REG - Optima Health PLC - Interim results
11/12/2024 07:00
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RNS Number : 5898P Optima Health PLC 11 December 2024
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11 December 2024
Optima Health Plc
Unaudited maiden interim results for the six months to 30 September 2024
Optima Health Plc (AIM: OPT), (together with its subsidiaries, the "Group"),
the UK's leading provider of technology enabled corporate health and
wellbeing solutions, announces its unaudited maiden results for the six-month
period ended 30 September 2024.
Highlights (including post period end)
· Demerger of Optima Health from Marlowe plc and listing on AIM
completed in September 2024
· Significant improvement in statutory operating profit when adjusted
for one-off demerger costs of £2.8m (HY25: £2.4m, HY24: (£0.1m))
· Integration of acquired businesses completed in June 2024
· Restructuring and integration costs down from £4.4m to £1.1m, with
no further integration related costs expected in the second half of FY25
· New business contract wins with annualised value of £3.6m in HY25,
offsetting prior period contractions, to support future growth, and £3.1m
annualised value signed or at preferred bidder stage post the period end
· Strong current new business pipeline of £11.5m annualised
revenue(( 1 ))
· Group revenue of £50.8m (HY24: £56.8m), the decrease driven by the
loss of a client alongside a further client reducing the required scope of the
Group's services (as previously disclosed in the Company's AIM admission
document) in the second half of FY24
· Adjusted EBITDA of £8.7m (HY24: £9.8m), consistent with revenue
movement
· Net debt reduced from £36.4m to £3.6m following the demerger which
reflects the £20.7m dividend paid to Marlowe plc offset by the release of
intercompany loans transacted as part of the demerger in September 2024
· One acquisition in late-stage exclusivity with further opportunities
under discussion
· Milestone of 10,000 patients reached in our pilot of our Digital
Assessment Routing Tool (DART) Musculoskeletal triage software in the NHS
Financial Highlights
ADJUSTED RESULTS HY25 HY24 Change
Revenue £50.8m £56.8m (11%)
Adjusted EBITDA(( 2 ))(,( 3 )) £8.7m £9.8m (12%)
EBITDA margin(2) 17.1% 17.3% (23 bps)
Operating profit(2) £6.7m £7.5m (12%)
Profit before tax(2) £6.6m £7.5m (13%)
Net debt (excluding lease liabilities) (£0.6m) (£34.0m) (98%)
STATUTORY RESULTS HY25 HY24 Change
Revenue £50.8m £56.8m (11%)
EBITDA £4.8m £5.4m (11%)
EBITDA margin 9.4% 9.5% (8 bps)
Operating loss (£0.4m) (£0.1m) (641%)
Loss before tax (£0.5m) (£0.1m) (296%)
Net debt (£3.6m) (£36.4m) (90%)
Summary and Outlook
Optima has completed the comprehensive integration of businesses acquired by
the Group during the period to build a robust scalable platform with a
diversified client base providing recurring revenue and opportunity for
further growth. The Company remains focused on growing both revenue and
EBITDA, with EBITDA margin improvements arising from synergies, good margins
on new business opportunities and advancing the scope of customers/contracts.
The Group has delivered a robust financial performance with trading consistent
with consensus market expectations. Alongside the potential expansion of
existing contracts, the Company has a strong pipeline of potential new
contacts, including those in active bidder status and those won but not yet
implemented both of which will underpin a portion of year-on-year core revenue
growth.
In addition to organic revenue growth, and in line with the Company's
strategy, the Board believe there are significant opportunities to accelerate
growth via further bolt-on acquisitions and continued consolidation in the
market. The Board continues to evaluate opportunities and is in exclusive
negotiations on one acquisition.
Commenting on the maiden financial results, Jonathan Thomas, Chief Executive
Officer, said: "We are proud to report Optima Health's maiden interim results
as a publicly listed company. The business delivered a robust performance in
the period, completing the integration of recently acquired businesses,
demerging from Marlowe plc and successfully listing on AIM whilst continuing
to build the pipeline for future growth. I am very thankful to our team who
have delivered these significant undertakings, giving me great confidence that
the business can now proceed to deliver its strategic objectives.
