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RNS Number : 8273M MyHealthChecked PLC 19 September 2023
MyHealthChecked PLC
("MyHealthChecked", 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 2023.
Financial highlights
· Revenue of £2.5m (H1 2022: £9.8m)
· Adjusted EBITDA loss £296,000 (H1 2022: £372,000 profit)
· Cash balance of £5m available to self-fund next growth phase
Commercial and operational highlights
· Launch of an extensive range of wellness tests into the UK's top
pharmacy retailer
· Investment in IT infrastructure to support customer journey of
extensive range of blood and urine tests
· H1 investment in stockholding (£1.7m) to meet 2023 demand
· Achievement of Healthcare Inspectorate Wales accreditation
· Cyber Essentials Plus renewed for digital security
· Operational streamlining to minimise cash burn
· Appointment of Amber Vodegel as a Non-Executive Director post-period
end
Penny McCormick, Chief Executive Officer of MyHealthChecked PLC, said:
"Despite the reduction in demand for COVID testing during the period under
review, we have been very pleased with the delivery and retail launch of a
broad range of blood and urine tests, progress with the capabilities of our
digital platform, regulatory approval of our portfolio under CE marking, and
achievement of Healthcare Inspectorate Wales accreditation.
"Post-period end we have seen increased demand for COVID testing as we move
towards the winter season, and the Eris and Pirola strains are in the news. We
remain well-placed to provide a reliable and effective supply chain at large
volumes to retail.
"During the period we have further demonstrated the Company's agile and
ambitious capabilities and are poised to build awareness of this vast new
range of tests in a dynamic category, whilst making progress in this new and
exciting sector."
Investor presentation
Penny McCormick, Chief Executive Officer and Adam Reynolds, Chairman will
provide a live presentation relating to the Half-Year Report via the
Investor Meet Company platform on Tuesday 19 September 2023 at 4.30pm. 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)
Adam Reynolds, Chairman via Walbrook PR
Penny McCormick, Chief Executive Officer
SPARK Advisory Partners Limited (NOMAD) Tel: +44 (0)20 3368 3550
Neil Baldwin / Jade Bayat
Dowgate Capital Limited (Broker) Tel: +44 (0)20 3903 7715
David Poutney / Nicholas Chambers
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.
MyHealthChecked (http://www.myhealthchecked.com) is the umbrella brand of a
range of at-home rapid tests, as well as DNA, RNA and blood sample collection
kits which have been created to support customers on their journeys to
wellness. The tests are lateral-flow self-tests, whilst the sample collection
kits enable the collection of blood, urine, nasal or mouth swab samples that
are analysed in partner laboratories for a range of biomarkers. The tests will
also be made 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
Whilst the market has been challenging in 2023, and the inevitable seasonal
COVID reduction has had an impact, we have been able to make significant
inroads into the consumer healthcare space and carve out an identity for
ourselves as a consumer health and wellness test provider. The successful
launch of a strong portfolio of multi-platform tests into the UK's biggest
pharmacy retailer has been a major milestone for MyHealthChecked.
Financial performance
Sales for the six months ended 30 June 2023 fell to £2.5m (six months ended
30 June 2022: £9.8m; year ended 31 December 2022: £22.3m) due to the
anticipated fall in demand for COVID Lateral Flow Tests ("LFTs"). The new
product range was launched in May 2023 into 801 Boots stores and www.boots.com
(http://www.boots.com) , alongside direct sales via www.myhealthchecked.com.
This has been a new category launch and awareness levels will build over time,
driven by marketing activity and store initiatives. 2023 will be a period of
bedding-in whilst awareness is driven through, and customer behaviour is
understood in this new space.
Gross margin increased to 41.3% (six months ended 30 June 2022: 15.4%; year
ended 31 December 2022: 20.8%) due to the release of a surplus accrual for the
processing of COVID PCR nasal swab kits sold in earlier years which were not
returned by customers and have now expired. Excluding this adjustment, the
gross margin achieved on sales in the period was 13.5% reflecting the
dominance of competitively priced LFTs in the product mix.
