TIDMIHC
RNS Number : 1604B
Inspiration Healthcare Group PLC
06 October 2020
Inspiration Healthcare Group plc
("Inspiration Healthcare", the "Company" or the "Group")
6 October 2020
Interim Results
Inspiration Healthcare Group plc (AIM: IHC), the global medical
device company, today announces its unaudited interim results for
the six months ended 31 July 2020 ("H1 2020/21").
Highlights:
-- Total Group Revenue up 77% to GBP14.2m
-- Revenue on a like for like basis increased by 25% (excluding acquired / 'one time' revenue)
-- Gross Margin up to 51.4% (from 46.8%)
-- EBITDA(1) up 178% to GBP2.5m
-- Operating Profit up 122% to GBP1.1m (before exceptional items up 277% to GBP2.1m)
-- Strong net cash position, GBP5.2m, provides opportunity to
accelerate market development investments
-- Maiden interim dividend payment declared
-- Transformational acquisition of SLE Ltd for a total
consideration of GBP18m - integration on track
-- Oversubscribed placing and open offer raising GBP17m
-- Significant contribution to the UK Ventilator Challenge,
sourcing over 500 adult ventilators and delivering GBP7.3m of 'one
time' revenue, of which GBP2.9m was in the first half year
-- Patents granted for FirstBreath and Project Wave to maintain R&D momentum
-- Expect to materially exceed market expectations for the current financial year
(1) Earnings before interest, tax, depreciation, share based
payments and exceptional items
Neil Campbell, Chief Executive Officer, said today:
"I am delighted to be able to report on such a positive first
half of this financial year. Despite the operating challenges
caused by Covid-19, our underlying growth was strong, demonstrating
the robustness of our business model and our agility to be able to
adapt to new situations quickly. Acquiring SLE has transformed the
Group and, in the past few weeks we have confirmed our thinking
about the exciting opportunities it brings and its potential to
deliver more benefits. We have started the process to integrate it
into the Group as a major step on our journey to become a world
leader in Neonatal Intensive Care. We are pleased to declare our
maiden interim dividend and are confident of further strong growth
during the rest of the year and beyond."
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Enquiries:
Inspiration Healthcare Group plc Tel: 01455 840555
Neil Campbell, Chief Executive Officer
Jon Ballard, Chief Financial Officer
Nominated Adviser & Broker Tel: 0207 397 8900
Cenkos Securities plc
Mark Connelly
Stephen Keys
Cameron MacRitchie
Cadogan PR Tel: 07771 713608
Alex Walters
alex.walters@cadoganpr.com
About Inspiration Healthcare
Inspiration Healthcare (AIM: IHC) is a global provider of
medical technology for use in neonatal intensive care &
operating theatres. The Company provides high quality innovative
products to patients around the world which help to improve patient
outcomes and it actively invests in innovative product
opportunities and disruptive technologies.
The Company has key own brand products that can be used within
the first days of life to help premature and sick babies; helping
resuscitation and stabilisation in the first moments of life
through to preventing brain damage and both invasive and
non-invasive respiratory support in terms of capital equipment and
disposable medical devices. Additionally, the Company has its own
range of products for maintaining normothermia pre, during and
post-surgery.
Since September 2019, the Company has acquired Vio Holdings a
designer, manufacturer and supplier of single use respiratory
products and sterile medical consumables and S.L.E., a leading
designer, manufacturer and global provider of neonatal ventilation
products. The Group generates approximately 60% of its revenues
from export markets and around two-thirds of its revenues come from
its own-branded products.
With product availability actively promoted to over 75 countries
through a distribution network, Inspiration Healthcare's success
has been built on continuous innovation, excellent customer service
and an inherent commitment to improving patient outcomes, working
in close collaboration with key opinion leaders across the
globe.
In the UK and Ireland, the Group has direct sales teams selling
Group Branded and complementary products from third parties, with
an additional range of home healthcare products. This is supported
by Technical Support for planned preventative maintenance and
emergency assistance.
The Group operates from various sites in the UK for R&D,
Marketing and operations with manufacturing based in Croydon (south
London) and Hailsham (East Sussex). The Group's Head Office is
located in Crawley, a short distance from London's Gatwick
Airport.
Further information on Inspiration Healthcare can be found at
www.inspiration-healthcare.com
Chairman's Statement
I am delighted to confirm that the Group has traded above our
expectations for the first half of this financial year ending 31
January 2021. Our revenue was up by 77% on the equivalent period
last year to GBP14.2 million.
