REG - Totally PLC - Preliminary results
12/07/2022 07:00
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RNS Number : 0918S Totally PLC 12 July 2022
12 July 2022
Totally plc
("Totally", the "Company" or the "Group")
Preliminary results for the 12-month period ended 31 March 2022
Record growth, whilst positioning for the future
Totally plc (AIM: TLY), a leading provider of frontline healthcare services,
corporate fitness and wellbeing services across the UK and Ireland, is pleased
to announce its preliminary results for the 12-month period ended 31 March
2022.
Financial highlights
· 12% increase in revenue to £127.4 million (2021: £113.7 million).
· 18% gross margin (2021: 18.3%).
· 24% increase in underlying EBITDA to £6.2 million, excluding £0.2
million in exceptional items (2021: £5.0 million EBITDA).
· Substantial increase in profit before tax to £1.3 million (2021:
£0.1 million).
· Cash as at 31 March 2022 of £15.3 million (31 March 2021: £14.8
million).
· Total dividend for the year of 1.00 pence per share (2021: 0.50 pence
per share).
· Substantial increase in basic earnings per share to 0.59 pence (2021:
0.17 pence).
· Urgent Care revenue increased by 3.6% to £109.2 million (2021:
£105.4 million); 17.8% gross margin (2021: 17.8%).
· Planned Care revenue increased by 43.7% to £7.5 million (2021: £5.2
million); 20.6% gross margin (2021: 23.7%).
· Insourcing revenue increased substantially to £10.3 million (2021:
£3.1 million); 17.4% gross margin (2021: 26.8%).
Operational highlights
· All Care Quality Commission registered services are rated as "Good".
· Delivered services to 2.5 million patients, reducing pressure on
NHS-led services.
· Awarded new contracts totalling c. £59 million including three-year
contract with King's College NHS Foundation Trust for a new urgent treatment
centre ("UTC") and five-year contract for the provision of GP out of hours
("GPOOH") services in Staffordshire and Stoke.
· Numerous contract extensions totalling c. £72 million, underpinning
recurring revenues, as healthcare commissioners sought to maintain service
consistency in a year still impacted by COVID-19.
· Completed acquisitions of Pioneer Health Care Limited ("Pioneer") and
Energy Fitness Professionals Limited ("EFP").
Post period highlights
· Multiple contract extensions awarded, underpinning recurring revenue,
including:
o Contract extensions, together valued at £19 million, for the management
of five UTCs across North West London, awarded to Greenbrook Healthcare
Limited ("Greenbrook") and Vocare Limited ("Vocare").
o Vocare awarded three contract extensions to continue to deliver GPOOH
services across the North East of England with a total value of c. £4.2
million.
o EFP awarded five-year contract extension for the delivery of on-site gyms
for the Royal Mail, valued at a total of £2.5 million.
o Greenbrook awarded a contract extension for the delivery of its virtual
consulting service in South-East London valued at £0.4 million, enabling
patients who have been directed to a UTC by NHS 111 to see a clinician
virtually.
· Final dividend of 0.50 pence per share proposed, bringing total
dividend for the year to 1.00 pence per share.
Investor presentation
A reminder that Wendy Lawrence, CEO and Lisa Barter, CFO, will provide a live
presentation relating to the preliminary results and outlook for the Company
via the Investor Meet Company platform on 13 July 2022 at 10:00 BST. The
presentation is open to all existing and potential shareholders. Questions can
be submitted pre-event via the Investor Meet Company dashboard up until 9:00am
the day before the meeting, or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add to meet
Totally plc via:
https://www.investormeetcompany.com/totally-plc/register-investor
(https://www.investormeetcompany.com/totally-plc/register-investor)
Investors who already follow Totally plc on the Investor Meet Company platform
will automatically be invited.
CHAIRMAN'S STATEMENT
I am pleased to report a further year of record results for the Group.
Revenues were £127.4 million (2021: £113.7 million) with underlying EBITDA
(excluding exceptional items) of £6.2 million (2021: £5.0 million). Net cash
as at 31 March 2022 stood at £15.3 million (31 March 2021: £14.8 million).
During the year, we continued to help manage increasing demand whilst
progressing our buy and build strategy to ensure we are positioned strongly to
support the NHS and other healthcare providers over the next five to ten
years.
We significantly grew our insourcing capability in response to growing demand,
mobilised new services within urgent care, and contributed to strategic
projects to improve the delivery of existing service models, such as NHS 111,
to ensure that every patient can access the support they need.
We have made great progress against our buy and build strategy with two key
acquisitions completed in the year. The addition of Pioneer Health Care and
Energy Fitness Professionals to the Group enables us to respond to challenges
faced in healthcare at the current time and equips us for a changing
healthcare landscape where wellbeing is higher on the agenda and waiting lists
are at all-time highs.
Everything we do is made possible by the experience and commitment of our
teams, whether they are leading the integration of our new businesses or
supporting patients on the front line. During the year, we also progressed our
agenda to become an employer of choice and rolled out enhancements to our
benefits packages which further recognise the value that each member of the
team creates for the business. We thank all of those who work for us, and
those we work with, for their continued engagement and commitment to patient
care.
We look forward to a further year of growth as we seek to improve healthcare
outcomes by providing essential support to reduce waiting times. Recently,
we have commenced a Board Review in line with the QCA Corporate Governance
Code to ensure that that we have the right skills and experience at Board
level to drive further success. We remain focused on our buy and build
strategy and we continue to seek out earnings enhancing opportunities where
they support our overall strategy.
Bob Holt OBE
Chairman
12 July 2022
CHIEF EXECUTIVE OFFICER'S REVIEW
Introduction
I am pleased to report another set of excellent results during a year which
has continued to present challenges to everyone delivering services in the
healthcare sector.
