REG - MyHealthChecked PLC - Half-Year Report
21/09/2022 07:01
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RNS Number : 0530A MyHealthChecked PLC 21 September 2022
MyHealthChecked PLC
("MyHealthChecked", "MHC", the "Group" or the "Company")
Half-Year Report
MyHealthChecked PLC, the consumer home-testing healthcare company, announces
its unaudited half-year report for the six months ended 30 June 2022, which
were stronger than expected and ahead of management expectations.
Financial Highlights
● Revenue up circa threefold to £9.8m (H1 2021: £3.3m)
- Post-period end: Record breaking July revenues of £6.8m
(unaudited)
● Adjusted EBITDA improved to £0.37m (H1 2021: loss of £0.20m)
● Improvement in Gross Profit to £1.5m (H1 2021: £1.1m)
● Net cash generated from operating activities of £0.96m (H1 2021: £1.29m
utilised)
● Cash balance at period end of £7.0m (H1 2021: £2.2m)
- Whilst continuing to invest across the business for future growth
● Strong cash generation and balances ensure next growth phases are self-funded
Commercial & Operational Highlights
● Distribution of FlowFlex™ COVID-19 lateral flow test kits into top 2
pharmacy retailers
● Over 6.4m COVID lateral flow tests delivered into the market, with a further
5m delivered post-period end
● Launch of new self-funded portfolio DNA tests
● Successful launch of DNA at-home wellness test range on Amazon
● Development technology builds for new blood testing launch in Q4 2022
● Retailer engagement around new testing portfolio
Penny McCormick, Chief Executive Officer of MyHealthChecked PLC, said: "We
have exceeded our expectations for revenue performance in the first half of
the year, and have further demonstrated our position of strength which has
been earned through strong delivery and consistent customer service, despite
even greater COVID unpredictability than experienced in 2021. Cash generation
has been a top KPI for us, to ensure that we can self-fund our next growth
phases and invest in building great technology and services for a successful
and sustainable future. I want to thank each person who has delivered for MHC
this year, doing so alongside the work being undertaken as we work towards a
new portfolio and associated launches, which we are excited to share with the
market in Q4."
Investor presentation
Penny McCormick, Chief Executive Officer and Nicholas Edwards, Chief
Financial Officer, will provide a live presentation relating to the Half-Year
Report via the Investor Meet Company platform tomorrow (Thursday 22 September
2022) at 4:30pm BST. The presentation is open to all existing and potential
shareholders.
Investors can sign up to Investor Meet Company for free and register for the
presentation via the link below:
https://www.investormeetcompany.com/myhealthchecked-plc/register-investor
(https://urldefense.proofpoint.com/v2/url?u=https-3A__www.investormeetcompany.com_myhealthchecked-2Dplc_register-2Dinvestor&d=DwMF-g&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=RXEgD2sy17iU21u6z4qOYU9uK8WGQ51N8K4QC3EH2Vk&m=DCSKgk93brPCPByveWXCbtSpix8rPXHizTENaAlj1N4&s=oRdbQWH1sa_h0HLjZZujH45KVSwoXKDWzZfdGEHM4V0&e=)
MyHealthChecked PLC www.myhealthcheckedplc.com (http://www.myhealthcheckedplc.com)
Penny McCormick, Chief Executive Officer via Walbrook PR
Nicholas Edwards, Chief Financial Officer
SPARK Advisory Partners Limited (NOMAD) Tel: +44 (0)20 3368 3550
Neil Baldwin
Oberon Capital Ltd (Broker) Tel: +44 (0)20 3179 5344
Mike Seabrook mikeseabrook@oberoninvestments.com (mailto:mikeseabrook@oberoninvestments.com)
Walbrook PR Ltd (Media & IR) Tel: +44 (0)20 7933 8780 or myhealthcheckedplc@walbrookpr.com
(mailto:myhealthcheckedplc@walbrookpr.com)
Paul McManus / Alice Woodings Mob: +44 (0)7980 541 893 / +44 (0)7407 804 654
About MyHealthChecked PLC (www.myhealthcheckedplc.com
(http://www.myhealthcheckedplc.com) )
MyHealthChecked PLC, based in Cardiff, is an AIM-quoted pioneering UK
healthcare company focused on a range of at-home healthcare and wellness
tests, supported by a user-friendly digital interface.
MyHealthChecked (http://www.myhealthchecked.com) is the umbrella brand of a
range of at-home wellness tests that are available online, and will be viable
for over-the-counter purchase.
