The following replaces the 'Final Results' announcement released on 26 June 2024 at 7.00 a.m. under RNS No 8631T.
The Final Results announcement was Inspiration Healthcare Group plc's preliminary unaudited results for the year ended 31 January 2024. Following completion of the audit of the accounts,
In addition,
The consequential changes of the above adjustments are as follows:
· Basic loss per share reduced to
· Consolidated statement of financial position:
o New category of short term investments created within current assets with balance of
o Cash and cash equivalents reduced by
o Retained earnings increased to
o Share based payments reserve reduced to
o No change in overall net assets or total equity
All other details remain unchanged.
The full amended text is shown below.
31 July 2024
Inspiration Healthcare Group plc
("Inspiration Healthcare", the "Group" or the "Company")
Audited Results for the year ended 31 January 2024
Inspiration Healthcare Group plc (AIM: IHC), the global medical technology company, pioneering, specialist neonatal intensive care medical devices, announces its audited results for the year ended 31 January 2024 ("FY2024").
Financial Highlights
· Group revenue of
· Gross profit reduced by 1.1% to
· Adjusted EBITDA1 of
· Adjusted operating loss2 before non-recurring items of
· Operating loss of
· Operating cash inflow of
· Net debt3 (excluding IFRS16 lease liabilities) increased to
1Earnings before interest, tax, depreciation, amortisation, impairment, share-based payments and non-recurring items
2Earnings before interest, tax, impairment, share-based payments and non-recurring items
3Cash and cash equivalents, short term investments, less revolving credit facility and invoice finance borrowings
Operational Highlights
· Launch of SLE1500 for non-invasive ventilation of neonatal patients
· Launch of SLE6000N a non-invasive version of our flagship product expanding market opportunities
· Acquisition of Airon Corporation provides established platform to advance
· MDSAP Certification achieved, accessing Canadian market, registrations now underway ahead of planned H2 FY2025 launch
Post year-end
· Launched new infusion pump as a distributed product from partner Micrel Medical Devices SA
· Neil Campbell stepped down as CEO and became a Non-executive Director
· Roy Davis, Non-executive Chair appointed Executive Chair and Interim CEO
· Planned closure of Hailsham site from end July 2024, further rationalising the Group's operating sites and expected to realise annualised savings of approximately
Equity raise
· Equity raise of
Roy Davis, Executive Chairman and Interim CEO of Inspiration Healthcare, said: "Inspiration Healthcare has a solid portfolio of best-in-class, life-saving neonatal technologies and infusion products that are addressing a critical need. Over the course of the year, we have seen underlying growth in our core neonatal and infusion businesses due to increased demand. The acquisition of Airon in January 2024 provides us with an established platform to advance our commercial strategy in
"The equity raise will provide us with additional working capital, a strengthened balance sheet and provide us with liquidity headroom. On behalf of the whole team, I would like to thank our shareholders for their continued support, and we look forward to updating the market further in due course."
For further information, please contact:
Inspiration Healthcare Group plc |
Tel: +44 (0)330 175 0000 |
Roy Davis, Executive Chairman Alan Olby, Chief Financial Officer |
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Liberum (Nominated Adviser & Broker) |
Tel: +44 (0)20 3100 2000 |
Richard Lindley Will King |
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Walbrook PR Ltd (Media and Investor Relations) |
Tel: +44 (0)20 7933 8780 or inspirationhealthcare@walbrookpr.com |
Anna Dunphy |
Mob: +44 (0) 7876 741 001 |
Stephanie Cuthbert |
Mob: +44 (0) 7796 794 663 |
Louis Ashe-Jepson |
Mob: +44 (0) 7747 515 393 |
About Inspiration Healthcare
Inspiration Healthcare (AIM: IHC) designs, manufactures and markets pioneering medical technology. Based in the
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
The Company operates in the
Further information on Inspiration Healthcare can be found at www.inspirationhealthcaregroup.com
Executive Chair and Interim CEO Report
Welcome to my first review as Executive Chairman and Interim CEO of Inspiration Healthcare Group plc. It is a privilege to take on this role at this time. Despite the challenges of the past couple of years I believe we have a number of significant opportunities ahead of us in both the
Overall however, the year was disappointing with revenues down 8.7% to
My initial focus as Chairman has been to examine the key factors impacting the business and identify a constructive path forward. The last couple of years have been difficult for the medical device sector, which has added pressure on the internal resources within the Group.
