TIDMINHC
RNS Number : 5646S
Induction Healthcare Group PLC
07 November 2023
Induction Healthcare Group PLC
("Induction", the "Company", or the "Group")
Unaudited Interim Results
for the six months ended 30 September 2023
Induction (AIM: INHC), a leading digital health platform driving
transformation of healthcare systems, announces its unaudited
interim results for the six months ended 30 September 2023.
Financial Highlights
-- Revenues of GBP6.1m (H1 2022: GBP7.1m). New NHS patient
portal contracts (revenue to be recognized in second half of this
financial year) compensates for decline in NHS video conferencing
usage.
-- Gross margin improvement to 75% (H1 2022: 66.1%). Improved
management of direct cost base including cloud infrastructure.
-- Adjusted EBITDA of GBP0.01m (H1 2022: Loss GBP1.0m) Breakeven after non-cash adjustments.
-- Operating loss reduced to GBP2.4m (H1 2022: (GBP4.5m)).
Ongoing cost containment programme continues to yield results.
-- Cash position GBP3.1m (FY23 YE: GBP4.3m). We remain on track
towards our objective of self-sustaining growth and cash flow
breakeven in FY24.
Operational Highlights
-- Awarded five new patient portal development contracts
totaling GBP1.9m with several large Trusts/ICS and ICBs for the
Zesty patient portal. In addition to the GBP1.4m announced in
October, a further GBP538,000 is announced today:
o Whittington Health NHS Trust worth GBP267,000 covering several
patient portal projects including the use of Induction's Form
Builder module for wait list validation, enhancing appointment
management functionality, and integrating with Whittington's
pre-surgical assessment tool.
o Milton Keynes University Hospital worth GBP271,000 covering
several patient portal projects related to reducing wait lists and
launching an Induction video consultation from the patient
portal.
-- Induction to be the first NHS-accredited portal to digitize
maternity records for expectant mothers ensuring patient records
are accessible within Zesty.
-- Completed roll out of NHS App integration with 6 new
customers. 2.5 million patients can now access Zesty via the NHS
App, up from 1 million patients at the beginning of April 2023.
-- One of only two patient portal providers to launch new
functionality into the NHS App related to notifications, messages,
and forms. This functionality is vital to supporting waitlist
validation.
-- In final stages of engineering work which will enable
patients to launch video consultation from within the patient
portal, as well as enable clinicians to access a video consultation
from their Electronic Medical Record (EMR) - integration of Zesty
and Attend Anywhere platforms.
-- Non-core asset (Switch) sold for material consideration.
Paul Tambeau, CEO of Induction Healthcare, said: "With reports
that over 8m patients will be on a waiting list by next year,
Induction has a vital role to play in helping NHS Trusts manage
their backlog and giving patients more choice in how they access
care. We're well positioned to do this because of the work we've
done on integrating our platforms and enhancing the features
available through the NHS App. Improvement in both gross margin and
operating losses also demonstrates the outcome of our cost
containment work completed in the last 9 months which remains on
track to achieve our goal of being breakeven this year."
Enquiries
Induction
Christopher Samler, Chair +44 (0)7712 194092
Paul Tambeau, Chief Executive Officer +44 (0)7983 104443
Singer Capital Markets (Nominated
Adviser and Broker) +44 (0)20 7496 3000
Philip Davies
Alaina Wong
Jalini Kalaravy
About Induction - www.inductionhealthcare.com
Induction (AIM: INHC) Induction delivers a suite of software
solutions that transforms care delivery and the patient journey
through hospital. 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.
CEO Review
Overview
Over the last six months, we have been focused on implementing
our FY24 plan that was based on four goals:
1. To be a profitable and sustainable growing business to
deliver our commitments to shareholders.
2. To successfully develop our Integrated Product.
3. To be customer centric and commercial in everything we do.
4. To implement and continuously develop an inclusive,
performance driven and rewarding employee experience.
I am pleased to say that we are making strong progress on all
four of these goals.
Through greater cost management, we are on track towards our
objective of self-sustaining growth and cash flow breakeven in
2024. In addition to completing the cost containment measures
started in Q4 FY23, an important driver has been better management
of our cloud infrastructure. Our cloud costs are down c.50%
compared to this time last year. In July 2023 we completed a major
overhaul of our database infrastructure and are currently
completing a significant change to our call screen which will
generate further savings as well as improve user experience. There
are additional projects we're evaluating to drive further savings
in our cloud infrastructure.
