REG - Totally PLC - Preliminary results
10/07/2023 07:00
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RNS Number : 4167F Totally PLC 10 July 2023
Totally plc
("Totally", the "Company" or the "Group")
Preliminary results for the 12-month period ended 31 March 2023
Continued growth and solid organisational progress
Totally plc (AIM: TLY), a leading provider of frontline healthcare services
which increases access to quality healthcare across the UK and in Ireland by
targeting the reduction of waiting lists and waiting times for patients,
alongside corporate fitness and wellbeing services for corporate customers, is
pleased to announce its preliminary results for the 12-month period ended 31
March 2023.
Financial highlights
• Revenue up 6.5% to £135.7 million (2022: £127.4 million).
• Gross margin increased 0.4pp to 18.4% (2022: 18.0%).
• Underlying EBITDA increased 11% to £6.9 million (2022: £6.2
million), excluding £0.6 million in exceptional items.
• Substantial increase in profit before tax to £1.8
million (2022: £1.3 million).
• Gross cash as at 31 March 2023 of £6.5 million (31 March
2022: £15.3 million).
• Cash consumption in the year of £8.9 million includes £8.2 million
on investing activities, including £6.4 million of contingent consideration
relating to acquisitions.
• Final dividend of 0.125 pence per share, making a total dividend
for the year of 0.625 pence per share (2022: 1.00 pence per share).
• Increase in basic earnings per share to 0.94 pence (2022: 0.92
pence).
• Electives care revenue almost doubled to £35.2 million (2022:
£17.8 million) with gross margin increasing to 19.8% (2022: 18.4%). Excluding
the impact of acquired revenue in FY22 (£12 million) organic growth was 21%.
• Urgent Care revenue decreased 10% to £98.8
million (2022: £109.2 million) as four contracts in North West London came
to an end; with gross margin stable at 17.6% (2023 17.7%).
• Corporate wellbeing revenue of £1.7 million (2022: £0.3 million)
with gross margin increasing to 41.5% (2022: 31.9%). Excluding the impact of
acquired revenue in FY22 (c. £1.2 million) organic growth was 40%.
Operational highlights
• All Care Quality Commission ("CQC") registered services continue
to be rated as "Good".
• Ensured c. two million patients were able to access appropriate
urgent care services and treated c. 120,000 patients from elective care
waiting lists.
• First, and only, 111 provider to fully mobilise NHS England's
Single Virtual Contact Centre ("SVCC") model, following contract win for NHS
111 resilience provision worth c. £10 million, enabling rapid mobilisation
of additional NHS 111 services and strengthening our position when tendering
for additional NHS 111 contracts.
• Retendered and mobilised a five-year contract for the delivery of
two urgent treatment centres in Bromley, where we have delivered services
since 2013.
• Numerous new contracts awarded to Energy Fitness Professionals
("EFP") for corporate wellbeing services, including Adidas and the expansion
of existing long-term contract with Royal Mail.
• Restructured our operational services to bring together all of
our healthcare services under one operational team focusing on Urgent and
Elective care.
Post period update
The Board anticipates revenue in the year ahead to be lower than in the period
to 31 March 2023. EBITDA is expected to be marginally below the period to 31
March 2023 reflecting improved margin driven by higher volumes in elective
care, and the continued management and reduction of overhead spend. The Board
are confident that the actions and strategy put in place over the past 12
months will ensure the Company remains in a strong position to continue to
grow significantly over the coming years.
Investor presentation
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 12 July 2023 at 11.00 am 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 9:00 am 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.
For further information please contact:
Totally plc 020 3866 3330
Wendy Lawrence, Chief Executive Officer
Bob Holt, Chairman
Canaccord Genuity Limited (Nominated Adviser & Joint Corporate Broker) 020 7523 8000
Bobbie Hilliam / Harry Rees
Singer Capital Markets (Joint Corporate Broker) 020 7496 3000
Aubrey Powell / Sam Butcher
Yellow Jersey PR 020 3004 9512
Sarah Hollins / Annabelle Wills / Jazmine Clemens
CHAIRMAN'S STATEMENT
I am pleased to report a further year of continued growth as we rebalanced our
portfolio towards higher margin business, and made significant organisational
progress across the Group.