Overheads were broadly in line with prior years. As previously announced, we
continue to focus on the commercialisation and development of our digital
platform. Total spend on the development and maintenance IT infrastructure
during the period under review amounted to £686,000 (six months ended 30 June
2022: £295,000; year ended 31 December 2022: £856,000) of which £374,000
(six months ended 30 June 2022: £145,000; year ended 31 December 2022:
£310,000) has been capitalised. This investment has been in the expansion of
the recommendation engine and development of the codebase for new blood and
urine tests, as well as enhancements to our Laboratory Information Management
System ("LIMS") to enable medical oversight and compliance with Healthcare
Inspectorate Wales, and the customer dashboard that allows all customers to
securely activate their test kits and enter their personal data, regardless of
their point of purchase. The development of the platform also ensures that
users of our tests have access to a high standard of clear guidance and
information provided by doctors, within a secure digital environment, that is
accessible to healthcare professionals.
Adjusted EBITDA is calculated as follows:
Unaudited Unaudited Audited
30 June 2023 30 June 2022 31 December 2022
£'000 £'000 £'000
Operating (loss)/profit (404) 12 1,506
Depreciation and amortisation 89 169 222
Impairment of intangible assets - - 378
Closure of laboratory costs * - 87 171
Share based payments 19 104 (20)
Adjusted EBITDA (296) 372 2,257
* Excluding loss on disposal of equipment
At 30 June 2023 our cash amounted to £5,015,000 (six months ended 30 June
2022: £6,995,000; year ended 31 December 2022: £7,608,000). At 31 December
2022 the Group had open purchase orders to the value of £2.8m for the
delivery of COVID LFTs (which are manufactured with a 24 month shelf life)
during 2023; by 30 June 2023 this stock had all been received and paid for in
full. Stock at 30 June 2023 amounted to £3.0m, an increase of £1.7m during
the period under review. There are no additional contractual commitments to
purchase COVID LFT stocks during 2023.
Business Review
The consumer healthcare space is dynamic and exciting, and consumers are in a
period of considerable behavioural change post-COVID which will have a major
impact on the future of consumer healthcare in the UK. As a high calibre
provider in the sector we are well-placed, and funded, to build upon our
strong portfolio and explore broader opportunities for business growth as the
market evolves at pace. This is a new phase for MyHealthChecked as our
reliance on COVID reduces, and we are eager to take the next steps through H2
2023 and beyond.
The retail category launch on 18 May 2023 of such a vast multi-platform,
multi-sample range of tests has been unprecedented. MyHealthChecked's range is
unique insofar as it covers saliva, blood, urine and stool collection, across
lateral flow and laboratory assays to deliver a varied portfolio of wellness
and health self-checks and laboratory biomarker and DNA tests. The creation
and launch of a comprehensive range of 20 tests was extremely ambitious, and
the successful delivery of this to a major retailer will remain one of our
biggest product launches - and successes - in perpetuity. The ambitious launch
positions us well in the market and demonstrates, as we did with COVID, our
ability to move with pace to deliver quality and compliant physical and
digital products and services to a tight timescale.
The priority, as agreed with our primary retail partner, has been to achieve
product 'go-live', followed by a period of awareness-building to achieve
product rotation and recommendation. New categories required an investment in
on-shelf fixtures, and we are now firmly focused on educating end-users and
store-staff. We have commenced a journey to achieving this primarily via
social media advertising and PR, along with partnership activity with retail.
This is allowing us to utilise traditional routes such as leafleting within
ecommerce orders in Q3 and trialling social media influencer activity as we
did around Father's Day. We are seeing an improvement in key KPIs including
unit sales, pieces of media coverage and web engagement times and, as we
continue to communicate with our extensive database of existing customers
alongside outreach to new customers, performance tracking will be key to us.
With a focus on ongoing performance, we appointed Amber Vodegel to our Board
on 3 July 2023. Amber's expertise, which includes mobile app development,
digital transformation, and platform development within the health space, with
a focus on driving consumer obsession and maximising user engagement, will
support our focus on launch activation. With her input we can also ensure a
high calibre of marketing expertise in driving the performance of our
portfolio. This will accompany efforts to grow our customer footprint and
strengthen our presence in the market through new retail channels.
