REG - Inspiration Health - Unaudited Preliminary results
28/05/2025 07:00
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RNS Number : 3028K Inspiration Healthcare Group PLC 28 May 2025
28 May 2025
Inspiration Healthcare Group plc
("Inspiration Healthcare", the "Group" or the "Company")
Unaudited Preliminary results for the year ended 31 January 2025
Inspiration Healthcare Group plc (AIM: IHC), the global medical technology
company, pioneering, specialist neonatal intensive care medical devices,
announces its unaudited preliminary results for the year ended 31 January 2025
("FY25").
Financial Highlights
· Group revenue of £38.3m (FY24: £37.6m) up 1.7% on prior year
· Gross profit reduced by 8.4% to £16.4m (FY24: £17.9m) as gross
margin declined to 42.8% (FY24: 47.5%)
· Adjusted EBITDA(1) of £0.2m (FY24: £2.0m)
· Adjusted operating loss(2) before non-recurring items of £1.9m
(FY24: loss of £0.4m)
· Operating loss of £14.7m (FY24: loss of £4.9m)
· Operating cash outflow of £1.5m (FY24: inflow of £2.0m)
· Net debt(3) (excluding IFRS16 lease liabilities) increased to £8.3m
(FY24: £6.0m)
(1)Earnings before interest, tax, depreciation, amortisation, impairment,
share-based payments and non-recurring items
(2)Earnings before interest, tax, impairment, share-based payments and
non-recurring items
(3)Cash and cash equivalents plus short-term investments, less revolving
credit facility and invoice finance borrowings
Operational Highlights
· New CEO Raffi Stepanian, appointed January 2025
· Restructured commercial team and back-to-basics strategy delivered
strong H2 sales momentum
· Received $4.3m order for SLE6000 ventilators from Middle East
customer in FY25, revenue to be recognised in FY26
· $6m contract win with an international humanitarian aid organisation
underpins FY26 return to growth
· Airon sales grew 81% on a pro forma basis, exceeding expectations
Raffi Stepanian, CEO of Inspiration Healthcare, said: "FY25 has been a year
of changes and resetting the course for the Group. After a challenging H1, we
had a great turnaround in H2, thanks to the back-to-basics approach initiated
by our Chair and interim CEO, Roy Davis and continuous focus on sales in our
international markets and the USA. The improved sales levels in the last
couple of months highlight the market demand of our product offerings and
provide a good momentum to the new financial year.
We start FY26 with a strong order book and continue the back-to-basics actions
to gain further efficiencies and improve customer satisfaction. We will
re-align our solutions to focus on our core strengths and market trends, as
well as expand in consumables and services to strengthen our overall
performance. I would like to take this opportunity to express my sincere
thanks to all my new colleagues in helping me get settled into the role, and
also to all of our shareholders for their loyal support. We look forward to
delivering on our goals as we progress through the year."
For further information, please contact:
Inspiration Healthcare Group plc Tel: +44 (0)330 175 0000
Raffi Stepanian, Chief Executive Officer
Alan Olby, Chief Financial Officer
Panmure Liberum (Nominated Adviser & Broker) Tel: +44 (0)20 3100 2000
Emma Earl
Will Goode
Will King
Walbrook PR Ltd (Media and Investor Relations) Tel: +44 (0)20 7933 8780 or inspirationhealthcare@walbrookpr.com
(mailto:inspirationhealthcare@walbrookpr.com)
Anna Dunphy / Rachel Broad Mob: +44 (0) 7876 741 001
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 in the UK from its Manufacturing and Technology Centre in
Croydon, South London, and in the USA from its facility in Melbourne, Florida.
Further information on Inspiration Healthcare can be found at
www.inspirationhealthcaregroup.com (http://www.inspirationhealthcaregroup.com)
Chair's & Chief Executive Officer's Report
Welcome to my annual review as Chair and Interim CEO of Inspiration Healthcare
Group plc. The past year has been challenging for the business with a
significant amount of change being implemented including a 'Back to Basics'
strategy to address the challenges and poor performance in the business over
the past couple of years.
'Back to Basics' is aimed at putting our patients and customers at the very
centre of everything we do by ensuring we are engaging with our end customers
and sales channel distributors to provide excellence in the products we offer
and service we deliver. As part of this approach, we are focussing the
business and simplifying our processes, systems & organisation.
Ultimately, this will help us increase sales and profitability, reduce costs,
and improve cash generation.
As part of our future strategy, we are also looking to increase sales of
consumable products and service revenues to improve the quality of earnings
and reduce our reliance on lumpier capital sales business. Once we have
re-focused the business and returned to growth in terms of sales, profits, and
cash generation we will then be in a position to move forward with our vision
to ensure leadership in the neonatal market.
I am pleased to say we are starting to see the benefits of this strategy and
the business is now moving in the right direction.
Overview
Overall progress in the year was positive. Following a year-on-year decline in
first half sales the business had a strong second half and full year revenues
increased 2% to £38.3m (FY24: £37.6m), including a full year contribution of
Airon revenue of £2.4m (FY24: £0.2m). Having experienced a loss making
first half, the strong sales in the second half meant that the business was
able to deliver a full year adjusted EBITDA of £0.2m (FY24: £2.0m).
At 31 January 2025, the Group's net debt (excluding IFRS16 lease liabilities)*
was £8.3 million (31 January 2024: £6.0 million). We anticipate strong
operating cash flow in the first half of the new financial year as our
inventory continues to reduce and our strong sales from the end of last year
convert to cash.
*Cash and cash equivalents plus short-term investments, less revolving credit
facility and invoice finance borrowings
The Group operates within a single business segment, providing essential
medical technology. Within this segment, the Group sells products and
services into three main market areas: 'Neonatal', 'Infusion Therapies' and
'Speciality Ventilation'.