Society opened for business again, and as the general population sought to
make up for "the lockdown years", we have responded to huge increases in
demand. During the year, we delivered services to 2.5 million patients. This
rising pressure on healthcare services has been alongside the continuation of
working to strict COVID-19 guidelines, including working in full PPE and
following regulations for self-isolation and testing regimes. Our staff have
continued to stand alongside their healthcare colleagues to deliver
exceptional care in difficult circumstances, whilst demand for our services
continued to increase beyond all our estimates and those of the NHS. Totally
has been there to provide additional capacity to support demand and ensure
that every patient receives access to the appropriate care when and where they
need it.
During the year, we also completed two quite different acquisitions as we
continued with our stated buy and build strategy. The acquisition of Pioneer
Health Care in March 2022 provides us with numerous growth opportunities as
waiting lists for elective care continue to grow. Pioneer has a strong market
reputation and brings extensive experience and expertise to the Totally group.
The acquisition of Energy Fitness Professionals in December 2021 enables us to
develop corporate services and support employee wellbeing as the population
returns to the workplace. EFP provides both direct and remote online wellbeing
services and holds contracts with numerous "blue-chip" companies. Leaders from
both acquired companies have taken up new roles in Totally to drive forward
growth across the Group.
Trading performance
The Group made excellent progress during the year and performance exceeded our
internal management and consensus market expectations. Performance was
supported by increased demand attributed to the impact of the global pandemic
which continued to increase demand for services and led to significant growth
in waiting lists. We remain debt free and held healthy cash balances
throughout the period reflecting our excellent approach to cash management.
A detailed update on our trading performance is included later in this report
from our Chief Financial Officer, Lisa Barter.
Strategic progress
We have made significant progress against our strategy during the year.
Recognising the importance of our people and culture, we launched a new set of
company values and completed and implemented a full review of terms and
conditions and benefits for all employees across the Group, which enables us
to offer a new, standardised benefits package across the majority of the
Group.
Our two completed acquisitions, in line with our buy and build strategy,
further strengthen our ability to respond to the increasing demands on the
healthcare system and increasing focus on health and wellbeing by large
corporate employers. The acquisition of EFP was completed in mid-December 2021
and Pioneer Health Care in mid-March 2022; financial contributions for this
year are therefore small.
We also continued to invest in our infrastructure with several significant
strategic projects to further enhance our efficiencies and ability to respond
to demand. We have implemented a new combined HR and finance system and
completed an extensive project to move employees onto one email and network
domain, increasing security for our partners and patients and making it easier
for our businesses to work together and deliver economies of scale.
Within our expanded communications and marketing function, we have refreshed
our Totally plc website and are now completing the migration of our business
websites onto one website for all services. To improve internal communications
with staff we have also rolled out a new intranet across the Totally group,
giving our teams access to the information they need to do their jobs all in
one place and providing additional support and materials that underpin our
values and our culture.
Growth
We believe that we are a leading provider of healthcare services, supporting
healthcare commissioners and providers to respond proactively and robustly to
changes in demand for services and indeed to provide new models of care as
required.
We hold long-term contracts for our services across the UK. During the year,
we successfully retained contracts that were due to expire and secured new
work across the Group. We have also seen several shorter-term renewals as
healthcare commissioners sought to rapidly secure continuity of service
without distracting precious resources from the operational tasks at hand.
These shorter-term renewals have been secured based on strong relationships
and excellent service delivery and help underpin our recurring revenues.
Elective care - through insourcing, outsourcings and Any Qualified Provider
("AQP") - continues to present a huge opportunity for growth. The number of
people on waiting lists is higher than ever, presenting extended opportunities
for this area of the business. The NHS in England alone estimates it will take
up to five years to reduce waiting lists back to pre-pandemic levels.
Our people
Our people are our greatest asset and what make Totally unique in its
flexibility to respond quickly and professionally to every demand faced.
We would not be where we are today without the team that we have built, and
continue to build and invest in. The incredible pressure that everyone has
worked through during the COVID-19 pandemic cannot be understated. We remain
immensely proud of what our teams have done throughout the year and continue
to do every day.
Recruitment is now a challenge for every business and certainly everyone
delivering healthcare. Attracting the best people remains a top priority for
Totally, hence the time, effort and resources we dedicate to supporting
service delivery and the people who work with us.
The future
Recent acquisitions and new opportunities within existing business areas
present opportunities to grow organically and we remain acquisitive in line
with our stated buy and build strategy.
We are working in partnership with NHS England at the forefront of plans to
deliver a single virtual contact centre framework which presents opportunity
for the business to grow flexibly, utilising a centre of excellence structure
to deliver the absolute best care to patients.
The opportunities in elective care and outpatient services are huge. Since
acquisition, Pioneer has seen a stepped increase in the number of enquiries
from hospitals to assist with waiting list reduction and secured multiple
contract extensions, expanding the specialties offered through existing
contracts and geographic spread.
We are progressing with the development of a digital offering which brings
together services from EFP and the Totally Group to help corporate customers
support their workforces. We can see strong potential in this marketplace,
with increased activity as employers bring their staff back to the office.
In the year ahead we will remain focused on making further progress with our
growth strategy whilst ensuring we maintain the delivery of high-quality
services.
We will continue to invest in our growing and increasingly skilled workforce,
ensuring we deliver the best care possible to every patient we treat whilst
growing the business and increasing our coverage across the UK.
In line with the UK's commitment to creating a zero-carbon economy, we will
also continue to focus on the further reduction of our carbon footprint. We
have already reduced our fleet of emergency vehicles, as well as using more
energy efficient vehicles where possible, and promote recycling and the use of
LED lighting across our premises.
I thank all shareholders for their continued support during what can only be
described as challenging but exciting times. We will continue to ensure that
we drive business growth through sensible acquisition and organic growth
activity across the Group.