The Group operates within a single business segment, providing essentially medical technology. Within this segment, the Group sells products and services into two main market areas: 'Neonatal' and 'Infusion Therapies'.
Neonatal focuses on intensive care equipment for premature and sick babies. We design, manufacture and sell our equipment around the world to over 75 countries and we also distribute complementary products in the
Infusion Therapies focuses on infusion pumps and associated consumables in the
Neonatal
Neonatal revenues were lower than last year at
During the year, supply chain issues continued to require attention. The limited availability of certain components has required the company to devise new solutions, taking up valuable R&D resources and requiring us to acquire parts at elevated prices impacting both gross margin and working capital as we held more stock. Although these solutions are not ideal, it does give us the security of being able to manufacture our products.
The changes to the European regulatory landscape, with the implementation of the EU Medical Device Regulation has also resulted in the early discontinuation of some of our products. Our commitment to our customers means that we have to maintain the supply of spare parts for seven years, which has increased working capital in some areas. Additionally, we have invested time and resources to ensure our products remain compliant within both the EU and the
During the year we also launched several new products.
· SLE1500 - A compact respiratory support system that provides non-invasive ventilation ("NIV") modes, which is considered the gold standard of care for preterm infants with respiratory distress syndrome ('RDS') and is gradually becoming the first choice for respiratory support. The SLE1500 gives respiratory support to babies that have a breathing reflex by providing nasal continuous positive airway pressure ('CPAP') and High Flow Oxygen therapy. We have also included our Oxygenie patented automatic Oxygen control algorithm.
· SLE6000N - A non-invasive version of our leading specialist neonatal ventilator, which facilitates precise, controlled ventilation for critically ill infants and can also feature Oxygenie. This has allowed us to enter slightly different markets. This also led to a re-branding of other variants of the SLE6000 to differentiate the entire portfolio and we now have three variants across critical care, high dependency care and non-invasive respiratory support. The SLE6000N is CE marked and available where CE marking allows products to be registered.
· LifeStart - having received feedback from US customers we launched a new version of LifeStart, our specialist unit that can be used as a stabilisation platform for babies that have experienced a difficult birth. The new version is more aligned with US user requirements, allowing US manufactured accessories to be added to the platform.
There is also significant growth potential in our consumables business, and we are looking to expand our portfolio of disposable products. We have undertaken a thorough review of our consumables for Neonatal Intensive Care and have identified a number of overlapping products along with gaps in the portfolio. This will lead to us improving our product offerings, whilst streamlining the number of products and working closely with existing suppliers.
Our technical support offering for maintenance programmes and spare parts represents another opportunity for growth. We have been running a project entitled 'service as a product' to challenge the way we approach technical service, which has identified many areas in which we can grow our technical service revenues, and with greater consumables and a better focus on technical support, we expect to drive growth in recurring revenue streams over FY2025 and beyond.
Infusion Therapies
The Infusion Therapies products delivered revenues of
We have continued to invest in sales and marketing in this area of our business and have introduced new products into the range in new therapy areas, which are starting to gain traction. This diversification is a key part of our growth strategy for this business, and we are working to develop the market by further expanding our product portfolio through distribution agreements and looking at new therapy areas for the existing portfolio.
We were delighted to be able to launch a key new pump from our partner Micrel. With the
North America Strategy
Airon is a leading manufacturer of pneumatic ventilators, which can be used in transport and MRI for babies through to adults. It has established sales channels, through national distributor(s), and provides a good platform to launch Inspiration Healthcare's existing products into the
We are excited to be working with our new colleagues as we welcome them into the Group and execute our
In the summer of 2023, we submitted an initial application to the FDA for clearance of the SLE6000 ventilator, albeit with some features removed. In light of recently amended FDA guidelines, particularly pertaining to cyber security, we have opted to reassess the most effective employment of our resources to comply with these new regulations. As a result, we have withdrawn our preliminary application for the SLE6000. Anticipation remains for a resubmission of our application after we have had further clarification from a meeting with the FDA, planned for the summer of 2024.
