TIDMIHC
RNS Number : 4458O
Inspiration Healthcare Group PLC
03 October 2023
Inspiration Healthcare Group plc
("Inspiration Healthcare", the "Company" or the "Group")
Interim Results
Underlying growth from core neonatal and infusion businesses
Inspiration Healthcare Group plc (AIM: IHC), the global medical
technology company, announces its unaudited interim results for the
six months ended 31 July 2023.
Financial highlights
-- Revenue GBP20.4 million (H1 2023: GBP20.5 million)
o Neonatal product revenues grew 4% to GBP16.1 million driven by
sales of the SLE6000 ventilator
o Infusion product revenues were GBP4.3 million (H1 2023: GBP4.9
million) due to de-stocking (now ended) by a major customer.
Excluding this customer, Infusion revenues grew 18% versus H1
2023
-- Gross Margin improved to 48.6% (H1 2023: 45.1%), driven by
increased higher margin ventilator sales
-- Adjusted EBITDA(1) GBP1.8 million (H1 2023: GBP2.2 million)
-- Operating Profit before non-recurring items GBP0.6 million (H1 2023: GBP1.0 million)
-- Cash generated by operating activities of GBP3.5 million (H1
2023: cash outflow of GBP0.5 million)
-- Net debt(2) reduced to GBP2.1 million (31 January 2023: GBP3.8 million)
-- Interim dividend of 0.205p per share, unchanged from H1 2023
(1) Earnings before interest, tax, depreciation, share based
payments and non-recurring items
(2) Excluding IFRS16 lease liabilities
Operational highlights (including post period)
-- Launched extension of SLE6000 range for non-invasive respiratory support
-- Initiated Medical Device Single Audit Program to access
Canadian market and reduce the need for individual country
audits
-- Streamlining property portfolio to realise operational efficiencies as well as cost savings
-- Strengthened Board with appointments of Alan Olby as CFO and
Marlou Janssen as Non-Executive Director
-- Submitted SLE6000 510k application to FDA for US market - post period end
-- Launched US version of LifeStart, our stabilisation platform
for babies that have had a difficult birth - post period end
-- Launched new website for improved customer experience
Investor presentation
The Company will provide a live presentation to investors via
the Investor Meet Company platform on Friday, 6 October 2023 at
11am BST. The presentation will give an update on the Company and
an overview of the Group's interim results. To register for the
presentation, please use this link:
https://www.investormeetcompany.com/inspiration-healthcare-group-plc/register-investor
Neil Campbell, Chief Executive Officer of Inspiration Healthcare
Group plc, commented: "During the first six months we have seen
underlying growth in our core neonatal and infusion businesses,
driven by continued customer demand for our products. We also
delivered significant improvements in our gross margins and
operating cash flow placing the Group in a stronger financial
position. We have made significant progress with our US expansion
strategy, filing for FDA approval of the SLE ventilators and
launching a version of LifeStart that is aligned with US user
requirements. The headwinds seen in H1 are dissipating and with a
strong pipeline of opportunities we are confident of returning to
growth in the second half. We would like to take this opportunity
to thank our shareholders for their continued support and we look
forward to the future with optimism."
Enquiries:
Inspiration Healthcare Group plc Tel: 0330 175 0000
Neil Campbell, Chief Executive Officer
Alan Olby, Chief Financial Officer
Tel: +44(0)20 3100 2000
Nominated Adviser & Broker
Liberum
Phil Walker
Richard Lindley
Will King
Walbrook PR Ltd (Media and Investor Tel: +44(0)20 7933 8780 or inspirationhealthcare@walbrookpr.com
Relations)
Mob: +44(0) 7876 741 001
Mob: +44(0) 7796 794 663
Anna Dunphy Mob: +44(0) 7747 515 393
Stephanie Cuthbert
Louis Ashe-Jepson
About Inspiration Healthcare
Inspiration Healthcare (AIM: IHC) designs, manufactures and
markets pioneering medical technology. Based in the UK, the Company
specialises in neonatal intensive care medical devices, which are
addressing a critical need to help to save the lives and improve
the outcomes of patients, starting with the very first breaths of
life.