"As the UK's leading provider of occupational health and wellbeing solutions,
Optima's primary focus is on organic growth in its core market. Alongside
this, we will continue to deliver targeted M&A to accelerate growth,
whilst pursuing opportunities to enter complementary adjacent markets and
further improving the quality of margins. Underpinning all this is a large and
growing market, and our dedicated employees, which will enable us to continue
to win new business to expand our digitally-enabled, high quality offering."
Briefing for Analysts Today
Optima's management team, led by Jonathan Thomas, Chief Executive Officer, and
Heidi Giles, Chief Financial Officer, will be hosting a briefing and Q&A
session for analysts at 11:00 GMT / 06:00 ET today, 11 December, at Members
Hall, One Moorgate Place, London EC2R 6EA, United Kingdom.
A live webcast of the presentation will be available via this link
(https://url.us.m.mimecastprotect.com/s/T9WtC73npQUwLRQlUBiJHoNfVE?domain=lsegissuerservices.com)
. The presentation will be available on Optima's website at
www.optimahealth.co.uk (http://www.optimahealth.co.uk/)
If you would like to dial in to the call and ask a question during the live
Q&A, please email Optimahealth@icrhealthcare.com
For further information please contact:
Optima Health plc Tel: +44 (0)33 0008 5113
Jonathan Thomas, CEO Email: media@OptimaHealth.co.uk
Heidi Giles, CFO
Nominated Adviser and Corporate Broker Tel: +44 (0)20 3100 2000
Panmure Liberum Limited Email: optimahealth@panmureliberum.com
Emma Earl/ Will Goode/ Mark Rogers/ Rupert Dearden
UK Financial PR Advisor optimahealth@icrinc.com
ICR Healthcare
Mary-Jane Elliott / Angela Gray / Lindsey Neville
About Optima Health
Optima Health is the UK's leading provider of occupational health and
wellbeing services, directly influencing and improving people's lives for 25
years. Optima Health's incredible team of professionals quickly and
effectively encapsulate client's needs, supporting organisations of all shapes
and sizes. Through tailored solutions and innovative systems, Optima Health
offers unparalleled clinical expertise to its clients. These solutions ensure
that processes are simple and allow its clients to spend more time focusing on
their employees driving a healthy, high-performing workplace. For more
information visit www.optima health.co.uk
Business Review
Strategic Progress
To further support Optima Health's strategic ambitions, the business was
demerged from Marlowe plc and listed on AIM on 26 September 2024. The Board
believes this will give the Group the opportunity to build and deliver
significant value for our investors, employees and customers by allowing
Optima Health the flexibility to explore and focus on strategies tailored to
our market and expertise.
A key focus for the Company has been the comprehensive integration of all the
acquired businesses within the group under the Optima Health brand, refreshed
values, and operating model. This significant integration programme was
completed in June 2024. This programme included all corporate functions, such
as finance, HR, business development, and IT. Operational delivery models have
also been successfully integrated with all customers and employees (clinical
and operational) now using their targeted proprietary IT systems, with
delivery being governed and audited using a best practise consistent approach.
This programme was fundamental in creating a robust platform to underpin
Optima Health's future growth ambition.
Clinical quality is fundamental to Optima Health's ongoing success. In June
2024 Optima Health undertook the renewal of its Safe Effective Quality
Occupational Health Service (SEQOHS) accreditation as an integrated business
for the first time.
The report summarised "Optima have an expert, knowledgeable, engaged team who
are all committed to their roles. Expert leadership, knowledge, holistic
approach and delivery is demonstrable within the evidence.
Excellent clinical governance underpins all service delivery in collaboration
with the governance compliance board. This governance framework is at the core
of the transition project ensuring clinical excellence is maintained. The
business offers a wide range of specialist services that enhances the core
OH services to ensure optimum service delivery, whilst maintaining excellent
customer service. A truly innovative service who are forward thinking and
strive to meet health needs whilst investing in the development of their
staff.
Excellent standards and good practice are evident, and this has been
acknowledged in the congratulatory outcomes."
M&A is a key component of our growth strategy. The business currently has
one acquisition in late-stage exclusivity and has several further
opportunities currently under discussion.
People
Optima Health values and recognises the commitment and hard work of all its
people. It is a key component of our ambition to create a great place to work
for our people and supporting a culture of healthy high performance to enable
Optima Health to continue to attract and retain the best people in the
industry.