Looking ahead, our focus is on growing awareness of this new category and
helping to educate customers on the benefits of self-testing. The category is
very new, and digital service and information enhancements will take
precedence over new assays in the short term. However, we will continue to
work closely with our Scientific Advisory Board to continually assess all new
market requirements, and progress should the market demand such developments.
We are also working with a talented team of technical developers to build out
our digital infrastructure and user journey. Our requirements here are
twofold: that overall, we provide a positive user experience by ensuring our
results are accurate and correct, that our customers can receive and interpret
their test results and actionable guidance correctly, and that we are
compliant with the requirements of Healthcare Inspectorate Wales; and that we
ensure robustness in cyber security, which we have demonstrated successfully
with the renewal of our Cyber Essentials Plus certification.
We have met the technology challenges we set ourselves, for example our sexual
health blood and urine tests require an enhanced level of medical oversight
and customer interaction, as the British Association for Sexual Health and HIV
guidelines require a different pathway for ongoing guidance. Some of the
complexities around our tests have required an intense technical, product and
customer care delivery to meet our ambitious timelines, and we are satisfied
that these brand-new builds provide a solid foundation for ongoing customer
journey enhancements.
The period saw us meet the high standards of governance and patient
safeguarding required to achieve Healthcare Inspectorate Wales Certification
("HIW"). HIW is the equivalent of England's Care Quality Commission ("CQC")
and is the required standard of healthcare-providing organisations that are
headquartered in Wales. As governance and compliance continuously remain a
high focus for us, we are well-placed in 2023 to achieve ISO 13485 and have
made significant progress towards achievement of this in the second half of
the year.
Supply chain management through COVID has challenged all players in the space,
and MyHealthChecked has been responsive throughout the pandemic and has
delivered in an exemplary fashion to high-demand retailers. As demand in Q1
2023 grew we honoured our stock commitments and invested accordingly during
the period. Subsequently, as demand has tapered off, we have no further
commitments to stock and are well-placed to meet post-period uplifts that are
arising due to immunity waning, new strains appearing, and winter/flu season
impacting.
Our cost base and cash resources are also being closely monitored and kept
under review, and we have actively reduced our staff costs post-period,
alongside a detailed review and renegotiation where appropriate of recurring
costs. In Q4 we will also reduce our office space. This will ensure we move
forward in a position to invest in awareness building and improvements that
will directly benefit the customer, with a focus on financially valuable
capital allocations that will strengthen our position and drive growth and
longevity.
Outlook
We will continue to work closely with our retail partners to build awareness
and expect that traction for the new product portfolio will build momentum in
2024 as we activate key initiatives and look to build on the Q1 2024 new year
period when customers are motivated and ready for a new wellness outlook.
Whilst we expect that H2 trading on the wellness tests will remain broadly in
line with run rate, we are working with our partners to drive awareness and
evolve the positioning of the range so that it maximises the opportunity that
home-testing brings. We continue to explore new initiatives around sample
collection including phlebotomy services that will further meet the needs of
the customer, alongside the continuing evolution of our digital user platform
to ensure we continue to excel in our user experience.
Post-period we have seen an uplift in the demand for COVID lateral flow tests,
and as outlined our stock investment means that we are well placed to service
the market. Signs indicate that COVID may become seasonal like flu, and there
may be a cyclical market emerging based on infection rates, for which
MyHealthChecked is well placed to serve.
Driving awareness and educating customers around the benefits of home-testing,
whilst enhancing our services, and growing our retail footprint are our
primary aims ahead. As the dynamic healthcare and investment market evolves,
we will also be open to strategic exploration and welcome conversations that
could bring earnings enhancing strategic opportunities for MyHealthChecked. As
well as delivering ISO 13485 as a strategic goal, we will continue to evaluate
the very best routes to support our customers, our retail partners, and the
NHS as we all navigate a changing healthcare system, and new behaviours.
As always, we thank our committed staff team and our valued shareholders for
their ongoing investment in the future of MyHealthChecked.