Revenues were £135.7 million (2022: £127.4 million) with underlying EBITDA
(excluding exceptional items) of £6.9 million (2022: £6.2 million). Gross
cash as at 31 March 2023 stood at £6.5 million (31 March 2022: £15.3
million), net cash was £4.0 million.
During the year we continued to support the NHS and other healthcare providers
with the management of increasing demand whilst consolidating recent
acquisitions and rebalancing our portfolio to higher margin business. As a
provider of both urgent care and elective care services, we are uniquely
positioned to respond to the changing needs of the NHS and maximise potential
in higher margin markets.
Following the acquisition of Pioneer Healthcare ("Pioneer") in March 2022, we
invested in the business to grow our insourcing and outsourcing capability and
respond to increases in demand. The urgent care market has proven more
challenging as individual Integrated Care Boards ("ICBs") and trusts focused
on their response to operational challenges. We invested in NHS England's new
SVCC Model and focused on urgent care contracts which enabled sufficient
staffing and an acceptable margin.
Our corporate wellbeing business, EFP, has performed well during the year as
demand for services rebounded post-pandemic. The corporate wellbeing market
continues to present huge potential for the future.
I remain indebted to our teams and their ongoing commitment to quality and
safety. We have now completed the difficult task of restructuring our business
to ensure that we remain fit for the challenge at hand. The NHS is under
extreme pressure to provide its services where demand continues to rise in
excess of the available capacity. As an independent sector partner, we
encounter challenges on a daily basis and I thank everyone who continues to
deliver our services and those who have left the business, for their
engagement and commitment to patient care during the year.
We look forward to a year of further improvement as we ready ourselves, and
become more efficient than ever before, to support our healthcare and
corporate partners with the challenge ahead.
Bob Holt OBE
Chairman
10 July 2023
CHIEF EXECUTIVE OFFICER'S REVIEW
Introduction
The NHS is in crisis and we continue to operate in what are exceptionally
challenging conditions which see the NHS facing unrelenting pressure. Our
continued focus on delivering excellent quality and safe services, alongside
close attention to cost management and the generation of shareholder value,
means we are announcing a robust set of results, with good revenue growth
versus the prior year, profit in line with previously revised market
expectations and a restructured business responding to the opportunities
presented.
All of our CQC registered services continue to be rated as "Good" and we
enabled millions of people across England and Ireland to access the care and
treatment they needed during the year.
Nevertheless, we have not been immune to the challenges facing all businesses
in the UK and the impact of well-publicised pressure within the healthcare
sector including an NHS in crisis. We have been required to make difficult
decisions as increased demand, workforce shortages and inflationary challenges
impacted our business in exactly the same way as the NHS and other providers
of NHS services. Until the NHS resolves pay disputes and strike action no
longer impacts services, we expect some ongoing disruption to service
provision. We have now completed a range of actions taken to integrate Pioneer
into the Group, remove duplication within services, manage costs and reduce
our reliance on agency staff. Our restructured business brings together all
healthcare services under one healthcare delivery business focused on urgent
care and elective care.
This new structure enables the realisation of economies of scale and removes
duplicated services and costs following the acquisition of Pioneer, meaning
that we can deliver highly efficient services which benefit from a single
management and governance structure and greater adoption of best practice.
We remain confident in the quality of our services, our ability to deliver and
the opportunities available for independent providers in this sector.
Financial performance in line with revised consensus
Totally delivered good revenue growth against the prior year at £135.7
million (FY22: £127.4 million). The continued growth of NHS waiting lists saw
revenue for elective services almost double to £35.2 million. Excluding the
impact of acquired revenue from Pioneer in March 2022, growth was 21%.
Within Urgent Care, revenue reduced as additional COVID-19 services fell away
and as certain contracts in North West London came to an end. The Group was
awarded a new contract with NHS England in January 2023 for the delivery of
NHS 111 resilience support and mobilised new five-year contracts for the
delivery of two urgent treatment centres in Bromley.
Demand for corporate wellbeing services, delivered by EFP, rebounded and
exceeded pre-pandemic levels as we onboarded exciting new customers including
sportswear brand Adidas, and expanded relationships with existing customers
such as global video-game developer, Electronic Arts, Royal Mail and Network
Rail.
