TIDMINHC
RNS Number : 7369H
Induction Healthcare Group PLC
28 November 2022
Induction Healthcare Group PLC
("Induction", the "Company", or the "Group")
Audited Final Results
Induction (AIM: INHC), a leading digital health platform driving
transformation of healthcare systems worldwide, announces its
audited final results for the year ended 31 March 2022.
Financial Highlights
Metric 2022 2021 Restated
Total proforma revenue (1) GBP12.1m GBP1.5m
---------- --------------
Non-Cash IFRS 3 Revenue adjustment (1) (GBP4.2m) (GBP0.1m)
---------- --------------
Revenue from Contracts with Customers GBP7.9m GBP1.4m
---------- --------------
Gross Profit GBP5.0m GBP0.7m
---------- --------------
Loss for the year GBP8.4m GBP7.6m
---------- --------------
Adjusted EBITDA (2) GBP0.0m GBP(4.1m)
(3)
---------- --------------
-- Under the provisions of IFRS 3, a Fair Value adjustment is
applied to acquired deferred revenue as a part of acquisition
accounting. This adjustment reduces reported total revenue
recognised from customer contracts by GBP4.2m (2021: GBP0.1m).
o Increased revenue from contracts with customers is up 464% to
GBP7.9m (2021: GBP1.4m)
-- Adjusted EBITDA(2) post IFRS 3 fair value adjustment of GBP0
(Break-Even) (2021: GBP(4.1)m restated(3) )
-- Annually Recurring Revenue ('ARR(5) ') grew to GBP13.5m
(2021: GBP2.0m) taking into account the multi-year renewal of NHS
England Attend Anywhere contracts post period end.
o NHS England contract renewals: GBP6.6m ARR, which was ahead of
management expectations
o Majority of NHS England Attend Anywhere contracts moved from
one year to a multi-year term.
o The Group delivered organic ARR growth of 100% year on year
(GBP4m (2021: GBP2m))
-- GBP7.5m cash as at 31 March 2022 (2021: GBP2.5m)
Operational Highlights
-- GBP25 million fundraise through a placing of 35,714,285 new Ordinary Shares
o Completion of the acquisition of Attend Anywhere Pty Ltd in
June 2021 for a cash consideration of GBP16.4 million plus the
issue of 14,285,714 consideration shares with a value of
GBP9.0m
-- Induction Zesty contract win with South West London
integrated care system ("ICS"), one of the first ICS led
procurements for digital patient services in England
-- 100% year-on-year growth for Induction Zesty
-- DWP Contract to support the virtualisation of the UK benefits
system using Induction Attend Anywhere, the first contract outside
of a healthcare setting
-- Induction AA national contract renewals with NHS Scotland and NHS Wales
Post period end highlights
-- Appointment of Christopher Samler as Non-Executive Chairman
-- Successful contract renewals with 94% of existing English NHS
customers for Induction Attend Anywhere, which secured 86% of group
recurring revenues by value
-- Non-exclusive Software Reseller Agreement signed with System
C Healthcare Limited for Induction Zesty
James Balmain, CEO of Induction Healthcare, said: "The global
digital health market is predicted to grow by 23.31% to US$7,844m
in 2025(4) and Induction's market segment is maturing rapidly,
driven by an acute need for digital transformation in hospitals
around the world.
"We have made strong growth in FY22 and a key focus for the
Group following the acquisition of Attend Anywhere Pty Ltd was the
renewal of Induction Attend Anywhere contracts throughout the UK,
of which we have been very successful with many NHS Trusts choosing
to renew for two or three years. We have continued to work
alongside existing health providers to deliver results and our high
margin and scalable SaaS operation remains the core driver of the
business. In the period we also achieved record ARR and retain a
strong cash position of GBP7.5m following the placing and
acquisition.
"As the world recovers from the pandemic, the pace of change is
creating significant opportunities for companies in our sector -
Induction is well positioned to capture global market share in the
coming years."
Annual Report and Accounts and Notice of AGM
The Annual Report and Accounts and notice of AGM will be
available later this morning on the Company's website;
https://inductionhealthcare.com/investors/financial-reports-and-publications/
.
Copies will be posted to shareholders in due course.
(1) Total pro-forma revenue is stated before the application of
IFRS3 being a fair value adjustment relating to the deferred
revenue acquired as part of the Attend Anywhere Pty Limited
acquisition in June 2021 and the acquisitions of Zesty Limited
(June 2020) and Horizon Strategic Partners Limited (November 2019),
giving pro-forma recognised revenue of GBP12.1m (2021: GBP1.5m).
After applying this non-cash adjustment, recognised revenue from
customer contracts for the year is GBP7.9m (2021: GBP1.4m
restated).
(2) Adjusted EBITDA is EBITDA (Loss GBP5.8m) adjusted for
exceptional items (+GBP0.5m), share based payment adjustments
(+GBP0.6m) and other non-cash items (+GBP0.4m), and application of
IFRS 3 relating to fair value adjustments (+GBP4.2m) arriving at
pro-forma Adjusted EBITDA for the year GBP0.0m (2021: GBP(4.1)m).
Refer to the Financial Review for further details.
(3) Adjusted EBITDA for the year ended 31 March 2021 has been
restated to take into account the effects of share-based payments
and the impact of the application of IFRS 3 in the prior period.
Refer to Note 6 in the Consolidated Financial Statements for
further details on the prior period adjustment.
(4) Source: "Global Virtual Healthcare Market, Cumulative Impact
of COVID-19", p31
(5) Annual Recurring Revenue ("ARR") is defined as annualised
contracted Software-as-a-Service ("SaaS") fee. ARR is calculated as
the annually recurring licence fees from contracts existing at 31
March 2022 that expire on 1 April 2022 or later. It represents the
annualised value of the recurring revenue base that is expected to
be carried into future periods, and its growth is a forward-looking
indicator of reported recurring revenue growth. ARR differs from
recognised revenue due to the timing of revenue recognition, which
includes amounts for partial years based on contract start dates,
whereas ARR is an annualised amount. Recognised revenue also
includes non-recurring non-SaaS fees.
(6) Restated balances relate to Revenue from Contracts with
Customers - reducing recognised revenue from GBP1.5m to GBP1.4m,
Gross Profit - reducing from GBP0.8m to GBP0.7m, Loss for the year
- increasing from GBP7.5m to GBP7.6m and Adjusted EBITDA - reducing
from (GBP4.0m) to (GBP4.1m)
ENQUIRIES
Induction Via Walbrook PR Ltd: induction@walbrookpr.com
James Balmain, Chief Executive Officer
Guy Mitchell, Chief Financial Officer
Singer Capital Markets (Nominated
Adviser and Broker) +44 (0)20 7496 3000
Philip Davies / Kailey Aliyar
Walbrook PR Ltd induction@walbrookpr.com
Paul McManus / Alice Woodings Mob: +44(0)7980 541 893 / +44
(0)7407 804 654
About Induction - www.inductionhealthcare.com
Induction (AIM: INHC) Induction delivers a suite of software
solutions through a single integrated platform that transforms care
delivery. Our system-wide applications help healthcare providers
and administrators to deliver care at any stage remotely as well as
face-to-face - giving the communities they serve greater
flexibility, control and ease of access. Purpose-built for
integration with leading Electronic Medical Record (EMR) platforms,
our products offer immediate stand-alone value that becomes even
greater when integrated with pre-existing systems.
Used at scale by national and regional healthcare systems, as
well non-health government services, our applications are relied
upon by hundreds of thousands of clinicians and millions of
patients across almost every hospital in the British Isles.
Chair Statement
I am delighted to have recently joined the Induction leadership
team following a successful year for the Group. The global COVID-19
pandemic has significantly accelerated the shift, that was already
underway, towards digitising care delivery. Throughout the world,
providers and patients expect greater flexibility in all aspects of
their life, including in the way they deliver and receive care.
Induction is at the heart of this transformation.
Induction delivered a record year for trading in FY22, driven
mainly by the acquisition of Attend Anywhere, leading to
substantial increases in both revenue and contracted ARR (Annually
Recurring Revenue). Equally, excluding the effect of the Attend
Anywhere acquisition, the Group delivered organic ARR growth of
100% year on year (GBP4m (2021: GBP2m)). The Group made a loss
before tax of GBP(9.6)m (2021: GBP(8.1)m restated).