The MyHealthChecked portfolio has been identified as part of a change in
mindset as customers become more familiar with the concept of accessible
healthcare in the growing at-home testing kit market with a focus on
accessibility at the right price, led by UK-based experts.
CHAIRMAN AND CEO JOINT STATEMENT
We are delighted with the delivery of a robust financial performance during
the first half of 2022, which has been achieved alongside delivery of our
other Company milestones including product and technical development and
product launches. Significantly, this included the successful development,
build and launch of our new portfolio of DNA wellness test panels, which has
been our first milestone launch following the success of our COVID testing
portfolio. We have sustained our progress in the COVID space which has become
increasingly competitive this year, demonstrating that once again we have
nurtured our customer base through high levels of uncertainty and surge
demand, with strong execution having added the distribution of lateral flow
tests to our "at-home" product portfolio.
This performance has been underpinned by a strong customer base, robust
partner suppliers, and most importantly, a committed team who have delivered
another superb set of results. Our thanks go to each person who has worked to
deliver as part of this team for MHC this year, together we are energised and
eager to deliver our new product launches in the coming months.
Financial performance - supply chain management and customer service
We traded strongly through Spring which far exceeded expectations with revenue
delivery of £9.8m (six months ended 30 June 2021: £3.3m; year ended 31
December 2021: £16.4m) and an adjusted EBITDA achievement of £372,000 (six
months ended 30 June 2021: £199,000 loss; year ended 31 December 2021:
£2,729,000). Revenue growth in the period was driven by high volume
distribution of COVID lateral flow tests ("LFTs") which were supplied into top
pharmacy retailers via both in-store and online channels. Demand spiked in
April as direct-to-consumer purchases were driven by the Government's
cessation of free lateral flow testing for the general public, and a change in
consumer behaviour to 'self-elected' lateral flow testing. Store distribution
increased throughout the first half of the year, building a reach that spanned
impulse travel outlets through to flagship top-tier city-centre stores.
During the period the business managed a high-volume national supply chain,
shipping over 6.4m COVID tests into the market and ensuring that we carefully
managed purchasing and logistics in an unpredictable and challenging global
situation.
Gross margins have reduced to 15.4% (six months ended 30 June 2021: 33.6%;
year ended 31 December 2021: 31.3%) reflecting the change in product mix
from higher margin COVID PCR testing to LFTs in what is a competitive, high
demand environment, and whilst the margins associated with LFTs are lower than
laboratory testing, we have used our best efforts to balance customer value
with the promise of a first-class, reliable supply chain management.
Overheads were broadly in line with prior years. In April we took the decision
to close our Manchester laboratory operation, reducing future operational
costs by approximately £25,000 per month. Our lab and experienced staff team
played a key role in securing major contracts and servicing customer orders in
2021, and our team delivered during peak demand phases. The closure has
enabled the business to focus on the commercialisation and development of our
digital platform, and future investment will be channelled into strengthening
the areas that provide the greatest long term growth potential, namely our
digital platform, complementary services, and commercialisation.
Adjusted EBITDA is calculated as follows:
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
£'000 £'000 £'000
Operating profit/(loss) 12 (267) 2,046
Depreciation and amortisation 103 61 157
Impairment provision - - 414
Closure of laboratory costs * 153 - -
Share based payments 104 7 112
Adjusted EBITDA 372 (199) 2,729
* Includes additional depreciation of £66,000
As a performance milestone on the acquisition of Nell Health Limited has not
been met the Directors believe that the contingent deferred consideration of
£1m will no longer be payable and have therefore released the provision for
this amount. Consequently the Group's profit before and after taxation
amounted to £1,009,000 (six months ended 30 June 2021: £269,000 loss; year
ended 31 December 2021: £2,004,000) giving a basic earnings per share of
0.13p (six months ended 30 June 2021: 0.04p loss; year ended 31 December 2021:
0.28p) and fully diluted earnings per share of 0.13p (year ended 31 December
2021: 0.27p).
Our careful delivery and focus on expenditure has also enabled us to retain a
robust cash position with cash balances as at 30 June 2022 of £6,995,000 (six
months ended 30 June 2021: £2,214,000; year ended 31 December 2021:
£6,387,000). This marks the achievement of cash KPIs and our commitment to
generating income for investment in our future portfolio and rollout.