Following actions to integrate Pioneer into the Group, remove duplication
within services, manage and control costs driven by the high inflation economy
and national workforce challenges, we are reporting EBITDA for FY23 in line
with our revised forecast announced in March. At year end, the Company had
gross cash of £6.5 million (31 March 2022: £15.3 million) with net cash at
the same date of £4.0 million.
A detailed update on our financial performance is included later in the
Financial Review from our Chief Financial Officer, Lisa Barter.
Strategic progress
During the year, as we exited the period directly impacted by COVID-19, we
focused on positioning the Group effectively for all future opportunities and
growth.
We invested in our recent acquisitions, Pioneer and EFP, to enable further
growth and ensure that our broader operations benefited from our larger
footprint and enhanced expertise within the business. Our healthcare business
restructure also means that we have our best people in key roles to drive
growth and quality services.
Following work undertaken in the previous year, we substantially completed
activity to rationalise our IT infrastructure and ensure compliance with Cyber
Essentials Plus, a new and key requirement for all NHS tenders and frameworks.
We were also the first provider to fully mobilise on NHS England's SVCC
framework, which means that Totally can respond more quickly than other
providers to support requests for NHS 111 service area due to the
associated rapid onboarding capabilities the system provides, strengthening
our position when tendering for additional NHS 111 contracts.
Following the relaunch of our websites in early 2022, we have continued to
develop this important communication channel, enhancing our patient-facing
information and career-focused areas to ensure that both audiences can access
the information they need easily. We have also continued the development of
our all-people intranet, My Totally and we are currently trialling an app to
increase ease of accessibility further.
Healthcare and corporate wellbeing markets remain full of opportunity
We support healthcare commissioners and providers to respond proactively and
robustly to changes in demand for services and to provide new models of care
as required. The opportunities that are presented by recent operational
progress, achieved during the year, are huge. The Totally management team is
working closely with healthcare commissioners to support the reduction of
increasing waiting lists for elective care and help meet or beat waiting time
targets in urgent care.
Our newly centralised business development team for all healthcare services is
achieving good levels of success in response to high levels of tender activity
as the NHS and other providers continue to seek ways to stem the challenges
within the healthcare sector.
Elective care continues to present a significant opportunity for the
organisation and we have recently confirmed positions on frameworks which
facilitates the rapid tendering for new contracts for insourcing and
outsourcing support. We have also expanded the services we provide in the
Republic of Ireland, helping to reduce waiting lists and waiting times.
Within urgent care, we are NHS England's only named resilience partner and the
first and only provider to have fully mobilised on the new SVCC framework,
enabling rapid onboarding of further NHS 111 contracts, and helping to further
strengthen our relationship with NHS England. The service is delivering better
than national average performance, and provides much-needed additional
capacity to ensure that people from across England can access the care they
need. We also mobilised a new five-year contract for the delivery of two
urgent treatment centres in Bromley, where we have been delivering services
since 2013, maintaining our position as a long-term provider for urgent
treatment centres.
Within corporate wellbeing, new business opportunities continue to be driven
by employers wanting to entice employees back into the workplace and have
refocused on core bricks and mortar fitness centres. Our on-site services are
supported by a flexible digital offering, which has been enhanced during the
year by a new licensing agreement with Les Mills, market leaders in class
instruction, to provide digital classes to all EFP members. EFP, which
celebrated 25 years in corporate wellbeing in June 2023, is a well-respected
provider within this growing sector.
Our people
Our people are our greatest asset and what makes Totally unique in its
flexibility to respond quickly and professionally to every demand faced.
We continue to invest in our workforce, seeking to increase the number of
clinicians who choose to work solely for Totally, but also provide flexible
working for those clinicians who want to work across NHS and independent
provider roles. This flexibility is a key reason why many choose to work for
us.
We are very aware of the workforce challenges which the healthcare sector
faces and continue to support the development of the next generation of NHS
clinical staff through the development of postgraduate doctors in training by
providing hands on experience within our services.
Attracting the best people remains a top priority for Totally, hence the time,
effort and resources we dedicate to this important function, which ensures
that we have the people in place to provide high quality, safe services.
