024
Notes £'000 £'000 £'000
Assets
Non-current assets
Intangible assets 13,223 17,251 13,278
Property, plant and equipment 6,906 7,235 7,137
Right of use assets 5,393 5,680 5,578
Deferred tax asset - 373 -
25,522 30,539 25,993
Current assets
Inventories 6 14,118 10,493 13,743
Trade and other receivables 7 9,623 10,167 8,669
Short-term investments 79 - 197
Cash and cash equivalents 2,128 1,948 412
25,948 22,608 23,021
Total assets 51,470 53,147 49,014
Liabilities
Current liabilities
Trade and other payables 8 (7,826) (6,849) (6,591)
Lease liabilities (664) (770) (697)
Borrowings (987) - (1,654)
Contract liabilities (810) (449) (625)
(10,287) (8,068) (9,567)
Non-current liabilities
Lease liabilities (5,237) (5,852) (5,477)
Borrowings (7,982) (4,000) (5,002)
(13,219) (9,852) (10,479)
Total liabilities (23,506) (17,920) (20,046)
Net assets 27,964 35,227 28,968
Shareholders' equity
Called up share capital 7,378 6,823 6,823
Share premium account 21,075 18,905 18,905
Other reserves (5) - -
Reverse acquisition reserve (16,164) (16,164) (16,164)
Share based payment reserve 341 421 280
Retained earnings 15,339 25,242 19,124
Total equity attributable to owners of the parent company 27,964 35,227 28,968
Unaudited Consolidated Statement of Changes in Shareholders' Equity
For the six months ended 31 July 2024
Called up Share Capital Reverse acquisition reserve Share based payment reserve Other reserves Retained earnings Total
equity
Share Premium
£000's £000's £000's £000's £000's £000's £000's
6,813 (16,164) 405 - 25,578 35,474
At 1 February 2023 18,842
Loss for the period 1 February 2023 to 31 July 2023 - - (56) (56)
- - -
Total comprehensive loss for the period - - (56) (56)
- - -
Transactions with owners in their capacity of owners
Dividends - - - - - (280) (280)
Issue of Ordinary Shares, net of transaction costs and tax 10 - (73) - - -
63
Employee share scheme expense - - 89 - - 89
-
Total transactions with owners 10 63 - 16 - (280) (191)
At 31 July 2023 6,823 18,905 (16,164) 421 - 25,242 35,227
Loss for the period 1 August 2023 to 31 January 2024 - - - - (5,978) (5,978)
-
Total comprehensive loss for the period - - - - (5,978) (5,978)
-
Transactions with owners in their capacity of owners
Dividends - - - - - (140) (140)
Employee share scheme expense - - (141) - - (141)
-
Total transactions with owners - - - (141) - (140) (281)
At 31 January 2024 6,823 18,905 (16,164) 280 - 19,124 28,968
Loss for the period 1 February 2024 to 31 July 2024 - - - - (3,785) (3,785)
-
Exchange differences arising on translation of overseas subsidiaries - - - (5) - (5)
-
Total comprehensive loss for the period - - - (5) (3,785) (3,790)
-
Transactions with owners in their capacity of owners
Issue of Ordinary Shares, net of transaction costs and tax 555 - - - - 2,725
2,170
Employee share scheme expense - - 61 - - 61
-
Total transactions with owners 555 2,170 - 61 - - 2,786
At 31 July 2024 7,378 21,075 (16,164) 341 (5) 15,339 27,964
Unaudited Consolidated Statements of Cash flows
For the six months ended 31 July 2024
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 July 31 July 31 January
2024 2023 2024
£'000 £'000 £'000
Cash flows from operating activities
Loss for the period/year (3,785) (56) (6,034)
Adjustments for:
Depreciation and amortisation 998 1,115 2,437
Remeasurement of leases - 36 (210)
Impairment of intangible assets - - 4,120
Employee share scheme expense/(credit) 61 89 (52)
Loss on disposal of tangible assets - 125 108
Loss on disposal of right of use assets - 4 -
Finance income (24) (30) (61)
Finance expense 552 320 810
Income tax expense / (credit) 82 (84) 358
(2,116) 1,519 1,476
Increase in inventories (375) (558) (3,378)
(Increase)/Decrease in trade and other receivables (1,153) 1,411 3,000
Increase in trade and other payables 1,230 1,037 630
Increase/(Decrease) in contract liabilities 185 (82) 94
Cash flows (used in)/generated from operations (2,229) 3,327 1,822
Taxation (paid)/received (82) 189 190
Net cash (used in)/generated from operating activities (2,311) 3,516 2,012
Cash flows from investing activities
Bank interest received 8 9 21
Interest on lease receivables 16 21 40
Acquisition of subsidiary, net of cash acquired - - (1,114)