The Company has a broad portfolio of its own products and
complementary distributed products , for use in neonatal intensive
care designed to support even the most premature babies throughout
their hospital stay. Its own branded products range from highly
sophisticated capital equipment such as ventilators for life
support through to single-use disposables.
The Company sells its products directly to hospitals and
healthcare providers in the UK and Ireland, where it also
distributes a range of advanced medical technologies for infusion
therapy. In the rest of the world the Company has an established
network of distribution partners around the world giving access to
more than 75 countries.
The Company operates from its world-class Manufacturing and
Technology Centre in Croydon, South London and from its facility in
Hailsham, East Sussex.
Further information on Inspiration Healthcare can be found at
www.inspirationhealthcaregroup.com
Chairman's Statement
The Group has seen encouraging growth in our core products
during the first half, which has been a significant driver in
improving margins towards historic levels. Operating cash flow also
improved, reducing the level of our net debt and putting the
business in a much stronger financial position.
Overall Group revenue for the period was flat at GBP20.4
million, with growth of our core products offset by significant
regulatory delays to one of our partners' key products and
de-stocking from one of our leading Infusion customers.
Our neonatal portfolio consists of our own branded products and
complementary distributed products, enabling us to add value to our
neonatal customers by supplying a broad range of specialist
products. However, for distributed products we are reliant on our
partners' supply chain and regulatory pathways. During 2022, one of
our partners' products was discontinued. The next generation
product was expected to gain European CE marking under the Medical
Device Regulations early in 2023. However, due to ongoing
regulatory delays and the lead times for delivery and production
scheduling this product is now expected to be commercially
available during the first half of next year. On a true
like-for-like basis excluding the discontinued product, in the
period neonatal revenues grew by 11% compared to H1 2023. Sales of
our lead product range, the SLE6000 ventilator, grew strongly
driven by strong demand in Ireland and Israel and a recovery in
China.
Our Infusion business sells to a variety of customers including
'homecare providers', which look after NHS patients in the
community freeing up hospital beds and improving the quality of
life for patients. Unfortunately, one of our major customers over
stocked during the previous 12 months and began a stock reduction
exercise in H1. We have worked with the customer to get their stock
levels back to more normalised levels and the de-stocking process
is now complete and a standard run rate is expected in the second
half. Excluding this customer, Infusion revenues grew by 18%
compared to H1 2023 as we expanded use of the products into new
therapy areas, demonstrating continued underlying growth in
sales.
Our aim during the first half was to rebuild our margins and
return to cash generation. During FY23, we had a cash outflow of
approximately GBP13 million, mainly driven by the GBP6 million
investment in the new Manufacturing and Technology Centre in
Croydon and investment in working capital to ensure we had stock of
components to maintain timely delivery of our products to
customers. I am pleased that during the first half of FY24, we have
been cash positive on an operating basis, our capital expenditure
has returned to normal levels and our net borrowings have reduced
from GBP3.8 million at 31 January 2023 to GBP2.1 million at 31 July
2023. We continue to have a Revolving Credit Facility of GBP5
million and Invoice Discounting facility of up to GBP5 million
giving the Group headroom of almost GBP8 million to cover cash flow
requirements.
We have been pleased to welcome two new Board members during the
first half. I am delighted that Alan Olby has joined us as Chief
Financial Officer, bringing a great deal of experience as CFO in a
growing Life Science business in both the public and private
markets. Alan has already started to put in new systems and
processes to bring about a higher level of rigour to our
forecasting and financial management.
I am also pleased that we have further strengthened our Board
with the appointment of Marlou Janssen. Marlou brings a wealth of
Med Tech expertise to the Board and her operational experience in
Med Tech, especially in the USA, is second to none. I am sure she
will play an important role in our strategic development over the
coming years and has already proven insightful and helpful
regarding our plans for international growth.