The increased losses incurred reflect the Group's continued
investment to allow it to scale and grow ARR and revenue in future
years. In addition, following the placing to raise GBP25m in June
2021, net cash as at 31 March 2022 improved substantially from
GBP2.5m to GBP7.5m. Following strong renewals of NHS England
contracts for Induction Attend Anywhere in March 2022, and some of
these contracts renewing and paying more than 1 year in advance,
the Group's cash position has further improved post-period end.
The Attend Anywhere acquisition provided the business with
national scale and a strong market position in an area of prominent
growth and investment. In February 2022, NHS England issued a
delivery plan(7) to tackle the backlog of elective care and our
leading products, Induction Zesty and Induction Attend Anywhere,
are well placed to support this initiative with their strong market
positions in the UK. However, the backlog of waiting times in
elective care following the COVID-19 pandemic is not confined to
the NHS and represents an opportunity for Induction globally. We
are well positioned to help ease these global stresses by
integrating Induction products into existing healthcare systems -
the precise strategic approach represents an immediate focus for
the Board.
It is a particularly exciting, albeit challenging, time for
Induction and for the executive team and Board - the demand for our
products, both in the UK and globally has never been stronger and
the company, the management team and the Board have to evolve to
meet this challenge. Induction is a small, relatively fast growth
business with many of the growing pains associated with scale
up.
As we grow we will need to ensure that we have the products,
systems and internal processes that meet our customers' and
management's needs. Above all, we will need to attract and retain
high quality and experienced people at every level in order to
ensure that we hit our commitments to our shareholders. In a tight
labour market, particularly in our field of digital expertise, this
is challenging.
I look forward to working with James and the whole Board as we
deliver on our promises and build Induction into the digital
healthcare platform of choice. I also look forward to working
closely with you, our stakeholders, as we seek to build on the
value of your investment - I anticipate speaking with many of you
over the coming months.
Christopher Samler
Non-Executive Chairman
28 November 2022
(7)
https://www.england.nhs.uk/coronavirus/wp-content/uploads/sites/52/2022/02/C1466-delivery-plan-for-tackling-the-covid-19-backlog-of-elective-
care.pdf
CEO Statement
31 March 2022 saw the end of a positive year for the Induction
Group. We delivered on all our key financial metrics, ending the
period in line with market expectations.
This performance was mainly driven by the acquisition of Attend
Anywhere Pty Ltd ("Induction Attend Anywhere"), completed in June
2021, adding GBP11m of ARR and GBP1.1m of profit before tax(8)
.
Revenue increased to GBP7.9m (2021: GBP1.4m (restated)), and
although the Group recorded a loss before tax of GBP9.6m (2021:
GBP8.1m (restated)), this is as a result of our deliberate
continued investment in key areas of the business, as well as
integrating Attend Anywhere.
A significant proportion of Induction Attend Anywhere revenues
are generated from our contracts with NHS England. Immediately
post-acquisition, Induction Attend Anywhere held contracts with 172
English NHS trusts - all of which expired in March 2022. This
presented obvious risk to the group, so we were delighted to renew
contracts with 94% of existing English NHS customers post period
end, which secured 86% of group recurring revenues by value.
The majority of FY23 NHS England contracts for Induction Attend
Anywhere were renewed on either a two or three year term,
de-risking group recurring revenues moving forwards.
In November 2021 we won a contract to supply the Department of
Work and Pensions (DWP) through our partner Involve Visual
Collaboration Limited ("Involve") to support the virtualisation of
the UK benefits system using Induction Attend Anywhere. Whilst we
are exploring the future potential for the Induction Attend
Anywhere platform in other non-health public sector settings, we
are mindful that our focus is in healthcare.
FY22 was a challenging year for our Induction Zesty patient
engagement platform. Existing customers relied heavily on Induction
Zesty during the pandemic, however new business wins fell short of
pre-pandemic forecasts as NHS hospitals were understandably
pre-occupied with treating COVID-19 cases.
I am pleased to report, however, a positive shift in market
sentiment as health systems around the world are now focused on
post-COVID recovery. Induction Zesty is increasingly playing a
critical role in reducing elective waiting lists, a key economic
and political focus. Contracted ARR more than doubled year on year
to GBP1.5m, with much of this growth occurring in the last quarter
of FY22. There has been significant investment during the year in
Induction Zesty capabilities and further development planned and we
are confident Induction Zesty will deliver continued growth in
FY23, despite a challenging economic and political environment.
Our market focus
We remain focused on ambulatory patients in hospitals -
outpatients. We continue to see consolidation and growth
opportunities in secondary acute, specialist tertiary, community
and mental health care settings.
Overall, we see attainable recurring annual revenues of between
GBP30m and GBP35m over the next 3 years across the British Isles
for our current suite of products.
We are, at heart, a healthcare company. We remain open to
partnerships that deliver our products, out of the box, into other
public sector organisations, but our core focus will remain within
healthcare and we will avoid product customisations for
non-healthcare customers that take us away from our core health
product vision.
Annually recuring revenue
We remain committed to building our recurring revenue streams,
via multi-year licensing of our software products, operating a
Software as a Service ("SaaS") business model. Whilst we do
generate non-recurring set-up revenue via our implementation teams,
we are resistant to building a large professional services
function, preferring to work with specialist partners.
Another key aspect of our strategy is to focus on the supply of
software products to existing healthcare providers, as opposed to
directly employing care teams and delivering care ourselves. In
doing this, we are looking to preserve the high margins and
recurring revenue streams associated with a SaaS business.
Video consultations - Induction Attend Anywhere
Whilst the COVID-19 pandemic created overnight demand for remote
consultations, we remain focused on ensuring Induction Attend
Anywhere's value proposition is both clearly communicated and
successfully enhanced over the coming months.
A key area of development during FY23 will be our customer
success function and we will continue to invest in the best talent
available to drive this important function forwards. With a large
and disparate user base across NHS England, it's vital we engage
with customers to understand changing usage requirements and close
the loop efficiently between customers, product development and
delivery.
Microsoft Teams still remains our clear competitor within
secondary care and we will continue to invest in product
development, prioritising new features that widen the gap further
between specialist consulting platforms (Induction Attend Anywhere)
and mainstream business conferencing applications (Teams, Zoom).
Integration into underlying EMR systems, via our HealthStream
platform, is a good example of this.
Digital patient engagement - Induction Zesty
As Patient Engagement Platforms gain increasing national
strategic relevance to the NHS, we are engaged in several key
projects, both regionally and nationally. We are seeing tangible
evidence that read and write integrations into hospital EMR systems
(Cerner, System C) are a key selling point and direct value driver
- this 'integrated' strategy will continue to be a focus for
Induction Zesty and our other product lines.
One of the current digital initiatives at many NHS hospitals is
patient initiated follow up booking ("PIFU"). It's estimated that
as many as 50% of hospital follow up appointments allocated to
patients are unnecessary. PIFU workstreams are aiming to allow
patients to book only if they need an appointment, supported by
ongoing remote monitoring to effectively manage clinical risk.
Induction Zesty has a complex rules engine that supports this
emerging workflow, creating a unique selling point for the
platform. Working alongside Cerner and Palantir, we expect to
launch a fully automated PIFU platform during FY23. Our strategy is
to lead the market on a fully automated offering, differentiating
our product from other request based manual offerings.
There is clear potential synergy between Induction Attend
Anywhere and Induction Zesty. We are moving forwards with our
cross-sell and upsell strategies and will continue to focus our
development effort on tighter integration between these two
products.
Our clinical apps business
Our clinical apps, Induction Guidance and Induction Switch,
continue to enjoy user growth and increasing engagement, ending the
year on 288k and 289k users respectively. ARR grew by 8% for
Induction Guidance, supported by a high contract renewal rate
amongst our 122 NHS hospital customers. UK market growth, however,
has proved more challenging for Induction Guidance.