Wendy Lawrence
Chief Executive Officer
12 July 2022
STRATEGIC REVIEW
Strengthened position for the future
URGENT CARE DIVISION
Progress during the year
The removal of COVID-19 restrictions for the general population during the
year and the emergence of the several COVID-19 variants increased pressure
across urgent care services. COVID-19 infection rates peaked, driving
sustained demand for NHS 111. In urgent treatment centres we saw a return to
previously high levels of demand, further increased by challenges experienced
by patients seeking to access primary care. In total, Urgent Care teams across
Totally responded to the needs of almost 2.5 million patients either through
NHS 111, UTCs or other services. Our experienced management team worked
closely with healthcare commissioners to respond to these challenges and
maintain service delivery.
Over the course of the 12-month period, the Urgent Care team secured and
mobilised new long-term contracts worth c. £59 million. In October 2021 we
rapidly mobilised a new urgent treatment centre at King's College NHS
Foundation Trust at Denmark Hill, Southwark (London). Greenbrook Healthcare is
contracted to deliver the UTC for three years. In March 2022, Vocare was
awarded a contract for the provision of GPOOH services for both Stafford and
Stoke CCGs. The contract enables Vocare to continue to provide services across
the region for at least a further five years, serving an increased population
of c. 1.2 million. The contract was awarded after a competitive tender and
replaces the services previously provided by Vocare as part of an Integrated
Urgent Care contract. The service has now been mobilised.
In addition to these new contracts, the Urgent Care Division secured contract
extensions totalling c. £72 million including the continuation of NHS 111
services in Staffordshire and Stoke, a two-year contract extension to provide
Initial Accommodation Centre users with GP services in the Hillingdon Borough
of London, and the extension of contracts to provide UTCs across multiple
areas in London.
The future
Demand for all urgent care services continues to outstrip NHS capacity. We
will continue to provide high-quality, innovative care models which support
patients' access to good care.
PLANNED CARE DIVISION
Progress during the year
This year has seen the normalising of services within the Planned Care
Division, with face-to-face consultations restarting, alongside a continuation
of online support where this was possible or needed.
The future
During the next year, we will seek to develop new service models that will
ensure patients can continue to access service quickly.
PIONEER HEALTH CARE
Progress during the year
Following the acquisition of Pioneer Health Care in March 2022, activities
commenced to combine the business with Totally's insourcing business, Totally
Healthcare, to create a single provider of insourcing and outsourcing services
(including Any Qualified Provider status) under the Pioneer brand. The
combined business will leverage the strengths within each organisation and
provide resilient capacity to deliver much-demanded insourcing and outsourcing
services across a wide range of surgical and medical patients, free at the
point of delivery to NHS patients.
Good progress has been made and a hugely experienced leadership team has been
put in place to take the business forward. The migration of finance activity
into the Group, to capture economies of scale, has been undertaken and a
review of HR, IT, branding and marketing activity is substantially underway.
Since becoming part of the Totally group, Pioneer has seen a stepped increase
in the number of enquiries from hospitals to assist with the reduction of
waiting lists in recent months and secured multiple contract extensions which
include the expansion of medical specialities covered as well as the number of
hospitals from which services can be delivered. Contract extensions cover the
whole of England but with a particular focus on the Midlands, Yorkshire and
the North of England.
The future
NHS England estimates that it will take five years to reduce waiting lists to
pre-pandemic levels, creating a huge opportunity for providers able to deliver
quality care. Pioneer is an established quality provider which, until
acquisition, limited its work to the North of England and now, as part of
Totally, has the potential to grow its footprint across the UK and Ireland,
offering our expanded range of services to both new and existing customers.
ENERGY FITNESS PROFESSONALS
Progress during the year
Since the acquisition, EFP has mobilised two new contracts, been awarded a
further five-year extension with long-standing customer the Royal Mail, and
work has begun on the development of an enhanced digital services offering
which brings together existing services from Totally and EFP.
Since the removal of COVID-19 restrictions in the UK, EFP has witnessed a
change in approach across all business sectors, with many businesses adopting
hybrid working patterns for their employees and refurbishing and enhancing
their fitness and wellbeing offering to encourage employees back to
the workplace.
EFP has continued to develop its digital offering, "Health Hub", leveraging
capabilities within EFP and the broader Totally group to provide new
opportunities for new and existing customers.
The future
As corporate customers offer flexible working patterns, there is a growing
need to provide physical and mental health services that can be accessed both
in person and online. EFP provides this combination of services. During the
coming year we will continue to expand the ranges of services offered, drawing
on the combined expertise within EFP and other Totally businesses.
FINANCIAL REVIEW
Outstanding trading performance
Pressure on urgent and emergency care in the UK continued to increase during
2021/22 and Totally has remained a key partner to the NHS throughout the year.
We continue to be well positioned to support the management of increasing
demand, not only in urgent care but also the ever-increasing waiting lists for
diagnostic and elective treatment.
We continued to respond to changes in demand driven by the global COVID-19
pandemic. Changes to guidance in society during the year led to increased
levels of the virus which impacted demand for our NHS 111 services and
required a stronghold of healthcare protocols to protect our own staff and
maintain services. Alongside this, demand across urgent care also continued to
rise, reflecting a society that sought to "live life as normal" whilst
experiencing challenges accessing primary care.
Waiting lists for elective care continued to rise, presenting further
opportunities for our Insourcing Division and new acquisition, Pioneer Health
Care, which was completed in March 2022. In December 2021, we also completed
the acquisition of Energy Fitness Professionals, a provider of corporate
wellbeing services, presenting the opportunity to diversify our contract base,
expand into the corporate market and respond to growing demand for employee
wellbeing solutions.
Further sustainable growth was delivered through a combination of organic
growth and sensible M&A activity. Growth in revenue was 12% year on year
at £127.4 million and the Group generated a profit before tax of £1.3
million (2021: £0.1 million). Underlying EBITDA increased 24% to £6.2
million (2021: £5.0 million), excluding exceptional items of £0.2 million
during the year.
