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RNS Number : 0385V MyHealthChecked PLC 03 April 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK
VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH
LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
MyHealthChecked PLC
("MyHealthChecked" or the "Company")
Preliminary Results
Year Ended 31 December 2022
MyHealthChecked PLC (AIM: MHC), the consumer home-testing healthcare company,
announces its preliminary results for the year ended 31 December 2022, a
successful year with strong revenue growth and profitability achieved for the
second consecutive year, driven by significant demand from the top high street
pharmacy retailers for COVID Lateral Flow Tests ("LFTs").
MyHealthChecked remains focused on delivering high-quality wellness testing
solutions and guidance to meet the evolving needs of our customers and help
them navigate this new and exciting space.
Financial highlights
● Revenue up 36% to £22.3m (2021: £16.4m)
● Gross Profit of £4.6m (2021: £5.1m)
● Adjusted EBITDA of £2.3m (2021: £2.7m) - reflecting the change in product
mix away from higher margin PCR testing to the distribution of LFTs
● Net cash generated from operating activities of £1.6m (2021: £3.0m)
● Cash balance at year end of £7.6m (2021: £6.4m) - whilst continuing to
invest across the business for future growth
● Strong cash position to ensure next growth phases remain self-funded
Commercial and operational highlights
● Actively developing B2B2C customer relationships in preparation to launch an
expanded portfolio of at-home wellness tests nationwide in 2023
● Soft launch of initial DNA at-home wellness portfolio in July 2022
● Reinvestment of earnings into developing new products for pipeline of at-home
wellness tests and building scalable, digital healthcare-centric technology
● Capabilities strengthened by establishing key relationships with high-quality
laboratory and kit-build partners
● Working towards ISO 27001 and migration of digital Quality Management System
('QMS') to support key compliance activity including transition to the
requirements of the In Vitro Diagnostics Regulation ("IVDR").
The full Group Annual Report and Financial Statements will be posted to
shareholders today, together wth the notice of the AGM, and will also be
available shortly at www.investors.myhealthcheckedplc.com
(http://www.investors.myhealthcheckedplc.com) .
Penny McCormick, Chief Executive Officer of MyHealthChecked PLC, said: "MHC
has not only established itself as a player in the wellness industry but has
also achieved excellent financial results in the last two years. Our
commitment to innovation, customer satisfaction, and financial stability and
management has set us on a path to delivering our goal of sustained liquidity.
As we enter an investment phase, we are confident in our ability to execute
our plans and scale our operations to meet the demand of our growing customer
base. With a robust balance sheet and a team of highly skilled professionals,
we are well-positioned to deliver a solid business in 2023 and beyond. The
upcoming launch of new tests and further development of our digital platform
presents a strong opportunity to create value for our shareholders and
solidify our position as a leading wellness company."
Investor Presentation
Penny McCormick, Chief Executive Officer and Nicholas Edwards, Chief
Financial Officer, will provide a live presentation relating to the
preliminary results via the Investor Meet Company platform today (Monday 3
April 2023) 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
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 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, and 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.
JOINT CHAIRMAN AND CHIEF EXECUTIVE'S REPORT
MyHealthChecked has had a successful year in 2022, with strong revenue growth
and profitability achieved for the second consecutive year. We surpassed
management expectations with our financial performance, maintaining a reliable
track record of delivery for our valued retail customers and partners.
Despite the unpredictable demand for our services throughout the challenging
COVID period, we were able to deliver and meet the high demands of our
customers in terms of volume. Our revenue increased by £5.9m (36%) to
£22.3m, and this growth has enabled us to achieve our ultimate goal of a
second year of positive cash flow. We ended the year with a cash balance of
£7.6m (2021: £6.4m), providing us with substantial working capital to drive
the business forward in 2023 and beyond.
It's a very exciting time for consumer healthcare and specifically testing,
and in our many years in the consumer healthcare and testing space, we have
never felt so energised around the potential for consumer self-testing. We are
excited about how this can positively impact the lives of millions as we
embrace preventative methods of care, can make a major difference to
individuals' lives, and ultimately release the pressure on much strained
healthcare services. Never before has there been so much information and
guidance available for us to make informed decisions on how we reduce our
future risks.