Adam
Reynolds
Penny McCormick
Chairman
Chief Executive Officer
18 September 2023
Consolidated statement of comprehensive income
For the 6 months ended 30 June 2023
Unaudited Audited
6 months ended Unaudited Year ended
30 June 6 months ended 31 December 2022
2023 30 June
2022
Notes £'000 £'000 £'000
Revenue 3 2,464 9,832 22,314
Cost of sales (1,446) (8,321) (17,667)
Gross profit 1,018 1,511 4,647
Sales and marketing costs (245) (282) (798)
Other administrative expenses (1,158) (960) (2,087)
Closure of laboratory - (153) (226)
Impairment of intangible assets - - (50)
Share-based payments (19) (104) 20
Administrative expenses (1,177) (1,217) (2,343)
Operating (loss)/profit (404) 12 1,506
Finance payable (1) (3) (5)
Interest receivable 50 - 3
Impairment of goodwill arising on the acquisition of Nell Health - - (987)
Contingent consideration no longer payable on the acquisition of Nell Health - 1,000 1,000
Limited
(Loss)/profit before income tax 3 (355) 1,009 1,517
Tax credit 36 - -
(Loss)/profit for the period (319) 1,009 1,517
Attributable to owners of the parent: (319) 1,009 1,517
(Loss)/earnings per Ordinary Share - basic 4
(0.61)p 1.95p 2.94p
Fully diluted earnings per Ordinary Share 4 (0.61)p 1.94p 2.92p
( )
Consolidated statement of financial position
As at 30 June 2023
Unaudited Unaudited Audited
30 June 2023 30 June 2022 31 December 2022
Notes £'000 £'000 £'000
Non-current assets
Property, plant and equipment 118 88 75
Right-of-use assets 63 88 75
Intangible assets 1,397 2,520 1,098
Total non-current assets 1,578 2,696 1,248
Current assets
Inventories 3,004 711 1,284
Trade and other receivables 537 3,224 1,288
Cash and cash equivalents 5,015 6,995 7,608
Total current assets 8,556 10,930 10,180
Total assets 10,134 13,626 11,428
Current liabilities
Trade and other payables 1,544 5,094 2,525
Lease liabilities 28 26 29
Total current liabilities 1,572 5,120 2,554
Non-Current liabilities
Lease liabilities 12 40 24
Total non-current liabilities 12 40 24
Total liabilities 1,584 5,160 2,578
Net assets 8,550 8,466 8,850
Share capital 5 780 780 780
Deferred shares - 6,359 6,359
Share premium account - 16,887 16,887
Capital redemption reserve - 1,815 1,815
Reverse acquisition reserve (6,044) (6,044) (6,044)
Retained earnings 13,814 (11,331) (10,947)
Total equity 8,550 8,466 8,850
Consolidated statement of changes in equity
For the 6 months ended 30 June 2023
Share capital Share Premium Capital redemption reserve Reverse acquisition Retained earnings Total
reserve
Deferred
shares
£ '000 £'000 £'000 £'000 £'000 £'000
£'000
Equity as at 756 16,671 1,815 (6,044) (12,444) 7,113
1 January 2022 6,359
Profit for the year - - - - 1,517 1,517
-
Total - - - - 1,517 1,517
comprehensive profit -
The Genome Store deferred consideration 24 216 - - - 240
-
Share-based payments - - - - (20) (20)
-
Equity as at 780 16,887 1,815 (6,044) (10,947) 8,850
31 December 2022 6,359
Loss for the period - - - - (319) (319)
-
Total - - - - - (319) (319)
comprehensive profit
Share-based payments - - - - 19 19
-
Capital reduction - (6,359) (16,887) (1,815) - 25,061 -
Equity as at 780 - - (6,044) 13,814 8,550
30 June 2023 -
Consolidated statement of cash flows
For the 6 months ended 30 June 2023
Unaudited Audited
6 months ended Unaudited Year ended
30 June 6 months ended 31 December 2022
2023 30 June
2022
£'000 £'000 £'000
Cash flows from operating activities
(Loss)/profit before taxation (355) 1,009 1,517
Adjustments for:
Non-cash movement in provisions and accruals (760) (1,000) (1,000)
Depreciation and amortization 89 169 222
Impairment of intangible assets - - 1,365
Loss on sale of laboratory assets - - 55
Finance income (50) - (3)
Finance expenses 1 3 5
Share-based payments 19 104 (20)
Adjusted operating (loss)/profit before changes in (1,056) 285 2,141
working capital
Changes in working capital
Increase in inventory (1,720) (214) (787)
Decrease/(increase) in trade and other receivables 751 (892) 1,044
(Decrease)/increase in trade and other payables (221) 1,779 (790)
Cash (used)/generated in operations (2,246) 958 1,608
Bank interest received 50 - 3
Interest paid (1) (3) (5)
Net cash (outflow)/inflow from operating activities (2,197) 955 1,606
Investing activities
Purchase of property, plant and equipment (45) (17) (22)
Purchase of intangible assets (374) (296) (316)
Net cash flows used in investing activities (419) (313) (338)
Taxation
Research and development tax credit 36 - -
Cash inflow from taxation 36 - -
Financing activities
Repayment of lease liability (13) (34) (47)
Cash outflows from financing activities (13) (34) (47)
Net change in cash and cash equivalents (2,593) 608 1,221
Cash and cash equivalents at the beginning of the period 7,608 6,387 6,387
Cash and cash equivalents at the end of the period 5,015 6,995 7,608
Notes to the unaudited interim financial information for the 6 months ended 30
June 2023
1. General information
MyHealthChecked PLC (the "Group") 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 diagnostic healthcare products.