Neonatal focuses on intensive care equipment for premature and sick babies. We
design, manufacture and sell our equipment around the world to over 75
countries and we also distribute complementary products in the UK and Ireland.
Infusion Therapies focuses on infusion pumps and associated consumables in the
UK where we are an active distributor of these technologies into various
therapy areas.
Speciality Ventilation represents the Airon business acquired in January 2024
which manufactures and sells pneumatic ventilators in the USA and
internationally.
12 months 12 months
Ended Ended
31 Jan 31 Jan
2025 2024
Revenue £'000 £'000
Neonatal products 24,652 28,915 -15%
Infusion Therapy products 11,201 8,534 +31%
Speciality Ventilation products (Airon) 2,398 181 -
Total 38,251 37,630 +2%
Neonatal products:
Capital 16,005 19,384 -17%
Consumables and service 8,647 9,531 -9%
24,652 28,915 -15%
Neonatal products by Geography:
UK/Ireland 9,085 10,148 -10%
International 15,567 18,767 -17%
24,652 28,915 -15%
Neonatal Key Brands:
SLE6000 9,976 9,534 +5%
SLE1000&5000 (end of life) 1,958 3,581 -45%
Other 12,718 15,800 -20%
24,652 28,915 -15%
Neonatal
Overall, Neonatal revenues were 15% lower than last year at £24.7m (FY24:
£28.9m). While the first half of the year was challenging from a sales
perspective delivering revenues of £10.8m (excludes Airon) the focus on our
'Back to Basics' strategy and increased sales activity in the second half
resulted in a strong performance with sales of £13.9m, +29% vs H1. This was
despite the continued delay in shipping the large Middle East order previously
announced. However, I am pleased to report that the first half of this order
was shipped within the year although it was unable to be recognised as revenue
due to delays in clearing customs in country. Post year end the order cleared
customs and has been recognised as revenue and we expect to ship the remainder
of the order in the first half of FY26 post receipt of the letter of credit.
Historically, capital items have been the main driver of neonatal product
sales, accounting for 67% of neonatal revenues in FY24. We have seen a 17%
decline in capital sales to £16.0m in FY25, partly caused by the lower sales
activity particularly in our international business already described; delays
in the timing of customer orders and also due to the discontinuation of our
older ventilator products.
Sales from neonatal products in the UK/Ireland were £9.1m (FY24: £10.1m)
down 10% on the prior year. This decline was driven by fewer sales
opportunities being identified and converted in the period as purchasing
decisions were pushed out due to budget constraints. We restructured the UK
sales team during the first quarter of the year and have subsequently seen
increased activity levels and improved customer engagement. During the year
we also launched some complementary distributed products (e.g. Monsoon
high-frequency jet ventilator) with the aim of increasing our sales
coverage. The business is now performing as expected and we have built a
solid pipeline of opportunities for the coming year.
International sales were £15.6m in the year, down 17% from £18.8m in FY24,
following the discontinuation of older ventilators (SLE1000 and SLE5000) and
generally poor sales. Increasing international sales activity and improving
our distributor customer service is a key focus for the commercial team. We
are working hard to ensure we meet the needs of our end customers and
proactively manage our distributor partners to help drive demand. This
approach has helped increase the international sales pipeline. Encouragingly,
prior to the year-end we secured our largest ever single contract to date, at
$6 million for SLE6000 and SLE1500 ventilators plus associated accessories and
consumables, with a trusted global humanitarian aid organisation focusing on
child and infant welfare. Delivery of this contract is during the first half
of the new financial year. The combination of the previously announced
Middle East contract and this new order underpins our 2026 sales and gives us
optimism for the future outlook for the business.
Revenues from end-of-life products (SLE5000 and SLE1000) were £2.0m in the
period (FY24: £3.6m). These products were 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 and SLE1500 are expected to compensate for the
loss of revenue from these products in due course.
Revenues from consumables and service of neonatal products were £8.6m in FY25
a decrease of 9% versus prior year (FY24: £9.5m). Increasing recurring
revenues from consumables and service is a strategic priority for the Group.
Given the lumpy nature of capital sales, especially in times of budget
constraint a move to the recurring revenue stream offered by consumable and
service revenues will help the business improve its quality of earnings and
reduce its reliance on large tenders. We are working on a new consumables
range which are expected to be launched later in 2025. We have also
recruited a new Group Head of Technical Support to help drive service
performance and revenues.
Infusion Therapies
Infusion Therapies delivered strong revenue growth of 31% to £11.2m in the
year (FY 2024: £8.5m). We are market leaders in the UK homecare market for
ambulatory infusion pumps. Our continued investment in sales, marketing, and
clinical support in this area of our business are starting to deliver and as a
result we had a strong year distributing Micrel products. During the year we
introduced the new Rhythmic and Serena pumps into the homecare market. With
the UK NHS increasingly looking to treat patients out of hospital, it is
important that new devices have the capability of being able to be monitored
remotely. The new pumps from our partner Micrel will allow for this making it
an attractive option for our existing customer base and allowing for future
growth. These products have been well received in the market and previously
hard to reach accounts are now engaging and referring patients to us for
product trials which is positive for our sales pipeline. In 2024 we sold the
highest number of pumps to the homecare providers in the last five years with
devices now being used by all homecare providers in the country.
During the year we also launched the Ultima pump into the hospital setting
aimed at oncology therapy and pain management. Positively we have won new PCA,
Epidural and Regional Anaesthesia business and trained over 1000 clinicians
across three NHS Trusts, cementing our commitment to provide exceptional after
sales support.