The Group continues to be cash generative. As at 31 March 2022, the Company
was in a healthy financial position with £15.3 million of net cash (31 March
2021: £14.8 million), after £7.4 million was utilised to complete
aforementioned acquisitions, with no debt financing. During the period, the
Company secured a £5.0 million rolling credit facility, should it be required
at any time in the future. To date this has not been utilised.
The Company accordingly made the distribution of its interim dividend in
February 2022. The intention is to consider future dividend payments based
upon the trading performance of the Group.
Growth in revenue was primarily driven by an increase in insourcing services.
Total revenue from the provision of insourcing services was £10.3 million
(2021: £3.1 million) predominantly made up of revenue from Totally Healthcare
which more than tripled to £9.6 million (2021: £3.1 million), as hospitals
and trusts sought support to tackle increasing waiting lists. An additional
£0.7 million of revenue was contributed by Pioneer Health Care, which was
acquired by the Group on 10 March 2022. Urgent Care revenue increased 3.6%
to £109.2 million. Planned Care revenues increased by 43.7% to £7.5 million,
as face-to-face consultations increased. Revenue from Energy Fitness
Professionals, acquired on 15 December 2021, totalled £0.3 million.
The Group secured a number of new contracts for urgent care services during
the financial year totalling c. £59 million, including a five-year contract
for the provision of GPOOH for Staffordshire and Stoke-on-Trent CCGs and a
three-year contract for the provision of an UTC for King's College NHS
Foundation Trust. Both contracts have now been fully mobilised. Additionally,
contract extensions for urgent care services worth c. £72 million were
secured, reflecting long-term relationships with healthcare commissioners and
service quality. These extensions, importantly, underpin recurring revenue
for the Group.
All trading divisions and businesses continue to tender for relevant contracts
where opportunity exists.
Margin reduced slightly to 18.0% (2021: 18.3%) largely as a result of managing
COVID-19 regulations.
All of our businesses continually review service delivery models and this
approach has supported us through our response as we exit the global pandemic.
We continue to use additional technology to offer services remotely,
delivering NHS 111 24/7 and flexing our services to deliver sustainable
support to our partner, the NHS.
The Group posted an EBITDA of £6.2 million excluding exceptional items of
£0.2 million. The profit before tax of £1.3 million is stated after an
amortisation charge of £2.3 million relating to the intangible value of
contracts acquired.
31 March 2022 31 March 2021
Revenue £127.4m £113.7m
Gross profit £22.9m £20.8m
EBITDA £6.2m £5.0m
Exceptional items (£0.2m) -
Depreciation (£1.9m) (£2.0m)
Amortisation (£2.6m) (£2.8m)
PBT £1.3m £0.1m
Net assets £35.4m £34.0m
Cash £15.3m £14.8m
Exceptional items
Exceptional items, amounting to £0.2 million, related to costs incurred in
the acquisitions of Energy Fitness Professionals and Pioneer Health Care.
Cash flow statement
Cash generated from operating activities remains positive in the year,
reflecting improved profitability of the Group offset by investment in M&A
activity.
31 March 2022 31 March 2021
Net cash flows from operating activities £11.2m £9.2m
Net cash flows from investing activities (£7.6m) (£0.7m)
Net cash flows from financing activities (£3.1m) (£2.6m)
Net increase in cash and cash equivalents £0.5m £5.9m
Cash and cash equivalents at the beginning of the year £14.8m £8.9m
Cash and cash equivalents at the end of the year £15.3m £14.8m
Contingent consideration
EFP Pioneer Vocare Total
£000 £000 £000 £000
At 31 March 2021 - - 258 258
Paid in the period - - (22) (22)
Arising on acquisition 300 6,100 - 6,400
As at 31 March 2022 300 6,100 236 6,636
The contingent consideration arising on acquisition is discussed below. The
remaining balance of the Vocare contingent consideration relates to monies
advanced to employees during the first month of employment. The balance is
payable quarterly and reflects advances recovered from employees when they
leave.
Acquisition of Energy Fitness Professionals
On 16 December 2021, the Company completed the acquisition of the entire share
capital of Energy Fitness Professionals Limited for £1.3 million on a
cash-free and debt-free basis with a normalised level of working capital.
The Consideration comprises £1.0 million in cash on completion, satisfied
using existing cash resources of the Company, and up to £0.3 million in cash
on a deferred basis based on the audited financial performance of EFP for the
financial year ending 31 March 2023.
Energy Fitness Professionals works with a growing number of high-profile
organisations across the UK, including large corporates, central Government
departments, universities, and colleges to provide workplace wellbeing and
corporate fitness services. EFPs offering includes gym design and gym
management, alongside digital services to support employee wellbeing in the
workplace, focusing on physical and mental wellbeing. The acquisition
provides Totally with access to a strong client base and digital foundation to
respond to increasing market demand from employers for services which support
employees with both physical and mental wellbeing services, in physical
locations and online.
The provisional assets and liabilities as at 16 December 2021 arising from the
acquisition were as follows:
Carrying Fair value adjustment £000 Provisional fair value £000
amount
£000
Property, plant and equipment 144 144
Right use of assets 62 62
Trade receivables and other debtors 138 138
Cash in hand 678 678
Trade and other payables (123) (123)
Bank loans and overdrafts (414) (414)
Leases (87) (87)
Corporation tax (103) (103)
Deferred tax (37) (37)
Net assets acquired 258 - 258
Goodwill 1,120 1,120
Total consideration 1,378 - 1,378
Satisfied by:
Cash 1,078
Deferred cash consideration 300
1,378
The goodwill is attributable to the knowledge and expertise of the workforce,
the expectation of future contracts and the operating synergies that arise
from the Group's strengthened market position. Any impairment charges will not
be deductible for tax purposes.