In January 2024, the Company received Medical Device Single Audit Program ("MDSAP") certification, confirming its Quality Management System processes comply with the requirements of the EU,
The Board continues to evaluate the focus of the Group, including the market and products along with the resources and structure of the Group. This has led to the appointment of a new Chief Commercial Officer reporting directly to me as Interim CEO. This new pivotal role will bring together all our commercial activities and will help drive our business forward.
In June 2024, we announced that we would close our Hailsham facility at the end of July. Activities undertaken at Hailsham are either being outsourced to a long-standing supplier or moved to the Group's
With the advancement of our North American strategy, a restructure of the commercial team and the addition of new products, I am confident that we are taking the right steps to deliver the longer-term growth ambitions of the Company.
The Group also strengthened the Board during the year with the appointments of Alan Olby as Chief Financial Officer and Marlou Janssen as Non-executive Director. Both bring significant commercial expertise in the medical device space and their experience will be instrumental as the Group continues to execute on its growth strategy.
Post year end there were two additional changes to the Board, Mark Abrahams retired as Chairman in March 2024 and Neil Campbell stepped down as CEO in May 2024 to become a Non-executive Director of the Group. On behalf of the Company and the shareholders, I would like to thank both Mark and Neil for their service and commitment to the Company over the past nine years and look forward to continuing to work with Neil as a Non-Executive Director and in his capacity as a Global Advocate supporting key relationships and business development opportunities.
Outlook
While there have been challenges beyond our control presented by volatility in the international markets we serve, we continue to be robustly positioned in a stable global long term growth sector with a best-in-class product portfolio.
We are actively executing our growth strategy to increase our presence in more stable markets, most notably
While revenues are expected to be second half weighted in FY25, current trading is in line with management's expectations. We are grateful to our shareholders for their continuing support, and we look forward to a successful FY25 and beyond.
I would like to thank our dedicated team around the world for all of their hard work and our customers for their continued use of our products, we are proud to support clinicians around the world in the life saving work that they do.
I would like to summarise by re-iterating my excitement for and confidence in the Group's ability to capitalise on the opportunities ahead. I believe our Group has a solid portfolio of best-in-class, life-saving neonatal technologies and infusion products that are addressing a critical need and is well placed to deliver significant long-term sustainable growth.
Roy Davis
Executive Chairman and Interim CEO
Financial Review
REVENUE
Group revenue decreased 8.7% to
Neonatal
Neonatal products achieved revenues of
· Loss of revenue from a distributed product of
· The Group has chosen to discontinue a number of products due to the increasing cost of parts and costs associated with maintaining CE marking making these uneconomic to continue with. Revenue from these products declining by
· Revenue from the remaining Neonatal products declined by 5.0% in the year with order and delivery patterns significantly impacting reported revenues. The Group shipped 247 ventilators in January 2023, boosting FY23 revenues, while only 47 ventilators were shipped in FY24, partly due to production being diverted for the anticipated
Infusion
Revenues for the Infusion products were
GROSS PROFIT
Gross profit of
OPERATING LOSS
The Group reported an Operating loss of
Administrative expenses increased year-on-year by 12.7% to
There were
Adjusted EBITDA reduced to
|
2024 |
2023 |
|
£'000 |
£'000 |
Operating (loss)/profit |
(4,927) |
431 |
Non-recurring items |
4,527 |
1,158 |
Adjusted Operating (loss)/profit |
(400) |
1,589 |
Depreciation |
1,293 |
1,354 |
Amortisation of intangible assets |
1,144 |
931 |
Share based payments |
(52) |
132 |
Adjusted EBITDA |
1,985 |
4,006 |
Finance expenses increased to
The Group recorded a tax charge of
LOSS Per Share ("LPS")
Basic and diluted LPS were 8.85p per share for FY2024 as a result of the loss for the year (FY2023: EPS 0.40p and 0.39p).