Operational Review
In March, we launched an extension to our leading range of
specialist neonatal ventilators, which facilitate precise,
controlled ventilation for critically ill infants. We now have
three variants of the SLE6000, which have been specifically
designed to meet the different, specialist healthcare needs of the
smallest neonates across critical care, high dependency care and
non-invasive respiratory support. They all offer new 'non-invasive
modes', which allow babies who are less sick to be supported by the
ventilator, therefore accessing a large part of the market that was
previously closed to the product.
The USA has always been an important strategic market for the
Company and we remain focused on expanding our USA presence. In
August this year, we submitted a 510K application to the FDA for
the SLE6000 ventilator. Although there is no guarantee of approval,
we hope to launch two variants of the ventilator along with
accessories and other complementary products in the second half of
2024. We believe this represents a significant potential commercial
opportunity for the Company, given existing ventilators available
in the US, size of the market, and the world wide acceptance of the
SLE6000 as a specialist neonatal ventilator.
Also in the USA, we have recently launched a new version of our
LifeStart(TM) product, which is more aligned with US user
requirements by allowing US manufactured accessories to be added to
the platform. LifeStart(TM) is a specialist unit that can be used
as a stabilisation platform for babies that have experienced a
difficult birth. The platform keeps the baby close to its
mother/family whilst the clinician determines when to clamp and cut
the umbilical cord. We are working with our distributor to build
out marketing plans as feedback from the first customers grows.
We are continuing to develop products through our R&D team
and are currently finalising a new respiratory device which
provides non-invasive respiratory support for babies that do not
need full intensive care support. The device has been developed
alongside one of our partners, who will sell a similar device in
the adult market. We expect to launch this product in the second
half. Additionally, we are now determining the next phase for
Project Wave, after the trial at Brighton and Sussex Universities
Hospital NHS Trust showed user and patient acceptance of the
product and we can start to look at wider market research to
determine pricing and how our commercial launch could be
initiated.
The Company has commenced the process to be certified under the
Medical Device Single Audit Program (MDSAP). This allows a single
MDSAP recognised auditing organisation to conduct a regulatory
audit of a medical device manufacturer on behalf of all the
regulatory authorities participating in the program. It combines
various Quality Management requirements from several regulatory
jurisdictions including the USA, Europe, Japan, Australia and
Canada. As we start to roll out our North America strategy it is
important to have the most efficient way of complying with local
regulations for the greatest number of products. Our quality
management systems have now been audited to these regulations and
we look forward to gaining certification, allowing our products to
be registered in Canada as well as reducing the need for individual
country audits.
Our Infusion division made substantial progress during the
period. We have invested in extra customer facing employees to
build our customer base and expand the use of the products into new
therapy areas, which has resulted in initial sales. This
diversification is an important part of our future growth strategy
and we will continue to launch new products from our partners in
this area of our business over the next twelve months.
As we have brought the three operating companies together we
have created a new website that gives a better user experience to
be able to access more information on Group products on one site.
This also has been built to allow future features to be added to
give a better user experience for product training along with the
potential for e-commerce.
In order to bring our teams together at our new Manufacturing
and Technology Centre in Croydon, during the first half we took the
decision to close our site in Earl Shilton, Leicestershire, where
we had an operational base for 15 years. Inevitably this impacted
some staff who could not relocate to our Croydon facility, and we
are sad to see them leave us but thank them for their hard work and
loyalty over the years and wish them well for the future. Our
Crawley facility has also now closed, and all our Head Office
functions have moved to Croydon, reducing overheads and improving
operational efficiency. While these changes resulted in some
one-off exceptional charges in the first half, we expect to realise
annual cash savings of GBP0.2 million as a result.
Financial Review
Revenue for the six months to 31 July 2023 totalled GBP20.4
million (H1 2023: GBP20.5 million). Whilst broadly flat at a
headline level, this masks an encouraging underlying performance.