Our opportunity for Infusion Therapies in the UK remains strong and we are
excited to continue our partnership with Micrel as we move forward.
Airon & North America strategy
Airon is a leading manufacturer of pneumatic ventilators, which can be used in
transport and MRI for babies through to adults. It has an established sales
channel through a national distributor. Airon was acquired in January 2024 and
provides a platform to launch Inspiration Healthcare's products into the USA
in the future. It also offers the potential opportunity to expand sales of
Airon products internationally.
Airon has performed well during the year and revenues grew 81% on a pro forma
basis (unaudited) to £2.4m (FY24: £1.3m of which only £0.2m was under our
ownership). As part of the consideration for the acquisition of Airon a
deferred consideration payment of up to $1.0m is due based on meeting sales
targets for the year to April 2025. These targets have now been exceeded and
the full deferred consideration is payable.
North America is an important market and accounts for approximately 50% of the
world demand for neonatal intensive care products and is a significant
strategic market for our longer-term growth. The Company is looking to
develop its product portfolio in the US through the regulatory approval of our
core neonatal ventilation products.
In 2023 the company submitted an initial application to the FDA for approval
of the SLE6000 ventilator. Subsequently this application was withdrawn
pending a more detailed review involving feedback from the FDA and input from
external consultants to ensure the best chance of success. We now have a
detailed plan aimed at developing a product suitable for the US market which
will be submitted for FDA approval in due course. Given the extensive work
required including biocompatibility, human factors and cyber security and the
FDA approval timelines we now believe a realistic timeline for product
approval is H1 2027.
While we now have to wait for approval of the SLE6000 we will look for other
synergistic opportunities to leverage the Airon acquisition to build our
presence in the USA.
Operations
Croydon is our main manufacturing and distribution centre for our Neonatal and
Infusion Therapies products. During the year as part of our efforts to
consolidate operations to Croydon we transferred our Viomedex consumable
manufacturing from our Hailsham location to a third-party manufacturer in
Asia. As a result, we closed our Hailsham site in July 2024 with an
annualised saving of £500,000.
Supply chain challenges over the past couple of years have resulted in higher
than desired inventory levels. Following the strong second half sales and
careful management inventory levels at 31 January 2025 were £13.1m down from
£13.7m at the start of the year. This remains a key area of focus for the
business, and we are targeting further reductions going forward to improve our
working capital.
Having achieved Medical Device Single Audit Program ("MDSAP") certification in
January 2024 for Inspiration Healthcare products we also received MDSAP
approval for Airon's products during the year. MDSAP approval confirms our
Quality Management System processes comply with the requirements of the EU,
USA, Japan, Australia, and Canada and simplify future audits and approvals.
MDSAP is compulsory for Canada and during the year we applied for and now have
Health Canada approval for our LifeStart, SLE1000 nCPAP, Inspire nCPAP and
Inspire rPAP products, with SLE6000 approval anticipated in FY26.
Our R&D team have continued to be focused on current product supply
issues, solving product quality issues as well as working on developing key
features for the SLE6000 and SLE1500 ventilators for the future, and
progressing the FDA registration project.
In the second half of the year, we also implemented an overhead cost reduction
programme to reduce headcount which will deliver annualised savings of
£1.25m.
Fund Raise and Strengthening the Balance Sheet
In June 2024 as part of our efforts to strengthen our balance sheet the Group
announced a Placing, Subscription and Retail Offer which raised £3.0 million
gross 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 for the business.
Board Structure and Stakeholders
As part of its ongoing governance of the business the Board continues to
evaluate the focus and strategy of the business, including the market and
products along with the resources and structure of the organisation.
FY24 saw significant changes to the Board and the leadership of the business:
· Mark Abrahams retired as Chairman in March 2024
· Neil Campbell stepped down as CEO in May 2024 and became a
Non-executive Director of the Group.
· Following Neil stepping down as CEO, I became Interim CEO while a
search for a new CEO was undertaken. With Raffi Stepanian's appointment in
January 2025 I then returned to my role as Non-Executive Chairman.
· Bob Beveridge, Chair of the Audit Committee and Senior Independent
Director stepped down as a Non-Executive Director in January 2025, following
nine years of service to the business.
· Brook Nolson, Chief Operating Officer also stepped down from the
Board and exited the business in November 2024.
· Raffi Stepanian joined the business as Chief Executive Officer in
January 2025. Raffi brings extensive international experience in the
ventilation sector having worked with Braes Medical and GE Healthcare in
leadership roles.
· Richard Jones joined the Board in January 2025 as a Non-Executive
Director and Chair of Audit and brings a wealth of experience in finance and
public markets.
I would like to take this opportunity of thanking Mark, Bob and Brook for
their commitment and service to the business during their tenure and to
welcome Raffi and Richard to the Board. I look forward to working with them
going forward.
We are fortunate to work in a business that helps saves lives from their very
first breath in this world. It is a privilege to work with our customers -
the doctors and nurses around the world - to help make a difference every
day. I would like to thank all of our customers for their continued use of
our products and the trust they place in us to support the lifesaving work
they do.
I would like to thank our employees and partners around the world for all of
their hard work. It is their dedication that makes Inspiration Healthcare the
company that it is and seeing it first hand as the Interim CEO I am proud of
their efforts in rising to the daily challenges we face as a business in such
a positive way.
Finally, I would like to thank our shareholders for their continuing support
for the business particularly after such a challenging period. I believe we
are now moving in the right direction and will be able to deliver on the
potential the business has.