Despite issues and concerns around Covid-19 during the first
half, revenues on a true like for like basis increased to GBP10.1
million as the Group benefitted from some capital equipment orders
from the NHS being brought forward and some pent up demand in our
order book from the end of the previous financial year being
released, along with our expected growth in the underlying
business.
Additionally, the Group benefited from a contribution of 4 weeks
of sales from the recently acquired SLE Ltd. This additional
acquired revenue along with the contribution of Viomedex accounted
for GBP1.2 million (excluding 'one time' adult ventilator sales)
compared to the same period last year. Finally, the Group
(including SLE) benefited from several 'one time' orders from the
NHS in the UK for ventilators and ancillary products and support
associated with Covid-19. In the first half of the year, the total
revenue for these contracts was GBP2.9 million and I am pleased to
say that a further GBP4.4 million of revenue has been delivered
since 1 August 2020. These orders are now complete.
At a Glance
Inspiration Acquired Revenue* Covid-19 Revenue Total
Revenue GBPmillion GBPmillion GBPmillion
GBPmillion
H1 YE Jan 21 GBP10.1 GBP1.2 GBP2.9 GBP14.2
------------ ------------------ ----------------- ------------
H1 YE Jan 20 GBP8.1 n/a n/a GBP8.1
------------ ------------------ ----------------- ------------
Growth Year-on-Year 25% n/a n/a 77%
------------ ------------------ ----------------- ------------
*Excluding inter-company revenues
As could be expected with the unknown impact of Covid-19, the
mix of products sold is different from that we had anticipated at
the beginning of the year. Needless to say, we are delighted at how
robust our product portfolio is and how well our margins stood up
over this period with Gross Margins (increasing) to 51.4% from
46.8% in the equivalent period. It is understandable that our
operating theatre sector suffered a downturn in revenues with much
planned surgery being postponed but pleasing that this was made up
by a strong performance in our Critical Care and Homecare sectors.
We look forward to a recovery in performance in the Operating
Theatre sector when hospitals return to routine work.
It pays testament to the staff across the Group as a whole that
during the height of the pandemic in the UK, we not only remained
open and delivered products and service support to our customers,
but we continued our important work in the background and have now
submitted Project Wave through the UK's IRAS portal to be assessed
for clinical trials. We hope that we will get clearance at the
earliest opportunity and can start clinical trials early in
2021.
The recent acquisition of the SLE business was underpinned by
expectations of synergistic growth opportunities through a stronger
product portfolio and greater geographic reach. Having only owned
the business for a few weeks we are very confident that the
acquisition will transform the Group quickly and deliver long term
synergistic value. With the additional cash and profit from the
one-time Covid-19 related activity along with a strong first half
performance in the underlying business I am excited about the next
chapter in the Group's development. We will use the additional
profit from the Covid-19 activity to further invest in our business
and fast track our growth.
Financial Review
Revenue for the six months to 31 July 2020 totalled GBP14.2
million (H1 2019/20: GBP8.1 million), an increase of 77% over the
equivalent period for the previous year with the inclusion of SLE,
Viomedex and the 'one time' UK NHS ventilator and ancillary product
orders. Like for like revenue growth was at 25% reflecting some
large contracts and certain specific opportunities being brought
forward resulting in revenue being weighted towards the first half.
EBITDA(1) improved by 178% to GBP2.5 million as a result of
improved gross margins, additional revenues and the impact of
Covid-19 on the timing of some cash-based overheads now expected to
be incurred during H2.
Operating profit before exceptional items for the period was
GBP2.1 million, an increase of 277% over the equivalent period of
the previous year.
Revenue from our Own Brand Products decreased 17% year on year
to GBP3.0 million (H1 2019/20: GBP3.6 million) and accounted for
30% of underlying revenue on a like for like basis, compared with
45% in the equivalent period. This is reflective of both a deferral
of operating theatre revenue as a result of Covid-19 and the large
Polish Alpha Core(5) Patient Warming System order received during
H1 of the prior period. Revenue from our Distributed Products was
up by 83% to GBP6.1 million on a like for like basis. The growth
was mainly as a result of strong performance in the Micrel product
range and unwinding back orders of products that could not be
shipped last year along with the NHS bringing forward orders that
were planned for later in the year due to Covid-19. Interest in the
Group's products remain strong.