Cash Flow
The Group generated net cash flow from operations of
Cash outflow on investing activities was significantly reduced at
Net debt (excluding IFRS16 lease liabilities) increased to
In February 2024, the Group renewed and increased its Revolving Credit Facility ('RCF') with a
The Group has received waivers from its bank in relation to the covenant tests due at 31 January and 30 April 2024 caused as a result of the delay to the anticipated large
Subsequently, the bank has removed restrictions on access to the RCF following the Company undertaking the equity raise.
Net Assets
The value of non-current assets as at 31 January 2024 totalled
Inventory increased by
Overall net assets at 31 January 2024 were
Dividends
An interim dividend of 0.205p per share (FY2023: 0.205p) was paid on 29 December 2023. As a result of the performance of the business, the Board is not recommending payment of a final dividend (FY2023: 0.41p) making a total dividend for the year of 0.205p per share (FY2023: 0.615p). Going forward, the Board has decided to suspend payments of dividends until further notice and will keep the dividend policy under review.
Alan Olby
Chief Financial Officer
Consolidated Income Statement
for the year ended 31 January 2024
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2024 |
2024 |
2024 |
2023 |
|
|
|
Note |
Adjusted £'000 |
Non-recurring items £'000 |
Total £'000 |
Total £'000 |
|
|
|
|
|
|
|
|
|
|
Revenue |
2 |
37,630 |
- |
37,630 |
41,233 |
|
|
Cost of sales |
|
(19,743) |
|
(19,743) |
(23,140) |
|
|
|
|
|
- |
|
|
|
|
Gross profit |
|
17,887 |
- |
17,887 |
18,093 |
|
|
Administrative expenses |
3 |
(18,287) |
(4,527) |
(22,814) |
(17,662) |
|
|
|
|
|
|
|
|
|
|
Operating (loss)/profit |
|
(400) |
(4,527) |
(4,927) |
431 |
|
|
|
|
|
|
|
|
|
|
Finance income |
|
61 |
- |
61 |
40 |
|
|
Finance expense |
|
(810) |
- |
(810) |
(395) |
|
|
|
|
|
|
|
|
|
|
(Loss)/Profit before tax |
|
(1,149) |
(4,527) |
(5,676) |
76 |
|
|
|
|
|
|
|
|
|
|
Income tax |
4 |
(358) |
- |
(358) |
196 |
|
|
|
|
|
|
|
|
|
|
(Loss)/Profit for the year attributable to |
|
|
|
|
|
|
|
owners of the parent company |
|
(1,507) |
(4,527) |
(6,034) |
272 |
|
|
|
|
|
|
|
|
|
|
(Loss)/Earnings per share |
|
|
|
|
|
|
|
Basic (pence per share) |
5 |
|
|
(8.85)p |
0.40p |
|
|
Diluted (pence per share) |
5 |
|
|
n/a |
0.39p |
|
Consolidated Statement of Comprehensive Income
for the year ended 31 January 2024
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|
|
|
|
2024 |
2023 |
|
|
|
|
|
|
Total £'000 |
Total £'000 |
|
|
|
|
|
|
|
|
|
|
(Loss)/Profit for the year |
|
|
|
(6,034) |
272 |
|
|
Other comprehensive income |
|
|
|
|
|
|
|
Items that may be reclassified to profit or loss |
|
|
- |
- |
|
|
|
Total other comprehensive income for the year |
|
|
- |
- |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the year |
|
|
|
(6,034) |
272 |
|
|
|
|
|
|
|
|
|
Consolidated Statement of Financial Position
as at 31 January 2024
(Registered Number: 03587944) |
|
|
|
|
|
|
|
2024 |
2023 |
|
Note |
|
£'000 |
£'000 |
|
|
|
|
|
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Intangible assets |
7 |
|
13,278 |
17,004 |
Property, plant and equipment |
8 |
|
7,137 |
7,497 |
Right of use assets |
|
|
5,578 |
5,970 |
Deferred tax asset |
|
|
- |
324 |
|
|
|
25,993 |
30,795 |
|
|
|
|
|
Current assets |
|
|
|
|
Inventories |
9 |
|
13,743 |
9,935 |
Trade and other receivables |
10 |
|
8,669 |
11,888 |
Short-term investments |
|
|
197 |
- |
Cash and cash equivalents |
|
|
412 |
2,276 |
|
|
|
23,021 |
24,099 |
|
|
|
|
|
Total assets |
|
|
49,014 |
54,894 |
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
11 |
|
(6,591) |
(5,812) |
Lease liabilities |
|
|
(697) |
(822) |