As we navigate this dynamic period of behavioural change, MHC remains focused
on delivering high-quality wellness testing solutions and guidance to meet the
evolving needs of our customers and help them navigate this new and exciting
space.
COVID-19 testing
COVID has been a major catalyst for this change in customer behaviour, and in
the past two years we have seen the market dominated by COVID testing. This
familiarisation of both self-testing and laboratory testing has given
customers confidence and normalised testing outside of a medical setting.
Throughout 2021 and 2022, COVID testing has been a major part of our business,
with over 17 million tests delivered to the market this past year.
However, as a result in the shift in product mix from higher margin Polymerase
Chain Reaction ("PCR") testing to lateral flow tests ("LFTs") during the
current year, we have seen gross margins in our COVID portfolio reducing.
However, post period we are launching a new testing portfolio to counter this
trend, whilst we continue to deliver value to our customers.
Retail launches
We are actively developing B2B2C customer relationships and are preparing to
launch an expanded portfolio of at-home wellness tests nationwide. Since the
soft-launch of our initial DNA portfolio in July of last year we have remained
focused on developing our wellness portfolio and supporting our retail
customers in expanding their own commercial strategies to meet their
customers' needs for at-home testing.
Market reports indicate significant growth potential for the home testing
market, with projections indicating the market will reach $45.58 billion by
2031 (source : Allied Market Research Nov 2022, At-Home Testing Market
Research 2031, Author(s) : Vikita T, Shubham S , Onkar S).
In order to play a major role in this market, we have prioritised building
strong relationships with our retail partners, with the goal of reaching as
many end users as possible. Beyond our retail partner launches we plan to
expand our core target base, while keeping a close eye on market trends to
ensure an optimal user journey, and positioning ourselves as cost-effective
and understanding of the current economic climate.
Product portfolio
Amid the challenges of the COVID era, we positioned ourselves as a leading
provider of products and services to meet the demand for testing - and we
succeeded. Our unique multi-platform portfolio of tests offers users access to
a variety of test types, sample collection options, and levels of analysis,
enabling us to meet diverse customer needs. Whether a customer requires an
initial screener, a lab analysis, or a DNA assessment, our tests provide
reliable results and guidance that empower our customers to make positive
changes to their nutrition and lifestyle.
But we don't stop there in our mission to improve our customers' health in the
longer term. Our tests are not just end-products, but tools that open up a
dialogue with the customer and facilitate the building of a long-term
relationship based on guidance, support, and monitoring. We don't simply
provide test results; through our evolving digital platform we are providing a
supportive relationship and guidance to ensure our customers achieve their
wellness goals.
As a result of our careful cash control, we have entered another new financial
year in a position of strength. We are reinvesting our earnings into
developing new products for our pipeline of at-home wellness tests and
building scalable, digital healthcare-centric technology. We remain committed
to delivering innovative solutions that meet the evolving needs of our
customers and the broader healthcare industry.
Developing talent within our team
Our new and dynamic management team has been the driving force in our past and
future success. The team's determined "can-do" mindset, coupled with a
customer-first approach and an agile streamlined delivery methodology is our
greatest asset.
In 2022, we restructured our product development process and grew our team to
ensure efficient delivery of milestone sprints. We also implemented a constant
feedback loop, where our customers and triallists provided input into each
iteration of our products before launch.
As we move forward, we are further strengthening the MHC team with new
resources in product and digital development operations, and commercial. We
have recently appointed a talented individual in the newly created role of
Operations Director and our primary focus in 2023 is to grow our commercial
team to further expand our B2B2C customer base and drive greater success.
Operations
Despite making the decision to close down our own laboratory operations due to
the downturn in COVID PCR testing in H1 of 2022, our lean distribution channel
has continued to underpin our success this past year. Our rapid responses to
changing customer and market needs has seen us bring our distribution centre
in-house near to our Cardiff headquarters, and we continue to strengthen our
highly effective operational set-up.