Gross margin of 51.4% increased from 46.8% in the equivalent
period due to improved Distributed Product margins and the
consolidation of manufacturer margins on a number of Group products
resulting from the acquisition of Viomedex.
Operating expenses pre-exceptional items increased by 62%. These
increases included 6 months of overheads associated with Viomedex,
4 weeks from SLE and additional one-time Covid-19 related expenses,
along with our planned continued investment in personnel to
maintain our growth. Investment in R&D amounted to
approximately 2% of underlying revenue in the first half, however,
we expect total spend on R&D to increase in the second
half.
Exceptional items of GBP1.0 million (H1 2019/20: GBP0.07
million) of which GBP0.4 million relates to the issue of 671,296
new ordinary shares in the Company to the vendors of Vio Holdings
in full and final settlement of the deferred consideration
arrangements relating to the acquisition. The remaining GBP0.6
million represent expenses incurred to 31 July 2020 in relation to
the acquisition of SLE Limited which completed on 7 July 2020.
Profit after tax of GBP0.8 million was up 95% on last year.
Adjusting for exceptional items and amortisation of intangible
assets acquired through business combinations, underlying earnings
per share was 4.3p (H1 2019/20: 1.3p).
Cash at 31 July 2020 was GBP6.7 million. A revolving credit
facility was put in place to help facilitate the acquisition of SLE
of which GBP1.5 million was due resulting in a net cash position of
GBP5.2 million as at 31 July 2020. It is pleasing to note that the
Group has generated enough cash to have paid off the loan early in
H2.
Operational Review
Sales in the UK (without sales of 'one time' orders for
Covid-19) were up 60% resulting from a previous strong order book,
also a greater installed base of products requiring consumables and
a small contribution from Viomedex (acquired September 2019).
Additionally, some sales for capital equipment that were expected
to have been realised in the second half have been brought forward
which will result in a change to the usual second half weighting of
sales activity. Internationally sales were down 28% primarily due
to a change of buying patterns of overseas critical care providers
focusing their resources on Covid-19. We expect international sales
to improve in the second half and domestic sales to maintain a more
normal level of activity over the next few months.
The Group continues to plan for Brexit and having acquired SLE
we are integrating their plans into the Group to ensure that we
continue to serve all our customers around the world. We have been
working alongside the Dept of Health contingency planning group and
ensuring that our regulatory compliance in the EU will not be
affected.
Jonathan Ballard was promoted from Group Financial Controller to
Chief Financial Officer due to the retirement of Mike Briant. We
have also appointed Brook Nolson as Chief Operating Officer, adding
considerable expertise to the Group's executive team and an
important resource as we integrate SLE and re-structure the Group
for further growth. In addition, we are currently seeking to fill
the non-executive role that was held by Brook Nelson prior to him
being appointed as COO and are making good progress in this regard.
Furthermore, we have recently strengthened our senior team with the
appointment of Dr Peter Reynolds, a Consultant Neonatologist, as
our VP Clinical, Research and Innovation.
Acquisition of SLE Ltd
The Group has acquired the entire share capital of SLE Ltd, a
well-known UK based manufacturer and supplier of Neonatal
ventilators for a total consideration of GBP18m. SLE offers great
commercial synergies to the Group with products that can be sold
alongside the Group's main product lines and opens opportunities in
overseas markets where SLE has a broader geographic reach than the
existing Group, especially in Asia-Pacific. The acquisition
transforms the size of the Group, almost doubling the size in every
metric. Although the acquisition only completed on 7 July 2020, SLE
has already shown potential to deliver more opportunities than
originally anticipated as we integrate the business into the
Group.
Dividend Declaration
The Board believes that the growth and profitability of the
Group now support implementation of a progressive dividend policy.
Our cash generation further confirms our ability to commence
dividend payments. The initial interim payment will be 0.2p per
share payable to shareholders on the register on 27th November
payable on 29th December 2020. It is the Board's intention to
announce approximately one third of the annual dividend at the
interim stage.
Outlook
The Group has made great progress in the first half of the
financial year despite the uncertainty and stress caused by
Covid-19. To have delivered such strong growth in our underlying
business, along with the acquisition of SLE and one-time orders due
to Covid-19 is a credit to the strength of our product portfolio,
reputation, partners and, of course, our people.