New product launches
The delivery of our testing portfolio, and subsequent soft launch, has been a
significant milestone for us in 2022 as we have begun to build a portfolio of
consumer wellness tests to support market needs outside of the pressurised
NHS. Our DNA tests have been developed in house, using SNPs ("Single
Nucleotide Polymorphisms") that must meet specific criteria before our
Scientific Advisory Board approves them for inclusion within our tests, and
have been developed to meet an anticipated change in consumer behaviour to
self-management and preventative wellness. Our initial portfolio has been
priced competitively within the DNA space for accessibility, and whilst it is
far too early to comment on market position, our initial launch on Amazon and
ongoing retailer discussions have indicated that the market is receptive to
at-home wellness testing, including those using DNA extraction methods. We
continue to work towards expanding our distribution network for this new
portfolio.
Technology Developments
A key development area for us in the first half of this year has been our
digital platform, which includes a simple reporting format for our new DNA
tests. We are further expanding this to accommodate our upcoming product
launches, whilst ensuring risk, customer safety, GDPR, data, security,
regulations and governance are at the core of our digital evolution. Our
platform has been used directly by well over 100,000 customers and provides a
great customer experience that meets with the approval of our direct at-home
customers and our retail partners. Our investment and development team
continues to channel into the building of a 'growth stack' where the emphasis
is on technology that allows for growth and auto scaling as our volume
increases, focusing on a modular approach that will ensure our platform is
agile, scalable and adaptable to the evolving digital landscape.
Post-period achievements
July 2022 was a record-breaking month with revenue of £6.8m (unaudited) after
the delivery of over 5.5m COVID LFTs into the market in that month alone.
Alongside this delivery we have made significant progress on building a Phase
2 portfolio of further wellness products ready for launch in Q4 2022, which
have been market validated using quantitative customer insights. These tests,
that predominantly use blood sampling methods, will further strengthen our
range, and enable us to provide the most popular tests, and subsequent results
on our proven, simple to use digital reporting platform.
Market readiness and new launches
Our team has grown in terms of calibre through the period, with the
appointment of digital development expertise, product management and marketing
personnel, along with the appointment of additional medical advisors and
knowledgeable subject matter experts in key marketing disciplines. We will
execute a significant marketing push in line with our new product launches,
and look forward to providing an update as we build momentum towards our
launches. Much of this strategy is being shaped by further qualitative market
insights through Q3 and Q4, as we invest in listening to a customer base that
has emerged since the pandemic with new perspectives and behaviours. We will
use this information to further shape our strategy and ensure that our
products, services, and messaging resonates with our customer base and brings
end users into a relationship development funnel.
Outlook
We have delivered strong revenue and operational performance in the first half
of 2022, which, alongside new product launches and the building of a robust
strategic growth plan, we believe will significantly support our customer base
in meeting their health needs. Through clear decision making and proactive
routes to self-selection, we can add value to the customer journey. We are
filled with optimism and energy for the remainder of the year, where we will
see our commercial, digital and product teams continue to strengthen, and
deliver the builds and rollout plans that will underpin further growth.
Our half year and post-period performance has further demonstrated the
establishment of a strong, credible, commercially focused operation that is
committed to growth and delivery, and our excitement for next year is further
heightened by the fact that we are still in the relatively early stages of our
growth plan, which is anchored within at-home testing. Our Management and
Board firmly believe in MyHealthChecked and are committed to building further
upon this position of strength that has been achieved, so far, in 2022.