Borrowings |
12 |
|
(1,654) |
(2,079) |
Contract liabilities |
|
|
(625) |
(531) |
|
|
|
(9,567) |
(9,244) |
|
|
|
|
|
Non-current liabilities |
|
|
|
|
Lease liabilities |
|
|
(5,477) |
(6,176) |
Borrowings |
12 |
|
(5,002) |
(4,000) |
|
|
|
(10,479) |
(10,176) |
Total liabilities |
|
|
(20,046) |
(19,420) |
|
|
|
|
|
Net assets |
|
|
28,968 |
35,474 |
Shareholders' equity |
|
|
|
|
Called up share capital |
|
|
6,823 |
6,813 |
Share premium |
|
|
18,905 |
18,842 |
Reverse acquisition reserve |
|
|
(16,164) |
(16,164) |
Share based payment reserve |
|
|
280 |
405 |
Retained earnings |
|
|
19,124 |
25,578 |
Total equity |
|
|
28,968 |
35,474 |
Consolidated Statement of Changes in Equity
|
Issued share capital |
Share premium |
Reverse acquisition reserve |
Share based payment reserve |
Retained earnings |
|
||||
Total |
|
|||||||||
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|||
At 1 February 2022 |
6,812 |
18,838 |
(16,164) |
278 |
25,725 |
35,489 |
|
|||
Profit for the year |
- |
- |
- |
- |
272 |
272 |
|
|
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Total comprehensive income for the year |
- |
- |
- |
- |
272 |
272 |
|
|||
|
|
|
|
|
|
|
|
|
||
Transactions with owners in their capacity as owners |
|
|
|
|
|
|||||
Issue of ordinary shares, net of transaction costs and tax |
1 |
4 |
- |
(5) |
- |
- |
|
|
||
Dividends |
- |
- |
- |
- |
(419) |
(419) |
|
|
||
Employee share scheme expense |
- |
- |
- |
132 |
- |
132 |
|
|
||
Total transactions with owners |
1 |
4 |
- |
127 |
(419) |
(287) |
|
|
||
|
|
|
|
|
|
|
|
|
||
At 31 January 2023 |
6,813 |
18,842 |
(16,164) |
405 |
25,578 |
35,474 |
|
|||
Loss for the year |
- |
- |
- |
- |
(6,034) |
(6,034) |
|
|
||
Total comprehensive income for the year |
- |
- |
- |
- |
(6,034) |
(6,034) |
|
|
||
|
|
|
|
|
|
|
|
|
||
Transactions with owners in their capacity as owners |
|
|
|
|
|
|||||
Issue of ordinary shares, net of transaction costs and tax |
10 |
63 |
- |
(73) |
- |
- |
|
|
||
Dividends |
- |
- |
- |
- |
(420) |
(420) |
|
|
||
Employee share scheme credit |
- |
- |
- |
(52) |
- |
(52) |
|
|
||
Total transactions with owners |
10 |
63 |
- |
(125) |
(420) |
(472) |
|
|
||
|
|
|
|
|
|
|
|
|
||
At 31 January 2024 |
6,823 |
18,905 |
(16,164) |
280 |
19,124 |
28,968 |
|
|
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Consolidated Cash Flow Statement
for the year ended 31 January 2024
|
|
2024 |
2023 |
|
Note |
£'000 |
£'000 |
Cash flows from operating activities |
|
|
|
(Loss)/Profit for the year |
|
(6,034) |
272 |
Adjustments for: |
|
|
|
Depreciation and amortisation |
|
2,437 |
2,285 |
Remeasurement of leases |
|
(210) |
(25) |
Impairment of right of use assets |
12 |
- |
446 |
Impairment of intangible assets |
10 |
4,120 |
- |
Employee share scheme (credit)/expense |
24 |
(52) |
132 |
Loss/(Profit) on disposal of tangible assets |
|
108 |
(26) |
Loss on disposal of intangible assets |
10 |
- |
6 |
Finance income |
6 |
(61) |
(40) |
Finance expense |
6 |
810 |
395 |
Income tax |
7(a) |
358 |
(196) |
|
|
1,476 |
3,249 |
Increase in inventories |
|
(3,378) |
(3,486) |
Decrease/(increase) in trade and other receivables |
|
3,000 |
(2,501) |
Increase/(decrease) in trade and other payables |
|
630 |
(740) |
Increase in contract liabilities |
|
94 |
7 |
Cash flows generated from/(used in) operations |
|
1,822 |
(3,471) |
Taxation received |
7(b) |
190 |
- |
Net cash generated from/(used in) operating activities |
|
2,012 |
(3,471) |
Cash flows from investing activities |
|
|
|
Bank interest received |
6 |
21 |
5 |
Interest received on leases |
6 |
40 |
35 |
Acquisition of subsidiary, net of cash acquired |
27 |
(1,114) |
- |
Purchase of property, plant and equipment |