Given the relatively minor contribution our clinical apps make
to overall group revenues and the solid traction we are seeing with
our patient facing products, we are carefully considering the role
of clinical apps within the group moving forwards.
An enterprise 'flexible care' platform, fit for global scale
There is an emerging health IT product category that aims to put
the patient in the centre of their care delivery. Currently this
category contains several product types including Telemedicine,
Patient Portals and Virtual Wards. The core capabilities of each of
these overlap to a large degree. Our product vision is based on the
view that, as demand for digital services rises, these product
types will converge into enterprise platforms that deliver value
end to end over the care pathway.
We continue to execute our buy, build and partner strategy with
this product vision in mind.
International growth
The global digital health market is predicted to grow from US
$2.8bn in 2021 to US $7.8bn in 2025(9) , as the need for more
flexible healthcare options become a necessity due to user
behaviour changes and organisational efficiency requirements.
We see growth potential in new geographical markets and have set
this as a major strategic focus for FY23. Given our scale within
the UK NHS, now is a good time to market our products in new
territories. Most developed (and many developing) health economies
have the same post- pandemic challenges as the UK, especially those
around rapidly increasing hospital waiting lists.
Our strategic pillars for growth
-- Consolidate our domestic position - we will continue to
invest in and refine our sales, commercial, delivery and customer
success capabilities - ensuring we stay ahead of competitors and
deliver strong organic ARR growth.
-- Grow our domestic and international channels to market -
Partners are playing an increasingly important role in our growth
story. Our partnership with Cerner, for example, will deliver more
than 50% of Induction Zesty's growth during FY23. As we scale, we
attract more partners, creating positive momentum that further
widens our market reach and enhances our product capabilities. The
recently announced (post-period end) VAR agreement with System C
further supports our strategy.
-- Invest in and deliver our integrated product strategy - As a
product company, a core tenant of our strategy is a single,
enterprise product that leads the growing digital patient
engagement segment.
-- Acquisitions and partnerships to drive international
expansion - As a rapidly growing but still early-stage sector, our
market is fragmented, with many small and medium sized companies in
each of the major world markets. We see acquisitions and
partnerships with VARs and other similar providers as a highly
valid method to enter new markets with scale and pace.
People
We continue to invest in talent and are more focused than ever
on building our company culture. As companies 'exit lockdown', we
are working hard to define a rewarding and inclusive hybrid working
environment. During the year we began the process of rolling out a
group wide performance management and incentive scheme, ensuring
everyone at Induction is aligned to the future success of the
Group.
Under the leadership of Dave Williams, our Group Chief Product
and Technical Officer (previously at Just Eat), we completed a
global re-organisation of our four product and technology teams
around the world, who account for over 80% of the Group total
headcount. Key managers now have global, multi-product
responsibility, removing any sense of silos by product and we are
now better placed to grow our business internationally and
integrate future acquisitions.
More recently we've attracted a highly experienced Chief Growth
Officer, Paul Tambeau, who is leading our sales, marketing,
customer success and international development teams.
Post-year end we also saw Chris Spencer step down from his
position as Chair. I would like to thank Chris for the great
support he has provided to bring the Group to the strong position
it is in today. We welcome Christopher Samler into the role and I
look forward to working alongside him and learning from him and his
valuable expertise as we drive the business forward.
Outlook
It's been a transformational year for Induction and we remain
energised about the future prospects for the Group. Our market
segment is maturing rapidly, driven by an acute need for digital
transformation in hospitals around the world.
Our steadfast focus on working alongside existing health
providers as opposed to directly competing with them in a more
disruptive manner is delivering results. A high margin and scalable
SaaS operation remains our core driver as a business.
As the world recovers from the pandemic, the pace of change is
creating significant opportunities for companies in our sector -
Induction is well positioned to capture global market share in the
coming years.
James Balmain
Chief Executive Officer
28 November 2022
(8) Profit before tax contributed by Induction Attend Anywhere
is taken after IFRS 3 adjustments related to deferred revenue of
GBP4.1m related to the acquisition. Refer to the Financial Review
on page 9 for further information on these adjustments.
(9) Source: "Global Virtual Healthcare Market, Cumulative Impact
of COVID-19", p31
Financial review
Revenue
For the year ended 31 March 2022, revenue from customer
contracts, post IFRS 3 fair value adjustments, was
GBP7.9m (2021: GBP1.4m, restated(10) ).
Under IFRS, deferred revenue is required to be fair valued. This
is a non-cash movement of deferred revenue to goodwill on the group
balance sheet and does not affect future years. The impact of this
in the year was GBP4.2m (2021: GBP0.1m). Had the IFRS 3 adjustment
not been applied Group revenues would have been GBP12.1m on a
pro-forma basis for the year (2021: GBP1.5m).
Reported revenue from customer contracts for Induction Zesty
grew to GBP1.5m (2021: GBP0.8m (restated)(10) ). The principal
driver for this growth has been the drive to digitise healthcare
and booking portals in NHS England.
Revenues for Induction Attend Anywhere, for the 10 months post
acquisition, were GBP5.7m post the IFRS 3 deferred revenue fair
value adjustment and GBP9.8m on a pro-forma basis.
Reported revenue from customer contracts for Induction Guidance
has remained steady at GBP0.6m (2021: GBP0.6m). Growth has been
slower in FY22 than expected.
Contracts acquired as part of the Induction Attend Anywhere
acquisition for NHS England and NHS Scotland were one-year
contracts which were due for renewal at 31 March 2022.
NHS Scotland renewed for 1 year and 94% of trusts in NHS England
renewed, many renewing for periods of 2 or 3 years. To secure the
multi-year deals small discounts were agreed resulting in revenue
renewals by value of 86%.
To further illustrate the in-year effect of IFRS fair value
adjustments, at the start of FY23, contracted revenue for Induction
Attend Anywhere, post the NHS Scotland and NHS England renewals was
GBP11.6m, despite renewals for NHS England contracts at 86% of the
prior year value.
In November 2021 a contract was agreed with the Department of
Work and Pensions (DWP), this was a contract for two years with two
subsequent 12-month extensions built in (a 2+1+1 deal) for up to
GBP1.3m of annual revenues.
Induction Switch user numbers have increased in year although
there has been limited sales traction within the year. The carrying
value of Switch is currently GBPnil and the Board determined that
the value of goodwill and intangible assets should remain at this
value.
Revenue from customer contracts, post IFRS 3 adjustments in
respect of fair value, is as follows:
2021
2022 GBP'000
GBP'000 (restated(11) )
--------------- --------- ----------------
United Kingdom 7,785 1,190
Europe 13 13
United States 18 23
Rest of World 92 135
--------------- --------- ----------------
7,908 1,361
--------------- --------- ----------------
(10) Reported revenue for Zesty for the year ended 31 March 2021
has been restated to take into the account the application of IFRS
3 deferred revenue fair value adjustments. Please refer to Note 6
for further information.
(11) Revenue for the year ended 31 March 2021 has been restated
to take into the account the application of IFRS 3 deferred revenue
fair value adjustments. Please refer to Note 6 for further
information.
Pro-Forma revenue from customer contracts (pre the IFRS 3
adjustments above):
2022 2021
GBP'000 GBP'000
--------------- -------- --------
United Kingdom 11,994 1,342
Europe 13 13
United States 18 23
Rest of World 92 135
--------------- -------- --------
12,117 1,513
--------------- -------- --------
The following table reconciles recognised revenue and pro-forma
revenue:
31 March 2021
31 March 2022 GBP'000
GBP000 (restated(10)
)
----------------------------------------------- -------------- --------------
Revenue 7,908 1,361
Fair value adjustments on contract liabilities 4,209 152
Pro-Forma revenue 12,117 1,513
----------------------------------------------- -------------- --------------
Both Induction Guidance and Induction Switch form our clinical
apps business and whilst user growth on both platforms has been
strong, the board are considering the role these apps play in
generating significant group revenues moving forwards, given the
strong traction we are seeing from our patient facing platforms
Induction Attend Anywhere and Induction Zesty.
