REG - MyHealthChecked PLC - Half-year Report
26/09/2024 07:00
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RNS Number : 6647F MyHealthChecked PLC 26 September 2024
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 2024.
Financial highlights
· Revenue of £0.9m (H1 2023: £2.5m; FY 2023: £11.0m)
· Adjusted EBITDA loss £1,199,000 (H1 2023: £296,000; FY 2023:
£15,000 profit)
· Cash balances of £6.05m (H1 2023: £5.02m; FY 2023: £7.75m)
available to self-fund next growth phase
· Contingent VAT reclaim gain (net of associated costs) of c. £1.67m
Commercial and operational highlights
· Over 55,000 Wellness test sold to consumers YTD
· Confirmed orders received to date for the delivery of over 3m COVID
tests during H2
· Wellness launch in online retailer Pharmacy2U
· Agreement to distribute PocDoc Healthy Heart Check to key retail
customer
· ISO 13485 and ISO 27001 certifications achieved
· Investment in IT infrastructure to support customer journey of
extensive range of blood and urine tests
· Cyber Essentials Plus renewed for digital security
Penny McCormick, Chief Executive Officer of MyHealthChecked PLC, said: "We
have been pleased with the performance of Wellness sales in H1 and are working
closely with Boots, our primary retailer, to build out awareness-building
promotional activities.
"COVID business continues to be seasonal, and the significant summer demand
made good use of any surplus stock procured from MHC in 2023, and we enter the
winter 2024 period with a confirmed order book delivering solid revenue in H2.
"Whilst we've focused on driving sales in the new Wellness category and
securing ongoing COVID revenue, we've been committed in 2024 to self-funding
compliance and IT infrastructure investments which will underpin our growth
plan. We have in place exceptionally robust product development processes in
line with ISO 13485, and an IT infrastructure that enables us to explore
next-level strategic developments with retail.
"Post-period, we have expanded our range with PocDoc, a new heart check panel
that connects with the NHS and is complementary to our existing portfolio. As
this dynamic new category continues to evolve we will evaluate our portfolio
on an ongoing basis and add in new technology where we can improve healthcare
outcomes for customers at retail.
"We have also appointed Proactive Consultancy Group ("Proactive"), an
award-winning medical industry VAT specialist, to review our VAT returns in
relation to our B2C COVID testing. Proactive has been successful in recovering
VAT for several COVID testing providers by demonstrating to HMRC that certain
sales should have been VAT-exempt."
Investor presentation
A video presentation on the interim results and business outlook, delivered by
the CEO, will be available to view on the Company's website later today:
https://investors.myhealthchecked.com/investors/presentations
(https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Finvestors.myhealthchecked.com%2Finvestors%2Fpresentations&data=05%7C02%7Cpenny%40myhealthchecked.com%7C0707d70931fa449597a208dcc9816ba7%7Cb07e4ca8f3b642448b3734766a4cc467%7C0%7C0%7C638606804927187605%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C0%7C%7C%7C&sdata=VWe2B7916GzixYNjNsNvFw2xzGG63vf%2FPn%2Bg7gc%2FjwE%3D&reserved=0)
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 are
made available through MHC online and through retail partners in-store and
online.
The MyHealthChecked portfolio has been identified as part of a change in
mindset as customers become more familiar with the concept of accessible
healthcare and proactive wellness 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
The first half of 2024 has seen the Group deliver on a number of key
compliance and operational projects to support its retail growth plans, whilst
testing the market with retailer promotional activity and various marketing
initiatives focussing on PR, digital marketing and direct customer
communication. Following three years of commercial delivery centred around
COVID test kits and the launch of our Wellness portfolio, we have taken
essential time this year to evolve our compliance infrastructure to meet the
rigor of ISO 13485 and enhance our digital platform to enable us to take to
market a number of partnership initiatives from Q4 2024.
Financial performance
Sales for the six months ended 30 June 2024 fell to £0.9m (six months ended
30 June 2023: £2.5m; year ended 31 December 2023: £11.0m) due to the strong
stock levels in our retail partner at 2023 year-end for COVID Lateral Flow
Tests ("LFTs"). This positioned retail well for the unexpected summer spike
that commenced in June 2024 and has meant that further 2024 COVID revenue will
fall into H2.
Gross margin fell from a profit of £601,000 for the six months ended 30 June
2023 to a loss of £286,000, primarily due to reduced COVID revenue and the
impact of the relatively fixed direct cost base associated with the extended
range of wellness tests launched in May 2023. These tests are still in an
early growth phase and will be key for us as we grow the category further. In
addition, gross margin in the prior year included the release of surplus
provisions of £685,000 (year ended 31 December 2023: £1,165,000) for the
processing of COVID PCR nasal swab kits sold in earlier years which had time
expired. Excluding the impact of the movement in provisions, and other fixed
costs included in cost of sales, the margin achieved on sales was 20% (six
months ended 30 June 2023: 23%; year ended 31 December 2023: 18%). Overall
gross margin will improve as the sales volumes of the new wellness product
range increases to cover the fixed cost base.