11 |
(434) |
(6,226) |
Purchase of intangible assets |
10 |
(63) |
(140) |
Capitalised development costs |
10 |
(1,135) |
(1,976) |
Net cash used in investing activities |
|
(2,685) |
(8,302) |
Cash flows from financing activities |
|
|
|
Principal elements of lease payments |
12 |
(829) |
(697) |
Principal elements of lease receipts |
14 |
281 |
217 |
Interest paid on lease liabilities |
6 |
(272) |
(300) |
Interest paid on loans and borrowings |
6 |
(528) |
(84) |
Dividends paid to the holders of the parent |
9 |
(420) |
(419) |
Proceeds from loans and borrowings |
18 |
577 |
6,079 |
Net cash (used in)/generated from financing activities |
|
(1,191) |
4,796 |
Net decrease in cash and cash equivalents |
(1,864) |
(6,977) |
|
Cash and cash equivalents at the beginning of the year |
|
2,276 |
9,253 |
Cash and cash equivalents at the end of the year |
15 |
412 |
2,276 |
Notes forming part of the Consolidated Financial Statements
1 Basis of the announcement
Inspiration Healthcare Group plc ("Company") is a public limited company incorporated in
The principal activities of Inspiration Healthcare Group plc and its subsidiaries (together, the "Group") continue to be the sale, service and support of critical care equipment to the medical sector including hospitals.
The individual financial statements of each entity in the Group are presented in the currency of the primary economic environment in which it operates (the functional currency). The Group Financial Statements are presented in pounds sterling, which is the presentation currency of the Group.
The financial information included in this preliminary announcement does not constitute the Company's statutory accounts for the year ended 31 January 2024 but is derived from those accounts. Statutory accounts for the year ended 31 January 2023 have been delivered to the registrar of companies. The auditor has reported on those accounts; their report was (i) unqualified (ii) did not include a reference to any matters to which the auditor drew attention to by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. The consolidated financial statements of the Company have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and in accordance with the
Going concern
The Group is reliant on borrowing facilities from external lenders to finance its ongoing operations. The Group has access to a revolving credit facility ('RCF') of
As a result of ongoing delays in receiving a material export order, the Group sought and received waivers from its lender in relation to the covenant tests as at 31 January 2024 and 30 April 2024, and has agreed alternate covenants for the period to 30 April 2025, with further drawdown of the RCF subject to lender consent.
On 26 June 2024, the Company announced a placing, subscription and retail offer ("the Fundraising") to raise
The Directors have considered financial projections for the next 18months covering several scenarios, these include a significant (10%) revenue downside versus the base case budget for the period. These projections demonstrate that the Group can operate within the revised headroom available following completion of the placing for the foreseeable future. The Directors, after taking into account the proceeds of the Fundraising, the material export order, and availability of the RCF, believe that they have a reasonable basis for concluding that the Group has adequate facilities to continue as a going concern and have therefore adopted the going concern basis in the preparation of these financial statements. The financial statements do not reflect any adjustments that would be required if they were prepared on a basis other than the going concern basis.