Acquisition of Pioneer Health Care
On 10 March 2022, the Company completed the acquisition of the entire share
capital of Pioneer Health Care Limited for up to £13.0 million on a cash-free
and debt-free basis with a normalised level of working capital.
The Consideration was payable as to 80% in cash and the remaining 20%
satisfied by the issue of new ordinary shares in Totally. £6.9 million was
paid on completion, on a cash-free and debt-free basis, and up to £6.1
million is payable on a deferred basis, based on the financial performance of
Pioneer in the year ended 31 March 2022 and expected to be paid in September
2022.
Pioneer Health Care is a highly reputable and independent healthcare provider
of specialist NHS secondary care services, free at the point of delivery and
which the Board believes provides an additional platform for further future
profitable growth. Pioneer Health Care delivers insourcing and outsourcing
services across a wide range of surgical and medical specialities to NHS
patients and holds contracts with NHS Foundation Trusts and Clinical
Commissioning Groups ("CCGs"), predominantly across the North of England.
Pioneer also holds the difficult-to-acquire AQP status, which enables it to
offer services direct to NHS patients across the whole of England, free at the
point of delivery, where there is sufficient demand.
The provisional assets and liabilities as at 10 March 2022 arising from the
acquisition were as follows:
Carrying Fair value adjustment £000 Provisional fair value £000
amount
£000
Property, plant and equipment 36 36
Trade receivables and other debtors 2,854 2,854
Cash in hand 1,150 1,150
Trade and other payables (1,543) (1,543)
Corporation tax (250) (250)
Net assets acquired 2,247 2,247
Goodwill 11,862 11,862
Total consideration 14,109 14,109
Satisfied by:
Cash 6,407
Deferred consideration of cash and shares 6,100
Ordinary shares issues 1,602
14,109
The initial accounting for the acquisition of Pioneer Health Care Limited has
only been provisionally determined at the end of the reporting period. For
tax purposes, the tax values of Pioneer Health Care Limited's assets are
required to be reset based on market values of the assets. At the date of
finalisation of these consolidated financial statements, the necessary market
valuations and other calculations had not been finalised and they have
therefore only been provisionally determined based on the directors' best
estimate of the likely tax values.
The goodwill is attributable to the knowledge and expertise of the workforce,
the expectation of future contracts and the operating synergies that arise
from the Group's strengthened market position. Any impairment charges will not
be deductible for tax purposes.
Dividend
We remain committed to the payment of dividends as we believe this reflects
our confidence in the Company's future prospects. The Board is therefore
pleased to be recommending to shareholders a final dividend of 0.50 pence per
share. This, together with the interim dividend of 0.50 pence per share paid
in February 2022, makes a total dividend for the year of 1.00 pence per share.
Subject to approval by shareholders at the Annual General Meeting to be held
on 5 September 2022, the final dividend will be paid on 12 October 2022 to
shareholders on the register as at the close of business on 9 September 2022.
The shares will be marked ex-dividend on 8 September 2022.
Lisa Barter ACA
Chief Financial Officer
12 July 2022
For further information please contact:
Totally plc 020 3866 3330
Wendy Lawrence, Chief Executive
Bob Holt, Chairman
Allenby Capital Limited (Nominated Adviser & Joint Corporate Broker) 020 3328 5656
Nick Athanas / Liz Kirchner (Corporate Finance)
Amrit Nahal (Sales & Corporate Broking)
Canaccord Genuity Limited (Joint Corporate Broker) 020 7523 8000
Bobbie Hilliam / Alex Aylen
Yellow Jersey PR 020 3004 9512
Sarah Hollins / Henry Wilkinson / Annabelle Wills
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 March 2022
31 March 2022 31 March 2021
Continuing operations £000 £000
Revenue 127,373 113,709
Cost of sales (104,504) (92,886)
Gross profit 22,869 20,823
Administrative expenses (16,730) (16,455)
Other income 26 656
Profit before exceptional items 6,165 5,024
Exceptional acquisition costs (179) -
Profit before interest, tax and depreciation 5,986 5,024
Depreciation and amortisation (4,516) (4,780)
Operating profit 1,470 244
Finance income 1 5
Finance costs (211) (193)
Profit before taxation 1,260 56
Income tax charge (179) 262
Profit for the year attributable to the equity 1,081 318
shareholders of the parent company
Other comprehensive income - -
Total comprehensive profit for the year net of tax 1,081 318
attributable to the equity shareholders of the parent company
31 March 2022 31 March 2021
Profit per share Pence Pence
From continuing operations:
Basic 0.59 0.17
Diluted 0.58 0.17
Consolidated Statement of Changes in Equity
For the year ended 31 March 2022
Share capital Share premium Retained earnings Equity shareholders' funds
£000 £000 £000 £000
At 1 April 2020 18,219 - 16,226 34,445
Total comprehensive profit for the year - - 318 318
Issue of share capital - 2 - 2
Dividend payment - - (911) (911)
Credit on issue of warrants and options - - 120 120
At 31 March 2021 18,219 2 15,753 33,974
Comprehensive profit for the year - - 1,081 1,081
Issue of shares 504 1,051 - 1,555
Dividend payment - - (1,367) (1,367)
Credit on issue of warrants and options - - 167 167
At 31 March 2022 18,723 1,053 15,634 35,410
Consolidated Statement of Financial Position
As at 31 March 2022
31 March 2022 31 March 2021
£000 £000
Non current assets
Intangible assets 48,935 37,468
Property, plant and equipment 3,475 4,010
Deferred tax 242 113
52,652 41,591
Current assets
Inventories 74 100
Trade and other receivables 14,099 8,675
Cash and cash equivalents 15,311 14,797
29,484 23,572
Total assets 82,136 65,163
Current liabilities
Trade and other payables (36,629) (26,130)
Contingent consideration (6,636) (258)
Lease liabilities (446) (564)
(43,711) (26,952)
Non current liabilities
Trade and other payables (22) (1,080)
Lease liabilities (1,981) (2,432)
Deferred tax (1,012) (725)
(3,015) (4,237)
Total liabilities (46,726) (31,189)
Net current liabilities (14,227) (3,380)
Net assets 35,410 33,974
Shareholders' equity
Called up share capital 18,723 18,219
Share premium 1,053 2