Optima Health has and intends to continue to invest in its people, in a
sustainable way, and aligned with its strategy. To support this the business
has invested in:
· Refining its core values to ensure all Optima Health employees
regardless of their legacy employer are accepted and valued
· Improving benefit provision across the group
· Supported candidates onto our GROW clinical academy programme, and
employees on the journey to achieve a professional qualification
· Introduced a People Development Framework to ensure our people can
identify how to progress within Optima Health, can access training and
experience needed, and are remunerated competitively.
· Sponsorship initiative introduced - since launching the program this
year we will have invested almost £45,000 in grass roots clubs, teams, and
projects. This funding has helped to provide equipment, training, and support,
making a real difference in the lives of countless people and their
communities.
Financial Review
Group revenue of £50.8m in HY25 represents a reduction of £6.0 million
(HY24: £56.8 million), primarily due to the loss at retender of one large
client and the decision of a second large client to bring a portion of its
occupational health provision in house. Both changes occurred in the last
quarter of the 2024 calendar year meaning that HY24 revenue included the full
benefit of these two clients.
Offsetting this, annualised new business contract wins were secured of £3.6m
in HY25, plus a further £3.1m either signed or at preferred bidder stage post
30 September 2024. Adjusting for these net new business wins that have not yet
commenced delivering revenues would represent an underlying organic growth
rate of 4.1% over HY24.
Currently the business has a strong new business pipeline of £11.5m
annualised revenue which it is actively working on, alongside incumbent
customer renewals, both bilateral and retenders.
We do not expect any further significant impact in FY25 from the loss and
reduction in scope of these two clients.
As demonstrated in our past performance, we remain confident that whilst FY25
revenue is expected to be below FY24 (as set out in the Admission Documents)
we will be able to organically grow revenue, both through winning new
customers and expanding delivery to existing customers.
Adjusted operating profit decreased to £6.7 million (HY24: £7.5 million) as
a result of the revenue reduction. Adjusted EBITDA decreased to £8.7 million
(HY24: £9.8 million). Adjusted EBITDA means operating profit before interest,
tax, depreciation and amortisation and excludes separately disclosed
acquisition and other costs.
Group adjusted EBITDA margin remained relatively flat at 17.1% (HY24: 17.3%)
which demonstrates management's commitment and ability to manage the cost base
in response to a contraction in revenue.
The recently announced UK Autumn Budget 2024 changes to employers' national
insurance is likely to have an impact on margins in the near term, but we are
confident we can mitigate these additional costs in the medium term through
pricing and operational efficiencies.
Further we remain confident that we can continue our long-term trend of
improving margins as we leverage operational efficiencies as a result of the
completion of integration programmes and implement further enhancements to our
operating platforms. On a statutory basis, operating loss was £0.4 million
(HY24: £0.1 million loss).
Adjusted profit before tax was £6.6 million (HY24: £7.5 million) and has
been adversely impacted by the reduction in revenue. On a statutory basis,
loss before tax for the half year was £0.5 million (HY24 loss before tax:
£0.1 million).
Both the statutory operating loss and loss before tax for HY25 included £2.8m
of one-off costs associated with the demerger and listing on AIM. Adjusting
for these one-off costs, the underlying business was profitable and has made
significant improvements in profitability over HY24.
Non-IFRS measures
The interim financial results contain all the information and disclosures
required by all accounting standards and regulatory obligations that apply to
the Group. The results also include measures which are not defined by
generally accepted accounting principles such as IFRS. We believe this
information, along with comparable IFRS measures, is useful as it provides
investors with a basis for measuring the performance of the Group on an
underlying basis. The Board and our management use these financial measures to
evaluate our operating performance. Non-IFRS financial measures should not be
considered in isolation from, or as a substitute for, financial information
presented in compliance with IFRS. Similarly, non-IFRS measures as reported by
us may not be comparable with similar measures reported by other companies.
Consistent with historical treatment under the previous shareholder Marlowe
plc costs associated with the integration activities which completed in HY25
have been removed to calculate adjusted metrics. Demerger/listing fees
incurred in HY25 are one-off in nature and have also been removed from the
adjusted metrics. The Directors believe that adjusted EBITDA and adjusted
measures of operating profit, profit before tax and earnings per share provide
shareholders with a useful representation of the underlying earnings derived
from the Group's business and a more comparable view of the year-on-year
underlying financial performance of the Group.