In 2022, we further strengthened our position as a gold-standard partner by
establishing key relationships with high-quality laboratory and kit-build
partners, as well as digital partners. These proactive and compliant suppliers
have further strengthened our capabilities and added to our credentials.
Compliance
Our regulatory team is fully committed to meet the new requirements of the In
Vitro Diagnostic Regulation ("IVDR") which affects our products in the UK. We
have a robust network of experienced regulatory partners to support us through
the transitional provisions of the IVDR and we have commenced a transition to
a digital Quality Management System to support us during this transition.
We have also submitted an application to the Healthcare Inspectorate Wales
("HIW") which will enable us to offer doctor-verified testing, and to provide
remote phlebotomy services in the future, whilst safeguarding our customers in
line with our commitments to best practice under HIW.
Investment in future technology
The cash generated from COVID testing has not only allowed us to define an
investment plan around future growth opportunities, it has also put us in a
position of strength where we can achieve our current plans for the business
without the need for additional working capital. This is a crucial advantage
that will allow us to move forward with confidence. As we worked to expand our
testing portfolio in 2023, we also committed to investing in our digital
platform, the plan for which is to unlock further growth potential.
Current Trading
While we anticipate a reduction in the demand for COVID tests as the general
public learns how to respond to living with the virus, we expect that testing
will remain an essential part of our business into 2023 and beyond. We have
seen steady sales in 2023, and as the year progresses, we will establish a new
trendline and will be ready to respond to spikes in demand.
Regarding our new multi-platform range of tests, 2023 will see us moving
beyond our initial soft launch to deliver a national rollout. We are confident
that the investments that we make in our portfolio and service will deliver
growing revenues in the future and a digital infrastructure upon which we can
build and grow, and we are energised by the many opportunities ahead.
Summary
MHC has not only established itself as a player in the wellness industry but
has also achieved excellent financial results in the last two years. Our
commitment to innovation, customer satisfaction, and financial stability and
management has set us on a path to delivering our goal of sustained liquidity.
As we enter an investment phase, we are confident in our ability to execute
our plans and scale our operations to meet the demand of our growing customer
base. With a robust balance sheet and a team of highly skilled professionals,
we are well-positioned to deliver a solid business in 2023 and beyond. The
upcoming launch of new tests and further development of our digital platform
presents a strong opportunity to create value for our shareholders and
solidify our position as a leading wellness company.
Adam
Reynolds
Penny McCormick
Chairman
Chief Executive Officer
FINANCIAL REVIEW
Income statement
Revenue for the year increased by 36% to £22.3m (2021: 16.4m) due to the
significant demand from the top high street pharmacy retailers for COVID
Lateral Flow Tests ("LTFs"). Gross margins reduced from 31% to 21%
reflecting the change in product mix from the processing of higher margin
COVID PCR testing ("PCR") to the distribution of LFTs in a highly competitive
market. In addition, capitalised costs amounting to £328,000 associated
with the development of COVID user interface on the digital platform, were
fully impaired during the current year through cost of sales.
Sales and marketing costs have increased from £699,000 to £798,000 due to
the increased investment in marketing activities associated with the new and
planned product launches.
Total administrative expenses were broadly comparable to the prior year at
£2,343,000 (2021: £2,386,000). Excluding the impairment of intangible
assets, share based payments and the laboratory closure costs other
administrative expenses increased to £2,087,000 (2021: £1,860,000) largely
due to the significant investment in the development of the digital platform
in readiness for the launch of the new product offerings in 2023. Research
and development costs expensed to administrative expenses in 2022 amounted to
£546,000 (2021: £175,000). As part of our focus on tight cost control the
decision was also taken to close the Manchester laboratory at a total cost of
approximately £226,000 as the facility was no longer operating cost
effectively following the drop in demand for PCR "Fit to Fly" tests. The
impairment charge of £50,000 in administration expenses relates to patents
and other costs associated with the MYLO/myLotus products previously
capitalised.