Operating Costs
Development expenses increased to GBP5.9m (2021: GBP1.9m). This
relates to the increase in headcount and operating costs following
the acquisition of Induction Attend Anywhere, a full year of
trading post-acquisition of Induction Zesty, and continued
investment in the development team particularly for Induction
Zesty. Development costs are presented net of capitalised software
development costs. The Group capitalises software development costs
which depreciate over three to five years, resulting in
capitalisation of GBP3.1m (2021: GBP1.7m).
Administrative expenses increased to GBP7.3m (2021: GBP4.9m),
(restated)12). Again, this relates to the acquisition of Induction
Attend Anywhere and full year trading of Induction Zesty. It also
reflects the expansion of the senior management and leadership
functions of the group, fundraise and acquisition-related
transaction costs of GBP0.5m (2021: GBP0.4m), and share-based
payment charge of GBP0.6m (2021: GBP0.7m).
Sales and marketing expenses increased to GBP1.2m (2021:
GBP0.6m). This reflects the investment in the group-wide commercial
functions of the Group to acquire further market share.
Excluding the results of Induction Attend Anywhere, development
costs for the Group were GBP4.2m (2021: GBP1.9m), again reflecting
the investment in the development team for Induction Zesty.
Administration costs were GBP6.1m (2021: GBP4.9m (restated12)),
reflecting the expansion of the senior management and leadership
functions of the Group. Sales and marketing costs were GBP1.2m
(2021: GBP0.6m) and relates purely to investment in group-wide
commercial functions.
Reported loss before tax for the year was GBP9.6m (2021: GBP8.1m
restated).
Core performance measures
Core performance measures are alternative performance measures
(APM) which are adjusted and non-IFRS measures. These measures
cannot be derived directly from our consolidated financial
statements. We believe that the following non-IFRS performance
measures, when provided in combination with reported performance,
will provide investors, analysts and other stakeholders with
helpful complementary information to better understand our
financial performance and our financial position from period to
period. The measures are not substitutable for IFRS results and
should not be considered superior to results presented in
accordance with IFRS.
We considered the adjusting items, including explanations of why
they were either not related to the underlying performance of the
business or impacted the comparability of the Group's results
year-on-year. We also reviewed the FRC's guidance, and considered
adjusting items used by the Group's peers and have concluded that
the appropriate disclosure of those items has been included.
The Group incurred several exceptional items during the year as
per the table below which shows adjusted operating profit /(loss)
before depreciation, amortisation, impairment, share based payments
and exceptional costs of GBP(4.2)m (2021: GBP(4.3)m (restated(12)
).
31/03/2021
31/03/2022 GBP'000
GBP'000 (restated(12)
)
------------------------------------------------------- ----------- --------------
Loss before tax (9,574) (8,117)
Add / (Less): Net finance expense / (income) 28 2
Add: Impairment losses - 1,366
Add: Depreciation and amortisation 3,785 1,356
------------------------------------------------------- ----------- --------------
Operating loss before depreciation, amortisation
and impairment (5,761) (5,393)
Adjusted for exceptional and non-cash costs:
- Acquisition and fundraise related transaction
costs(1) 531 375
- Other exceptional items(3) 404 -
- Share based payments (non-cash)(4) 613 6,984
------------------------------------------------------- ----------- --------------
Adjusted Operating profit/(loss) before, depreciation,
amortisation, impairment and exceptional costs
("Adjusted EBITDA") (4,213) (4,320)
Pro-forma IFRS 3 adjustment: - Fair value adjustments
on
contract liabilities2 and contingent consideration 4,209 243
------------------------------------------------------- ----------- --------------
Pro-Forma Adjusted EBITDA (4) (4,077)
------------------------------------------------------- ----------- --------------
1. These costs are directly attributable to business
combinations and are excluded from underlying performance as they
would not have been incurred had the business combination not
occurred. They do not relate to the underlying trading of the Group
and are added back to aid comparability of the Group's
profitability year-on-year.
2. As a result of applying IFRS 3 in accounting for
acquisitions, the Group is required to determine the fair value of
all acquired assets and Liabilities at the date of acquisition.
This includes determining the fair value of the contract
liabilities ("deferred income") of the acquiree. The fair value of
the contract liabilities (and therefore revenue subsequently
recognised) was less than the amounts recognised by Attend
Anywhere, Zesty and Horizon Strategic Partners on a standalone
basis, resulting in a fair value adjustment of GBP4.2m related to
Attend Anywhere and Zesty (2021: GBP0.2m fair value adjustment
related to Zesty and Horizon Strategic Partners). This is excluded
from pro-forma adjusted EBITDA on the basis that it is non-cash and
is not representative of the trading performance of the business in
the period and this exclusion ensures comparability. Pro-Forma
adjusted EBITDA is also adjusted to add back GBPNil (2021: GBP0.9m)
fair value movement in contingent consideration.
3. Includes items related to one-time non-recurring executive
and senior management team restructuring costs (GBP366k) and other
one-off items (GBP38k). Senior management team restructuring costs
are added back to Adjusted EBITDA due to the fact that these are
non-recurring and not representative of the underlying performance
of the Group.
4. Comparative restated to include share-based payments.
Share-based payments are excluded from Adjusted EBITDA due to the
fact that these are non-cash and therefore not representative of
the underlying trading of the group.
(12) This has been restated to take into the account the
application of IFRS 3 deferred revenue fair value adjustments and
exclusion of share based payments as a non-cash item. Please refer
to Note 6 for further information.
Adjusted EBITDA for the year was GBP4.3m (2021: GBP(4.3)m
(restated13)). Before allowing for the application of IFRS 3
pro-forma Adjusted EBITDA) for the year was GBP0.0m (2021:
GBP(4.1)m (restated)). It is important to recognise the difference
this adjustment makes to the trading results of the Group as it is
non-cash accounting adjustment only.
Cash
The Group's cash position as at 31 March 2022 was GBP7.5m (2021:
GBP2.5m). The operating cash outflow was focused
on growing commercial teams particularly around sales and
marketing headcount and also marketing campaigns, events and
supporting materials. These costs are investments in acquiring
future market share and are incurred ahead of future revenues as
the benefit will be seen in future years. In addition, while we
capitalise a large portion of our development costs, shown in
investing activities, there is a portion that is not capitalised
and is also included in operating cash outflows above as a revenue
expense. Again, the benefit of this investment will be realised in
future years as we deliver our expanded product functionality to
more customers. Investment outlay of GBP16.8m (2021: GBP3.7m)
includes GBP13.5m for the acquisition payment (net of cash
acquired) for Induction Attend Anywhere and GBP3.1m for capitalised
development costs (2021: GBP1.7m).
The Directors regularly monitor cash usage and forecast
cashflows to ensure that the projected business needs are
supported, and future acquisitions can be delivered as part of the
overall strategy to grow the business. The liquidity of the Group
is sufficient to meet the cash needs of the business as they become
due, and management have performed a going concern analysis with no
material uncertainties noted (refer to note 1.2 in the consolidated
financial statements for further information).
31/03/2022 31/03/2021
GBP'000 GBP'000
Operating cash flows (2,061) (4,012)
Cash balance 7,496 2,472
--------------------- ---------- ----------
Assets and Liabilities
Goodwill as at 31 March 2022 of GBP19.8m (2021: GBP9.4m) and
Intangibles of GBP20.9m (2021: GBP5.9m) are derived from three
acquisitions, Attend Anywhere Pty Ltd during FY22 and Zesty Limited
and Horizon Strategic Partners Limited in the prior years.
The carrying value of Induction Switch goodwill and intangible
assets has been fully impaired by GBP1.4m in the prior year.
All acquisitions have been valued for IFRS 3 purposes by
external consultants resulting in the investment being recognised
among the fair value of net assets acquired, including deferred
revenue.
31/03/2022 31/03/2021
GBP'000 GBP'000
------------------ ---------- ----------
Goodwill 19,758 9,373
Intangible assets 20,962 5,884
------------------ ---------- ----------
Trade and other receivables have increased significantly in the
year due and is reflective the overall increased trading during the
year. The balance consists of Induction Attend Anywhere invoices
for services performed unpaid at 31 March 2022.