Outlook
FY25 was a pivotal year for the business. We have made changes in our
business with our 'Back to Basics' approach and following a challenging first
half have seen a significant improvement in the second half. The shipments
of the Middle East and new humanitarian aid organisation contracts underpin a
strong start to FY26 and provide us with confidence going forward. After a
period of poor performance, we are now heading in the right direction and I am
excited to be able to work with our new CEO, Raffi Stepanian, to take the
business forward and deliver on the potential it holds.
I would like to summarise by re-iterating my continued belief and confidence
in the Group's ability to capitalise on the opportunities ahead. I believe the
business has a solid portfolio of best-in-class, life-saving neonatal
technologies and infusion products that are addressing a critical need and
that under the leadership of our new CEO and our dedicated team is well placed
to deliver significant long-term sustainable growth.
Roy Davis
Chair
Financial Review
Revenue
Group revenue increased 1.7% to £38.3m (FY24: £37.6m) for the year as
discussed in more detail in the Chair and Chief Executive Officer's report.
Gross profit
Gross profit of £16.4m was 8.4% lower than the prior year (FY24: £17.9m) and
represents a gross margin of 42.8% for the year, reduced from the 47.5%
achieved in FY24. The margin was negatively impacted by sales mix, in
particular from growth in the lower margin Infusion products as well as the
impact from reduced sales of capital items and inventory provisions linked to
end-of-life products.
Operating loss
The Group reported an Operating loss of £14.7m for the year (FY24: loss of
£4.9m). This included non-recurring items of £12.8m (F24: £4.5m) and an
underlying Adjusted Operating Loss of £1.9m (FY24: loss of £0.4m).
Administrative expenses excluding non-recurring items, were unchanged in the
year at £18.3m reflecting strong cost control and the initial benefit from
the cost reduction programme initiated in the second half of the year.
Non-recurring items were £12.8m for the year (FY24: £4.5m). This includes a
non-cash impairment charge of £10.3m recorded against goodwill, intangible
and other non-current assets arising from updated forecasts. Non-recurring
items also includes £1.6m of restructuring costs resulting from the closure
of the Hailsham facility, the CEO and COO departures, redundancies within both
the commercial and operational teams, and provisions for dilapidations at
leasehold properties that are being vacated. Non-recurring items also included
an accrual of £0.8m for the contingent consideration due to the acquisition
of Airon Corporation as Airon's performance in the year has exceeded forecasts
prepared at the time of the acquisition. See note 3 for further detail on
non-recurring items.
Adjusted EBITDA reduced to £0.2m (FY24: £2.0m) because of the lower gross
profit. A reconciliation of operating loss to adjusted EBITDA is set out
below:
2025 2024
£'000 £'000
Operating loss (14,686) (4,927)
Non-recurring items 12,802 4,527
Adjusted Operating loss (1,884) (400)
Depreciation 1,315 1,293
Amortisation of intangible assets 894 1,144
Share based payments (115) (52)
Adjusted EBITDA 210 1,985
Finance expenses increased to £1.1m (FY24: £0.8m) reflecting the increased
level of net debt carried through the course of the year, combined with the
increase in effective interest rate compared with FY24.
The Group recorded a tax credit of £0.8m for the year (FY24: charge of
£0.4m) arising from the recognition of R&D tax credits which the Group
has chosen to exchange for cash refunds.
Loss per share ("LPS")
Basic LPS was 18.8p per share for the year as a result of the loss for the
year (FY24: 8.9p).
Cash flow
Net debt (excluding IFRS16 lease liabilities) increased to £8.3m at 31
January 2025, compared with £6.0m last year, an increase of £2.3m.
Net cash outflow from operations was £1.5m for the year, compared with a
£2.0m inflow in the prior year. This was largely arising from non-recurring
restructuring expenses offset by £0.2m adjusted EBITDA profit and a £0.2m
reduction in working capital.
Cash outflow on investing activities reduced to £1.7m compared with £2.7m in
FY24, with the prior year including £1.1m outflow relating to the acquisition
of Airon. Capitalised development costs were £1.4m in the year (FY24: £1.1m)
and capital expenditure £0.5m (FY24: £0.4m).
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.
In February 2024, the Group renewed and increased its Revolving Credit
Facility ('RCF') with a £10.0m RCF now in place, expiring in February 2027,
with an option to extend for a further year. The Group also continues to have
access to an invoice discounting facility of up to £5.0m. As at 31 January
2025, £7.0m of the RCF and £2.1m of the invoice discounting facility were
being utilised.
In November 2024, the Group's lender agreed to a covenant waiver in relation
to the 31 October 2024 test and a reset of the EBITDA covenant for 31 January
2025 as well as a reset for the interest cover and leverage covenants for the
period through to 31 January 2026 as a result of the continued delay to the
Middle East contract and the trading results achieved through the course of
the year. Additionally, the Group's lender capped drawings on the RCF at
£7.8m, until such time as net leverage is reduced below 3.0x. The Group
continues to be able to draw on the £5.0m invoice discounting facility to
cover day to day working capital requirements. The EBITDA covenant was met at
31 January 2025 and the Directors believe that the current facilities provide
sufficient liquidity headroom for the Group going forwards given the positive
outlook and expected operating cash generation in FY26 which is also expected
to provide adequate headroom in relation to the interest cover and leverage
covenants.
Net assets
The value of non-current assets as at 31 January 2025 totalled £15.9m, a
decrease of £10.1m over the year because of the impairment loss on goodwill
and other non-current assets. Additions to capitalised research and
development costs and property, plant and equipment were offset by
depreciation and amortisation charges for the year.