Adam Reynolds Penny McCormick
Chairman Chief Executive Officer
21 September 2022
Consolidated statement of comprehensive income
For the 6 months ended 30 June 2022
Unaudited Audited
6 months ended Unaudited Year ended
30 June 6 months ended 31 December 2021
2022 30 June
2021
Notes £'000 £'000 £'000
Revenue 3 9,832 3,274 16,376
Cost of sales (8,321) (2,174) (11,251)
Gross profit 1,511 1,100 5,125
Other administrative expenses (1,395) (1,360) (2,553)
Impairment of intangible assets - - (414)
Share-based payments (104) (7) (112)
Administrative expenses (1,499) (1,367) (3,079)
Operating profit/(loss) 12 (267) 2,046
Finance expenses (3) (2) (2)
Additional consideration payable on the acquisition of The Genome Store - - (40)
Limited
Contingent consideration on the acquisition of Nell Health Limited no longer 1,000 - -
payable
Profit/(loss) before income tax 1,009 (269) 2,004
Tax - - -
Profit/(loss) for the period 3 1,009 (269) 2,004
Attributable to owners of the parent: 1,009 (269) 2,004
Earnings/(loss) per ordinary share - basic 4
0.13p (0.04p) 0.28p
Fully diluted earnings per ordinary share 4 0.13p - 0.27p
( )
Consolidated statement of financial position
As at 30 June 2022
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
Notes £'000 £'000 £'000
Non-current assets
Property, plant and equipment 88 152 163
Right-of-use assets 88 - -
Intangible assets 2,520 590 2,289
Total non-current assets 2,696 742 2,452
Current assets
Inventories 711 783 497
Trade and other receivables 3,224 3,114 2,332
Cash and cash equivalents 6,995 2,214 6,387
Total current assets 10,930 6,111 9,216
Total assets 13,626 6,853 11,668
Current liabilities
Trade and other payables 5,094 2,994 3,315
Lease liabilities 26 - -
Deferred taxation - 87 -
Deferred consideration and other provisions - 226 1,240
Total current liabilities 5,120 3,307 4,555
Non-Current liabilities
Lease liabilities 40 - -
Total non-current liabilities 40 - -
Total liabilities 5,160 3,307 4,555
Net assets 8,466 3,546 7,113
Share capital 5 780 725 756
Deferred shares 6,359 6,359 6,359
Share premium account 16,887 15,513 16,671
Capital redemption reserve 1,815 1,815 1,815
Reverse acquisition reserve (6,044) (6,044) (6,044)
Retained earnings (11,331) (15,745) (12,444)
Share-based payment reserve - 923 -
Total equity 8,466 3,546 7,113
Consolidated statement of changes in equity
For the 6 months ended 30 June 2022
Share capital Share Premium Share-based payment reserve Capital redemption reserve Reverse acquisition Retained earnings Total
reserve
Deferred
shares
£ '000 £'000 £'000 £'000 £'000 £'000 £'000
£'000
Equity as at 518 12,442 916 1,815 (6,044) (15,476) 530
1 January 2021 6,359
Profit for the year - - - - - 2,004 2,004
-
Total - - - - - 2,004 2,004
comprehensive profit -
Transfer from share- based payment reserve - - (916) - - 916 -
-
Issue of shares net of expenses 194 2,979 - - - - 3,173
-
Conversion of loan note and interest 13 92 - - - - 105
Exercise of options 2 - 18 - - - - 20
Other share issue 1 16 - - - - 17
Share-based payments - - - - - 112 112
-
Acquisition of Nell Health Limited 28 1,124 - - - - 1,152
Equity as at 756 16,671 - 1,815 (6,044) (12,444) 7,113
31 December 2021 6,359
Profit for the period - - - - - 1,009 1,009
-
Total - - - - - - 1,009 1,009
comprehensive profit
Share-based payments - - - - - 104 104
-
The Genome Store deferred consideration 24 216 - - - - 240
-
Equity as at 780 16,887 - 1,815 (6,044) (11,331) 8,466
30 June 2022 6,359
Consolidated statement of cash flows
For the 6 months ended 30 June 2022
Unaudited Audited
6 months ended Unaudited Year ended
30 June 6 months ended 31 December 2021
2022 30 June
2021
£'000 £'000 £'000
Cash flows from operating activities
Profit/(loss) before taxation 1,009 (269) 2,004
Adjustments for:
Deferred consideration adjustment (1,000) - 40
Decrease in provisions - - (26)
Depreciation and amortization 169 61 157
Impairment of intangible assets - - 414
Finance expenses 3 2 2
Share-based payments 104 7 112
Adjusted operating profit/(loss) before changes in 285 (199) 2,703
working capital
Changes in working capital
Increase in inventory (214) (781) (494)
Increase in trade and other receivables (892) (2,918) (2,124)
Increase in trade and other payables 1,779 2,610 2,931
Cash generated/(used) in operations 958 (1,288) 3,016
Other interest paid (3) (2) (2)
Net cash inflow/(outflow) from operating activities 955 (1,290) 3,014
Investing activities
Purchase of property, plant and equipment (117) (128) (147)
Purchase of intangible assets (296) (3) (102)
Acquisition of Nell Health Limited - - (50)
Net cash flows used in investing activities (413) (131) (299)
Financing activities
Issue of ordinary shares (net of issue expenses) - 3,174 3,211
New lease finance 100 - -
Repayment of lease liability (34) (5) (5)
Net cash inflows from financing activities 66 3,169 3,206
Net change in cash and cash equivalents 608 1,748 5,921
Cash and cash equivalents at the beginning of the period 6,387 466 466
Cash and cash equivalents at the end of the period 6,995 2,214 6,387
Notes to the unaudited interim financial information for the 6 months ended 30
June 2022
1. General information
MyHealthChecked PLC is a public limited company incorporated and domiciled in
England and Wales. The registered office of the Company is The Maltings, East
Tyndall Street, Cardiff, CF24 5EA. The registered company number is 06573154.