There is an increase in Trade and other payables in the year due
to increased operating costs and accruals following the acquisition
of Induction Attend Anywhere. Costs relate to hosting, partner
commissions, marketing programmes and professional fees.
Deferred tax liabilities have increased significantly during the
year. This is driven by a GBP3.7m Liability recognised in relation
to fair value adjustments of intangible assets acquired in business
combinations.
Current tax receivable has increased to GBP1.2m (2021: GBP0.4m)
and relates to R&D tax credits due for current and prior years.
These amounts are expected to be received within the next 9 months
once all tax claims are submitted to HMRC. Tax payable relates to
taxes due by Induction Attend Anywhere in Australia.
Guy Mitchell
Chief Financial Officer
28 November 2022
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2022
2022 2021
GBP000 GBP000
Restated*
================================================ ======= ==========
Revenue from contracts with customers 7,908 1,361
Cost of sales (2,920) (636)
================================================= ======= ==========
Gross profit 4,988 725
Sales and marketing expenses (1,209) (590)
Administrative expenses (7,333) (4,900)
Development expenses (5,991) (1,893)
Impairment losses - (1,366)
================================================= ======= ==========
Loss from operations (9,545) (8,024)
Finance income 1 3
Finance expense (30) (5)
Fair value losses on contingent consideration - (91)
================================================= ======= ==========
Loss before tax (9,574) (8,117)
Tax credit 1,140 503
================================================= ======= ==========
Loss for the year (8,434) (7,614)
================================================= ======= ==========
Exchange gains/(losses) arising on translation
on foreign operations 801 (9)
Reclassified to profit and loss during the year 9 (7)
================================================= ======= ==========
Other comprehensive income for the year, net
of tax 810 (16)
================================================= ======= ==========
Total comprehensive income (7,624) (7,630)
================================================= ======= ==========
Loss per share attributable to the ordinary equity holders of the parent
Profit or loss
======================================== ================= ================
Basic (0.10) (0.19)
========================================= ================= ================
Diluted (0.10) (0.19)
Consolidated Statement of Financial Position
As at 31 March 2022
2022 2021
GBP000 GBP000
==================================================== ======== ========
Assets
Non-current assets
Property, plant and equipment 244 15
Intangible assets 20,962 5,884
Goodwill 19,758 9,373
Deferred tax assets 1,540 880
==================================================== ======== ========
Total non-current assets 42,504 16,152
==================================================== ======== ========
Current assets
Contract assets 787 155
Trade and other receivables 3,349 896
Current tax receivable 1,240 447
Cash and cash equivalents 7,496 2,472
==================================================== ======== ========
Total current assets 12,872 3,970
==================================================== ======== ========
Total assets 55,376 20,122
==================================================== ======== ========
Liabilities
Non-current liabilities
Contract liabilities 326 187
Deferred tax liability 5,851 1,048
Other financial liabilities 128 -
==================================================== ======== ========
Total non-current liabilities 6,305 1,235
==================================================== ======== ========
Current liabilities
Trade and other payables 3,365 1,396
Contract liabilities 2,580 1,027
Current tax payable 789 -
Other financial liabilities 72 -
==================================================== ======== ========
Total current liabilities 6,806 2,421
==================================================== ======== ========
Total liabilities 13,111 3,656
==================================================== ======== ========
Net assets 42,265 16,466
==================================================== ======== ========
Equity attributable to equity holders of the parent
Share capital 460 210
Share premium reserve 41,665 18,432
Merger reserve 20,206 10,879
Foreign exchange reserve 801 (9)
Other reserves 1,405 792
Retained earnings (22,272) (13,838)
==================================================== ======== ========
Total equity 42,265 16,466
==================================================== ======== ========
Consolidated Statement of Changes in Equity
As at 31 March 2022
Foreign
Share Share premium Merger exchange Other Retained Total
capital GBP000 reserve reserve reserves earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
======================================== =============== ========= ========= ========== ========== =========
At 31 March 2020 and
1 April 2020 148 18,432 (10) 7 94 (6,224) 12,447
Comprehensive income
for the
year
Loss for the year - - - - - (7,614) (7,614)
Other comprehensive loss
for the year - - - (16) - - (16)
================================= ===== =============== ========= ========= ========== ========== =========
Total comprehensive income
for the year - - - (16) - (7,614) (7,630)
================================= ===== =============== ========= ========= ========== ========== =========
Transactions with owners,
recorded directly in
equity
Issue of shares as consideration
fora business combination 62 - 10,953 - - - 11,015
Share issue costs - - (64) - - - (64)
Equity settled share-based
payments - - - - 698 - 698
================================= ===== =============== ========= ========= ========== ========== =========
Total contributions by
and distributions to owners 62 - 10,889 - 698 - 11,649
================================= ===== =============== ========= ========= ========== ========== =========
At 31 March 2021 and
1 April 2021 210 18,432 10,879 (9) 792 (13,838) 16,466
================================= ===== =============== ========= ========= ========== ========== =========
Comprehensive income
for the
year
Loss for the year - - - - - (8,434) (8,434)
Other comprehensive income
for the year - - - 810 - - 810
================================= ===== =============== ========= ========= ========== ========== =========
Total comprehensive income
for the year - - - 810 - (8,434) (7,624)
================================= ===== =============== ========= ========= ========== ========== =========
Transactions with owners,
recorded directly in
equity
Issue of ordinary shares 179 24,821 - - - - 25,000
Issue of shares as consideration
for
a business combination 71 - 8,929 - - - 9,000
Equity settled share-based
payments - - - - 613 - 613
Share-issue costs - (1,190) - - - - (1,190)
================================= ===== =============== ========= ========= ========== ========== =========
Reclassification of equity - (398) 398 - - - -
================================= ===== =============== ========= ========= ========== ========== =========
Total contributions by
and distributions to owners 250 23,233 9,327 - 613 - 33,423
================================= ===== =============== ========= ========= ========== ========== =========
At 31 March 2022 460 41,665 20,206 801 1,405 (22,272) 42,265
================================= ===== =============== ========= ========= ========== ========== =========
Consolidated Statement of Cash Flows
For the year ended 31 March 2022
2022 2021
GBP000 GBP000
===================================================== ======== =======
Cash flows from operating activities
Loss for the year (8,434) (7,614)
Adjustments for
Depreciation of property, plant and equipment 28 7
Amortisation of intangible fixed assets 3,785 1,340
Impairment losses on intangible assets - 1,366
Finance income (1) (3)
Finance expense 30 5
Fair value adjustments on financial liabilities - 91
Share-based payment expense 613 698
Net foreign exchange loss/(gain) - 3
Income tax charge/(credit) (1,146) (503)
===================================================== ======== =======
3,309 3,004
===================================================== ======== =======
Movements in working capital:
Decrease/(Increase) in trade and other receivables
and contract assets 1,661 (485)
Increase in trade and other payables and contract
liabilities 1,115 1,085
Interest received 1 3
Interest paid (30) (5)
Income taxes received 458 -
Income taxes paid (141) -
===================================================== ======== =======
Net cash used in operating activities (2,061) (4,012)
===================================================== ======== =======
Cash flows from/(used in) investing activities
Acquisition of subsidiary, net of cash acquired (13,486) (1,987)
Purchases of property, plant and equipment (256) (5)
Payment of software development costs (3,090) (1,660)
===================================================== ======== =======
Net cash used in investing activities (16,832) (3,652)
===================================================== ======== =======
Cash flows from/(used in) financing activities
Issue of ordinary shares 25,000 -
Proceeds on other financial liabilities 210 -
Share issue costs (1,190) (64)
Repayment of bank borrowings - (501)
Payment of lease liabilities (12) -
===================================================== ======== =======
Net cash from/(used in) financing activities 24,008 (565)
===================================================== ======== =======
Net cash increase/(decrease) in cash and cash
equivalents 5,115 (8,230)
Cash and cash equivalents at the beginning of year 2,472 10,718
Exchange gains/(losses) on cash and cash equivalents (91) (16)
===================================================== ======== =======
Cash and cash equivalents at the end of the year 7,496 2,472
===================================================== ======== =======
NOTES TO THE YEAR RESULTS
1. Basis of preparation
The financial information in these results has been prepared
using the recognition and measurement principles of International
Accounting Standards, International Financial Reporting Standards
and Interpretations adopted for use in the United Kingdom
(collectively Adopted IFRSs). The principal accounting policies
used in preparing the results are those the Group has applied in
its financial statements for the year ended 31 March 2022.