The neonatal portfolio was held back by the loss of revenue from a
distributed product which contributed GBP1.0 million in H1 2023 as
explained above. On a like-for-like basis excluding this
distributed product, the neonatal portfolio grew by 11% in the
period, driven by sales of the SLE6000 ventilator.
Our infusion products delivered revenue of GBP4.3 million in the
period (H1 2023: GBP4.9 million) a decline of 14% versus last year.
However, adjusting for the customer de-stocking during the period,
underlying sales grew by 18%, continuing the growth trend seen in
FY23.
Gross margin improved to 48.6% in the period compared to 45.1%
in the same period last year. This improvement has been down to
product mix. As we commented in FY23, our margins were reduced due
to product mix and we expected them to return to historic levels as
the mix of products became more favourable, which has been the
case. Although mix can vary during the second half, we expect
margins to stabilise around their current level.
Operating expenses totalled GBP9.3 million in the period (H1
2023: GBP8.2 million) reflecting wage inflation increasing
employment costs which are the largest category within our
overheads, as well as increasing travel expenses with overseas
markets re-opening, increased regulatory fees and the impact of
exchange rate movements.
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 July 31 July 31 January
2023 2022 2023
GBP'000 GBP'000 GBP'000
---------------------------- ----------- ----------- ------------
Operating profit 150 1,049 431
----------------------------- ----------- ----------- ------------
Non-recurring items 406 - 1,158
----------------------------- ----------- ----------- ------------
Adjusted operating profit 556 1,049 1,589
----------------------------- ----------- ----------- ------------
Depreciation 653 601 1,354
Amortisation 462 466 931
Share based payment 89 87 132
----------------------------- ----------- ----------- ------------
Adjusted EBITDA 1,760 2,203 4,006
----------------------------- ----------- ----------- ------------
Adjusted EBITDA(1) amounted to GBP1.8 million, a decrease of 20%
over H1 2023 as the increased gross profit was offset by increased
in operating expenses. Operating profit for the period was GBP0.2
million after the inclusion of non-recurring charges of GBP0.4
million largely resulting from the restructure of operations with
the closure of the offices at Earl Shilton and Crawley, which is
now complete.
Finance costs increased to GBP0.3 million in the period (H1 2023
GBP0.2 million) as a result of increases in interest rates and
higher average net debt compared to the prior period.
Net Debt as at 31 July 2023 was GBP2.1 million, a net inflow of
GBP1.7 million for the first half. Net Debt has been reduced as a
result of EBITDA generation and a focus on reducing working
capital. Headroom against the Group's bank facilities (GBP5 million
RCF and GBP5 million invoice discounting facility) was GBP7.9
million at 31 July providing significant flexibility to manage
working capital flows.
Dividend
We confirm that our interim dividend payment will remain at the
same level as H2 2023 at 0.205p per share. This will be payable to
shareholders on the register on 24 November 2023 and will be paid
on 22 December 2023. The shares will go ex-dividend on 23 November
2023.
Outlook
The Company continues to execute its strategy to drive growth
through maximising sale of existing products, geographic expansion
and R&D investment to broaden its product portfolio and is well
positioned to benefit from the growth of the neonatal and infusion
markets.
With a strong pipeline of opportunities for both neonatal and
infusion products, combined with the underlying growth seen in the
first half, we are confident in returning to growth in the second
half and expect to maintain the improvement in margins for the
remainder of the year.