Retained earnings 15,634 15,753
Equity shareholders' funds 35,410 33,974
Consolidated Cash Flow Statement
For the year ended 31 March 2022
31 March 2022 31 March 2021
£000 £000
Cash flows from operating activities
Profit for the year 1,081 318
Adjustments for:
- options and warrants charge 167 120
- depreciation and amortisation 4,516 4,780
- tax charge/(income) recognised in profit or loss 179 (262)
- finance income (1) (5)
- finance costs 211 193
- receipt from escrow relating to acquisitions - (656)
Movements in working capital:
- inventories 26 (24)
- movement in trade and other receivables (2,382) 2,710
- movement in trade and other payables 7,366 2,044
Cash used for operations 11,163 9,218
Income tax paid - (4)
Net cash flows from operating activities 11,163 9,214
Cash flows from investing activities
Purchase of property, plant and equipment (418) (778)
Disposal of property, plant and equipment - 12
Additions of intangible assets (1,085) (605)
Acquisition of subsidiaries, net of cash acquired (6,071) -
Receipt from escrow relating to acquisitions - 656
Contingent consideration paid (22) (13)
Net cash flows from investing activities (7,596) (728)
Cash flows from financing activities
Issued share capital 22 2
Expenses attached to equity issue (70) -
Dividends paid to holders of the parent (1,367) (911)
Interest paid (126) (55)
Payments on lease liabilities (1,512) (1,648)
Net cash flows from financing activities (3,053) (2,612)
Net increase in cash and cash equivalents 514 5,874
Cash and cash equivalents at the beginning of year 14,797 8,923
Cash and cash equivalents at the end of the year 15,311 14,797
NOTES TO THE FINANCIAL INFORMATION
FOR THE YEAR ENDED 31 MARCH 2022
1. GENERAL INFORMATION
Totally plc is a public limited company (the "Company") incorporated in the
United Kingdom under the Companies Act 2006 (registration number 3870101). The
Company is domiciled in the United Kingdom and its registered address is
Cardinal Square West, 10 Nottingham Road, Derby DE1 3QT. The Company's
ordinary shares are traded on the AIM market of the London Stock Exchange
("AIM").
The Group's principal activities are the provision of innovative and
consolidatory solutions to the healthcare sector, which are provided by the
Group's wholly owned subsidiaries.
The Company's principal activity is to provide management services to its
subsidiaries.
2. BASIS OF PREPARATION
The financial information set out in this announcement does not constitute
statutory accounts as defined by section 435 of the Companies Act 2006. It has
been prepared in accordance with the prepared in accordance with the
recognition and measurement principles of international accounting standards
in conformity with the requirements of the Companies Act 2006 and in
accordance with the AIM rules and is therefore not in full compliance with
IFRS. The principal accounting policies applied in the preparation of the
financial information are detailed in note 3.
The financial statements for the year ended 31 March 2022 are not authorised
for issue however it is anticipated that audit reports will not be modified
and will not draw attention to any matters by way of emphasis or contain a
statement under 498(2) or 498(3) of the Companies Act 2006.
The financial information has been prepared on the historical cost basis and
is presented in Sterling and all values are rounded to the nearest thousand
pounds (£000) except when otherwise indicated.
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Strategic
Report. The financial position of the Group is described in the Financial
Review.
The Group has consistently had net current liabilities in recent reporting
periods which reflects the nature of the contractual terms with customers and
suppliers. The Group carefully manages financial resources, closely monitoring
the working capital cycle and has long-term contracts with a number of
customers and suppliers across different geographic areas within the United
Kingdom and industries. Based on the existing cash balances, underlying
performance and cash flows generated from operating activities, the Directors
believe that the Group has sufficient financial resources to be able to meet
its obligations as they fall due for a period of at least 12 months from the
date of this financial information and are comfortable that it is a going
concern.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of consolidation
The Group's financial statements include the results of the Company and its
subsidiaries, all of which are prepared up to the same date as the parent
company.
Subsidiaries
Subsidiaries are all entities over which the Company has the ability to
exercise control and are accounted for as subsidiaries. The trading results
of subsidiaries acquired or disposed of during the period end are included in
the income statement from the effective date of acquisition or up to the
effective date of disposal, as appropriate.
All intra-group transactions, balances, income and expenditure are eliminated
on consolidation.
The purchase method of accounting is used to account for the acquisition of
subsidiaries by the Company. The cost of an acquisition is measured as the
fair value of the assets given, equity instruments issued and liabilities
incurred or assumed at the date of exchange. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are
initially measured at fair value at the acquisition date irrespective of the
extent of any non-controlling interest. The excess of cost of acquisition over
the fair values of the Group's share of identifiable net assets acquired is
recognised as goodwill. Any deficiency of the cost of acquisition below the
fair value of identifiable net assets acquired (i.e. discount on acquisition)
is recognised directly in the income statement. All acquisition expenses have
been reported within the income statement immediately.
Any contingent consideration to be transferred by the Group is recognised at
fair value at the acquisition date. Subsequent changes to the fair value of
the contingent consideration that are deemed to be an asset or liability are
recognised in accordance with IAS 39 either in profit or loss or as a change
to other comprehensive income.
Where necessary, adjustments are made to the financial information of
subsidiaries to bring the accounting policies used in line with those used by
other members of the Group.