In terms of sales growth, we have capitalised on the funding
provided by the NHS to support Trusts to adopt or enhance their
patient portal. We've been successful in securing GBP1.9m in new
contracts which will fund key items on our integrated product
roadmap, such as:
-- Digitizing maternity records for expectant mothers, as well
as making diagnostic appointment details available from within the
patient portal.
-- Enabling a patient to launch a video consultation from within
the patient portal - integrating Attend Anywhere and Zesty.
-- Enhancing our appointment management functionality so that it
can be used to support Patient Initiated Follow Up / and Clinician
Initiated Follow Up initiatives.
-- Using our Form Builder module to support waitlist validation.
-- Deeping our integration with EMR partners such as Oracle
Cerner, as well as other third-party systems.
Whilst the large majority of these new contracts are one time
revenue, the enhanced platform will result in new features and case
studies to support future sales.
We have made tangible progress in integrating our product,
notably being able to launch a video consultation from within the
patient portal. We expect this work to be completed in early Q4
FY24 and already have 3 customers contracted to adopt this
functionality. We're also near completion of work to enable a
clinician or staff member to launch a video consultation within
their EMR.
We also continue to work closely with the NHS Wayfinder team in
integrating new features into the NHS App. We are one of only two
patient portal providers to launch new functionality into the NHS
App related to notifications, messages, and forms. This
functionality is vital to supporting waitlist validation. We've
also completed roll out of NHS App integration with 6 new
customers; 2.5 million patients can now access Zesty via the NHS
App, up from 1 million patients at the beginning of April.
Consistent with our previously announced focus on our key
strategic assets, we sold the Switch platform for a material
consideration. We continue to look for a strategic buyer for the
Guidance platform.
Financial Overview
We ended the first half of this year with GBP6.1m in recognised
revenue, down from GBP7.1m over the same period last year. This
decrease primarily reflects some Attend Anywhere contracts churning
in England as well as lower than expected utilisation in Wales.
This is offset by a 20% increase in Zesty revenue over the previous
corresponding period. As we look to the full year, we note that
most of the new NHS contracts will be recognised in the second half
of the fiscal year, meaning a higher overall contribution from
Zesty to revenue.
Gross margin in H1 improved to 75% compared to 66.1% in the same
period last year. This demonstrates the improved management of
direct cost base including cloud infrastructure.
Our operating loss was reduced in H1 to -GBP2.4m, an improvement
from -GBP4.5m compared with the same period last year. This
reflects that the ongoing cost containment programme continues to
yield results. On an adjusted EBITDA position, we ended H1 at
GBP0.01m compared to a loss of GBP1m over the same period last
year.
From a cash perspective, we ended H1 with GBP3.1m, down from
GBP4.3m at the end of FY23. The timing difference of the impact of
post year end termination costs and delay in receipt of invoiced
revenue accounts for this drop at the half year.
Outlook
With reports that over 8m patients will be on a waiting list by
next year, we have a vital role to play in helping NHS Trusts
manage their backlog and give patients more choice in how they
access care. We're well positioned to do this because of the work
we've completed on integrating our platforms and enhancing the
features available through the NHS App. The NHS continues to
prioritize further developments within the NHS App, enabling
Induction to become more embedded in the health ecosystem. We're
already seeing early evidence of the effectiveness of Induction's
digital tools in supporting waitlist validation which positions us
well for future growth.
We continue to see headwinds with Attend Anywhere renewals due
to downward pressure on pricing, Trusts returning to more in-person
appointments, and a post-Covid decline in the perceived advantages
of video appointments.
We're also seeing increasing demand for integrating the
capabilities of both our Zesty and Attend Anywhere platforms,
creating a better experience for clinicians and patients.
Given the rightsizing changes we have already implemented, and
the growth opportunities in front of us, we are increasingly
confident about Induction's future as a leading player in the
interface between the patient and their secondary care clinical
teams.