Outlook
In line with our buy and build strategy, we remain acquisitive where
opportunities enhance our ability to deliver increased shareholder returns and
broaden services for commissioners.
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 and manage our costs. We expect the coming year to be challenging as
the NHS continues to operate in crisis and faces ever-increasing demand across
all services.
The Board remains very confident in that the number of opportunities for the
Company continue to grow and we are ready and prepared to further support the
NHS as it continues to focus on the recovery and embedding of sustainable
services able to cope with continuing higher levels of demand and the
reduction of waiting times and waiting lists.
I thank all of our shareholders for their support during this challenging
year. We will continue to focus on driving business growth, both within
existing operations and through sensible acquisitions.
Wendy Lawrence
Chief Executive Officer
10 July 2023
STRATEGIC REVIEW
Well-positioned for future opportunities
HEALTHCARE
We provide urgent and elective care services to healthcare commissioners and
other corporate organisations, the police and the prison services.
During the year, we brought all healthcare operations together under one
leadership structure which will enable economies of scale, the reduction of
duplication, increased opportunities to drive best practice and a
simplification of branding for our customers.
Urgent care services continue to be delivered under the Totally Urgent Care
brand and include all services which were previously awarded to and delivered
by Vocare and Greenbrook Healthcare, including urgent treatment centres, NHS
111, clinical assessment services, GP out-of-hours and acute visiting
services.
Elective care services make up a range of services previously provided under
the Pioneer Healthcare, Totally Healthcare, Totally Planned Care, About Health
and Premier Physical Healthcare brands. All services are focused on tackling
growing waiting lists and accessibility to services, including:
• Working with hospitals and trusts to help support the reduction of
waiting lists through insourcing, outsourcing and a range of extended primary
and secondary care collaborative partnerships through our Any Qualified
Provider ("AQP") status;
• Provision of community outpatient services including specialist
dermatology and referral management services;
• Therapy services, with a focus on physiotherapy and podiatry across a
number of settings, including GP practices, prisons and health centres.
In March 2023, we achieved accreditation for Cyber Essentials Plus, a new
accreditation requirement for tendering NHS contracts and frameworks which was
fast-tracked by the NHS in response to the increased threat of cyber-attacks
worldwide.
Urgent care services
Urgent care services help healthcare commissioners ensure patients have access
to the right healthcare service, at the right time, in the right place, both
in hours and out of hours. Our services aim to reduce emergency admissions and
unnecessary attendances at hospitals to reduce pressure on the overall
healthcare system. Each year we support around two million patients who are
seeking treatment or advice.
Our clinical team is made up of experienced doctors, nurses and paramedics,
who can provide detailed assessments, advise on treatment options, support
patients to care for themselves at home and arrange urgent care if required.
2023 2022 2021 2020
Revenue (£m) 98.8 109.2 105.4 96.5
Gross margin 17.6% 17.7% 17.8% 17.5%
Following inspections during the year by the CQC of our urgent treatment
centres in London, we are pleased to confirm that all our CQC registered
services continue to be rated 'Good' overall.
Demand for urgent care services remained high during the period. Our
experienced management team worked closely with healthcare commissioners to
respond to these challenges and maintain service delivery. In total, our
Urgent Care teams responded to the needs of around two million patients either
through NHS 111, at urgent treatment centres or within other services.
Over the course of the 12-month period, the Urgent Care team secured and
mobilised new long-term contracts worth c.£77 million, the most significant
being a new five-year contract for the continued delivery of two urgent
treatment centres in Bromley, where we have delivered services since 2013.
As part of a new contract for the delivery of NHS 111 resilience services on
behalf of NHS England, Totally was also the first and only provider to date to
fully mobilise on NHS England's SVCC model. This strategic investment also
enables the mobilisation of new, additional contracts for the delivery of NHS
111 services to be undertaken at the click of a button, strengthening our
position when tendering for additional NHS 111 contracts.
In addition to these new contracts, nine services due for contract renewal
during the year, collectively valued at c.£20 million, were extended for
further periods.
A further ten services, with an overall contract value of c.£12.5 million,
which were due for renewal on 31 March 2023 have also since also been
extended.