Mark Abrahams
Chairman
3 October 2023
(1) Earnings before interest, tax, depreciation, share based
payments and non-recurring items
Unaudited Consolidated Income Statement and Statement of Total
Comprehensive Income
For the six months ended 31 July 2023
Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
31 July 31 July 31 January
2023 2022 2023
Notes GBP'000 GBP'000 GBP'000
----------------------------------------- ------- ----------- ------------------- ------------
Revenue 20,370 20,523 41,233
Cost of sales (10,472) (11,261) (23,140)
Gross profit 9,898 9,262 18,093
Operating expenses (9,342) (8,213) (16,504)
Operating profit (before non-recurring
costs) 556 1,049 1,589
Non-recurring costs 4 (406) - (1,158)
Operating profit (after non-recurring
costs) 150 1,049 431
Finance income 30 18 40
Finance cost (320) (182) (395)
(Loss) / Profit before tax (140) 885 76
Income tax 5 84 (119) 196
(Loss) / Profit attributable to
the owners of the parent company
and total comprehensive (loss)/income
for the period (56) 766 272
Earnings per share, attributable
to owners of the parent company
Basic expressed in pence per share 7 (0.08p) 1.57p 0.40p
Diluted expressed in pence per
share 7 (0.08p) 1.55p 0.39p
----------------------------------------- ------- ----------- ------------------- ------------
Unaudited Consolidated Statement of Financial Position
As at 31 July 2023
Unaudited Unaudited Audited
As at As at As at
31 July 31 July 31 January
2022
2023 Restated* 2023
Notes GBP ' 000 GBP"000 GBP ' 000
-------------------------------------------------------------------------------- ----------- ----------- -------------------
Assets
Non-current assets
Intangible assets 17,251 16,357 17,004
Property, plant and equipment 7,235 5,692 7,497
Right of use assets 5,680 7,025 5,970
Deferred tax asset 373 136 324
-----------
30,539 29,210 30,795
-------------------------------------------------------------------------------- ----------- ----------- -------------------
Current assets
Inventories 10,493 8,739 9,935
Trade and other receivables 8 10,167 10,147 11,888
Cash and cash equivalents 1,948 3,033 2,276
-------------------------------------------------------------------------------- ----------- ----------- -------------------
22,608 21,919 24,099
Total assets 53,147 51,129 54,894
-------------------------------------------------------------------------------- ----------- ----------- -------------------
Liabilities
Current liabilities
Trade and other payables 9 (6,849) (7,446) (5,812)
Lease liabilities (770) (760) (822)
Borrowings - - (2,079)
Contract liabilities (449) (319) (531)
-------------------------------------------------------------------------------- ----------- ----------- -------------------
(8,068) (8,525) (9,244)
-------------------------------------------------------------------------------- ----------- ----------- -------------------
Non-current liabilities
Lease liabilities (5,852) (6,541) (6,176)
Borrowings (4,000) - (4,000)
(9,852) (6,541) (10,176)
-------------------------------------------------------------------------------- ----------- ----------- -------------------
Total liabilities (17,920) (15,066) (19,420)
-------------------------------------------------------------------------------- ----------- ----------- -------------------
Net assets 35,227 36,063 35,474
-------------------------------------------------------------------------------- ----------- ----------- -------------------
Shareholders' equity
Called up share capital 6,823 6,812 6,813
Share premium account 18,905 18,838 18,842
Reverse acquisition reserve (16,164) (16,164) (16,164)
Share based payment reserve 421 365 405
Retained earnings 25,242 26,212 25,578
-------------------------------------------------------------------------------- ----------- ----------- -------------------
Total equity 35,227 36,063 35,474
-------------------------------------------------------------------------------- ----------- ----------- -------------------
*A prior period adjustment was made in relation to deferred tax
in the Audited Financial Statements for the year ended 31 January
2023 and consequently, adjustments to Goodwill and Deferred Tax
have been made in the Consolidated Statement of Financial Position
as at 31 July 2022. Please see note 10 for further detail.