Paul Tambeau
CEO
7 November 2023
Condensed Consolidated Statement of Comprehensive Income
(Unaudited)
For the six months ended 30 September 2023
30 September 2023 30 September 2022
Unaudited Unaudited
Note GBP'000 GBP'000
---------------------------------------------------------- ----------------------------- ------------------
Revenue from contracts with customers 2 6,057 7,118
Cost of sales (1,514) (2,414)
---------------------------------------------------------- ----------------------------- ------------------
Gross Profit 4,543 4,704
Sales and marketing expenses 3 (578) (821)
Development expenses 3 (4,652) (4,159)
Administrative expenses 3 (1,731) (4,237)
Operating loss (2,418) (4,513)
---------------------------------------------------------- ----------------------------- ------------------
Finance Costs (2) (4)
Finance Income 2 -
---------------------------------------------------------- ----------------------------- ------------------
Loss before tax (2,418) (4,517)
---------------------------------------------------------- ----------------------------- ------------------
Taxation - (311)
---------------------------------------------------------- ----------------------------- ------------------
Loss for the period from continuing operations (2,418) (4,828)
---------------------------------------------------------- ----------------------------- ------------------
Profit / (Loss) from discontinued operations, net of tax 5 755 -
---------------------------------------------------------- ----------------------------- ------------------
Loss for the period (1,663) (4,828)
---------------------------------------------------------- ----------------------------- ------------------
Attributable to:
Equity holders of the parent (1,663) (4,828)
---------------------------------------------------------- ------------------
(1,663) (4,828)
---------------------------------------------------------- ----------------------------- ------------------
Loss per share from operations
---------------------------------------------------------- ----------------------------- ------------------
- Basic 4 (0.03) (0.06)
- Diluted 4 (0.03) (0.06)
---------------------------------------------------------- ----------------------------- ------------------
Condensed Consolidated Statement of Comprehensive Income
(Unaudited)
For the six months ended 30 September 2023
30 September 30 September
2023 2022
Unaudited Unaudited
Note GBP'000 GBP'000
-------------------- --------------------
Loss for the period (1,663) (4,828)
-------------------------------- -------------------- --------------------
Other comprehensive income
Items that may be reclassified
to profit or loss
Foreign currency translation
differences (394) 457
Reclassified to profit and
loss during the period 162 (801)
Other comprehensive income
for the financial period (233) (344)
-------------------------------- -------------------- --------------------
Total comprehensive loss
for the financial period (1,896) (5,172)
-------------------------------- -------------------- --------------------
Attributable to:
Equity holders of the parent (1,896) (5,172)
(1,896) (5,172)
-------------------------------- -------------------- --------------------
Loss per share:
Basic loss per share (GBP) 4 (0.03) (0.06)
Diluted loss per share (GBP) 4 (0.03) (0.06)
Condensed Consolidated Statement of Financial Position
As at 30 September 2023
30 September 2023 31 March 2023
Unaudited Audited
Note GBP'000 GBP'000
------------------ --------------
Non-current assets
Goodwill 10,685 10,685
Intangible Assets 13,005 15,251
Property, Plant and Equipment 7 9
Deferred tax assets 552 556
-----------------------------------------------------
Total non-current assets 24,249 26,501
----------------------------------------------------- ------------------ --------------
Current assets
Trade and other receivables 6 2,165 2,672
Contract Assets 1,589 1,228
Current tax receivable 810 1,175
Cash and cash equivalents 3,055 4,287
Assets held for sale 2,474 2,474
-----------------------------------------------------
Total current assets 10,093 11,836
----------------------------------------------------- ------------------ --------------
Total assets 34,342 38,337
----------------------------------------------------- ------------------ --------------
Non-current liabilities
Contract liabilities - (3,588)
Deferred tax liabilities (3,789) (3,870)
Other financial liabilities - (56)
-----------------------------------------------------
Total non-current liabilities (3,789) (1,235)
----------------------------------------------------- ------------------ --------------
Current liabilities
Trade and other payables 7 (1,922) (2,713)
Provisions (25) (528)
Contract liabilities (4,846) (2,198)
Liabilities associated with assets held for sale (1,016) (1,016)
Other financial liabilities (91) (72)
Total current liabilities (7,900) (6,527)
----------------------------------------------------- ------------------ --------------
Total liabilities (11,689) (14,041)
-----------------------------------------------------
Net assets/(liabilities) 22,653 24,296
----------------------------------------------------- ------------------ --------------
Equity attributable to equity holders of the parent
Share capital 462 462
Share premium 41,665 41,665
Merger reserve 20,205 20,205
Translation reserve (405) (162)
Other reserves 1,776 1,578
Accumulated deficit (41,050) (39,452)
-----------------------------------------------------
Total equity 22,653 24,296
----------------------------------------------------- ------------------ --------------
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 September 2023