Elective Care
All our elective care services focus on helping commissioners, trusts and
hospitals maximise accessibility to good quality, safe elective care which
helps support the reduction of waiting lists.
2023 2022 2021 2020
Revenue (£m) 35.2 17.8 8.3 9.4
Gross margin 19.8% 18.4% 24.8% 23.3%
Revenue for elective care services almost doubled during the year, primarily
driven by the full year contribution from Pioneer which benefited from a rapid
increase in demand for insourcing and outsourcing services. Waiting lists for
elective care increased significantly during the COVID-19 pandemic and are now
67% higher than in March 2020 and continue to grow as industrial action
impacts elective procedures further.
During the year, we saw a continued increase in demand for insourcing and
outsourcing services. Totally Elective Care provides 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. Most recently, we have broadened activity with the Saolta Hospital
Group in Ireland for the provision of urology services and successfully
tendered for a position on a key new framework in Wales to support with
waiting lists, enabling rapid procurement of services to enable trusts to
respond to increasing demand.
Healthcare - looking ahead
We expect the coming year to be challenging but still see increasing potential
within the market. The NHS is in crisis, struggling to manage demand and
workforce issues and demand for all services continues to outstrip all
available capacity. As a partner to the NHS, we will continue to identify
and act upon all opportunities to support the delivery of quality patient
care, which enables Totally to grow and continue to build its reputation as
that partner of choice.
CORPORATE WELLBEING
"EFP" was acquired by Totally in December 2021 and works with a growing number
of high-profile organisations across the UK, including large corporate
companies, central government departments, universities and colleges to
provide workplace wellbeing and corporate fitness services.
EFP manages 61 gyms on behalf of corporate customers and also offers gym
design alongside digital services to support employee wellbeing in the
workplace.
2023 2022 2021 2020
Revenue (£m) 1.7 0.3 - -
Gross margin 41.5% 31.9% - -
During the year, corporate wellbeing demand exceeded pre-pandemic levels and
revenues rose strongly (up 40% on a like-for-like basis) with the addition of
new contracts, including Adidas, Codemasters and Oxford University Press, and
equipment installations for existing customers such as EA (Electronics Arts)
and Network Rail. EFP also confirmed a new five-year contract to support Royal
Mail, extending this relationship to more than 20 years.
New business opportunities continue to be driven by employers wanting to
entice employees back into the workplace and have refocused on core bricks and
mortar fitness centres, supported by a flexible digital offering.
In March, EFP agreed a new licensing agreement with Les Mills, the market
leaders in class instruction, to provide digital classes to all EFP members,
providing additional options for customers with hybrid or work from home
colleagues.
Corporate wellbeing - looking ahead
There are still significant opportunities for growth as corporate wellbeing
becomes a priority for more and more corporate employers looking to enhance
their workplace and encourage employees back to the office environment.
During the year we invested in additional business development capacity to
help respond to the increasing opportunities available and we will be
investigating new opportunities for growth, including the cross-selling of
services from across the Totally Group, in the coming year.
FINANCIAL REVIEW
Further growth within challenging operating environment
The NHS and other healthcare providers remain under significant pressure as
the impact of long waiting lists and delays in treatment for many millions of
people continues. During the year we responded to the needs of this
challenging market and an NHS in crisis, which experienced economic, political
and operational pressure. We continued to support our commissioners, trusts
and hospitals across England with services which enabled them to focus on
patients only they could see and ensured patients accessed the most
appropriate service to meet their needs.
Alongside this, we undertook planned activity to begin to rebalance our
portfolio towards higher market elective care and corporate wellbeing
business, maximising the potential of new acquisitions, Pioneer and EFP, by
creating additional capacity for patients to be seen via insourcing and
outsourcing agreements, the delivery of clinics and other care in community
settings, and helping corporate customers ensure their employees remain fit
and healthy.
Totally delivered revenue growth against the prior year and in line with
revised market forecasts issued on 2 March 2023. Overall revenue for the Group
increased by 6.5% year on year at £135.7 million (2022: £127.4 million),
supported by increased demand for services to reduce elective care waiting
lists, which increased 21% in real terms, and the recognition of a full year's
trading for Pioneer.