Unaudited Consolidated Statement of Changes in Shareholders'
Equity
For the six months ended 31 July 2023
Called Reverse Share
up Share Share acquisition based payment Retained Total
Capital Premium reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 February 2022
(restated) 6,812 18,838 (16,164) 278 25,725 35,489
Profit for the period
1 February 2022 to
31 July 2022 - - - - 766 766
Total comprehensive
income for the period - - - - 766 766
-------------------------- ----------- ----------- -------------- ---------------- ----------- ---------------
Transactions with
owners in their
capacity
of owners
Dividends - -- -- -- (279) (279)
Employee share scheme
expense - - - 87 - 87
-------------------------- ----------- ----------- -------------- ---------------- ----------- ---------------
Total transactions
with owners - - - 87 (279) (192)
-------------------------- ----------- ----------- -------------- ---------------- ----------- ---------------
At 31 July 2022
(restated) 6,812 18,838 (16,164) 365 26,212 36,063
Loss for the period
1 August 2022 to 31
January 2023 - - - - (494) (494)
Total comprehensive
loss for the period - - - - (494) (494)
-------------------------- ----------- ----------- -------------- ---------------- ----------- ---------------
Transactions with
owners in their
capacity
of owners
Dividends - - - - (140) (140)
Issue of Ordinary
Shares, net of
transaction
costs and tax 1 4 - (5) - -
Employee share scheme
expense - - - 45 - 45
Total transactions
with owners 1 4 - 40 (140) (95)
-------------------------- ----------- ----------- -------------- ---------------- ----------- ---------------
At 31 January 2023 6,813 18,842 (16,164) 405 25,578 35,474
Loss for the period
1 February 2023 to
31 July 2023 - - - - (56) (56)
Total comprehensive
loss for the period - - - - (56) (56)
-------------------------- ----------- ----------- -------------- ---------------- ----------- ---------------
Transactions with
owners in their
capacity
of owners
Dividends - - - - (280) (280)
Issue of Ordinary
Shares, net of
transaction
costs and tax 10 63 - (73) - -
Employee share scheme
expense - - - 89 - 89
Total transactions
with owners 10 63 - 16 (280) (191)
-------------------------- ----------- ----------- -------------- ---------------- ----------- ---------------
At 31 July 2023 6,823 18,905 (16,164) 421 25,242 35,227
-------------------------- ----------- ----------- -------------- ---------------- ----------- ---------------
Unaudited Consolidated Statements of Cash flows
For the six months ended 31 July 2023
Unaudited Unaudited Audited
6 months 6 months Year
ended Ended ended
31 July 31 July 31 January
2023 2022 2023
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
(Loss)/Profit for the period/year (56) 766 272
Adjustments for:
Depreciation and amortisation 1,115 1,067 2,285
Employee share scheme expense 89 87 132
Loss/(profit) on disposal of tangible
assets 125 3 (26)
Loss on disposal of intangible assets - - 6
Loss on disposal of right of use assets 4 - -
Remeasurement of leases 36 - (25)
Impairment of right of use assets - - 446
Finance income (30) (18) (40)
Finance expense 320 182 395
Income tax (credit)/expense (84) 119 (196)
---------------------------------------------- -------------------- ------------------- ---------------------
1,519 2,206 3,249
Increase in inventories (558) (2,290) (3,486)
Decrease/(increase) in trade and other
receivables 1,411 (1,125) (2,501)
Increase/(decrease) in trade and other
payables 1,037 908 (740)
(Decrease)/increase in contract liabilities (82) (206) 7
---------------------------------------------- -------------------- ------------------- ---------------------
Cash flows generated from/(used in)
operations 3,327 (507) (3,471)
Taxation received 189 - -
---------------------------------------------- -------------------- ------------------- ---------------------
Net cash generated from/(used in) operating
activities 3,516 (507) (3,471)
---------------------------------------------- -------------------- ------------------- ---------------------
Cash flows from investing activities
Bank interest received 9 2 5
Interest on lease receivables 21 16 35
Purchase of property, plant and equipment (206) (4,067) (6,226)