Inventory reduced by £0.6m in the year to £13.1m (FY24: £13.7m) and is
expected to fall more significantly in the coming year as the delayed Middle
East contract is fulfilled and as excess long-term supply commitments entered
into during the COVID pandemic come to an end. Trade and other receivables
increased by £2.6m to £11.3m (FY24 £8.7m) due to the timing effect of
increased revenues in the final quarter compared with the prior year. Trade
and other payables increased by £1.6m to £8.2m at 31 January 2025 (FY24:
£6.6m) including the deferred consideration of £0.8m due to the shareholders
of Airon and an increase in trade payables due at year end.
Overall net assets at 31 January 2025 were £16.6m (FY24: £29.0m).
Dividends
As a result of the performance of the business in the year, the Board is again
not recommending payment of a final dividend (FY24: nil) making a total
dividend for the year of nil per share (FY24: 0.205p). Going forward, the
Board has decided to maintain the suspension of payments of dividends until
further notice and will keep the dividend policy under review.
Alan Olby
Chief Financial Officer
Consolidated Income Statement (Unaudited)
for the year ended 31 January 2025
2025 2025 2025 2024 2024 2024
Note Total Adjusted
Non-recurring items £'000 £'000 Non-recurring items
£'000 £'000
Adjusted Total
£'000 £'000
Revenue 2 38,251 - 38,251 37,630 - 37,630
Cost of sales (21,873) - (21,873) (19,743) - (19,743)
Gross profit 16,378 - 16,378 17,887 - 17,887
Administrative expenses 3 (31,064) (18,287)
(18,262) (12,802) (4,527) (22,814)
Operating loss (1,884) (12,802) (14,686) (400) (4,527) (4,927)
Finance income 34 - 34 61 - 61
Finance expense (1,096) - (1,096) (810) - (810)
Loss before tax (2,946) (12,802) (15,748) (1,149) (4,527) (5,676)
Income tax 4 781 - 781 (358) - (358)
Loss for the year attributable to owners of the parent company (2,165) (12,802) (14,967) (1,507)
(4,527) (6,034)
Loss per share
Basic (pence per share) 5 (18.82p) (8.85p)
Consolidated Statement of Comprehensive Income (Unaudited)
for the year ended 31 January 2025
2025 2025 2025 2024 2024 2024
Total Adjusted
Non-recurring items £'000 £'000 Non-recurring items
£'000 £'000
Adjusted Total
£'000 £'000
Loss for the year (2,165) (12,802) (14,967) (1,507) (4,527) (6,034)
Other comprehensive expense
(24) -
Currency translation differences (24) - - -
Total other comprehensive expense for the year (24) -
(24) - - -
Total comprehensive loss for the year (14,991) (1,507)
(2,189) (12,802) (4,527) (6,034)
Consolidated Statement of Financial Position (Unaudited)
as at 31 January 2025
(Registered Number: 03587944)
2025 2024
Note £'000 £'000
Assets
Non-current assets
Intangible assets 7 5,333 13,278
Property, plant and equipment 8 5,889 7,137
Right of use assets 4,709 5,578
15,931 25,993
Current assets
Inventories 9 13,083 13,743
Trade and other receivables 10 11,336 8,669
Short-term investments - 197
Cash and cash equivalents 733 412
25,152 23,021
Total assets 41,083 49,014
Liabilities
Current liabilities
Trade and other payables 11 (8,238) (6,591)
Contract liabilities (498) (625)
Borrowings 12 (2,089) (1,654)
Lease liabilities (540) (697)
Provisions 13 (467) -
(11,832) (9,567)
Non-current liabilities
Borrowings 12 (6,985) (5,002)
Lease liabilities (5,361) (5,477)
Provisions 13 (270) -
(12,616) (10,479)
Total liabilities (24,448) (20,046)
Net assets 16,635 28,968
Shareholders' equity
Called up share capital 8,966 6,823
Share premium 19,487 18,905
Reverse acquisition reserve (16,164) (16,164)
Share based payment reserve 165 280
Foreign exchange reserve 24 -
Retained earnings 4,157 19,124
Total equity 16,635 28,968
Consolidated Statement of Changes in Equity (Unaudited)
for the year ended 31 January 2025
Issued Reverse Share based Foreign exchange
share Share acquisition payment reserve Retained
capital premium reserve reserve earnings
Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
6,813 18,842 (16,164) 405 - 25,578 35,474
At 1 February 2023
Loss for the year - - - - - (6,034) (6,034)
Total comprehensive loss for the year - - - - - (6,034) (6,034)
Transactions with owners in their capacity as owners
Issue of ordinary shares, net of transaction costs and tax 10 63 - (73) - - -
Dividends - - - - - (420) (420)
Employee share scheme credit - - - (52) - - (52)
Total transactions with owners 10 63 - (125) - (420) (472)
At 31 January 2024 6,823 18,905 (16,164) 280 - 19,124 28,968
Loss for the year - - - - - (14,967) (14,967)
Total comprehensive loss for the year - - - - - (14,967) (14,967)
Transactions with owners in their capacity as owners
Issue of ordinary shares, net of transaction costs and tax 2,143 582 - - - - 2,725
Exchange differences arising on translation of overseas subsidiaries - - - - 24 - 24
Employee share scheme credit - - - (115) - - (115)
Total transactions with owners 2,143 582 - (115) 24 - 2,634
At 31 January 2025 8,966 19,487 (16,164) 165 24 4,157 16,635
Consolidated Cash Flow Statement (Unaudited)
for the year ended 31 January 2025
2025 2024
Note £'000 £'000
Cash flows from operating activities
Loss for the year (14,967) (6,034)
Adjustments for:
Depreciation and amortisation 2,209 2,437
Remeasurement of leases 13 (210)
Impairment of goodwill and other intangible assets 7 8,492 4,120
Impairment of tangible assets and right of use assets 1,808 -
Employee share scheme credit (115) (52)
Loss on disposal of tangible assets 8 108
Finance income (34) (61)
Finance expense 1,096 810
Income tax 4 (781) 358
(2,271) 1,476
Changes in working capital
Decrease/(increase) in inventories 660 (3,378)
(Increase)/decrease in trade and other receivables (2,214) 3,000
Increase in trade and other payables 1,753 630
(Decrease)/increase in contract liabilities (127) 94
Increase in provisions 737 -
Cash flows (used in)/generated from operations (1,462) 1,822
Taxation (paid)/received (87) 190
Net cash (used in)/generated from operating activities (1,549) 2,012
Cash flows from investing activities
Bank interest received 10 21
Interest received on leases 24 40