Total spend on the development and maintenance of IT infrastructure during the
year amounted to £193,000 (six months ended 30 June 2023: £746,000; year
ended 31 December 2023: £982,000) of which £47,000 (six months ended 30 June
2023: £374,000; year ended 31 December 2023: £521,000) has been capitalised.
This investment has been in relation to the ongoing improvements and
enhancements to the platform, and strengthening of the code base, to support
our growth strategy and is a significant reduction against the 2023 spend
required to enable the launch of the broad portfolio of new wellness tests.
Other overheads were broadly in line with the prior year due to the continued
focus on tight cost control. Sales and marketing costs increased from
£230,000 to £272,000 during the period under review to support retail
promotional activity and drive other initiatives to raise awareness of the
value proposition and to drive growth in sales of wellness products.
Adjusted EBITDA is calculated as follows:
Unaudited Unaudited Audited
30 June 2024 30 June 2023 31 December 2023
£'000 £'000 £'000
Operating loss (1,348) (404) (361)
Depreciation, amortisation and (profit)/loss on disposal 119 89 224
Redundancy costs - - 114
Share based payments 30 19 38
Adjusted EBITDA (1,199) (296) 15
At 30 June 2024 our cash amounted to £6,048,000 (six months ended 30 June
2023: £5,015,000; year ended 31 December 2023: £7,749,000).
Business Review
Our strategic focus continues to be the development of the business as a
leading retail test and digital service provider of wellness health checks,
whilst building retailer-centric strategic plans upon which we will deliver
future growth.
The marketing plan to drive the adoption and growth of our multi-platform,
multi-sample range of tests has delivered over 55,000 wellness tests into the
market during the current year, and we continue to monitor key performance
indicators around numbers of users, engagement time, and open rate of direct
marketing.
Retail promotional activity in H1 enabled us to test the market and learn the
impact of price promotions on this very new category, whilst monitoring
performance when tests are promoted alongside complementary wellness products.
This is providing us, and our retail partners, with intel upon which we can
continuously make better commercial decisions as we learn more about our
customers and how they purchase, and why. Our own direct marketing has told us
very clearly that customers respond less to price-centric communications and
engage far more effectively with content that is related specifically to
health areas and outcomes. We have played a key role in a number of retail
promotions this year including the Male Health activity and Boots' Health MOT
initiative in Q1 2024, where our home heart tests featured in the
communications around this free Boots health check.
As previously reported our product development is centred around enhancing our
digital customer journeys, and this is where we have continued to focus our
ongoing efforts. The time taken since launch has taught us which tests perform
most effectively, and this, coupled with our increasing knowledge on customer
needs and how messaging is responded to, is enabling us to explore product
enhancements, how we group tests together and how we can best evolve our
propositions. Nowhere provides a more robust customer testing-ground than the
retail environment, and we are learning quickly how to enhance and evolve our
portfolio.
We previously touched on the provision of phlebotomy services, and we are
moving towards a point in the near future where we will be able to share firm
plans regarding this enhanced service.
We ended last year having met the demands of the winter COVID season. The
subsequent COVID spike came late and began increasing at the start of June
2024 and continued post-period end. We continue to work very closely with our
retail partners and suppliers to ensure our channels to market are robust,
compliant, and operating to exemplary standards which means that our service
can continue unhindered by unplanned demand and unexpected market challenges.
Delivering ongoing COVID business is a key priority for MHC, as we soon enter
our fifth calendar year as a COVID test provider.
The securing of ISO 13485, a standard for Quality Management Systems that
specifically relates to products and services with a health purpose, has
strengthened our internal processes, along with our communication and a
clear definition of functional requirements. We have worked hard to evolve our
processes to meet requirements and provide a more robust infrastructure whilst
remaining focused on operating as a lean and dynamic organisation. We have
continued in 2024 without additional headcount or facilities and instead
concentrated on developing our team and strengthening our internal processes
to support delivery. Our supply chain has been another key area of focus, and
the recent unexpected administration of our primary kit builder has resulted
in some temporary supply issues which are being remedied as a priority.
As outlined in the Financial Performance overview, margin can be challenging
and this is due to us delivering at the early stages of a category that is a)
still new and, ergo, b) has volume growth potential ahead as it is still at
the beginning of its growth journey. Our supplier relationships go from
strength to strength, and together we will work towards better pricing
alongside solid scale-up plans to strengthen our position. Managing the supply
chain has been a key objective this year, and the ISO 13485 process places
strong onus on us to control manufacturing processes and play an active role
in ensuring standards. We have built stronger supplier relationships as a
result.