Share Share Translation Other Merger Accumulated Total
Capital Premium reserve reserve reserve deficit equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- ----------------- -------------- -------------------- -------------------- --------------- ------------------- -----------
Balance at 1
April 2023 462 41,665 (162) 1,578 20,205 (39,452) 24,296
Total
comprehensive
loss for the
period
Loss for the
period - - - - - (1,663) (1,663)
Other
comprehensive
loss for the
period - - (243) - - - (243)
Total
comprehensive
loss for the
period - - (243) - - (1,663) (1,906)
----------------- ----------------- -------------- -------------------- -------------------- --------------- ------------------- -----------
Transactions
with owners, in
their
capacity as
owners
Equity-settled
share-based
payments - - - 199 - - 199
Total
contributions
by and
distributions
to owners - - - 199 - - 199
----------------- ----------------- -------------- -------------------- -------------------- --------------- ------------------- -----------
Balance at 30
September 2023 462 41,665 (405) 1,776 20,205 (41,050) 22,653
----------------- ----------------- -------------- -------------------- -------------------- --------------- ------------------- -----------
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 September 2021
For the period ended For the period ended
Note 30 September 2023 30 September 2022
GBP'000 GBP'000
-------------------------------------------------------------- --------------------- ---------------------
Cash flows from operating activities
Loss for the financial period (1,663) (4,828)
Adjustments for:
Depreciation of property, plant and equipment 1 39
Amortisation and impairment of intangible assets 2,150 2,363
Finance costs 2 4
Finance income (2) -
Share-based payment expense 199 246
Taxation 311
Gain on sale of discontinued operations, net of tax (750) -
1,600 (2,963)
--------------------- ---------------------
Decrease / (Increase) in trade and other receivables and contract
assets 146 (1,500)
(Decrease) / Increase in trade and other payables and contract
liabilities (1,731) 7,303
(Decrease) / Increase in provisions (503) -
Interest received 2 -
Interest paid (2) (4)
Income taxes paid - (288)
Income taxes received 365 44
Net cash generated from / (used in) operating activities (1,786) (3,690)
---------------------------------------------------------------------- --------------------- ---------------------
Cash flows from investing activities
Payment of software development costs - (1,615)
Acquisitions of property, plant and equipment - (5)
Disposal of discontinued operations, net of cash 750 -
Net cash from investing activities 750 (1,620)
---------------------------------------------------------------------- --------------------- ---------------------
Cash flow from financial activities
Share issue proceeds - (194)
Payment of lease liabilities (33) -
Net cash from financing activities (33) (194)
---------------------------------------------------------------------- --------------------- ---------------------
Net increase in cash equivalents (1,069) 1,876
Cash and cash equivalents at the beginning of the financial period 4,287 7,495
Effects of exchange rate changes on cash and cash equivalents (163) (393)
Cash and cash equivalents at the end of the financial period 3,055 8,978
====================================================================== ===================== =====================
Notes to the Condensed Consolidated Interim Financial
Statements
1. Accounting Policies
1.1. Reporting entity
Induction Healthcare Group PLC ("Induction", the "Group" or the
"Company") is publicly listed on the AIM market of the London Stock
Exchange ("LSE"), and incorporated, domiciled and registered in the
United Kingdom. The registered number is 11852026 and the
registered address is 30 Crown Place, London, EC2A 4ES.
1.2. Basis of preparation
These interim financial statements have been prepared and
approved by the directors in accordance with International
Financial Reporting Standards ("Adopted IFRSs"). They do not
include all the information required for a complete set of IFRS
financial statements. However, selected explanatory notes are
included to explain events and transactions that are significant to
an understanding of the changes in the Group's financial position
and performance since the most recent annual consolidated financial
information included in the annual report and accounts as of and
for the year ended 31 March 2023.
The accounting policies applied are consistent with those
applied in the most recent consolidated annual report and accounts
for the year ended 31 March 2023, which are available on the
Company's website at www.inductionhealthcare.com under "Investors -
Financial reports & publications"
Subsidiaries are fully consolidated from the date of
acquisition, being the date on which the Group obtained control and
continue to be consolidated until the date when such control
ceases. The financial information of the subsidiaries is prepared
for the same reporting period as the Group, using consistent
accounting policies. All intra-group balances, transactions,
unrealised gains and losses resulting from intra-group transactions
are eliminated in full.
Changes in the Group's interest in a subsidiary that do not
result in a loss of control are accounted for as equity
transactions.
When the Group loses control over a subsidiary, the assets and
liabilities are derecognised along with any related non-controlling
interest and other components of equity. Any resulting gain or loss
is recognised in profit or loss. Any interest retained in the
former subsidiary is measured at fair value when control is
lost.