High inflation and a competitive workforce environment have been key themes
across the period and, like the NHS, we have been required to take difficult
decisions as we sought to deliver quality services under contracts which had
been procured in a significantly different economy, and a pre-pandemic
healthcare system.
As at 31 March 2023, the Company held £6.5 million in cash (2022: £15.3
million) with net cash at the same date of £4.0 million. Cash consumption in
the year of £8.9 million includes £(8.2) million on investing activities,
including £6.4 million contingent consideration paid, and £(1.9) million
outflow in working capital as a new normalised position settles, £(0.3)
million corporation tax and £(1.0) million outflow from financing
activities. This includes the cost of the dividend of £(1.9) million.During
the period, the Company utilised half of the £5.0 million rolling credit
facility which was secured in the previous year to support working capital
requirements.
The Group generated a profit before tax of £1.8 million (2022: £1.3
million), up 42% against prior year., underlying EBITDA was lower than
anticipated but in line with revised guidance issued in March 2023, up 11% at
£6.9 million (2022: £6.2 million), excluding exceptional items of £0.6
million.
The Company accordingly made the distribution of its interim dividend in
February 2022. The Board recommends to shareholders a final dividend of 0.125
pence per share. The intention remains to consider future dividend payments
based upon the trading performance of the Group.
Trading performance
Growth in revenue was primarily driven by an increase in revenue from our
elective services (previously reported as Planned Care, Totally Healthcare and
Pioneer Healthcare). Revenue for Elective Care almost doubled to £35.2
million (2022: £17.8 million), as hospitals and trusts continued to seek
support to tackle increasing waiting lists. The full year effect of the
acquisition of Pioneer was £11.3 million revenue.
Urgent Care revenue decreased 10% to £98.8 million (2022: £109.2 million)
as COVID-19-related demand fell away, and contracts expired. As previously
disclosed, this includes four urgent treatment centres in North West London.
Revenue from EFP totalled £1.7 million (2022: £0.3 million for the period
15 December 2021 to 31 March 2022), up 40% on a like for like basis as demand
exceeded pre-pandemic levels driven by a focus on bricks and mortar fitness
and wellbeing services as employers sought to entice employees back to the
office. The full year effect of the acquisition of EFP was £0.9 million.
The Group secured a number of new contracts for Urgent Care services during
the financial year totalling c.£77 million, including a five-year contract
retention for the provision of two urgent treatment centres in Bromley and a
contract for the delivery of NHS 111 national resilience services which
together deliver annualised income of c. £18 million. Additionally,
contract extensions for Urgent Care services worth c.£20 million were secured
within the period, reflecting long-term relationships with healthcare
commissioners and service quality. A further ten services, with an overall
contract value of c.£12.5 million, which were due for renewal on 31 March
2023 have also been extended.
At the end of the period, the business was restructured to bring all
healthcare operations under a single leadership team with centralised business
development. We continue to actively tender for new business across healthcare
and corporate wellbeing.
Gross margin increased slightly to 18.4% (2022: 18.0%) largely as a result of
delivering more higher margin elective care and corporate wellbeing services.
On 2 March 2023, the Group updated shareholders on current trading and the
impact of inflationary and workforce challenges. Following multiple actions
taken to manage costs and reduce reliance on agency staff, the Group posted an
underlying EBITDA of £6.9 million (2022: £6.2 million) excluding exceptional
items of £(0.6) million (2022: £(0.2) million). The profit before tax of
£1.8 million (2022: £1.3 million) is stated after an amortisation charge of
£1.5 million relating to the intangible value of contracts acquired.
31 March 2023 31 March 2022
Revenue £135.7m £127.4m
Gross profit £25.0m £22.9m
EBITDA £6.9m £6.2m
Exceptional items (£0.6m) (£0.2m)
Depreciation (£2.0m) (£1.9m)
Amortisation (£2.2m) (£2.6m)
PBT £1.8m £1.3m
Net assets £37.1m £35.4m
Cash £6.5m £15.3m
Exceptional items
Exceptional items, amounting to £0.6 million, related to costs incurred from
the restructure of operational and management teams. Prior year exceptional
items were acquisition related.