A reconciliation between statutory operating profit and EBITDA is shown below:
HY25 £m HY24 £m
Continuing operations
(Loss) from operations (0.4) (0.1)
Amortisation of acquisition intangibles 3.2 3.2
Depreciation and amortisation of non-acquisition intangibles 2.0 2.3
EBITDA 4.8 5.4
A reconciliation between statutory loss and the adjusted performance measures
noted above is shown below:
(Loss)/ profit Operating EBITDA
Six months ended 30 September 2024 before tax £m (Loss)/profit £m
Continuing operations
Statutory reported (0.5) (0.4) 4.8
Restructuring/integration costs 1.1 1.1 1.1
Demerger/listing costs 2.8 2.8 2.8
Amortisation of acquisition intangibles 3.2 3.2 -
Adjusted Results 6.6 6.7 8.7
Six months ended 30 September 2023 (Loss)/ profit Operating EBITDA
before tax £m (Loss)/profit £m
Continuing operations
Statutory reported (0.1) (0.1) 5.4
Restructuring/integration costs 4.4 4.4 4.4
Demerger/listing costs - - -
Amortisation of acquisition intangibles 3.2 3.2 -
Adjusted Results 7.5 7.5 9.8
Restructuring and other costs
Restructuring costs for HY25 were £1.1 million (HY24: £4.4 million)
reflecting that the Group has successfully completed the comprehensive
integration programme, with no further costs of this type expected from 30
September 2024 onwards. Restructuring costs primarily consist of:
• The cost of duplicated staff roles during the integration and
restructuring period
• The redundancy cost of implementing the post completion staff
structures; and
• The cost of dual running duplicate facilities no longer required
• IT costs associated with the integration and transfer to Group IT
systems, including costs of third-party software used in the delivery of
customer contracts where there is a programme to transition such software to
one of the Group's existing platforms
Amortisation of acquisition intangible assets for HY25 was £3.2 million
(HY24: £3.2 million). This is attributable to the carrying value of
intangible assets resulting from the previous execution of the M&A
strategy under Marlowe plc.
Demerger/listing costs were incurred in HY25 when the Group demerged from
Marlowe plc and listed on AIM. The main costs incurred include legal fees,
reporting accountant fees and nominated advisor fees. These costs are
non-recurring and not considered to be reflective of the underlying trading
performance.
Earnings per share
Basic earnings per share are calculated as profit for the period less a
standard tax charge divided by the weighted average number of shares in issue
in the period.
Earnings per share* (EPS) HY25 HY24
Basic adjusted earnings per share
£0.62
£5,266.80
Basic loss per share
(£0.08)
(£263.87)
*Refer to note 7
The earnings per share (EPS) figures for the current and prior periods are not directly comparable due to the significant changes in the share capital structure. During the current period, the company issued 88,775,901 new shares, compared to a total of 1,075 shares in issue during the prior period. This substantial increase in share capital affects the calculation of EPS, as the weighted average number of shares in issue has materially changed.
Interest
Finance costs amounted to £0.1 million in HY25 (HY24: £0.1 million). This
mainly relates to IFRS 16 adjustments for right of use assets and additionally
HY25 had a small amount relating to the Revolving credit facility (RCF)
secured at the time of demerging from Marlowe plc.
Taxation
The tax charge for the period has been calculated using the expected effective
tax rate method. The UK Corporation Tax rate for the year is 25% (HY 25%), and
this rate has been used as the basis for the calculation. Adjustments for any
allowances, reliefs, or other tax-specific factors are reflected in the
estimated effective tax rate applied to the interim results.
Statement of financial position
The Group looks to maintain a strong balance sheet that is commensurate with
the high levels of recurring revenues associated with its business model. Net
assets at 30 September 2024 were £165.8 million (31 March 2024: £127.6
million). As part of the demerger from Marlowe plc all intercompany loans with
Marlowe plc were released by deed of release in HY25.