Proceeds from sale of short-term investments 197 -
Acquisition of subsidiary, net of cash acquired - (1,114)
Purchase of property, plant and equipment 8 (529) (434)
Purchase of intangible assets 7 (62) (63)
Capitalised development costs 7 (1,379) (1,135)
Net cash used in investing activities (1,739) (2,685)
Cash flows from financing activities
Proceeds from issue of shares 2,725 -
Principal elements of lease payments (758) (829)
Principal elements of lease receipts 310 281
Interest paid on lease liabilities (253) (272)
Interest paid on loans and borrowings (833) (528)
Dividends paid to the holders of the parent - (420)
Proceeds from/(repayment of) invoice financing facility 12 435 (425)
Proceeds from revolving credit facility 12 2,980 1,002
Repayment of revolving credit facility 12 (997) -
Net cash generated from/(used in) financing activities 3,609 (1,191)
Net increase/(decrease) in cash and cash equivalents 321 (1,864)
Cash and cash equivalents at the beginning of the year 412 2,276
Cash and cash equivalents at the end of the year 733 412
Notes forming part of the Consolidated Financial Statements
1 Basis of the announcement
Inspiration Healthcare Group plc ("Company") is a public limited company
incorporated in England and Wales and domiciled in England. The Company's
registered address is Unit 7/8, Commerce Park, Commerce Way, Croydon, CR0 4YL
and the registered company number is 03587944. The Company's ordinary shares
are traded on the AIM Market of the London Stock Exchange plc.
The principal activities of Inspiration Healthcare Group plc and its
subsidiaries (together, the "Group") continue to be the sale, service and
support of critical care equipment to the medical sector including hospitals.
The individual financial statements of each entity in the Group are presented
in the currency of the primary economic environment in which it operates (the
functional currency). The Group Financial Statements are presented in pounds
sterling, which is the presentation currency of the Group.
The financial information included in this preliminary announcement does not
constitute the Company's statutory accounts for the year ended 31 January 2025
but is derived from those accounts. Statutory accounts for the year ended 31
January 2024 have been delivered to the registrar of companies. The auditor
has reported on those accounts; their report was (i) unqualified (ii) did not
include a reference to any matters to which the auditor drew attention to by
way of emphasis without qualifying their report, and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act 2006. The
consolidated financial statements of the Company have been prepared in
accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006 and in accordance with the UK adopted
international accounting standards.
Going concern
The Group relies on a combination of cash generated from operations and
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 customary 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 certain covenant
tests during the year, and agreed revised covenants for future covenant tests,
with further drawdown of the RCF capped at £7.8m until leverage is reduced
below 3.0x.
The Directors have considered financial projections for the next 18 months
covering several scenarios, these include a significant (10%) revenue downside
versus the budget for the period. These projections demonstrate that the Group
can operate within the facilities available to it and meet the relevant
covenant targets for the foreseeable future. The Directors, after taking into
account the available facilities, its trading projections including working
capital requirements, believe that they have a reasonable basis for concluding
that the Group has adequate liquidity 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.
Alternative financial measures
In the reporting of its financial performance, the Group uses certain measures
that are not defined under IFRS, the Generally Accepted Accounting Principles
(GAAP) under which the Group reports. The Directors believe that these
non-GAAP measures assist with the understanding of the performance of the
business. These non-GAAP measures are not a substitute for, or superior to,
any IFRS measures of performance but they have been included as the Directors
consider them to be an important means of comparing performance year-on-year
and they include key measures used within the business for assessing
performance.
The Group refers to the following alternative financial measures:
Measure Definition
Adjusted EBITDA Earnings before interest, tax, depreciation, amortisation, share based
payments and non-recurring items
Adjusted Operating Loss Operating loss before non-recurring items
Net Debt excluding IFRS 16 lease liabilities. Cash and cash equivalents, short term investments, less revolving credit
facility and invoice financing borrowings
2 Revenue
The Group derives revenue from the transfer of goods and services over time
and at a point in time in the following product and geographical split:
2025 2024
£'000 £'000
Products:
Neonatal products 24,652 28,916
Infusion products 11,201 8,533
Ventilation products 2,398 181
Total 38,251 37,630
Geography:
Domestic
- UK 19,589 17,680
- Ireland 694 1,001
International
- Europe 5,613 4,354
- Asia Pacific 5,936 8,436
- Middle East & Africa 2,918 4,206
- Americas 3,501 1,953
Total 38,251 37,630
3 Non-recurring Items
During the year, the Group recognised the following non-recurring items:
2025 2024
£'000 £'000
Impairment of goodwill and other assets 10,300 -
Impairment of capitalised development costs - 4,120
Impairment credit on leased properties - (86)
Acquisition costs - 69
Restructuring 1,584 142
Contingent consideration 813 -
Other 105 282
Total 12,802 4,527
An impairment charge of £10,300,000 (2024: £nil) has been recognised in
respect of the Group's goodwill and other assets following the annual
impairment review. For further information, refer to Note 7, Intangible
Assets.