The financial information set out above does not constitute the
Group's statutory information for the years ended 31 March 2022 or
2021, but is derived from those accounts. The Group's consolidated
financial information has been prepared in accordance with
accounting policies consistent with those adopted for the year
ended 31 March 2021. Statutory accounts for 2021 have been
delivered to the Registrar of Companies and those for 2022 will be
delivered following the Company's annual general meeting. The
auditor has reported on these accounts, their reports were
unqualified and did not contain statements under the Companies Act
2006, s498(2) or (3).
2. Going concern
In assessing the appropriateness of the going concern
assumption, the Board of Directors ("the Directors") has reviewed
the ability to continue operating over the period to 30 April 2024
("the going concern period"). The Directors have also reviewed
other relevant information, together with considering scenarios
with adverse impacts across the Group's principal risks relating
to: revenue reductions from either non-renewals of major contracts
with customers or downward price pressures; non-materialisation of
forecast sales to new customers and delays in securing new
contracts with customers resulting in delayed cash inflows. These
risks are further connected to macro-economic conditions and the UK
government's fiscal policy, in particular the funding and support
to the group's customers which are primarily NHS Trusts and other
government bodies. The Directors determined that the forecast
period extends to 30 April 2024 to take into account the operating
cycle of the group, which sees significant contract renewals in
March 2024, with cash inflows received in April 2024.
The Directors' cash inflows under the base case of going concern
assessment assumes all existing customer contracts with major
customers will be renewed when they come due within the forecast
period at the same contract terms. It also includes assumptions
regarding growth in revenues due to new customer contracts, and
growth in revenues due to sales of new products to existing
customers. The base case going concern assessment cash outflows
allows investment in the full range of planned market and product
development activities, through increased employee-related and
other spend to achieve revenue targets over this forecast
period.
The Directors have considered a severe but plausible downside
scenario whereby the Group is impacted by: reductions in revenue
arising from either non-renewals of some major customer contracts
or downward price pressure; non-materialisation of some forecast
sales to new customers and three to six-month delays in securing
some contracts with new customers resulting in delays in SaaS
revenues and cash inflows, with associated reductions in
incremental costs directly linked to revenue generation. The severe
but plausible downside scenario has indicated that cash balances
are their lowest in March 2024 before increasing again in April
2024 in line with the Group's operating cycle. At this low point,
cash balances remain positive. Under a more severe scenario, the
Directors believe they can timeously respond to decreases in cash
inflows by taking mitigating actions to reduce costs. These include
but are not limited to; delays in hiring new employees; delays in
hiring new contractors; and reducing discretionary spend through,
for example, reducing professional and consulting expenditure and
contractor costs.
In determining that there is no material uncertainty related to
going concern, the Directors have applied significant judgement
regarding renewals of existing contracts with major customers, in
particular NHS customers. The Directors have made this judgement
after considering the UK budget announcement in November 2022.
Whilst there remains uncertainty as to the specifics of the NHS
funding plan following the budget announcement, the Directors note
that NHS funding generally was increased and there was a focus on
NHS efficiency, which the Group's products / services are designed
to assist with.
Therefore, the Directors believe that the judgement they have
made is appropriate based upon information available at that
point.
After due consideration, the Directors have concluded that there
is a reasonable expectation that the Group and Company have
adequate resources to meet their liabilities as they fall due for
the period to 30 April 2024, and therefore these financial
statements are prepared on a going concern basis.
3. Revenue
The following is an analysis of the Group's revenue for the year
from continuing operations:
2022 2021
GBP000 GBP000
Restated
================================================= ======= =========
Provision of software (including set-up services
of GBP0.2m (2021: GBPNil)) 7,388 1,188
Post-contract support and maintenance 217 73
Text message revenue 303 100
================================================= ======= =========
Total revenue from contracts with customers 7,908 1,361
================================================= ======= =========
Revenue from the provision of software of GBP7.4m is shown after
IFRS 3 related adjustments of GBP4.2m (2021: GBP1.4m (restated)
after GBP0.2m of IFRS 3 related adjustments to deferred income).
This includes GBP0.07m related to Induction Zesty (2021: GBP0.12m
related to Induction Zesty and GBP0.03m related to Induction
Guidance). As a result of applying IFRS 3 in accounting for
acquisitions, the Group is required to determine the fair value of
all acquired assets and liabilities. This includes determining the
fair value of the contract liabilities ("deferred income") of the
acquiree.
The following is an analysis of revenue by country of
destination:
2022 2021
GBP000 GBP000
Restated
============================================ ======= =========
United Kingdom 7,785 1,190
Europe 13 13
United States 18 23
Rest of World 92 135
============================================ ======= =========
Total revenue from contracts with customers 7,908 1,361
============================================ ======= =========
Revenue from the United Kingdom of GBP7.9m is shown after IFRS 3
related adjustments of GBP4.2m (2021: GBP1.4m (restated) after
GBP0.2m of IFRS 3 related adjustments.
The following is an analysis of revenue by product line. Attend
Anywhere Pty Ltd (Induction Attend Anywhere) was acquired on 9 June
2021, refer to Note 15 for further information. Zesty Limited
(Induction Zesty) was acquired on 8 June 2020, see Note 16 for
further information.
2022 2021
GBP000 GBP000
Restated
========================== ======= =========
Induction Attend Anywhere 5,715 -
Induction Zesty 1,517 753
Induction Guidance 642 603
Induction Switch 34 5
========================== ======= =========
7,908 1,361
========================== ======= =========
Revenue from Induction Attend anywhere of GBP5.7m is shown after
IFRS 3 related adjustments of GBP4.1m. Revenue from Induction Zesty
of GBP1.5m is shown after IFRS 3 related adjustments) of GBP0.07m
(2021: GBP0.8m (restated) after GBP0.12m of IFRS 3 related
adjustments). Revenue for Induction Guidance is GBP0.6m (2021:
GBP0.6m after GBP0.03m of IFRS 3 related adjustments).
The following represents the timing of revenue recognition:
2022 2021
GBP000 GBP000
Restated
=============================== ======= =========
Services transferred over time 7,595 1,196
Services at point in time 313 165
=============================== ======= =========
7,908 1,361
=============================== ======= =========
The following represents the transaction prices allocated to
performance obligations that are unsatisfied or partially satisfied
at 31 March 2022, and the timing of the recognition of revenue from
these balances.
2022 2021
GBP000 GBP000
=================== ======= =======
Within one year 985 1,027
More than one year 321 187
=================== ======= =======
1,306 1,214
=================== ======= =======
4. Expenses by nature
The following represents expenses incurred during the year, by
nature:
2022 2021
GBP000 GBP000
Restated
================================================ ======= =========
Employee costs 7,859 5,123
Depreciation of property, plant and equipment 29 7
Amortisation of intangible assets 3,785 1,340
Impairment of goodwill and intangible assets - 1,366
Contractors' costs 2,366 1,103
Acquisition related transaction costs 423 375
Fundraise related transaction costs recognised
in profit and loss 108 -
Professional and legal fees 459 359
Research and development expense capitalised (3,090) (1,660)
Share-based payment charge 613 698
Fair value adjustments on financial liabilities - 91
5. Employee benefit expenses
2022 2021
GBP000 GBP000
================================================ ======= =======
Employee benefit expenses (including directors)
comprise:
Wages and salaries 5,735 3,583
Social security costs 551 414
Defined contribution pension cost 309 140
Share-based payment expenses 613 698
Other employee benefits 651 288
================================================ ======= =======
Total employee benefit expense 7,859 5,123
================================================ ======= =======
The monthly average number of persons, including the directors,
employed by the Group during the year was as follows:
2022 2021
No. of employees No. of employees
=========================== ================= =================
Development 40 23
Sales and Marketing 10 12
Delivery and Support 8 -
General and Administrative 19 6
=========================== ================= =================
Total Average FTE 77 41
=========================== ================= =================
The remuneration of the highest paid director was GBP0.5m (2021:
GBP0.3m). Included in other employee benefits is GBPNil (2021:
GBP0.03m) compensation for loss of office paid to a former director
of the group. Also included in other employee benefits is a bonus
of GBP0.4m (2021: GBP0.1m).