Cash flow
The Group benefits from stable recurring revenue streams underpinned by its
long-term contracts, providing consistent monthly cash inflows. In the first
half of the year, as expected operating cash flow included a working capital
outflow of £4.7 million (HY24: £0.76 million). This was influenced by
regular timing factors such as business-as-usual VAT payments, accruals from
the prior year-end (e.g., annual bonus payments), and higher prepayments for
annual expenses like insurance premiums, rates, and training courses. In the
prior period, working capital benefited from increased liabilities due to
management incentive schemes and contingent consideration provisions, which
supported in reducing the overall cash outflow. Working capital performance in
the second half is expected to reflect timing benefits typically realised
later in the year.
Capital expenditure in HY25 totalled £1.7 million (HY24: £1.5 million)
reflecting the continued investment in our software systems and ongoing
investment in our business and facilities.
As part of the demerger from Marlowe plc, the Company paid Marlowe a cash
dividend of £20.7 million in September 2024. This dividend represented all
the cash on the Company's balance sheet. Also, in September 2024 the Group
utilised £10.0 million of the RCF it has committed to support working capital
requirements and the payment of the demerger/listing costs, post paying the
dividend to Marlowe.
The Group received a £2.0m cash inflow as a result of Management purchasing
772,489 shares at a price of £2.56 each.
Net debt and financing
Net debt at 30 September 2024, including £3.0 million of lease liabilities,
was £3.6 million (HY24: £36.4 million net debt).
Net debt (excluding lease liabilities) at 30 September 2024 was £0.6 million
(HY24: £34.0 million net debt). The decrease in net debt since the year end
reflects the £20.7m dividend paid to Marlowe plc offset by the release of
intercompany loans transacted as part of the demerger in September 2024.
In the second half, outside of normal trading, cash will be used to pay for
the incurred demerger and listing costs. In addition to this there is a final
deferred consideration amount to be settled to a previous owner of a group
company. This has been provisioned for on the balance sheet (£1.1m).
Key Performance Indicators ('KPIs')
The Group uses many different KPI's at an operational level which are specific
to the business and provide information to management. The Board uses KPIs
that focus on the financial performance of the Group such as revenue, adjusted
EBITDA, adjusted profit before tax, adjusted operating profit and cash-flow,
including debtor analysis.
CONDENSED CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME
Unaudited Unaudited Audited Year ended
Six months to Six months to 31 March
30 September 2024
30 September 2023
Note
2024
£'000 £'000
£'000
Continuing operations
Revenue 4 50,751 56,760 110,887
Cost of sales (34,993) (38,109) (74,413)
Gross profit 15,758 18,651 36,474
Administrative expenses (7,070) (8,805) (18,449)
Depreciation and amortisation 5 (5,231) (5,464) (10,777)
Exceptional items 6 (3,894) (4,441) (7,969)
Loss from operations (437) (59) (721)
Finance expense (93) (75) (135)
Loss before taxation (530) (134) (856)
Taxation (142) (137) (227)
Loss for the period (672) (271) (1,083)
Other comprehensive (loss)/income - - -
Total comprehensive loss for the period attributable to owners of the parent (672) (271) (1,083)
Loss per share attributable to owners of the parent:
Basic and diluted loss per share (£) 7 (0.08) (263.87) (1,030.45)
All the activities of the Group are from continuing operations.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
As at Audited
30 September 2024 As at
31 March
2024
Note £'000 £'000
ASSETS
Non-current assets
Property, plant and equipment 2,268 2,161
Intangible assets 8 176,780 179,830
Right-of-use asset 2,977 2,514
Net defined benefit pension assets 83 83
Total non-current assets 182,108 184,588
Current assets
Inventories 83 63
Trade and other receivables 18,613 17,512
Cash and cash equivalents 9,384 21,096
Total current assets 28,080 38,671
Total assets 210,188 223,259
Liabilities
Current liabilities
Trade and other payables 16,245 22,318
Related party loans 11 - 55,081
Lease liabilities 835 1,697
Current tax liabilities 150 62
Total current liabilities 17,230 79,158
Non-current liabilities
Borrowings 12 10,000 -
Provisions 1,252 1,368
Lease liabilities 2,158 702
Deferred tax liabilities 13,791 14,413
Total non-current liabilities 27,201 16,483
Total liabilities 44,431 95,641
Net assets 165,757 127,618
Equity