Cash flow statement
31 March 2023 31 March 2022
Net cash flows from operating activities (£2.2m) £11.2m
Net cash flows from investing activities (£8.2m) (£7.6m)
Net cash flows from financing activities £1.6m (£3.1m)
Net increase in cash and cash equivalents (£8.8m) £0.5m
Cash and cash equivalents at the beginning of the year £15.3m £14.8m
Cash and cash equivalents at the end of the year £6.5m £15.3m
Contingent Consideration
EFP Pioneer Vocare Total
£000 £000 £000 £000
At 31 March 2022 300 6,100 236 6,636
Paid in the period - (6,100) (8) (6,108)
As at 31 March 2023 300 - 228 528
The remaining balance of the Vocare contingent consideration relates to
pre-acquisition monies advanced to employees during the first month of
employment. The balance is payable quarterly and reflects advances recovered
from employees when they leave. The consideration related to EFP is expected
to be paid during the third quarter of the current financial year, following
the audit of FY23 performance.
Dividend
We remain committed to the payment of dividends as we believe this reflects
our continued confidence in the Company's future prospects. The Board is,
therefore, pleased to be recommending to shareholders a final dividend of
0.125 pence per share. This, together with the interim dividend of 0.50 pence
paid in February 2023, makes a total dividend for the year of 0.625 pence per
share. The final dividend will be satisfied by dividends distributed by
subsidiaries to the parent prior to the Annual General Meeting. Subject to
approval by shareholders at the Annual General Meeting to be held on 1
September 2023, the final dividend will be paid on 11 October 2023 to
shareholders on the register as at the close of business on 7 September 2023.
The shares will be marked ex-dividend on 8 September 2023.
Outlook
Following our review at the end the final quarter of FY23 we revised our
forecasts to recognise increasingly challenging operating conditions. For
the forthcoming year, we are confident that there is further ever-increasing
opportunity which we believe cannot be satisfied without the support of
existing independent sector capacity. Our pipeline of opportunities remains
considerable.
We are working closely with ICBs, trusts and NHS England and continue to build
our reputation as a reliable and responsive partner of choice so that we can
respond quickly when they seek to procure additional services.
Lisa Barter FCA
Chief Financial Officer
10 July 2023
31 March 2023 31 March 2022
Continuing operations £000 £000
Revenue 135,696 127,373
Cost of sales (110,695) (104,504)
Gross profit 25,001 22,869
Administrative expenses (18,113) (16,730)
Other income 2 26
Profit before exceptional items 6,890 6,165
Exceptional acquisition costs (562) (179)
Profit before interest, tax and depreciation 6,328 5,986
Depreciation and amortisation (4,249) (4,516)
Operating profit 2,079 1,470
Finance income 26 1
Finance costs (321) (211)
Profit before taxation 1,784 1,260
Income tax charge - (179)
Profit for the year attributable to the equity 1,784 1,081
shareholders of the parent company
Other comprehensive income - -
Total comprehensive profit for the year net of tax 1,784 1,081
attributable to the equity shareholders of the parent company
31 March 2023 31 March 2022
Profit per share Pence Pence
From continuing operations:
Basic 0.94 0.92
Diluted 0.93 0.90
Consolidated Statement of Changes in Equity
For the year ended 31 March 2023
Share capital Share premium Retained earnings Equity shareholders' funds
£000 £000 £000 £000
At 1 April 2021 18,219 2 15,753 33,974
Total comprehensive profit for the year - - 1,081 1,081
Issue of share capital 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
Comprehensive profit for the year - - 1,784 1,784
Issue of share capital 887 892 - 1,779
Dividend payment - - (1,908) (1,908)
Credit on issue of warrants and options - - - -
At 31 March 2023 19,610 1,945 15,510 37,065
Consolidated Statement of Financial Position
As at 31 March 2023
31 March 2023 31 March 2022
£000 £000
Non current assets
Intangible assets 47,737 48,935
Property, plant and equipment 1,218 1,139
Right-of-use assets 1,362 2,336
Deferred tax 363 242
50,680 52,652
Current assets
Inventories 75 74
Trade and other receivables 13,680 14,099
Cash and cash equivalents 6,451 15,311
20,206 29,484
Total assets 70,886 82,136
Current liabilities
Trade and other payables (28,172) (36,629)
Contingent consideration (528) (6,636)
Borrowings (2,500) -
Lease liabilities (275) (446)
(31,475) (43,711)
Non current liabilities
Trade and other payables (140) (22)
Lease liabilities (1,661) (1,981)