The cash generated by this growth will allow us to invest
further in H2 and over the forthcoming year. We intend to invest in
our marketing and accelerate our plans for product development to
ensure that our exciting new products reach the widest customer
base as quickly as possible.
Given the success in the first half, we expect to materially
exceed market expectations in the full year and will maintain
momentum into next year.
Mark Abrahams
Chairman
6 October 2020
(1) Earnings before interest, tax, depreciation, share based
payments and exceptional items
Unaudited Consolidated Income Statement
For the six months ended 31 July 2020
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31-Jul 31-Jul 31-Jan
2020 2019 2020
Notes GBP'000 GBP'000 GBP'000
------------------------------------- ------ ---------------- ------------------ -------------------
Revenue 14,218 8,057 17,775
Cost of sales (6,916) (4,288) (9,203)
Gross profit 7,302 3,769 8,572
Operating expenses (6,220) (3,281) (7,434)
Operating profit 1,082 488 1,138
Analysed as:
Operating profit before exceptional
items 2,122 563 1,521
Exceptional items (1,040) (75) (383)
------------------------------------- ------ ---------------- ------------------ -------------------
Finance income 2 4 9
Finance cost (10) (9) (21)
Profit before tax 1,074 483 1,126
Income tax expense 4 (287) (79) (393)
Profit attributable to the owners
of the parent company 787 404 733
Earnings per share, attributable
to owners of the parent company
Basic expressed in pence per share 6 1.84p 1.32p 2.19p
Diluted expressed in pence per
share 6 1.82p 1.29p 2.15p
------------------------------------- ------ ---------------- ------------------ -------------------
Unaudited Consolidated Statement of Comprehensive Income
For the six months ended 31 July 2020
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31-Jul 31-Jul 31-Jan
2020 2019 2020
Notes GBP'000 GBP'000 GBP'000
-------------------------------------------- ------- ---------- ---------- -------------------
Profit for the period/year 787 404 733
Other comprehensive income/(expense)
Items that may be reclassified
to profit or loss
Cash flow hedges 65 13 (31)
Total other comprehensive income/(expense)
for the period/year 65 13 (31)
----------------------------------------------------- ---------- ---------- -------------------
Total comprehensive income for
the period/year 852 702
----------------------------------------------------- ---------- ---------- -------------------
Unaudited Consolidated Statement of Financial Position
As at 31 July 2020
(Registered Number: 03587944)
Unaudited Unaudited Audited
As at As at As at
31-Jul 31-Jul 31-Jan
2020 2019 2020
Notes GBP'000 GBP'000 GBP'000
-------------------------------------------------------------------------------- -------------------- ----------------------- ------------------------
ASSETS
Non-current assets
Intangible assets 15,818 1,212 3,655
Property, plant and equipment 811 397 496
Right of use asset 482 448 553
Investments - 111 -
--------------------
17,111 2,168 4,704
-------------------------------------------------------------------------------- -------------------- ----------------------- ------------------------
Current assets
Inventories 9,118 1,225 3,091
Trade and other receivables 9,547 3,111 4,205
Cash and cash equivalents 7,663 2,646 4,480
-------------------------------------------------------------------------------- -------------------- ----------------------- ------------------------
26,328 6,982 11,776
Total assets 43,439 9,150 16,480
-------------------------------------------------------------------------------- -------------------- ----------------------- ------------------------
Liabilities
Current liabilities
Trade and other payables (8,627) (2,059) (3,988)
Lease liabilities (97) (86) (132)
Financial liability - - (40)
Contract liabilities (2,624) (505) (376)
(11,348) (2,650) (4,536)
Non-current liabilities
Trade and other payables (248) - (742)
Lease liabilities (376) (367) (426)
Borrowings (1,500) - -
Deferred tax liability (227) (105) (227)
-------------------------------------------------------------------------------- -------------------- ----------------------- ------------------------
(2,351) (472) (1,395)
-------------------------------------------------------------------------------- -------------------- ----------------------- ------------------------
Total liabilities (13,699) (3,122) (5,931)
-------------------------------------------------------------------------------- -------------------- ----------------------- ------------------------
Net assets 29,740 6,028 10,549
-------------------------------------------------------------------------------- -------------------- ----------------------- ------------------------
Shareholders' equity
Called up share capital 6,797 3,067 3,838
Share premium account 18,761 - 3,475
Reverse acquisition reserve (16,164) (16,164) (16,164)
Share based payment reserve 247 169 153
Other reserves 31 4 (34)
Accumulated profit 20,068 18,952 19,281
Total equity attributable to owners
of the parent company 29,740 6,028 10,549
-------------------------------------------------------------------------------- -------------------- ----------------------- ------------------------
Unaudited Consolidated Statement of Changes in Shareholders'
Equity
For the six months ended 31 July 2020
Share
Called Reverse based