Share capital 9 888 -
Share premium 9 2,993 975
Capital contribution reserve 10 162,403 126,498
Retained earnings (527) 145
Total equity 165,757 127,618
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share premium Capital contribution reserve Retained earnings Total
capital Equity
£'000 £'000 £'000 £'000 £'000
Balance at 01 April 2023 - 825 126,498 706 128,029
Comprehensive income
Loss for the period - - - (271) (271)
Transactions with owners
Issue of shares - 150 - - 150
Balance at 30 September 2023 (unaudited) - 975 126,498 435 127,908
Balance at 01 October 2023 - 975 126,498 435 127,908
Comprehensive income
Loss for the period - - - (812) (812)
Transactions with owners
Group reorganisation - - - 522 522
Balance at 31 March 2024 - 975 126,498 145 127,618
Balance at 01 April 2024 - 975 126,498 145 127,618
Comprehensive income
Loss for the period - - - (672) (672)
Transactions with owners
Group reorganisation - - 56,651 - 56,651
Issue of shares 888 2,018 - - 2,906
Dividends paid - - (20,746) - (20,746)
Balance at 30 September 2024 (unaudited) 888 2,993 162,403 (527) 165,757
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited Unaudited Audited
Six months to 30 September 2024 Six months to 30 September 2023 Year end
to 31 March
2024
Note £'000 £'000
Cash flow from operating activities
Loss before taxation from continuing activities (530) (134) (856)
Adjustments for non-operating items:
Depreciation of property, plant and equipment 523 653 1,196
Amortisation of intangible assets 8 4,018 3,951 7,941
Depreciation of right-of-use assets 690 860 1,640
Loss on disposal of property, plant and equipment 64 - 3
Loss on remeasurement of lease liabilities 44 - 3
Movement in provisions (116) 2 208
Finance expenses 93 75 135
Net cash generated from operating activities before changes in working capital 4,786 5,407 10,270
(Increase)/Decrease in inventories (20) 31 100
(Increase)/Decrease in trade and other receivables (1,101) (2,288) 2,351
Increase/ (Decrease) in trade and other payables (3,570) 918 2,027
Cash generated from operations 95 4,068 14,748
Tax paid (678) (151) (1,903)
Net cash (used in) / generated from operating activities (583) 3,917 12,845
Cash flow from investing activities
Purchase of intangible assets 8 (968) (1,188) (2,445)
Purchase of property, plant and equipment (694) (294) (404)
Net cash used in investing activities (1,662) (1,482) (2,849)
Cash flow from financing activities
Principal paid on lease liabilities (603) (767) (1,492)
Interest paid on lease liabilities (90) (75) (135)
Bank interest paid (3) - -
Dividends paid (20,746) - -
Proceeds from issue of share capital 1,975 - -
Proceeds from borrowings 10,000 - -
Net cash used in financing activities (9,467) (842) (1,627)
Net increase / (decrease) in cash and cash equivalents (11,712) 1,593 8,369
Cash and cash equivalents at the beginning of the period 21,096 12,727 12,727
Cash and cash equivalents at the end of the period 9,384 14,320 21,096
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Company information
Optima Health is a public company incorporated in England and Wales. Its
registered address is Meadow Court, 2 Hayland Street, Sheffield, England, S9
1BY. The consolidated interim financial statements consolidate those of the
Company and its subsidiaries.
2. Summary of significant accounting policies
Basis of preparation
These consolidated interim financial statements present the results of the
Company and its subsidiaries (the "Group") for the six months ended 30
September 2024. They have not been audited and do not constitute statutory
accounts as defined by Section 434 of the Companies Act 2006
These condensed consolidated interim financial statements have been prepared
in accordance with AIM rules and the recognition and measurement requirements
of UK-adopted International Accounting Standards ("IFRS"). The accounting
policies adopted in the interim financial statements are consistent with those
adopted in the audited consolidated financial statements for inclusion in the
AIM admission document and those that will be applied in the Group's annual
financial statements for the period ending 31 March 2025.
The comparative figures for the financial year ended 31 March 2024 are
consistent with those presented in the Group's AIM admission document.
The consolidated interim financial statements are presented in thousands of
Pounds Sterling ("£'000"), which is the functional and presentational
currency of the Group.
Basis of consolidation
The interim financial statements consolidate the results of the Company and
its subsidiary undertakings made up to 30 September 2024.