Proceeds from sale of short-term investments 118 - -
Purchase of property, plant and equipment (47) (206) (434)
Purchase of intangible assets - (63) (63)
Capitalised development costs (380) (646) (1,135)
Net cash used in investing activities (285) (885) (2,685)
Cash flows from financing activities
Principal elements of lease payments (372) (435) (829)
Principal elements of lease receipts 195 150 281
Interest on lease liabilities (131) (140) (272)
Interest paid on loans and borrowings (418) (175) (528)
Dividends paid to the holders of the parent - (280) (420)
Issue of shares 2,725 - -
Proceeds from/(Repayment of) loans and borrowings 2,313 (2,079) 577
Net cash generated from/(used in) financing activities 4,312 (2,959) (1,191)
Net increase/(decrease) in cash and cash equivalents 1,716 (328) (1,864)
Cash and cash equivalents at the beginning of the period/year 412 2,276 2,276
Cash and cash equivalents at the end of the period/year 2,128 1,948 412
Notes to the Unaudited Interim Financial Statements
For the six months ended 31 July 2024
1. Basis of Preparation
This condensed consolidated interim financial information for the six months
ended 31 July 2024 have been prepared in accordance with AIM rule 18 in
relation to half year reports. This information should be read in conjunction
with the annual financial statements for the year ended 31 January 2024, which
have been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union.
2. Going concern basis
The Group is reliant on borrowing facilities from external lenders to finance
its ongoing operations. The Group has access to a revolving credit facility
('RCF') of £10.0million and an invoice finance facility of up to
£5.0million. The RCF facility contains certain financial covenants relating
to the Group.
As a result of ongoing delays in receiving a material export order, the Group
sought and received waivers from its lender in relation to the covenant tests
as at 31 January 2024 and 30 April 2024, and agreed alternate covenants for
the period to 30 April 2025, with further drawdown of the RCF subject to
lender consent.
On 26 June 2024, the Company announced a placing, subscription and retail
offer ("the Fundraising") to raise £2.8million, net of expenses, by the issue
of 21,428,570 new Ordinary Shares in the Company. The Fundraising completed on
23 July 2024 following shareholder approval and admission of shares to trading
on AIM. Upon completion of the placing, the Group's lender released any
restriction on further drawdown of the RCF which provides the Group with
additional liquidity of £3.5million, subject only to continued compliance
with the revised covenants. On 25 July 2024, the Company announced that it had
signed the material export order, valued at $4.3 million, and expects to
deliver the goods in the second half of the current financial year.
The Directors have considered financial projections for the next 18 months
covering several scenarios, these include a significant (10%) revenue downside
versus the base case budget for the period. These projections demonstrate that
the Group can operate within the revised headroom available following
completion of the placing for the foreseeable future. The Directors, after
taking into account the proceeds of the Fundraising, the material export
order, and availability of the RCF, believe that they have a reasonable basis
for concluding that the Group has adequate facilities to continue as a going
concern and have therefore adopted the going concern basis in the preparation
of these financial statements. The financial statements do not reflect any
adjustments that would be required if they were prepared on a basis other than
the going concern basis
3. Interim financial information
The interim financial information for the period ended 31 July 2024 is
unaudited and does not constitute statutory accounts within the meaning of
Section 434 of the Companies Act 2006. The interim financial information for
the period ended 31 July 2023 is also unaudited. The audited accounts for the
year ended 31 January 2024 for Inspiration Healthcare Group plc were approved
by its Board of Directors on 30 July 2024 and have been delivered to the
Registrar of Companies with an unqualified audit report.