The Group's operating profit amounted to £1,506,000 (2021: £2,046,000) and,
after the release of the provision for contingent consideration of £1m, the
impairment of the associated goodwill of £987,000 and net interest payable of
£2,000 (2021: £2,000) the Group's profit before and after taxation was
£1,517,000 (2021: £2,004,000) giving a basic earnings per share of 0.20p
(2021: 0.28p) and fully diluted earnings per share of 0.19p (2021: 0.27p).
Adjusted EBITDA is calculated as follows:
2022 2021
£'000 £'000
Operating profit 1,506 2,046
Depreciation and amortisation 222 157
Impairment of intangible assets 378 414
Share based payments (20) 112
Laboratory closure costs (excluding the loss on disposal of equipment) 171 -
Adjusted EBITDA 2,257 2,729
Financial position
The Group's net assets at 31 December 2022 amounted to £8,850,000 (2021:
£7,113,000). This comprised total assets of £11,428,000 (2021: £11,668,000)
and total liabilities of £2,578,000 (2021: £4,555,000). The total assets
included property, plant and equipment (including right-of-use assets) of
£150,000 (2021: £163,000) and intangible assets, being development costs in
respect of the digital platform and website, know-how, goodwill and patent
costs, of £1,098,000 (2021: £2,289,000). As noted above an impairment
provision was made against the goodwill arising on the acquisition of Nell
Health Limited which was acquired last year.
Cashflow
The Group's cash balance at the year-end was £7,608,000 (2021: £6,387,000).
The net inflow from operating activities amounted to £1,606,000 (2021:
£3,014,000), whilst the cash outflows from investing activities amounted to
£338,000 (2021: £299,000) and £47,000 (2021: £3,206,000 inflow) was spent
on financing activities.
Capital management
The Board's objective is to maintain a balance sheet that is both efficient
and delivers long term shareholder value. The Board continues to monitor the
balance sheet to ensure it has an adequate capital structure.
Key Performance Indicators ("KPIs")
The Board recognises the importance of both financial and non-financial KPIs
in driving appropriate behaviours and enabling the monitoring of Group
performance.
The key financial KPIs monitored by the Board are revenue, gross margin and
EBITDA which are discussed under the review of the Income Statement above.
In addition, the Board also reviews cash and working capital balances on a
monthly basis.
With regard to non-financial KPIs, the Board monitors its relationship with
key customers and suppliers, the motivation and retention of employees and
progress against the planned development of the digital platform and new
product offerings.
Events after the reporting year
On 17 January 2023 the Court approved the reduction of the share capital of
the Company which involved 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.
Nicholas Edwards
Chief Financial Officer
FINANCIAL STATEMENTS
The notes to the Financial Statement are an integral part of these financial
statements and will be available in full in the Group Annual Report and
Financial Statements which will be available on the Company website later
today.