Subsidiaries are entities over which the Group has control. The Group controls
an entity when the Group is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those
returns through its power over the entity. Subsidiaries are fully consolidated
from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases. Income, expenditure,
unrealised gains and intra-Group balances arising from transactions within the
Group are eliminated.
Going concern
The Group meets its day-to-day working capital requirements through cash
generated from operations. The Directors have considered the Group's forecast
cash flows as well as the Group's liquidity requirements, including downside
scenarios.
As part of the demerger process, the Group paid a dividend of £20,746,000 to
Marlowe plc, the former shareholder in accordance with the agreed terms of the
transaction. As a result, the Group has secured a £20m revolving credit
facility to initially fund transaction costs and working capital requirements
following the demerger, of which it has drawn £10m. The related party
liabilities with Marlowe plc were released as part of this process.
The Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the next twelve months.
Therefore, the Group has adopted the going concern basis of accounting in
preparing the interim financial statements. In making this assessment the
Directors have considered the headroom available on the debt facility combined
with the expected level of cash generation of the Group over the next twelve
months.
3. Critical accounting estimates and judgements
The preparation of the condensed consolidated interim financial statements
requires Directors to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from these
judgements and estimates.
In preparing these condensed consolidated interim financial statements, the
significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same as those
that applied to the audited consolidated financial statements for inclusion in
the AIM admission document.
4. Revenue
The Group generates revenue primarily from the provision of occupational
health and wellbeing services sold in the ordinary course of the Group's
activities. Management considers there to be one revenue stream within the one
operating segment.
All revenue is recognised over time based on services delivered in the period.
In the period ended 30 September 2024, there was 1 customer who contributed
10% or more of the revenue generated by the Group (2023: 1)
Customers representing revenue greater than 10% Unaudited Unaudited
30 September 2024 30 September 2023 Year ended
31
March
2024
£'000 £'000 £'000
Customer 1 7,546 6,502 13,854
Other 43,205 50,258 97,033
50,751 56,760 110,887
Geographical reporting
The Group operates in the UK and all revenue is derived from the UK.
5. Depreciation and amortisation
Unaudited Unaudited Audited
30 September 2024 30 September 2023 Year ended
31 March
2024
£'000 £'000 £'000
Depreciation of property, plant and equipment 523 653 1,196
Amortisation of intangible assets 862 795 1,630
Amortisation of intangible assets arising on acquisition 3,156 3,156 6,311
Depreciation charge of right-of-use assets 690 860 1,640
5,231 5,464 10,777
6. Exceptional items
Unaudited Unaudited Year ended
30 September 2024 30 September 2023 31 March
2024
£'000 £'000 £'000
Restructuring costs 1,062 4,441 8,571
Management incentive schemes - - (602)
Demerger and listing costs 2,832 - -
3,894 4,441 7,969
Restructuring costs include the costs associated with the integration of
acquisitions, including:
· The cost of duplicated staff roles and other duplicated operational
costs during the integration and restructuring period;
· The redundancy cost of implementing the post completion staff
structures; and
· IT costs associated with the integration and transfer to Group IT
systems.
These costs, particularly those related to the demerger and listing, are
regarded as non-recurring. Restructuring costs associated with historical
acquisitions are not expected to form part of the Group's regular, ongoing
operating expenses in the future.
7. Loss per share
Basic and diluted loss per share
The calculation of basic and diluted loss per share is based on the loss
attributable to equity holders divided by the weighted average number of
shares in issue during the period.
Unaudited Unaudited Audited
30 September 2024 30 September 2023 31 March
£'000 £'000 2024
£'000
Loss for the period from continuing activities (672) (271) (1,083)
30 September 2024 30 September 2023 31 March
No. No. 2024
No.