Restructuring costs of £1,584,000 (2024: £142,000) largely relate to
redundancy and severance payments arising from the closure of our Hailsham
site, as well as payments to Directors for loss of office and expenses
associated with the recruitment of the new CEO. These costs also include
dilapidation provisions of £415,000 associated with the exit of vacated
premises in Hailsham and Croydon.
Contingent consideration of £813,000 (2024: £nil) is due to the shareholders
of Airon, based on revenue targets for the 12-month period ending on 30 April
2025. The maximum amount payable of $1,000,000 has been fully provided for at
31 January 2025 on the basis that managements' forecasts indicate that revenue
targets will be fully met.
Other non-recurring costs of £105,000 relate to legal and professional fees
associated with a contract dispute.
4 Income tax
Analysis of tax for the year is as follows:
2025 2024
£'000 £'000
Current tax
UK corporation tax
Current year (134) -
Prior year adjustment (647) 37
Total current tax (781) 37
Deferred tax
Origination and reversal of temporary timing differences - 321
Total deferred tax - 321
Tax (credit)/charge on loss on ordinary activities (781) 358
The prior year adjustment of £647,000 relates to R&D tax credits for FY23
and FY24.
The tax assessed for the year is higher (2024: higher) than the standard rate
of corporation tax in the UK 25.0% (2024: 24.0%) as explained below:
Effective Tax Rate
2025 2024 2025 2024
£'000 £'000 % %
Loss on ordinary activities before taxation (15,748) (5,676)
Tax using the effective UK corporation tax rate of 25.00% (2024: 24.00%) (3,937) (1,362) 25.0 24.0
Effects of:
Non-deductible expenses 2,260 251 (14.3) (4.4)
Additional deduction for research and development (155) - 1.0 -
Fixed asset differences 1 112 - (2.0)
Surrender of tax losses for R&D tax credit refund 202 - (1.3) -
Adjustment in respect of prior periods (647) 37 4.1 (0.7)
Unrecognised temporary differences 1,495 1,320 (9.5) (23.3)
Total tax (credit)/charge (781) 358
Effective tax rate (6.3)
5.0
5 Loss per ordinary share
Basic loss per share for the year 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 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 in the current and
prior year as the exercise of share options would have the effect of reducing
loss per share and is therefore not dilutive.
2025 2024
Loss attributable to equity holders of the company £'000 (14,967) (6,034)
Weighted average number of shares in issue during the year 79,534,567 68,216,532
Dilutive effect of potential ordinary shares: n/a n/a
Diluted weighted average number of shares in issue during the year n/a n/a
The basic loss per share for the year are as follows:
2025 2024
Loss per share (pence) (18.82) (8.85)
6 Dividends
There was no interim dividend in the year ended 31 January 2025 (2024: 0.205p
per share). The Board is also not proposing to pay a final dividend for the
year (2024: £nil).
7 Intangible assets
Intangible assets Development Intellectual
Goodwill acquired costs property Software Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 February 2023 7,610 5,528 6,097 276 896 20,407
Capitalised in the year - - 1,135 - 63 1,198
Additions arising on business combinations 328 12 - - - 340
At 1 February 2024 7,938 5,540 7,232 276 959 21,945
Capitalised in the year - - 1,379 - 62 1,441
At 31 January 2025 7,938 5,540 8,611 276 1,021 23,386
Accumulated amortisation and impairment
At 1 February 2023 - 1,633 937 276 557 3,403
Charge in the year - 605 338 - 201 1,144
Impairments - - 4,120 - - 4,120
At 31 January 2024 - 2,238 5,395 276 758 8,667
Charge in the year - 605 144 - 145 894
Impairments 7,610 403 461 - 18 8,492
At 31 January 2025 7,610 3,246 6,000 276 921 18,053
Net book value
At 31 January 2025 328 2,294 2,611 - 100 5,333
At 31 January 2024 7,938 3,302 1,837 - 201 13,278
The Group tests goodwill and other intangible assets for impairment on an
annual basis, or more frequently if there are indications that assets may be
impaired. Goodwill and intangible assets are allocated on an individual basis
to individual Cash Generating Units ('CGU'). The Directors have allocated the
business to two CGUs being the legacy business from the combination of
Inspiration Healthcare, Viomedex and SLE, and Airon Corporation.
The recoverable amount of each CGU has been determined from value in use
calculations. The key assumptions for the value in use calculations are the
discount rate and growth rates used for future cash flows and the anticipated
future changes in revenue and costs.
The forecasts for each CGU cover a five-year period are based on the detailed
budget for the year ended 31 January 2026 approved by the Board. The cashflows
beyond the budget are extrapolated for a further four-year period based on
future expectations. This forecast is then extrapolated to perpetuity using a
2.5% (FY24: 2.0%) growth rate.
Annual growth rates for revenues for the five-year forecast period have been
included between 5% and 12% year-on-year and costs between 3% and 5%
year-on-year. A post-tax discount rate of 12.5% (FY24: 12.5%) has been used in
these calculations, equivalent to 15.3% on a pre-tax basis. The discount rate
uses weighted average cost of capital which is reflective of a medical device
Company operating both domestically and internationally.
As a result of the impairment review for the year ended 31 January 2025, an
impairment charge has been recognised in relation to the legacy business of
£10,300,000 following a reassessment of the future cash flows and taking into
account past performance. This impairment loss has been allocated firstly
against the £7,610,000 goodwill of this CGU which has been fully written off
and then on a pro rata basis against other non-current assets of the CGU.
For the Airon CGU, a discount rate of 22.5% would need to be applied for
headroom to be eliminated. Airon CGU was not tested for impairment in FY24 as
this was the year of acquisition.