www.investors.myhealthcheckedplc.com
(http://www.investors.myhealthcheckedplc.com)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For The Year Ended 31 December 2022
2022 2021
£'000 £'000
Revenue 22,314 16,376
Cost of sales (17,667) (11,245)
Gross profit 4,647 5,131
Sales and marketing costs (798) (699)
Other administrative expenses (2,087) (1,860)
Closure of laboratory (226) -
Impairment of intangible assets (50) (414)
Share based payments 20 (112)
Administration expenses (2,343) (2,386)
Operating profit 1,506 2,046
Finance costs (5) (2)
Finance income 3 -
Contingent consideration no longer payable on the acquisition of Nell Health 1,000 -
Limited
Impairment of goodwill arising on acquisition of Nell Health Limited (987) -
Additional consideration payable on the - (40)
acquisition of The Genome Store Limited
Profit before income tax 1,517 2,004
Tax charge - -
Profit for the year 1,517 2,004
Other comprehensive income - -
Total comprehensive profit for the year 1,517 2,004
Attributable to owners of the parent: 1,517 2,004
Earnings per ordinary share - basic 0.20p 0.28p
Fully diluted earnings per ordinary share 0.19p 0.27p
All activities relate to continuing operations.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As At 31 December 2022
2022 2021
£'000 `£'000
Non-current assets
Property, plant and equipment 75 163
Right of use assets 75 -
Intangible assets 1,098 2,289
Total non-current assets 1,248 2,452
Current assets
Inventories 1,284 497
Trade and other receivables 1,288 2,332
Cash and cash equivalents 7,608 6,387
Total current assets 10,180 9,216
Total assets 11,428 11,668
Current liabilities
Trade and other payables 2,525 3,315
Lease liabilities 29 -
Deferred consideration - 1,240
Total current liabilities 2,554 4,555
Non-current liabilities
Lease liabilities 24 -
Total non-current liabilities 24 -
Total liabilities 2,578 4,555
Net assets 8,850 7,113
Share capital 780 756
Deferred shares 6,359 6,359
Share premium account 16,887 16,671
Capital redemption reserve 1,815 1,815
Reverse acquisition reserve (6,044) (6,044)
Retained earnings (10,947) (12,444)
Total equity 8,850 7,113
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share capital Deferred shares Share Premium Share-based payment reserve Capital redemption reserve Reverse acquisition Retained earnings Total
reserve
£ '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 year - - - - - 1,517 1,517
-
Total - - - - - - 1,517 1,517
comprehensive profit
Share-based payments - - - - - (20) (20)
-
The Genome Store Limited deferred consideration 24 216 - - - - 240
-
Equity as at 780 16,887 - 1,815 (6,044) (10,947) 8,850
31 December 2022 6,359
CONSOLIDATED STATEMENT OF CASH FLOWS
For The Year Ended 31 December 2022
2022 2021
£'000 £'000
Cash flows from operating activities
Profit before taxation 1,517 2,004
Adjustments for:
Deferred consideration (1,000) 40
Decrease in provisions - (26)
Depreciation and amortization 222 157
Impairment of intangible assets 1,365 414
Loss on sale of laboratory assets 55 -
Finance expenses 5 2
Finance income (3) -
Share-based payments (20) 112
Adjusted operating profit before changes in working capital 2,141 2,703
Changes in working capital
Increase in inventory (787) (494)
Decrease/(Increase) in trade and other receivables 1,044 (2,124)
(Decrease)/Increase in trade and other payables (790) 2,931
Cash generated in operations 1,608 3,016
Net interest payable (2) (2)
Net cash inflow from operating activities 1,606 3,014
Investing activities
Acquisition of Nell Health Limited - (50)
Purchase of property, plant and equipment (22) (147)
Purchase of intangible assets (316) (102)
Net cash flows used in investing activities (338) (299)
Financing activities
Issue of ordinary shares (net of issue expenses) - 3,211
Repayment of lease liability (47) (5)
Net cash flows from financing activities (47) 3,206
Net change in cash and cash equivalents 1,221 5,921
Cash and cash equivalents at the beginning of the year 6,387 466
Cash and cash equivalents at the end of the year 7,608 6,387
NOTES TO THE FINANCIAL STATEMENTS
The notes to the Financial Statement are available in full in the Group Annual
Report and Financial Statements which will be available shortly on the Company
website: www.myhealthcheckedplc.com (http://www.myhealthcheckedplc.com)
Basis of preparation
The financial statements have been prepared in accordance with UK adopted
international accounting standards (IFRS), and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS
Earnings per share
2022 2021
Basic and diluted
Profit for the year and earnings used in basic & diluted EPS £1,517,000 £2,004,000
Weighted average number of shares - basic 774,303,000 710,852,000
Weighted average number of shares - fully diluted 778,223,000 744,056,000
Earnings per share 0.20p 0.28p
Fully diluted earnings per share 0.19p 0.27p
Basic earnings per share is calculated by dividing the profit attributable to
equity holders of the Company by the weighted average number of ordinary
shares in issue during the year.
Events after the reporting date
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.
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