Weighted average number of ordinary shares 8,685,240 1,027 1,051
30 September 30 September 31 March
2024 2023 2024
£
£ £
Basic and diluted loss per share (£) (0.08) (263.87) (1,030.45)
7. Loss per share (continued)
Adjusted earnings per share
The Directors believe that the adjusted earnings per share provide a more
appropriate representation of the underlying earnings derived from the Group's
business. The adjusting items are shown in the table below:
Adjusted earnings per share
Unaudited Unaudited Audited
30 September 2024 30 September 2023 31 March
£'000 £'000 2024
£'000
Loss for the period (672) (271) (1,083)
Adjustments:
Restructuring costs 1,062 4,441 8,571
Demerger and listing costs 2,832 - -
Management incentive scheme - - (602)
Amortisation of acquisition intangibles 3,156 3,156 6,311
Tax adjustment (1,005) (1,917) (3,757)
Adjusted profit for the period 5,373 5,409 9,440
30 September 2024 30 September 2023 31 March
No. No. 2024
No.
Weighted average number of ordinary shares 8,685,240 1,027 1,051
30 September 30 September 31 March
2024 2023 2024
£
£ £
Adjusted Basic and diluted profit per share (£) 0.62 5,266.80 8,981.92
8. Intangible assets
Goodwill Customer contracts Software Trade name Total
£'000 £'000 £'000 £'000 £'000
Cost
At 1 April 2023 112,671 54,559 22,280 5,117 194,627
Additions - internally developed - - 2,445 - 2,445
At 31 March 2024 112,671 54,559 24,725 5,117 197,072
Amortisation
At 1 April 2023 - 5,271 3,433 597 9,301
Charge for the period - 4,130 3,299 512 7,941
At 31 March 2024 - 9,401 6,732 1,109 17,242
Net book value
At 31 March 2024 112,671 45,158 17,993 4,008 179,830
Cost
At 1 April 2024 112,671 54,559 24,725 5,117 197,072
Additions - internally developed - - 968 - 968
At 30 September 2024 112,671 54,559 25,693 5,117 198,040
Amortisation
At 1 April 2024 - 9,401 6,732 1,109 17,242
Charge for the period - 2,065 1,697 256 4,018
At 30 September 2024 - 11,466 8,429 1,365 21,260
Net book value
At 30 September 2024 112,671 43,093 17,264 3,752 176,780
9. Share capital
Allotted, called up and fully paid Share capital £0.01 £0.01 Share premium
Ordinary shares Ordinary A shares
£'000 No. No. £'000
Balance at 1 April 2023 - 100 825 825
Issue of Ordinary A shares - - 150 150
Balance at 31 March 2024 - 100 975 975
Balance at 1 April 2024 - 100 975 975
Issue of Ordinary A shares - - 32 51
Issue of Ordinary shares 888 88,775,901 - 1,967
Reclassification of Ordinary A shares - 1007 (1,007) -
Cancellation of Ordinary shares - (782) - -
Balance at 30 September 2024 888 88,776,226 - 2,993
On 26 September 2024, the entire issued share capital of the Company was
admitted to trading on AIM.
10. Capital Contribution
The capital contribution reserve represents non-cash contributions to the
Company from equity holders. This includes £126.5m for the recognition of the
investment in subsidiaries transferred from Marlowe plc for £nil
consideration.
In September 2024, as part of the demerger process, loans due to Marlowe plc
were released and the management incentive scheme liability was settled by
Marlowe plc, resulting in £56.7m being credited to the capital contribution
reserve in the period.
The reserve is available for distribution in accordance with Section 830 of
Companies Act 2006.
11. Related party loans
Unaudited Year ended
30 September 2024 31 March
2024
£'000 £'000
Current
Amounts owed to related parties - 55,081
- 55,081
Amounts owed to related parties included balances owed to the ultimate
controlling party and other members of the pre-demerger group. All related
party loans were unsecured, bore no interest and were repayable on demand. The
loans were released as part of the de-merger in September 2024 and were
therefore credited to the capital contribution reserve.
12. Borrowings
Unaudited Year ended
30 September 2024 31 March
2024
£'000 £'000
Non - Current
Bank loans 10,000 -
10,000 -
The long-term bank loan is in relation to the drawdown of an unsecured
revolving credit facility of £20m with an uncommitted accordion facility of
up to £15m. The facilities are for an initial term of three years with an
option for the Company to extend by up to two years.
1 Identified tender opportunities in our new business sales process which is
being actively pursued or has been submitted awaiting outcome
2 Earnings before interest, taxes, depreciation and amortisation ("EBITDA")
and adjusted for integration and demerger costs as detailed on page 6
3 Explanation of non-IFRS measures are contained within the Business
review
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