Deferred tax (545) (1,012)
(2,346) (3,015)
Total liabilities (33,821) (46,726)
Net current liabilities (11,269) (14,227)
Net assets 37,065 35,410
Shareholders' equity
Called up share capital 19,610 18,723
Share premium 1,945 1,053
Retained earnings 15,510 15,634
Equity shareholders' funds 37,065 35,410
Consolidated Cash Flow Statement
For the year ended 31 March 2023
31 March 2023 31 March 2022
£000 £000
Cash flows from operating activities
Profit before taxation 1,784 1,260
Adjustments for:
- options and warrants charge 25 167
- depreciation and amortisation 4,249 4,516
- finance income (26) (1)
- finance costs 321 211
Movements in working capital:
- inventories 1 26
- movement in trade and other receivables 419 (2,382)
- movement in trade and other payables (8,674) 7,366
Cash used for operations (1,901) 11,163
Income tax paid (280) -
Net cash flows from operating activities (2,181) 11,163
Cash flows from investing activities
Purchase of property, plant and equipment (730) (418)
Additions of intangible assets (1,070) (1,085)
Acquisition of subsidiaries, net of cash acquired - (6,071)
Contingent consideration paid (6,370) (22)
Net cash flows from investing activities (8,170) (7,596)
Cash flows from financing activities
Issued share capital 1,779 22
Expenses attached to equity issue - (70)
Borrowings 2,500
Dividends paid to holders of the parent (1,908) (1,367)
Interest paid (321) (126)
Payments on lease liabilities (559) (1,512)
Net cash flows from financing activities 1,491 (3,053)
Net increase in cash and cash equivalents (8,860) 514
Cash and cash equivalents at the beginning of year 15,311 14,797
Cash and cash equivalents at the end of the year 6,451 15,311
NOTES TO THE FINANCIAL INFORMATION
FOR THE YEAR ENDED 31 MARCH 2023
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 2023 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. There were no acquisitions or disposals
during the period.
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.
The IFRS 15 5 step revenue recognition criteria is applied as follows:
identifying the contracts with customer, identifying performance obligation,
determine the transaction price, allocate the transaction price to the
performance obligation and the satisfying of performance obligation. This
applies to all contracts with customers, except where they fully in the scope
of other standards.
Elective care Services
Revenue represents invoiced sales of services to regional Clinical
Commissioning Groups of the National Health Service ('NHS') as well as non NHS
clients. 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. For the NHS contracts, 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 and Eire.
Finance income
Finance income comprises bank interest received, recognised on an accruals
basis.
Finance costs
Finance costs comprise bank charges, interest on leases recognised under IFRS
16 and interest on the revolving credit facility utilised.
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
derecognised 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 derecognised.
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 development costs, 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 contributions 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 statements or interpretations adopted
during the year are detailed below:
• IFRS 9: Annual Improvements to IFRS Standards 2018-2020 Cycle
• IFRS 3: Amendments to IFRS 3 updating certain references to the
Conceptual Framework for Financial reporting
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
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
IFRS 17 IFRS 17 supersedes IFRS 4 01 January 2023
IFRS 16 Amendment regarding lease liabilities in a sale and lease back transaction 01 January 2024
IAS 1 Amendment regarding non-current liabilities with covenants 01 January 2024
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 2023 31 March 2022
Earnings Basic earnings per share Diluted earnings per share Earnings Basic earnings per share Diluted earnings per share
£'000 £'000
Profit before exceptional items 2,346 1.24p 1.22p 1,226 1.00p 0.98p
Effect of exceptional items (562) (0.29)p (0.29)p (145) (0.08)p (0.08)p
Profit attributable to owners of the parent 1,784 0.94p 0.93p 1,081 0.92p 0.90p
2023 2022
000s 000s
Weighted average number of ordinary shares 190,836 182,553
Dilutive effect of shares from share options 3,238 3,753
Fully diluted weighted average number of ordinary shares 194,074 186,306
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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