Revenue recognition
Revenue comprises the provision of services to the healthcare sector,
including urgent care, physiotherapy, dermatology, insourcing, outsourcing and
corporate wellbeing services. Services are provided through short-term and
long-term contracts.
Services are provided through short-term and long-term contracts.
Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group and the revenue can be reliably measured.
Revenue is measured as the fair value of the consideration received or
receivable, excluding discounts, rebates, value added tax and other sales
taxes.
Insourcing services
Revenue is recognised as services are provided. Revenue is recognised in the
month when the service is provided, as this is the point when revenue activity
can be reliably measured.
Planned care services
Revenue represents invoiced sales of services to regional Care Commissioning
Groups of the National Health Service. Revenue is recognised in the month when
the service is provided, as this is the point when revenue activity can be
reliably measured. Revenue can be subject to clawback adjustments based on
performance against criteria as detailed in the individual contracts.
Urgent care services
Revenue is recognised in the month when the service is provided, as this is
the point when revenue activity can be reliably measured. Revenue can be
subject to clawback adjustments based on performance against criteria as
detailed in the individual contracts.
Corporate wellbeing services
Revenue arises from provision of management services for corporate gyms and
upfront monthly membership fees for gyms paid by individuals. Both are
recognised in the month to which they relate.
All revenue originates in the United Kingdom.
Finance income
Finance income comprises bank interest received, recognised on an accruals
basis.
Finance costs
Finance costs comprise bank charges and interest on leases recognised under
IFRS 16.
Government grants
The Group applied for government support programmes introduced in response to
the global pandemic. Included in comprehensive income in 2021 was £967,000 of
government grants obtained relating to supporting the payroll of the Company's
employees (2022: £nil). The Company elected to present this as reducing the
related expense. The Company had to commit to spending the assistance on
payroll expenses, and not reduce employee head count below prescribed levels
for a specified period of time. The Company does not have any unfulfilled
obligations relating to this programme.
Property, plant and equipment
Property, plant and equipment is carried at cost less accumulated depreciation
and any recognised impairment in value. Cost comprises the aggregate amount
paid to acquire assets and includes costs directly attributable to making the
asset capable of operating as intended.
Depreciation is calculated to write down the cost of the assets to their
residual values by equal instalments over the estimated useful economic lives
as follows:
Motor vehicles - 3 and 5 years
Computer equipment - 2 and 5 years
Plant and machinery and Office equipment - 2 to 5 years
Freehold property improvements and Short leasehold property - 3 to 10 years
The assets' residual values, useful lives and methods of depreciation are
reviewed, and adjusted if appropriate, on an annual basis. An asset is
de-recognised upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising on de-recognition of the
asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in the income statement in the
period that the asset is de-recognised.
Inventories
Inventories are valued at the lower of cost and net realisable value. In
general, cost is determined on a first in first out basis and includes all
direct expenditure based on a normal level of activity. Net realisable value
is the price at which the stocks can be sold in the normal course of business
after allowing for the costs of realisation and where appropriate for the
costs of conversion from its existing state to a finished condition.
Intangible assets other than goodwill
Intangible assets other than goodwill comprise computer software and customer
contracts and relationships.
Computer software is recognised at cost and subsequently amortised over its
expected useful economic life of three years.
Customer contracts and the related customer relationships were acquired in
business combinations and recognised separately from goodwill. They are
initially recognised at their fair value at the acquisition date (which is
regarded as their cost). Subsequent to initial recognition, these assets are
amortised over the expected life of contracts and reported at cost less
accumulated amortisation and accumulated impairment losses. Assets are
reviewed for impairment on at least an annual basis.
Goodwill
Goodwill represents the excess of the fair value of the consideration of an
acquisition over the fair value of the Group's share of the net identifiable
assets of the acquired subsidiary at the date of acquisition. Goodwill is
considered to have an indefinite useful life. Goodwill is tested for
impairment annually and again whenever indicators of impairment are detected
and is carried at cost less any provision for impairment.
Impairment of non-current assets
For the purposes of impairment testing, goodwill is allocated to each of the
Group's cash-generating units ("CGU"s) or groups of CGUs that is expected to
benefit from the synergies of the combination.
A CGU to which goodwill has been allocated is tested for impairment annually,
or more frequently when there is an indication that the unit may be impaired.
If the recoverable amount of the CGU is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of any
goodwill allocated to the unit and then to the other assets of the unit
pro-rata based on the carrying amount of each asset in the unit. Any
impairment loss for goodwill is recognised directly in profit or loss. An
impairment loss recognised for goodwill is not reversed in subsequent periods.
The value of the goodwill was tested for impairment during the current
financial year by means of comparing the recoverable amount of each CGU or
group of CGUs with the carrying value of its goodwill.
On disposal of the relevant CGU, the attributable amount of goodwill is
included in the determination of the profit or loss on disposal.
Trade and other receivables
Trade receivables, which are generally received by the end of the month
following terms, are recognised and carried at the lower of their original
invoiced value less provision for expected credit losses.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and short-term deposits with
an original maturity of three months or less.
Trade and other payables
Trade payables are obligations to pay for goods and services that have been
acquired in the ordinary course of business from suppliers. Trade and other
payables are recognised at original cost.
Borrowings
Borrowings are initially recognised at fair value, being proceeds received
less directly attributable transaction costs incurred. Borrowings are
subsequently measured at amortised cost with any transaction costs amortised
to the income statement over the period of the borrowings using the effective
interest method.
Foreign currency transactions
Transactions denominated in foreign currencies are translated at the exchange
rate at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies at the period end are translated at the
exchange rate ruling at that date. Foreign exchange differences arising on
translation are recognised in the income statement.
Leased assets
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of fixed
lease payments. The lease payments are discounted using the interest rate
implicit in the lease. If that rate cannot be readily determined, the lessee's
incremental borrowing rate is used, being the rate that the lessee would have
to borrow the funds necessary to obtain an asset of similar value to the
right-of-use asset with similar terms, security and conditions.