Purchase of intangible assets (63) (54) (140)
Capitalised development costs (646) (944) (1,976)
---------------------------------------------- -------------------- ------------------- ---------------------
Net cash used in investing activities (885) (5,047) (8,302)
---------------------------------------------- -------------------- ------------------- ---------------------
Cash flows from financing activities
Principal elements of lease payments (435) (315) (697)
Principal elements of lease receipts 150 105 217
Interest on lease liabilities (140) (152) (300)
Interest paid on loans and borrowings (88) (25) (84)
Bank interest paid (87) - -
Dividends paid to the holders of the
parent (280) (279) (419)
(Repayment of)/proceeds from loans and
borrowings (2,079) - 6,079
Net cash (used in)/generated from financing
activities (2,959) (666) 4,796
---------------------------------------------- -------------------- ------------------- ---------------------
Net decrease in cash and cash equivalents (328) (6,220) (6,977)
Cash and cash equivalents at the beginning
of the period/year 2,276 9,253 9,253
Cash and cash equivalents at the end
of the period/year 1,948 3,033 2,276
---------------------------------------------- -------------------- ------------------- ---------------------
Notes to the Unaudited Interim Financial Statements
For the six months ended 31 July 2023
1. Basis of Preparation
This condensed consolidated interim financial information for
the six months ended 31 July 2023 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 2023, 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 and borrowing facilities. At 31 July
2023 net debt of the Group was GBP2.1 million and available
facilities of up to GBP10 million provided cash headroom of up to
GBP7.9 million. Consequently, the Directors believe that the Group
has sufficient liquidity to meet its obligations as they fall due
and consider it appropriate to continue 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
2023 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 2022 is also
unaudited. The audited accounts for the year ended 31 January 2023
for Inspiration Healthcare Group plc were approved by its Board of
Directors on 11 May 2023 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 2023 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. Non-recurring items
Non-recurring items are items which, given their nature,
management believes should be disclosed separately for the purposes
of presenting the results of the Group and the earnings per share
figures. During the six months ending 31 July 2023, the Group
recognised the following non-recurring items:
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
31 July 31 July 31 January
2023 2022 2023
GBP'000 GBP'000 GBP'000
----------------------------------- ----------- ----------- ------------
Impairments of leased properties - - 446
Restructuring costs 266 - -
Aborted acquisition costs - - 467
Other 140 - 245
Total 406 - 1,158
----------------------------------- ----------- ----------- ------------
Restructuring costs include asset impairments, severance and
related costs following the Group's decision to close the Earl
Shilton and Crawley offices to consolidate the property portfolio
and centralise the business in Croydon.
Other includes project consultancy costs and legal fees relating
to a contract dispute.
Notes to the Unaudited Interim Financial Statements
(continued)
For the six months ended 31 July 2023
5. Taxation
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
31 July 31 July 31 January
2023 2022 2023
GBP'000 GBP'000 GBP'000
------------------------------------- ----------- ----------- ------------
UK corporation tax (credit)/charge
in the period (35) 168 42
Deferred tax credit in the period (49) (49) (238)
Tax on (loss)/profit on ordinary
activities (84) 119 (196)
------------------------------------- ----------- ----------- ------------
6. Dividends
The final dividend for the year ended 31 January 2023 of 0.41
per share (2022: 0.41p per share) was paid to shareholders on 28
July 2023.
The Board has declared an interim dividend of 0.205p per share
(H1 2023: 0.205p per share) to be paid on 22 December 2023.