Customer Care is ever important to us and we currently rank 4.4 on Trustpilot
('excellent') as we strive hard to deliver a great service and support our
customers through their journey, to ensure they are satisfied with us and our
products, and with the information our tests provide. We were further
delighted to be shortlisted by Boots as 'Supplier of the Year' in July.
Current trading and outlook
In July we soft-launched our wellness product range in Pharmacy2U ('P2U'). P2U
offers a range of at-home tests and is looking to grow its ecommerce presence
having already built up a strong prescription customer base. We have also
signed a 3-year contract with Vital Signs Solutions Limited to offer their
PocDoc 9-minute lipid panel test direct to consumers and via health
professionals. PocDoc is a fast and affordable heart check test, which is
complementary to our portfolio, and is due to be marketed in early 2025. We
look forward to sharing further details as our launch plan gets fully
underway.
The Group has also appointed Proactive Consultancy Group ('Proactive'), an
award-winning medical industry VAT specialist, to review our VAT returns in
relation to sales of our B2C COVID test kits. Proactive has been successful in
recovering VAT for several COVID testing providers by demonstrating to HMRC
that certain sales should have been exempt from VAT. Proactive has filed a
claim on behalf of the Group, which if successful would result in a repayment,
after associated costs, of approximately £1.67m.
Demand for wellness tests continues to grow and we have secured firm orders
for over 3m COVID LFTs deliverable during H2.
The Board is pleased with the progress the business has made in the current
year as MHC continues to deliver against a well understood and consistent
strategy. The cash position remains strong with funds carefully managed and
utilised to strengthen the business and platform so that we can deliver
ambitious workstreams on foundations that are robust, secure and compliant.
We also appreciate the efforts of our talented and committed staff team and
thank them for their delivery to date this year, and we progress with
confidence into H2 to deliver on key initiatives, for which we look forward to
updating Shareholders.
Adam Reynolds Penny McCormick
Chairman Chief Executive Officer
25 September 2024
Consolidated statement of comprehensive income
For the 6 months ended 30 June 2024
Unaudited Audited
6 months ended Unaudited Year ended
30 June 6 months ended 31 December 2023
2024 30 June
2023
Notes £'000 £'000 £'000
Revenue 3 881 2,464 10,977
Cost of sales (1,167) (1,863) (8,929)
Gross (loss)/profit (286) 601 2,048
Sales and marketing costs (272) (230) (621)
Other administrative expenses (760) (756) (1,636)
Redundancy costs - - (114)
Share based payments (30) (19) (38)
Administrative expenses (790) (775) (1,788)
Operating loss (1,348) (404) (361)
Finance payable (1) (1) (2)
Interest receivable 150 50 168
Loss before income tax 3 (1,199) (355) (195)
Tax credit - 36 36
Loss for the period (1,199) (319) (159)
Attributable to owners of the parent: (1,199) (319) (159)
Loss per Ordinary Share - basic 4
(2.31)p (0.61)p (0.31)p
Fully diluted earnings per Ordinary Share 4 (2.31)p (0.61)p (0.31)p
( )
Consolidated statement of financial position
As at 30 June 2024
Unaudited Unaudited Audited
30 June 2024 30 June 2023 31 December 2023
Notes £'000 £'000 £'000
Non-current assets
Property, plant and equipment 66 118 79
Right-of-use assets 37 63 50
Intangible assets 1,420 1,397 1,462
Total non-current assets 1,523 1,578 1,591
Current assets
Inventories 339 3,004 342
Trade and other receivables 161 537 3,660
Cash and cash equivalents 6,048 5,015 7,749
Total current assets 6,548 8,556 11,751
Total assets 8,071 10,134 13,342
Current liabilities
Trade and other payables 524 1,544 4,612
Lease liabilities 12 28 26
Total current liabilities 536 1,572 4,638
Non-Current liabilities
Lease liabilities - 12 -
Total non-current liabilities - 12 -
Total liabilities 536 1,584 4,638
Net assets 7,535 8,550 8,704
Share capital 6 780 780 780
Employee Benefit Trust (25) - (25)
Reverse acquisition reserve (6,044) (6,044) (6,044)
Retained earnings 12,824 13,814 13,993
Total equity 7,535 8,550 8,704
Consolidated statement of changes in equity
For the 6 months ended 30 June 2024
Share capital Deferred shares Share Premium Capital redemption reserve Reverse acquisition Retained earnings Total
reserve
Employee
Benefit Trust
reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Equity as at 780 16,887 1,815 (6,044) (10,947) 8,850
1 January 2023 - 6,359
Profit for the year - - - - (159) (159)
- -
Total - - - - - (159) (159)