Lease payments are allocated between principal and finance costs. The finance
cost is charged to profit or loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability
for each period.
Right-of-use assets are measured at cost comprising the initial measurement of
lease liability, any lease payments made at or before the commencement date
less any lease incentives received, and any initial direct costs.
Right-of-use assets are depreciated over the shorter of the asset's useful
life and the lease term on a straight-line basis.
Payments associated with short-term leases of equipment and vehicles and all
leases of assets considered low value are recognised as an expense in profit
or loss on a straight-line basis. Short-term leases are leases with a lease
term of twelve months or less.
Exceptional items
Exceptional items are those items that, in the Directors' view, are required
to be separately disclosed by virtue of their size or incidence to enable a
full understanding of the Group's financial performance.
Income taxes
Current income tax assets and liabilities are measured at the amount expected
to be recovered or paid to the taxation authorities based on tax rates and
laws that are enacted or substantively enacted by the period-end date.
Deferred income tax is recognised using the balance sheet liability method,
providing for temporary differences between the tax bases and the accounting
bases of assets and liabilities. Deferred income tax is calculated on an
undiscounted basis at the tax rates that are expected to apply in the period
when the liability is settled and the asset is realised, based on tax rates
and laws enacted or substantively enacted at the period-end date.
Deferred income tax liabilities are recognised for all temporary differences,
except for an asset or liability in a transaction that is not a business
combination, and at the time of the transaction affects neither the accounting
profit nor taxable profit or loss.
Deferred income tax is charged or credited to the income statement, except
when it relates to items charged or credited to equity, in which case the
deferred tax is also dealt with in equity. Deferred income tax assets and
liabilities are offset against each other only when the Company has a legally
enforceable right to do so.
Deferred income tax assets are recognised to the extent that it is probable
that future taxable profits will be available against which the deductible
temporary differences can be utilised.
Retirement benefits
The Group operates a defined contribution plan. A defined contribution plan is
a pension plan under which the employer pays fixed contribution into a
separate entity. Contributions payable to the plan are charged to the income
statement in the period to which they relate. The Group has no legal or
constructive obligations to pay further contributions if the fund does not
hold sufficient assets to pay all employees the benefits relating to employee
service in the current and prior periods.
Share-based payments
The Group provides benefits to employees (including Directors) of the Group in
the form of share-based payment transactions, whereby employees render
services in exchange for shares or rights over shares. The fair value of the
employee services rendered is determined by reference to the fair value of the
shares awarded or options granted. Share options are valued using the
Black-Scholes pricing model, or the Monte Carlo model where performance-based
market vesting conditions apply. This fair value is charged to the income
statement over the vesting period of the share-based payment scheme, with the
corresponding increase in equity.
The value of the charge is adjusted in the income statement over the remainder
of the vesting period to reflect expected and actual levels of options
vesting, with the corresponding adjustment made in equity.
New and amended standards adopted by the Group
The accounting policies adopted are consistent with those of the previous
financial year. New or amended financial standards or interpretations adopted
during the year are detailed below:
• Amendments to IFRS 9 Financial Instruments, IAS 39 Financial
Instruments: Recognition and Measurement, IFRS 7 Financial Instruments:
Disclosures, and IFRS 16 Leases - Interest Rate Benchmark Reform (Phase 2)
• Amendments to IFRS 16 Leases - COVID-19-Related Rent concessions
beyond 30 June 2021.
No material impact has arisen as a result of applying these standards.
Standards, interpretations and amendments not yet effective
The following standards, amendments and interpretations, which are effective
for reporting periods beginning after the date of these financial statements,
have not been adopted early:
Standard Description Effective date
IFRS 1 Amendments resulting from Annual Improvements to IFRS Standards 2018-2020 01 January 2022
(subsidiary as a first-time adopter)
IFRS 3 Amendments updating a reference to the Conceptual Framework 01 January 2022
IFRS 9 Amendments resulting from Annual Improvements to IFRS Standards 2018-2020
(fees in the '10 per cent' test for derecognition of financial liabilities)
01 January 2022
IAS 1 Amendments regarding the classification of liabilities 01 January 2023
IAS 1 Amendment to defer the effective date of the January 2020 amendments 01 January 2023
IAS 1 Amendments regarding the disclosure of accounting policies
01 January 2023
IAS 8 Amendments regarding the definition of accounting estimates 01 January 2023
IAS 12 Amendments regarding deferred tax on leases and decommissioning 01 January 2023
obligations
IAS 16 Amendments prohibiting a company from deducting from the cost of property, 01 January 2022
plant and equipment amounts received from selling items produced while the
company is preparing the asset for its intended use
IAS 37 Amendments regarding the costs to include when assessing whether a contract is 01 January 2022
onerous
In reviewing the above standards, the Company does not believe that there will
be a material impact on the financial statements.
4. EARNINGS PER SHARE
31 March 2022 31 March 2021
Earnings Basic earnings per share Diluted earnings per share Earnings Basic earnings per share Diluted earnings per share
£'000 £'000
Profit before exceptional items 1,226 0.67p 0.66p 318 0.17p 0.17p
Effect of exceptional items (145) (0.08)p (0.08)p - - -
Profit attributable to owners of the parent 1,081 0.59p 0.58p 318 0.17p 0.17p
2022 2021
000s 000s
Weighted average number of ordinary shares 182,553 182,187
Dilutive effect of shares from share options 3,753 2,552
Fully diluted weighted average number of ordinary shares 186,306 184,739
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. Dilutive potential ordinary shares are those
share options granted to employees where the exercise price is less than the
average market price of the Company's ordinary shares during the period. For
diluted earnings per share the weighted average number of ordinary shares in
issue is adjusted to assume conversion of all dilutive potential ordinary
shares unless there is a loss before exceptional items.
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