The Company's annual report and financial statements for the year ended 31
January 2024 were prepared under International Financial Reporting Standards
(IFRS) as adopted by the European Union, International Financial Reporting
Interpretations Committee (IFRIC) interpretations and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS. The standards
used are those published by the International Accounting Standards Board
(IASB) and endorsed by the EU at the time of preparing those statements.
4. Non-recurring items
Non-recurring items are items which, given their nature, management believes
should be disclosed separately for the purposes of presenting the results of
the Group and the earnings per share figures.
During the six months ending 31 July 2024, the Group recognised the following
non-recurring items:
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
31 July 31 July 31 January
2024 2023 2024
£'000 £'000 £'000
Contingent consideration for Airon Corporation 782 - -
Acquisition costs (3) - 69
Impairment of capitalised development costs - - 4,120
Impairment credit on leased properties - - (86)
Restructuring costs 360 266 142
Other 64 140 282
Total 1,203 406 4,527
Contingent consideration of £782,000 represents a provision for the earn out
liability which is measured based on revenue target for Airon over the
12-month period ending on 30 April 2025. The maximum amount payable is
$1,000,000 if the highest revenue target is achieved. Airon revenues in the
first three months of the earn-out period were ahead of the maximum target for
the earn-out and therefore if the levels of revenue were maintained for the
whole earn out period, management expect the maximum contingent consideration
to be payable. As a result, the maximum amount payable of $1,000,000 has
been accrued as at 31 July 2024.
Restructuring costs of £360,000 relate to severance, redundancy and
associated professional costs relating to the departure of the CEO as well as
resulting from the decision to close the Group's Hailsham facility and further
consolidate the property portfolio and centralise the business in Croydon.
Other non-recurring charges include legal and professional fees relating to
a contract dispute.
5. Loss per ordinary share
Basic (loss)/earnings per share for the period is calculated by dividing the
loss attributable to ordinary shareholders for the year after tax by the
weighted average number of shares in issue.
Diluted (loss)/earnings per share is calculated by adjusting the weighted
average number of ordinary shares in issue to assume conversion of all
potential dilutive ordinary shares. No diluted loss per share is presented for
the period ended 31 July 2024 as the exercise of share options would have the
effect of reducing the loss per share and is therefore not dilutive.
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
31 July 31 July 31 January
2024 2023 2024
Loss attributable to equity holders of the Company £'000 (3,785) (56) (6,034)
Weighted average number of ordinary shares in issue during the period/year 69,300,311 68,198,333 68,216,532
Loss per share (pence) (5.46) (0.08) (8.85)
6. Inventory
Unaudited 31 July 2024 Unaudited 31 July 2023 Audited
£'000 £'000 31 January 2024
£'000
Raw materials 7,212 6,621 7,623
Work in progress 1,546 701 1,897
Finished goods 5,360 3,171 4,223
Total 14,118 10,493 13,743
7. Trade and Other Receivables
Unaudited 31 July 2024 Unaudited 31 July 2023 Audited
£'000 £'000 31 January 2024
£'000
Trade receivables 8,718 8,802 8,071
Loss allowance (498) (321) (498)
Net trade receivables 8,220 8,481 7,573
Net investment in leases 290 620 489
Other receivables 500 350 245
Prepayments and accrued income 613 716 362
Total 9,623 10,167 8,669
8. Trade and Other Payables
Unaudited 31 July 2024 Unaudited 31 July 2023 Audited
£'000 £'000 31 January 2024
£'000
Trade payables 5,280 4,841 4,359
Corporation tax payable 82 10 82
Other taxes and social security 463 676 583
Other payables 538 523 606
Accrued expenses 1,463 799 961
Total 7,826 6,849 6,591
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