comprehensive loss -
Capital reduction - (16,887) (1,815) - 25,061 -
(note 6) - (6,359)
Employee Benefit Trust shares - - - - (25)
(25) - -
Share-based payments - - - - 38 38
- -
Equity as at 780 - - (6,044) 13,993 8,704
31 December 2023 (25) -
Loss for the year - - - - (1,199) (1,199)
- -
Total - - - - - (1,199) (1,199)
comprehensive loss -
Share-based payments - - - - 30 30
- -
Equity as at 780 - - (6,044) 12,824 7,535
30 June 2024 (25) -
Consolidated statement of cash flows
For the 6 months ended 30 June 2024
Unaudited Audited
6 months ended Unaudited Year ended
30 June 6 months ended 31 December 2023
2024 30 June
2023
£'000 £'000 £'000
Cash flows from operating activities
Loss before taxation (1,199) (355) (195)
Adjustments for:
Non-cash movement in provisions and accruals - (760) (1,165)
Depreciation and amortization 124 89 223
Profit/(loss) on sale of assets (5) - 1
Finance income (150) (50) (168)
Finance expenses 1 1 2
Share-based payments 30 19 38
Adjusted operating loss before changes in (1,199) (1,056) (1,264)
working capital
Changes in working capital
Decrease/(increase) in inventory 3 (1,720) 942
Decrease/(increase) in trade and other receivables 3,499 751 (2,366)
(Decrease)/increase in trade and other payables (4,088) (221) 3,252
Cash (used)/generated in operations (1,785) (2,246) 564
Bank interest received 149 49 160
Net cash (outflow)/inflow from operating activities (1,636) (2,197) 724
Investing activities
Proceeds from sale of fixed assets 10 - -
Purchase of office equipment (14) (45) (46)
Purchase of intangible assets (47) (374) (521)
Net cash flows used in investing activities (51) (419) (567)
Taxation
Research and development tax credit - 36 36
Cash inflow from taxation - 36 36
Financing activities
Purchase of Employee Trust Shares - - (25)
Repayment of lease liability (14) (13) (27)
Cash outflows from financing activities (14) (13) (52)
Net change in cash and cash equivalents (1,701) (2,593) 141
Cash and cash equivalents at the beginning of the period 7,749 7,608 7,608
Cash and cash equivalents at the end of the period 6,048 5,015 7,749
Notes to the unaudited interim financial information for the 6 months ended 30
June 2024
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 2024, which
was approved by the Board of Directors on 25 September 2024, 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 2023 and expected to be adopted in the financial
year ending 31 December 2024.
The interim financial information includes unaudited comparative figures for
the unaudited 6 months to 30 June 2023 and comparatives for the year ended 31
December 2023 that have been extracted from the audited financial statements
for that year. The financial statements for the year ended 31 December 2023
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 2024 30 June 2023 31 December 2023
£'000 £'000 £'000
COVID related products 572 2,342 10,633
Other 309 122 344
Revenue from the provision of diagnostic healthcare products 881 2,464 10,977
(Loss)/profit from the provision of diagnostic healthcare products (1,073) (105) 275
Corporate costs (275) (299) (636)
Net finance income 149 49 166
Group loss before tax (1,199) (355) (195)
Cash 6,048 5,015 7,749
Segment assets 1,961 5,066 5,566
Corporate assets 62 53 27
Total assets 8,071 10,134 13,342
Segment liabilities 475 1,444 4,402
Corporate liabilities 61 140 236
Total liabilities 536 1,584 4,638
4. Loss per Ordinary Share
Unaudited Unaudited Audited
30 June 2024 30 June 2023 31 December 2023
Basic and diluted loss per Ordinary Share
Loss for the period £1,199,000 £319,000 £159,000
Weighted average number of shares - basic 52,005,932 52,005,932 52,005,932
Less shares held by Employee Benefit Trust (weighted) (184,111) - (34,804)
Weighted average no of shares 51,821,821 52,005,932 51,971,128
Weighted average number of shares - fully diluted 51,821,821 52,005,932 51,971,128
Loss per share - basic 2.31p 0.61p 0.31p
Fully diluted loss per share 2.31p 0.61p 0.31p
Basic loss per share is calculated by dividing the 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 2024 the effect of the share options was considered anti-dilutive.
5. Contingent gain
On 27 August 2024 Proactive Consultancy Group (a specialist VAT advisory firm)
submitted a claim to HMRC, on behalf of the Group, for the repayment of VAT
levied on certain COVID PCR tests sold in earlier years on a success fee
basis. If the claim is successful, the Group will receive approximately
£1.67m after associated costs.
6. 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.
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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