The principal activity of the Group is in the development and
commercialisation of at-home health diagnostics medical tests.
2. Significant accounting policies
Basis of preparation
The interim financial information for the six months ended 30 June 2022, which
was approved by the Board of Directors on 20 September 2022, does not
constitute statutory accounts as defined by section 434 of the Companies Act
2006.
These interim consolidated financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting. They do not include all
disclosures that would otherwise be required in a complete set of financial
statements.
The financial information presented is unaudited and has been prepared using
the same accounting policies as those adopted in the financial statements for
the year ended 31 December 2021 and expected to be adopted in the financial
year ending 31 December 2022.
The interim financial information includes unaudited comparative figures for
the unaudited 6 months to 30 June 2021 and comparatives for the year ended 31
December 2021 that have been extracted from the audited financial statements
for that year.
The financial statements for the year ended 31 December 2021 were reported on
by the Company's auditors and delivered to the Registrar of Companies. The
report of the auditors was unqualified and did not contain an adverse
statement under section 498 (2) or (3) of the Companies Act 2006.
In the opinion of the Directors, the interim financial information for the
period presents fairly the financial position and the results from operations
and cash flows for the period.
Going concern
The interim financial statements have been prepared under the going concern
basis as the Directors have undertaken a review of the future financing
requirements of the ongoing operation of the business and considers the Group
is able to meet its working capital requirements.
3. Segment information
In the opinion of the directors, the Group has one class of business, being
that of the provision of diagnostic healthcare products. All the segment
assets associated with the provision of diagnostic healthcare products are
located in the UK.
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
£'000 £'000 £'000
Revenue from the provision of diagnostic healthcare products 9,832 3,274 16,376
Profit for the period from provision of diagnostic healthcare products 430 131 2,815
Corporate costs (421) (400) (771)
Deferred consideration adjustment 1,000 - (40)
Group profit/(loss) before and after tax 1,009 (269) 2,004
Cash 6,995 2,214 6,387
Segment assets 6,579 4,543 5,221
Corporate assets 52 96 60
Total assets 13,626 6,853 11,668
Segment liabilities 4,973 3,070 3,057
Corporate liabilities 187 237 1,498
Total liabilities 5,160 3,307 4,555
4. Profit/(loss) per share
Unaudited Unaudited Audited
30 June 2022 30 June 2021 31 December 2021
Basic and diluted
Profit/(loss) for the period £1,009,000 £(269,000) £2,004,000
Weighted average number of shares - basic 774,420,000 665,654,000 710,852,000
Weighted average number of shares - fully diluted 797,488,000 - 744,056,000
Profit/(loss) per share 0.13p (0.04)p 0.28p
Fully diluted profit per share 0.13p - 0.27p
Basic profit/(loss) per share is calculated by dividing the profit/(loss)
attributable to equity holders of the Company by the weighted average number
of ordinary shares in issue during the period. Due to the loss in the six
month period ended 30 June 2021 the effect of the share options was considered
anti-dilutive and hence no diluted loss per share information has been
provided.
5. Share capital
On 22 February 2021, 194,285,714 ordinary shares were at issued at 1.75p per
share for a total consideration of £3.4 million before expenses of £227,000
and the convertible loan note (plus accrued interest) was converted into
13,138,647 shares at an issue price of 0.8p per share. On the acquisition of
Nell Heath Limited on 3 July 2021 a further 27,842,931 new ordinary shares of
0.1p each were issued at 4.14p per share as part of the initial consideration
payable of £1.2m. In addition, 2,500,000 EMI options were exercised during
the year at a price of 0.8p per share and 500,000 shares were issued to Ms
McCormick at a price of 3.5p in part settlement of her performance related
pay.
On 25 March 2022, 24,000,000 new ordinary shares of 0.1p were issued to settle
the deferred consideration payable on the acquisition of The Genome Store
Limited of £240,000 after all performance milestones were met.
This interim financial statement will be released in accordance with the AIM
Rules for Companies, available shortly on the Company's website at
https://investors.myhealthchecked.com/.
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