The Group operates a defined contribution pension plan which was
put in place in October 2018. The total expense relating to the
plan in the year was GBP0.3m (2021: GBP0.1m).
6. Tax expense
6.1 Income tax recognised in profit or loss
2022 2021
GBP000 GBP000
=============================================== ======= =======
Current tax
Corporation tax expense 360 -
Prior year adjustment in respect of research &
development tax credit (764) (446)
=============================================== ======= =======
Total current tax (405) (446)
=============================================== ======= =======
Deferred tax expense
Origination and reversal of timing differences (438) (116)
Prior year deferred tax movement (297) 59
=============================================== ======= =======
Total deferred tax (735) (57)
=============================================== ======= =======
Tax income on loss on ordinary activities (1,140) (503)
=============================================== ======= =======
The reasons for the difference between the actual tax charge for
the year and the standard rate of corporation tax in the United
Kingdom applied to losses for the year are as follows:
2022 2021
GBP000 GBP000
================================================== ======= =======
Loss for the year (9,574) (8,117)
Tax at the standard rate of corporation tax of
20.13% (2021: 19%) (1,927) (1,561)
Research & development tax relief (292) -
Expenses not deductible for tax purposes 1,674 310
Share-based payments 123 124
Prior year adjustments - research and development
tax relief (722) (386)
Prior year adjustments on deferred tax (297) -
Deferred tax not recognised 303 961
Other timing differences 109 (50)
Difference in overseas tax rates 328 -
Effective rate change (429) -
================================================== ======= =======
Total tax income (1,140) (503)
================================================== ======= =======
6.2 Current tax assets and liabilities
2022 2021
GBP000 GBP000
======================================= ======= =======
Current tax assets
R&D tax credit receivable 1,240 446
Current tax liabilities
Corporation tax liability in Australia (789) -
======================================= ======= =======
451 446
======================================= ======= =======
Current tax assets relate to research and development tax
credits in respect of 2 subsidiaries, for the years ended 31 March
2020, 31 March 2021 and 31 March 2022. The claim for the year ended
31 March 2020 was submitted to HMRC and settled post-year end for
one subsidiary.
6.3 Deferred tax balances
A deferred tax liability of GBP3.7m (2021: GBP0.8m) has been
recognised in relation to the fair value of intangible assets
acquired in a business combinations. A deferred tax liability of
GBP1.05m has been recognised in relation to the fair value
adjustments to contract liabilities acquired in business
combinations. A deferred tax asset of GBP0.7m (2021: GBP0.8m) was
recognised in relation to unused tax losses acquired in business
combinations. This deferred tax asset was recognised only to the
extent that there are deferred tax liabilities available with the
same tax authority and which will be unwound in the same period as
the deferred tax asset.
A deferred tax asset of GBP4.2m (2021: GBP2.8m) has not been
recognised due to uncertainty over future taxable profits in the
relevant subsidiaries with tax losses. The unrecognised deferred
tax asset includes those in relation to tax losses of GBP17m (2021:
GBP14.6m). These amounts exclude amounts related to Horizon
Strategic Partners Limited, which is expected to generate profits
and for which a deferred tax asset of GBP0.05m (2021: GBP0.08m) has
been recognised. They also exclude those for Zesty Limited, where
deferred tax assets have been recognised in relation to the
deferred tax liabilities for the intangible fixed assets acquired
through business combinations. A deferred tax asset of GBP0.6m
(2021: GBP0.8m) has been recognised for Zesty Limited.
7 . Loss per share
7.1 Basic loss per share
2022 2021
GBP GBP
======================================================== ====== ======
From continuing operations attributable to the ordinary
equity holders of the Group (0.10) (0.19)
======================================================== ====== ======
Total basic loss per share attributable to the ordinary
equity holders of the Group (0.10) (0.19)
======================================================== ====== ======
7.2 Diluted loss per share
2022 2021
GBP GBP
========================================================== ====== ======
From continuing operations attributable to the ordinary
equity holders of the Group (0.10) (0.19)
========================================================== ====== ======
Total diluted loss per share attributable to the ordinary
equity holders of the Group (0.10) (0.19)
========================================================== ====== ======
7.3 Reconciliation of loss used in calculating loss per
share
2022 2021
GBP000 GBP000
============================================ ============ ===========
Loss attributable to the ordinary equity holders of the Group used
in calculating basic loss per
share and diluted loss per share:
From continuing operations (8,434) (7,614)
============================================ ============ ===========
(8,434) (7,614)
============================================ ============ ===========
7.4 Weighted average number of shares used as the
denominator
2022 2021
number number
=================================================== ============ ============
Shares in issue at the beginning of the period 42,050,728 29,626,201
Shares issued 35,714,285 -
Shares issued on business combination 14,285,714 12,424,527
=================================================== ============ ============
Issued ordinary shares as at the end of the period 92,050,727 42,050,728
Weighted average number of ordinary shares used
as the denominator in calculating basic loss per
share 82,461,686 39,701,981
On 9 June 2021, the Group acquired Attend Anywhere Pty Ltd
("Attend Anywhere" or "AA"). The consideration for the acquisition
included the issue of 14,285,714 new ordinary shares.
As part of the transaction, the Group also completed a fundraise
by issuing 35,714,285 new ordinary shares.
8. Business combinations during the year
Subsidiary Acquired
On 9 June 2021, Induction Healthcare Group plc acquired 83.5% of
the share capital of Attend Anywhere Pty Limited and 100% of the
share capital of A.C.N. 167 231 307 PTY Ltd ("A.C.N."), which owns
16.5% of the share capital of Attend Anywhere Pty Limited, thereby
obtaining 100% control over Attend Anywhere Pty Limited. Attend
Anywhere Pty Limited owns 100% of the share capital of Attend
Anywhere Limited, a UK subsidiary.
The consideration included cash consideration of GBP16.4m, plus
the issue of 14,285,714 new ordinary shares which had a fair value
of GBP9m. This brings the total consideration to GBP25.4m prior to
transaction costs.
Attend Anywhere is a leading provider of video consultations in
the UK secondary care market, holding national contracts with NHS
Scotland, NHS Wales and the HSE in Ireland, alongside a number of
regional contracts in England. Attend Anywhere's proprietary
technology, allows users to easily access and use the video service
via a common browser, without the need for plug-ins or downloading
a native app.
The Group's strategy is to build a leading and future-forward
integrated virtual care platform, incorporating patient onboarding,
clinical guidelines, digital communications, online appointment
management and, via the acquisition of Attend Anywhere, video
consultations. While the current focus is on secondary care, there
is scope to migrate into allied care settings, such as primary
care, mental health and community care.
Attend Anywhere is a clear strategic fit with Induction and the
acquisition will provide a number of commercial, operational and
financial benefits, which are expected to create value for
shareholders.
Proportion of Consideration
Name Principal Activity Date of Acquisition voting equity transferred
interest acquired GBP000
=================== ===================== ====================== ================== =============
Attend Anywhere Provision of video
Pty Limited consulting software 09/06/2021 83.50% 21,207
A.C.N. 167 231 307
PTY Ltd Holding Company 09/06/2021 100% 4,191
Attend Anywhere Provision of support 09/06/2021 100% (indirect) -
Limited services to group
entities
=================== ===================== ====================== ================== =============
Consideration transferred
The following represents the consideration transferred to the
owners of Attend Anywhere Pty Limited, A.C.N. 167 231 307 PTY Ltd
and Attend Anywhere Limited.
2022
GBP000
================================ =======
Share consideration 9,000
Cash consideration 16,398
================================ =======
Total consideration transferred 25,398
================================ =======
The fair value of cash consideration equals its carrying value.