up Share Share acquisition payment Other Retained Total
Notes Capital Premium reserve reserve reserves earnings equity
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
At 31 January 2019 3,067 - (16,164) 91 (9) 18,548 5,533
Profit for the period
1 February 2019 to
31 July 2019 - - - - - 404 404
Other comprehensive
income - - - - 13 - 13
Total comprehensive
income for the period - - - - 13 404 417
---------------------------- --------- --------- ------------ --------- ------------ ---------------- ---------
Transactions with
owners in their
capacity
of owners
Employee share scheme
expense - - - 78 - - 78
---------------------------- --------- --------- ------------ --------- ------------ ---------------- ---------
Total transactions
with owners - - - 78 - - 78
---------------------------- --------- --------- ------------ --------- ------------ ---------------- ---------
At 31 July 2019 3,067 - (16,164) 169 4 18,952 6,028
Profit for the period
1 August 2019 to
31 January 2020 - - - - - 329 329
Other comprehensive
income - - - - (44) - (44)
---------------------------- --------- --------- ------------ --------- ------------ ---------------- ---------
Total comprehensive
income/(expense)
for the period - - - - (44) 329 285
---------------------------- --------- --------- ------------ --------- ------------ ---------------- ---------
Transactions with
owners in their
capacity
of owners
Employee share scheme
expense - - - (16) - - (16)
Issue of ordinary
shares as consideration
for a business
combination,
net of transaction
cost and tax 771 - - - - - 771
Proceeds from shares
issued, net of transaction
costs and tax - 3,475 - - - - 3,475
Deferred tax - - - - 6 - 6
Total transactions
with owners 771 3,475 - (16) 6 - 4,236
---------------------------- --------- --------- ------------ --------- ------------ ---------------- ---------
At 31 January 2020 3,838 3,475 (16,164) 153 (34) 19,281 10,549
Profit for the period
1 February 2020 to
31 July 2020 - - - - - 787 787
Other comprehensive
income - - - - 65 - 65
---------------------------- --------- --------- ------------ --------- ------------ ---------------- ---------
Total comprehensive
income for the period - - - - 65 787 852
---------------------------- --------- --------- ------------ --------- ------------ ---------------- ---------
Transactions with
owners in their
capacity
of owners
Employee share scheme
expense - - - 94 - - 94
Issue of ordinary
shares as consideration
for a business
combination,
net of transaction
cost and tax 2,959 - - - - - 2,959
Proceeds from shares
issued, net of transaction
costs and tax - 15,286 - - - - 15,286
---------------------------- --------- --------- ------------ --------- ------------ ---------------- ---------
Total transactions
with owners 2,959 15,286 - 94 - - 18,339
---------------------------- --------- --------- ------------ --------- ------------ ---------------- ---------
At 31 July 2020 6,797 18,761 (16,164) 247 31 20,068 29,740
---------------------------- --------- --------- ------------ --------- ------------ ---------------- ---------
Unaudited Consolidated Statements of Cash flows
For the six months ended 31 July 2020
Unaudited Unaudited Audited
6 months 6 months Year
ended Ended ended
31-Jul 31-Jul 31-Jan
2020 2019 2020
Notes GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Cash generated from operations 7 2,242 261 1,616
Interest paid (10) (9) (21)
Taxation received - 105 104
Taxation paid (114) (75) (235)
------------------- ------------------ ----------------------
Net cash inflow from operating activities 2,118 282 1,464
-------------------------------------------- ------------------- ------------------ ----------------------
Cash flow from investing activities
Payment for acquisition of subsidiary,
net of cash acquired (16,200) - (3,000)
Interest received 2 4 9
Purchase of property, plant and equipment (59) (71) (163)
Purchase of intangible assets (16) (12) (24)
Capitalised development costs (87) (33) (192)
-------------------------------------------- ------------------- ------------------ ----------------------
Net cash used in investing activities (16,360) (112) (3,370)
-------------------------------------------- ------------------- ------------------ ----------------------
Cash flow from financing activities
Proceeds from issue of shares 16,967 - 4,246
Share issue costs (957) - (250)
Proceeds from borrowings 1,500 - -
Principle elements of lease payments (85) (63) (149)
Net cash used in financing activities 17,425 (63) 3,847
-------------------------------------------- ------------------- ------------------ ----------------------
Net increase in cash and cash equivalents 3,183 107 1,941
Cash and cash equivalents at the beginning
of the period 4,480 2,539 2,539
Cash and cash equivalents at the end
of the period/year 7,663 2,646 4,480
-------------------------------------------- ------------------- ------------------ ----------------------
Notes to the Unaudited Interim Financial Statements
For the six months ended 31 July 2020
1. Basis of Preparation
This condensed consolidated interim financial information for
the six months ended 31 July 2020 have been prepared in accordance
with AIM rule 18 in relation to half year reports. This information
should be read in conjunction with the annual financial statements
for the year ended 31 January 2020, which have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union.