8 Property, Plant and Equipment
Leasehold improvements Fixtures and fittings Plant, machinery, office equipment Motor Total
vehicles
£'000 £'000 £'000 £'000 £'000
Cost
At 1 February 2023 7,040 121 2,247 58 9,466
Additions 168 11 255 - 434
Disposals (289) (45) (23) (8) (365)
At 31 January 2024 6,919 87 2,479 50 9,535
Additions 46 3 442 38 529
Disposals - (6) (6) (50) (62)
At 31 January 2025 6,965 84 2,915 38 10,002
Accumulated Depreciation
At 1 February 2023 370 65 1,493 41 1,969
Charge for the year 375 7 290 13 685
Disposals (192) (41) (19) (4) (256)
At 31 January 2024 553 31 1,764 50 2,398
Charge for the year 352 10 375 4 741
Disposals - (2) (2) (50) (54)
Impairments (note 7) 908 7 108 5 1,028
At 31 January 2025 1,813 46 2,245 9 4,113
Net book value
At 31 January 2025 5,152 38 670 29 5,889
At 31 January 2024 6,366 56 715 - 7,137
Depreciation charged for the financial year is split between cost of sales
£104,000 (2024: £81,000) and administrative expense £637,000 (2024:
£604,000) in the Consolidated Income Statement.
9 Inventories
2025 2024
£'000 £'000
Raw materials 7,233 7,623
Work in progress 337 1,897
Finished goods 5,513 4,223
Total 13,083 13,743
Inventories are presented net of provisions of £544,000 (2024: £225,000) to
write down the values to management's estimate of net realisable value.
10 Trade and other receivables
2025 2024
£'000 £'000
Trade receivables 9,594 8,071
Loss allowance (247) (498)
Net trade receivables 9,347 7,573
R&D tax credits receivable 786 -
Other taxes and social security 319 -
Net investment in leases 166 489
Other receivables 93 245
Prepayments and accrued income 625 362
Total 11,336 8,669
11. Trade and other payables
2025 2024
£'000 £'000
Trade payables 5,661 4,359
UK corporation tax - 82
Other taxes and social security 404 583
Other payables 184 606
Accrued expenses 1,989 961
Total 8,238 6,591
Accrued expenses include an amount for contingent consideration of £813,000
(2024: £nil) payable to the former shareholders of Airon Corporation. This
amount is based on revenue targets for the 12-month period ending 30 April
2025, with a maximum payout of $1,000,000 if the highest revenue target is
met.
None of the contingent consideration was provided for at 31 January 2024 as
management did not expect the minimum threshold for the earn-out to be met.
However, revenue growth at Airon since its acquisition in January 2024 has led
management to anticipate achieving the targets. Consequently, the full amount
has been provided for as of 31 January 2025. Goodwill has not been adjusted,
as revenue growth factors emerged post-acquisition. The contingent
consideration has been recognised as a non-recurring cost in the current
financial year.
By 30 April 2025, the earn-out period ended with maximum revenue target
exceeded, and the maximum pay out is expected to be paid in June 2025.
12. Borrowings
2025 2024
£'000 £'000
Current liabilities
Invoice Financing Facility 2,089 1,654
Non-current liabilities
Revolving Credit Facility ("RCF") 6,985 5,002
Total 9,074 6,656
Invoice Financing Facility
The Group continues to benefit from an invoice financing facility to borrow
against notifiable trade receivables. The arrangement with the bank is such
that the customers remit cash directly with the bank and invoices are settled
against the facility. The Group continues to bear the credit risk relating to
any defaulting customers and therefore the related trade receivables continue
to be recognised on the Group's Statement of Financial Position. Availability
under the facility is capped at £5,000,000 and borrowings bear interest at
2.05% over base rate. There are no covenants relating to this facility.
Revolving Credit Facility ('RCF')
On 22 February 2024, the Company renewed and extended its RCF facility for a
committed amount of £10,000,000 over three years expiring in February 2027
with the option to extend for a further year. Covenants over interest cover
and leverage are in place and are tested quarterly. The Company received a
waiver from its lender in respect of the 31 January 2024 and 30 April 2024
covenant tests because of extended delays to a material Middle East order. The
Company agreed revised covenants for the period until 31 January 2025
including monthly minimum liquidity target of £1,500,000 and a quarterly
EBITDA target. Interest on borrowings from the RCF is charged at 3.25% over
SONIA.
A further waiver in respect of the 31 October 2024 EBITDA covenant was granted
by the Company's lender with a revision to the 31 January 2025 EBITDA covenant
which was subsequently met. Covenants in place for 2025 and beyond revert to
the original interest cover and leverage measures with the thresholds
increasing quarter on quarter reaching interest cover of greater than 3.0x and
leverage of less than 2.5x for the period ending 31 January 2026.
A temporary cap of £7,800,000 on drawings from the RCF has been put in place
until such time as leverage is reduced below 3.5x.
The movement in the RCF facility during the year was as follows:
2025 2024
£'000 £'000
At 1 February 5,002 4,000
Proceeds from drawdown of loans 2,980 1,002
Repayment of loans (997) -
At 31 January 6,985 5,002
13. Provisions
£'000
At 1 February 2024 -
Reallocation from trade and other payables 312
Unwinding of Discount 10
Charged to Consolidated Income Statement 415
At 31 January 2025 737
Due within one year or less 467
Due after more than one year 270
737
The Group has recognised provisions of £737,000 as at 31 January 2025
relating to leasehold dilapidations. Leasehold dilapidations relate to the
estimated cost of returning a leasehold property to its original state at the
end of the lease in accordance with the lease terms. The main uncertainly
relates to estimating the cost that will be incurred at the end of the lease.
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