The fair value of the equity consideration has been determined with
reference to the market value of the shares of Induction Healthcare
Group plc immediately prior to the issue of the consideration
shares, adjusted for the impact of a lack of marketability discount
of 10%. The lack of marketability discount arises as a result of
restrictions on the trading of the shares issued to the former
owners of Attend Anywhere Pty Limited and A.C.N 167 231 307 Pty Ltd
as consideration for the acquisition of the company, for a period
after the acquisition. Restrictions on trading of shares extend for
12 months after acquisition date and share prices may be affected
once these restrictions cease.
Assets acquired and liabilities recognised at the date of
acquisition
The following represents assets acquired and liabilities
recognised on acquisition. All amounts are final and not
provisional.
2022
GBP000
============================================ =======
Intangible assets 15,193
Cash and cash equivalents 2,912
Other current assets 4,751
Deferred tax liability (4,856)
Other non-current liabilities (85)
Contract liabilities (1,782)
Other current liabilities (746)
============================================ =======
Total identifiable net assets at fair value 15,386
============================================ =======
The separately identifiable intangible assets and valuation
techniques used to measure the fair value of these material assets
acquired were as follows:
Assets acquired Valuation technique
====================== =========================================================
Customer contracts and Income Approach: With and without method. This
relationships method estimates the value of customer related
assets by quantifying the impact on cash flows
under a scenario in which the customer-related
assets must be replaced. The projected revenues,
operating expenses, and cash flows are calculated
in a "With" and "Without" scenario, and the differential
between the cash flows from the two scenarios
serve as the basis for estimating the fair value
of the customer-related asset.
Technology Excess Earnings Method: a stream of revenue and
expenses are identified with a particular group
of assets that are necessary to support the earnings
associated with the subject intangible asset.
By identifying and subtracting contributory assets,
the residual earnings are estimated to be attributable
to the subject intangible asset and are discounted
to present value at an appropriate discount rate.
An obsolescence rate of 25% is applied to the
forecasts used in the valuation model.
Contract liabilities The fair value of the of the deferred revenue
liability has been determined using the bottom-up
approach. Under this approach the fair value
is determined to be equal to the costs still
to be incurred in fulfilling the performance
obligations related to the contract liability,
plus an associated profit on these costs. The
costs still to be incurred in satisfying the
remaining performance obligations are hosting
fees, staff costs to support the operation of
the platform and provide support and maintenance
and other software fees necessary for the operation
of the platform. A mark-up on cost to be incurred
in fulfilling the performance obligation of 28%
was
applied.
Goodwill arising on acquisition
The following represents goodwill arising on acquisition
2020
GBP000
============================================ ========
Consideration transferred at fair value 25,398
Total identifiable net assets at fair value (15,386)
============================================ ========
Goodwill arising on acquisition 10,012
============================================ ========
Goodwill arising on acquisition relates to the strategic fit
with the existing products of the Group and strengthened market
position for the Group. Goodwill includes intangible assets that
were not valued separately, such as the assembled workforce,
potential savings for economies of scale, and potential development
of further product offerings using existing know-how in the
business acquired.
Analysis of cash flows on acquisition
2020
GBP000
=================================================================== ========
Consideration paid in cash (16,398)
Transaction costs of the acquisition (included in cash flows
from operating activities) (423)
Transaction costs attributable to the issuance of shares (included
in cash flows from financing activities, net of -
tax)
Less: cash and cash equivalent balances acquired 2,912
=================================================================== ========
Net cash outflows on acquisition (13,909)
=================================================================== ========
Acquisition related costs of GBP423k were recognised in
administrative expenses.
Impact of acquisition on the results of the Group
From the date of acquisition, Attend Anywhere Pty Limited and
A.C.N. 167 231 307 PTY Ltd contributed GBP5.7m to the revenue of
the group and profit before tax of GBP1.1m. The Group has not
disclosed the impact to revenue and profit before tax for the 12
month period under IFRS3.B64, as it is impracticable to determine
the impact of the IFRS 3 fair value adjustment to contract
liabilities ("deferred income") at 1 April 2021.
9. Goodwill
Carrying amount of goodwill
The following represents the carrying value of goodwill as at 31
March 2022.
2022 2021
GBP000 GBP000
======================= ======= =======
Cost 20,175 9,790
Accumulated impairment (417) (417)
======================= ======= =======
19,758 9,373
======================= ======= =======
The following reconciles goodwill at the beginning and end of
the period.
2022 2021
GBP000 GBP000
=============================================== ======= =======
Cost
At 1 April 9,790 1,553
Additions as a result of business combinations 10,012 8,237
Translation differences 373 -
=============================================== ======= =======
At 31 March 20,175 9,790
=============================================== ======= =======
Accumulated impairment
At 1 April 417 -
Impairment charge - 417
=============================================== ======= =======
At 31 March 417 417
=============================================== ======= =======
Allocation of goodwill to cash generating units
Goodwill is allocated to the Group's cash generating unit as
follows:
2022 2021
GBP000 GBP000
========================== ======= =======
Induction Attend Anywhere 10,385 -
Induction Zesty 8,237 8,237
Induction Guidance 1,136 1,136
Induction Switch - -
========================== ======= =======
19,758 9,373
========================== ======= =======
The Attend Anywhere CGU consists of the assets and cash flows
related to the Attend Anywhere video consultation product. The
Zesty CGU consists of the assets and cash flows related to the
Zesty patient portal product. The Induction Guidance CGU consists
of the assets and cash flows related to the Induction Guidance
product line (formerly MicroGuide, acquired as part of the
acquisition of Horizon Strategic Partners). The Induction Switch
CGU consists of the assets and cash flows related to the Induction
Switch app.
10. Intangible assets
Trade name Users Technology Total
(re-presented)
======================================= ========== ====== =============== ======
GBP000 GBP000 GBP000 GBP000
======================================= ========== ====== =============== ======
Cost
======================================= ========== ====== =============== ======
At 31 March 2020 264 919 1,500 2,683
======================================= ========== ====== =============== ======
Additions - internally developed - - - 1,660
Acquired through business combinations 369 507 3,286 4,162
======================================= ========== ====== =============== ======
At 31 March 2021 633 1,426 6,446 8,505
======================================= ========== ====== =============== ======
Additions - internally developed - - - 3,090
Acquired through business combinations - 7,713 7,480 15,193
Translation differences - 321 398 719
======================================= ========== ====== =============== ======
At 31 March 2022 633 9,460 17,414 27,507
======================================= ========== ====== =============== ======
Trade name Users Technology Total
(re-presented)
GBP000 GBP000 GBP000 GBP000
Accumulated amortisation and impairment
At 31 March 2020 15 53 265 333
======================================== ========== ====== =============== ======
Charge for the year 61 189 1,090 1,340
Impairment charge 7 23 918 948
======================================== ========== ====== =============== ======
At 31 March 2021 83 265 2,273 2,621
======================================== ========== ====== =============== ======
Charge for the year 62 1,067 2,658 3,786
Translation differences - 54 83 137
======================================== ========== ====== =============== ======
At 31 March 2022 145 1,386 5,014 6,544
======================================== ========== ====== =============== ======
Net book value
At 31 March 2020 249 866 1,234 2,349
At 31 March 2021 550 1,161 4,173 5,884
======================================== ========== ====== =============== ======
At 31 March 2022 488 8,074 12,400 20,962
======================================== ========== ====== =============== ======
Amounts for the "Technology" intangible asset category for the
year ended 31 March 2021 and as at 31 March 2020 have been
represented in order to combine the acquired technology assets
category with the capitalised development costs category. This is
due to the fact that the nature of the assets is similar.
11. Cash and cash equivalents
2022 2021
GBP000 GBP000
========================================================= ======= =======
Cash at banks and on hand 6,996 872
Short-term deposits 500 1,600
Demand deposits - -
========================================================= ======= =======
Cash and cash equivalents per the statement of financial
position and cash flow statement 7,496 2,472
========================================================= ======= =======
Cash at banks earn interest at floating rates based on daily
bank deposit rates. Short-term deposits are made on weekly basis,
depending on the immediate cash requirements of the Group, and earn
interest at the respective short-term deposit rates.
12. Events after the reporting date
There were no material events after the reporting date that have
an impact on these financial statements
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END
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