2. Going concern basis
The Group meets its day-to-day working capital requirements
through its cash resources. After making enquiries, the directors
have a reasonable expectation that the Group has adequate resources
to continue in operational existence for the foreseeable future.
The Group therefore continues to adopt the going concern basis in
preparing its consolidated interim financial statements.
3. Interim financial information
The interim financial information for the period ended 31 July
2020 is unaudited and does not constitute statutory accounts within
the meaning of Section 434 of the Companies Act 2006. The interim
financial information for the period ended 31 July 2019 is also
unaudited. The audited accounts for the year ended 31 January 2020
for Inspiration Healthcare Group plc were approved by its Board of
Directors on 24 April 2020 and have been delivered to the Registrar
of Companies with an unqualified audit report.
The Company's annual report and financial statements for the
year ended 31 January 2020 were prepared under International
Financial Reporting Standards (IFRS) as adopted by the European
Union, International Financial Reporting Interpretations Committee
(IFRIC) interpretations and with those parts of the Companies Act
2006 applicable to companies reporting under IFRS. The standards
used are those published by the International Accounting Standards
Board (IASB) and endorsed by the EU at the time of preparing those
statements.
4. Taxation
A provision has been made for corporation tax at the rate of 19%
on the estimated taxable profits for the period.
5. Dividends Paid
No dividends were paid or declared in the currect period.
The Board has declared an interim dividend of 0.2p per share to
be paid on 29 December 2020.
6. Earnings per ordinary share
Basic earnings per share for the period is calculated by
dividing the profit attributable to ordinary shareholders for the
year after tax by the weighted average number of shares in
issue.
Basic diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares in issue to assume
conversion of all potential dilutive ordinary shares.
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
31-Jul 31-Jul 31-Jan
2020 2019 2020
GBP'000 GBP'000 GBP'000
------------------------------------------------ ---------- ---------- --------
Profit
Profit attributable to equity holders
of the Company 787 404 733
Add back exceptional items 1,040 75 383
Add back amortisation of intangible
assets acquired through business combinations 31 - -
Add back deferred tax charge on intangible
assets acquired from the acquisition
of Vio Holdings Limited - - 117
------------------------------------------------ ---------- ---------- --------
Numerator for underlying earnings per
share calculation 1,858 479 1,233
------------------------------------------------ ---------- ---------- --------
The weighted average number of shares in issue and the diluted
weighted average number of shares in issue were as follows:
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
31-Jul 31-Jul 31-Jan
2020 2019 2020
-------------------------------------------- ----------- ----------- -----------
Shares
Weighted average number of ordinary
shares in issue for the purpose of
basic earnings per share 38,380,850 30,667,548 30,667,548
Weighted average number of shares issued
during the period/year 4,485,115 - 2,747,203
-------------------------------------------- ----------- ----------- -----------
Weighted average number of ordinary
shares in issue during the period/year
for the purposes of basic earnings
per share 42,865,965 30,667,548 33,414,751
Dilutive effect of potential Ordinary
shares:
Share options 474,675 583,941 583,941
-------------------------------------------- ----------- ----------- -----------
Diluted weighted number of shares in
issue for the purpose of diluted earnings
per share 43,340,640 31,251,489 33,998,692
-------------------------------------------- ----------- ----------- -----------
GBP16.2 million of the GBP17.0 million proceeds from the
28,921,463 shares issued during the period was used to fund the
acquisition of SLE Limited, see note 8. These have been prorated
for the time they have been in place.