7. 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 July 31 July 31 January
2023 2022 2023
GBP'000 GBP'000 GBP'000
------------------------------------------------- ----------- ----------- ------------
(Loss)/Profit attributable to equity
holders of the Company (56) 766 272
Add back non-recurring items 406 - 1,158
Add back amortisation of intangible
assets acquired through business combinations 302 302 605
Numerator for underlying earnings
per share calculation 652 1,068 2,035
------------------------------------------------- ----------- ----------- ------------
Notes to the Unaudited Interim Financial Statements
(continued)
For the six months ended 31 July 2023
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 July 31 July 31 January
2023 2022 2023
------------------------------------------ ------------ ------------ ------------
Number of Ordinary Shares in issue
at the beginning of the period/year 68,130,606 68,121,447 68,121,447
Weighted average number of shares
issued during the period/year 67,727 - 5,771
------------------------------------------ ------------ ------------ ------------
Weighted average number of ordinary
shares in issue during the period/year
for the purposes of basic earnings
per share 68,198,333 68,121,447 68,127,218
Dilutive effect of potential Ordinary
shares:
Share options 1,121,012 866,052 691,392
------------------------------------------ ------------ ------------ ------------
Diluted weighted number of shares
in issue for the purpose of diluted
earnings per share 69,319,345 68,987,499 68,818,610
------------------------------------------ ------------ ------------ ------------
The basic and diluted earnings per share are as follows:
Unaudited Unaudited Audited
6 months 6 months Year
Ended Ended Ended
31 July 31 July 31 January
2023 2022 2023
pence pence pence
--------------------------------------------- ----------- ----------- ------------
Basic earnings per share (0.08) 1.57 0.40
Adjust for:
Non-recurring items 0.60 - 1.70
Amortisation of intangible assets acquired
through business combinations 0.44 0.44 0.89
Adjusted basic earnings per share 0.96 2.01 2.99
--------------------------------------------- ----------- ----------- ------------
Diluted earnings per share (0.08) 1.55 0.39
--------------------------------------------- ----------- ----------- ------------
Adjusted for:
Non-recurring items 0.59 - 1.68
Amortisation of intangible assets acquired
through business combinations 0.44 0.44 0.88
Adjusted diluted earnings per share 0.95 1.99 2.95
--------------------------------------------- ----------- ----------- ------------
Notes to the Unaudited Interim Financial Statements
(continued)
For the six months ended 31 July 2023
8. Trade and Other Receivables
Audited
Unaudited Unaudited 31 January
31 July 31 July 2023
2023 2022 GBP'000
GBP'000 GBP'000
---------------------------------- ------------- ------------- -------------
Trade receivables 8,802 9,019 10,393
Loss allowance (321) (230) (266)
Net trade receivables 8,481 8,789 10,127
UK corporation tax receivable - - 143
Other taxes and social security - - 304
Net investment in leases 620 436 616
Other receivables 350 117 183
Prepayments and accrued income 716 805 515
Total 10,167 10,147 11,888
---------------------------------- ------------- ------------- -------------
9. Trade and Other Payables
Audited
Unaudited Unaudited 31 January
31 July 31 July 2023
2023 2022 GBP'000
GBP'000 GBP'000
---------------------------------- ------------- ------------- -------------
Trade payables 4,841 4,852 4,081
Other taxes and social security 686 212 257
Other payables 523 289 434
Accrued expenses 799 2,093 1,040
Total 6,849 7,446 5,812
---------------------------------- ------------- ------------- -------------
10. Prior year adjustment
A Prior period adjustment has been made in respect of the
Group's deferred tax. In FY2021, the Group recognised a deferred
tax liability relating to taxable temporary differences that arose
from the recognition of intangibles on the acquisition of SLE
Limited in July 2020. At the time of the acquisition, a deferred
tax asset was not recognised. However, accounting standards require
a deferred tax asset to be recognised to the extent of the existing
deferred tax liability and therefore a deferred tax asset should
have been recognised in FY2021.
This was corrected by restating each of the affected financial
statement line items for prior periods at the time of the audited
financial statements for the year ended 31 January 2023 and as a
result, the 31 July 2022 interim results presented herein have also
been restated accordingly.
Further information on the financial impact of the prior period
adjustment can be found in the Group's audited accounts for the
year ended 31 January 2023.
11. 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 and others. In April 2023, the Directors made the decision
to close the Earl Shilton office, in order to further consolidate
the Group's properties, reduce overheads and bring teams together
at our new Manufacturing and Technology Centre in Croydon. All
affected employees have been notified of this decision and the
office closed at the end of September 2023.
Employment of related parties
Several close family members of the Directors are employed by
the Group, and they are remunerated at a fair market rate which is
commensurate with their roles.
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END
IR FLFSAIRLFIIV
(END) Dow Jones Newswires
October 03, 2023 02:00 ET (06:00 GMT)
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