These interim condensed consolidated financial statements are
unaudited and were approved by the Board of Directors and
authorised for issue on 6 November 2023 and are available on the
Company's website at www.inductionhealthcare.com under "Investors -
Financial reports & publications".
2. Revenue
2.1 Revenue by performance obligations
Period to 30 September 2023 Period to 30 September 2022
GBP'000 GBP'000
--------------------------------------------- ---------------------------- ----------------------------
Provision of software 5,221 6,294
Post-contract support and maintenance 165 103
Set-up services 169 30
Professional services 225 492
Text message revenue 277 199
----------------------------------------------
Total revenue from contracts with customers 6,057 7,118
---------------------------------------------- ---------------------------- ----------------------------
3. Expenses by nature
Period to 31 September 2023 Period to 30 September 2022
GBP'000 GBP'000
--------------------------- ---------------------------
Employee benefit expense 3,686 4,809
Contractors 814 1,858
Amortisation of intangible assets 2,150 2,363
Depreciation of property, plant and equipment 1 39
Professional and legal fees 48 251
Research and development expense capitalised - (1,615)
4. Earnings per share
Basic EPS is calculated by dividing the profit for the year
attributable to ordinary equity holders of the parent by the
weighted average number of ordinary shares outstanding during the
year.
Diluted EPS is calculated by dividing the profit attributable to
ordinary equity holders of the parent (after adjusting for interest
on the convertible preference shares) by the weighted average
number of ordinary shares outstanding during the year plus the
weighted average number of ordinary shares that would be issued on
conversion of all the dilutive potential ordinary shares into
ordinary shares.
The following table reflects the income and share data used in
the basic and diluted EPS calculations:
Loss attributable to ordinary shares (basic and diluted)
30 September 30 September
2023 2022
GBP'000 GBP'000
------------------------------------------------------------------------------------- ------------ ------------
Loss attributable to ordinary shares used in calculating basic loss per share and
diluted
loss per share
From continuing operations (2,418) (4,828)
From discontinued operations 755 -
-------------------------------------------------------------------------------------- ------------ ------------
(1,663) (4,828)
------------ ------------
Weighted average number of ordinary shares (basic and
diluted)
Period to 30 September 2023 Period to 30 September 2022
----------------------------------------------------- ---------------------------- ----------------------------
Shares in issue on 1 April 92,380,300 92,050,727
Issue of ordinary shares on exercise of equity
settled share-based payments - 329,573
Issued ordinary shares as at the end of the period 92,380,300 92,380,300
------------------------------------------------------ ---------------------------- ----------------------------
Weighted-average number of ordinary shares (basic and
diluted) 92,380,300 92,206,033
------------------------------------------------------ ---------------------------- ----------------------------
Basic loss per share from continuing operations (0.03) (0.06)
Total basic loss per share (0.03) (0.06)
Diluted loss per share from continuing operations (0.03) (0.06)
Total diluted loss per share (0.03) (0.06)
5. Discontinued operations
During June 2023, the Group completed the sale of the Induction
Switch disposal Group for an undisclosed sum. This disposal Group
was classified as held for sale in accordance with IFRS 5
"Non-current assets held for sale and discontinued operations" at
31 March 2023. The sale was completed in line with the Group's
strategy to focus on sustainable growth.
6. Trade and other receivables
30 September 2023 31 March 2023
GBP'000 GBP'000
Receivables from third-party customers 1,568 2,069
Other receivables 320 351
Prepayments 230 125
Social security and other taxes receivable 47 127
------------------ --------------
Total trade and other receivables 2,165 2,672
------------------ --------------
Trade receivables are non-interest bearing and are generally on
terms of 30 days. Included within trade and other receivables is
GBPnil expected to be recovered in more than 12 months.
7. Trade and other payables
30 September 2023 31 March 2023
GBP'000 GBP'000
------------------ --------------
Trade payables 509 849
Accruals 886 1,096
Social security and other taxes 469 703
Other payables 58 65
1,922 2,713
------------------ --------------
Included within trade and other payables is GBPnil expected to
be settled in more than 12 months
All trade and other payables are non-interest bearing and are
normally settled on 30-day terms.
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END
IR DDBDBCUGDGXL
(END) Dow Jones Newswires
November 07, 2023 02:00 ET (07:00 GMT)
Induction Healthcare (LSE:INHC)
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