A further 671,296 shares were issued during the period in
relation to deferred consideration shares for the acquisition of
Vio Holdings Limited and its subsidiary company amounting to
GBP435,000.
The basic and diluted earnings per share are as follows:
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
31-Jul 31-Jul 31-Jan
2020 2019 2020
Pence Pence pence
-------------------------------------------- ---------- ---------- --------
Basic earnings per share 1.84 1.32 2.19
Adjust for:
Exceptional items 2.43 0.24 1.15
Intangible assets acquired though business
combinations 0.07
Tax charge on intangible assets acquired
from the acquisition of Vio Holdings
Limited - - 0.36
-------------------------------------------- ---------- ---------- --------
Underlying basic earnings per share 4.34 1.56 3.69
-------------------------------------------- ---------- ---------- --------
Diluted earnings per share 1.82 1.29 2.15
-------------------------------------------- ---------- ---------- --------
Adjusted for:
Exceptional items 2.40 0.24 1.13
Intangible assets acquired through
business combinations 0.07
Tax charge on intangible assets acquired
from the acquisition of Vio Holdings
Limited - - 0.34
-------------------------------------------- ---------- ---------- --------
Underlying diluted earnings per share 4.29 1.53 3.62
-------------------------------------------- ---------- ---------- --------
7. Note to the Consolidated Statement of Cash flows
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
31-Jul 31-Jul 31-Jan
2020 2019 2020
GBP'000 GBP'000 GBP'000
Profit before taxation 1,074 483 1,126
Adjustments for:
Net finance cost 8 5 12
Depreciation and amortisation 331 273 617
Impairment of investment - - 111
Impairment of intangible assets - - 72
Employee share scheme expense 94 78 62
Deferred consideration share issue 435 - -
Loss on disposal of tangible asset - 3 3
Increase in inventories (1,653) (507) (1,696)
Decrease/(increase) in trade and other
receivables 995 (30) (889)
Increase/(decrease) in trade and other
payables 1,101 (230) 2,141
Increase / (decrease) in contract liabilities (143) 186 57
--------------- ----------- -----------------
Net cash inflow from operating activities 2,242 261 1,616
----------------------------------------------- --------------- ----------- -----------------
8. Business combinations
On 7 July 2020, the Group acquired 100% of the share capital of
SLE Limited for GBP18.0 million on a cash free debt free basis. SLE
Limited designs, manufactures and supplies neonatal ventilators
worldwide.
As a result of the acqusition, the Group is expected to benefit
from both revenue and cost synergies, additional routes to
international markets whilst the acquired manufacturing capability
is expected to allow the Group to further improve gross
margins.
Details of the purchase consideration is as follows:
Unaudited
GBP'000
Purchase consideration
Cash paid 16,200
Ordinary shares issued 1,800
Total purchase consideration 18,000
-------------------------------- ----------
The cash consideration was raised via the issue of new ordinary
shares.
A GBP5m revolving credit facility was also put in place of which
GBP1.5 million was utilised in order to fund acquistion related
expenses.
Issue costs of GBP957,000 which were directly attributable to
the issue of the shares have been netted off against share
premium.
Both the purchase price allocation and fair value exersice of
the assets and liabilities recognised as a result of the
acquisition are ongoing as at the period end. As such the total
amount acquired above the draft assesment of net identiiable assets
acquired has been allocated to Goodwill totalling GBP12.2 million
in the first intance. Therefore all amounts in relation to the
Business Combination are provisional.
The purchase price allocation and fair value exercise are
expected to be completed by the year ended 31 January 2021.
9. Related party transactions
-- Lease of Leicestershire facility
The Leicestershire facility at Earl Shilton is rented on an arms
length basis from a self-invested pension plan controlled by Neil
Campbell, Toby Foster and others. The lease was renewed on an arms
length basis in April 2018.
-- Key management
Directors control 7% of the voting shares of the Company as at
31 July 2020.
Registere d Office:
2 Satellite Business Village
Fleming Way
Crawley RH10 9NE
T elephone : +44 (0) 1455 840555
Fax : +44 (0) 1455 841464
website www.Inspiration-healthcare.com
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END
IR FLFFTIALEIII
(END) Dow Jones Newswires
October 06, 2020 02:00 ET (06:00 GMT)
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