2. Significant accounting policies
Basis of preparation
The interim financial information for the six months ended 30 June 2023, which
was approved by the Board of Directors on 18 September 2023, 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 2022 and expected to be adopted in the financial
year ending 31 December 2023.
The interim financial information includes unaudited comparative figures for
the unaudited 6 months to 30 June 2022 and comparatives for the year ended 31
December 2022 that have been extracted from the audited financial statements
for that year. The financial statements for the year ended 31 December 2022
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 Group 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 2023 30 June 2022 31 December 2022
£'000 £'000 £'000
Covid related products 2,342 9,832 22,305
Other 122 - 9
Revenue from the provision of diagnostic healthcare products 2,464 9,832 22,314
Loss/(profit) for the period from provision of diagnostic healthcare products (88) 433 1,987
Corporate costs (316) (421) (481)
Net finance income/(expense) 49 (3) (2)
Deferred consideration adjustment - 1,000 13
Group (loss)/profit before tax (355) 1,009 1,517
Cash 5,015 6,995 7,608
Segment assets 5,066 6,579 3,778
Corporate assets 53 52 42
Total assets 10,134 13,626 11,428
Segment liabilities 1,444 4,973 2,105
Corporate liabilities 140 187 473
Total liabilities 1,584 5,160 2,578
4. (Loss)/profit per Ordinary Share
Unaudited Unaudited Audited
30 June 2023 30 June 2022 31 December 2022
(restated) (restated)
Basic and diluted (loss)/profit per Ordinary Share (restated)
(Loss)/profit for the period £(319,000) £1,009,000 £1,517,000
Weighted average number of shares - basic 52,005,932 51,628,000 51,620,000
Weighted average number of shares - fully diluted 52,005,932 51,981,000 51,881,000
(Loss)/profit) per share - basic (0.61)p 1.95p 2.94p
Fully diluted (loss)/profit per share (0.61)p 1.94p 2.92p
Basic (loss)/profit per share is calculated by dividing the (loss)/profit
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 2023 the effect of the share options was considered
anti-dilutive. The comparative figures been restated to reflect the impact
of the share consolidation referred to in note 5 below.
5. Share capital
On 17 January 2023 the Court approved the reduction of the share capital of
the Company, involving the cancellation of all the Deferred Shares, the Share
Premium Account and the Capital Redemption Reserve. The purpose of the
Capital Reduction was to create distributable reserves.
On 11 May 2023, 13 new Ordinary Shares were allotted to the Company's
registrars, Neville Registrars Limited, so that the total number of existing
Ordinary Shares would be exactly divisible by 15 for the share
consolidation. On 12 May 2023 the 780,088,980 existing Ordinary Shares of
0.1 pence each were consolidated on a 15 for 1 basis, such that every 15
existing Ordinary Shares were consolidated into 1 Ordinary Share of 1.5p pence
in nominal value. On completion of the share consolidation the Company had
52,005,932 new Ordinary Shares in issue.
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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