Alternative financial measures
In the reporting of its financial performance, the Group uses certain measures that are not defined under IFRS, the Generally Accepted Accounting Principles (GAAP) under which the Group reports. The Directors believe that these non-GAAP measures assist with the understanding of the performance of the business. These non-GAAP measures are not a substitute for, or superior to, any IFRS measures of performance but they have been included as the Directors consider them to be an important means of comparing performance year-on-year and they include key measures used within the business for assessing performance.
The Group refers to the following alternative financial measures, please refer to the Financial Review for further information and reconciliations to the relevant GAAP measure.
· Adjusted EBITDA
· Adjusted Operating Profit
· Net Debt excluding IFRS 16 lease liabilities
2 Revenue
The Group derives revenue from the transfer of goods and services over time and at a point in time in the following product and geographical split:
|
|
|
2024 |
2023 |
|
|
|
£'000 |
£'000 |
Products: |
|
|
|
|
Neonatal products |
|
|
29,097 |
32,105 |
Infusion products |
|
|
8,533 |
9,128 |
Total |
|
|
37,630 |
41,233 |
Geography: |
|
|
|
|
Domestic |
|
|
|
|
- |
|
|
17,680 |
19,340 |
- |
|
|
1,001 |
547 |
International |
|
|
|
|
- |
|
|
4,354 |
5,315 |
- |
|
|
8,436 |
9,458 |
- |
|
|
4,206 |
5,386 |
- |
|
|
1,953 |
1,187 |
Total |
|
|
37,630 |
41,233 |
3 Non-recurring Items
During the year, the Group recognised the following non-recurring items:
|
|
2024 |
2023 |
|
|
£'000 |
£'000 |
Impairment of capitalised development costs |
|
4,120 |
- |
Impairment (credit)/charge on leased properties |
|
(86) |
446 |
Acquisition costs |
|
69 |
467 |
Restructuring |
|
142 |
- |
Other |
|
282 |
245 |
Total Non-recurring items |
|
4,527 |
1,158 |
An impairment charge of
An impairment credit of
Acquisition costs in the year of
Restructuring costs of
Other non-recurring charges include
4 Income tax
Analysis of tax charge for the year is as follows:
|
|
|
|
2024 |
2023 |
|
£'000 |
£'000 |
|
|
|
Current year |
- |
14 |
Prior year adjustment |
37 |
28 |
|
37 |
42 |
|
|
|
Deferred tax |
|
|
Origination and reversal of temporary timing differences |
321 |
(306) |
Prior year adjustment |
- |
68 |
|
|
|
|
321 |
(238) |
|
|
|
Tax charge/(credit) on (loss)/profit on ordinary activities |
358 |
(196) |
The tax assessed for the year is higher (2023: lower) than the standard rate of corporation tax in the
|
2024 |
2023 |
|
£'000 |
£'000 |
|
|
|
(loss)/Profit on ordinary activities before taxation |
(5,676) |
76 |
Tax using the effective |
(1,362) |
14 |
Effects of: |
|
|
Non-deductible expenses |
251 |
188 |
Additional deduction for research and development |
- |
(314) |
Fixed asset differences |
112 |
44 |
Adjustment in respect of prior periods |
37 |
(137) |
Tax losses not recognised |
1,320 |
9 |
Total tax charge/(credit) |
358 |
(196) |
Budget 2021 announced that the
5 Loss per ordinary share
Basic (loss)/earnings per share for the year is calculated by dividing the profit attributable to ordinary shareholders for the year after tax by the weighted average number of shares in issue. Diluted (loss)/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. No diluted loss per share is presented for the year ended 31 January 2024 as the exercise of share options would have the effect of reducing loss per share and is therefore not dilutive
|
2024 |
2023 |
|
|
|
(Loss)/Profit attributable to equity holders of the company £'000 |
(6,036) |
272 |
|
|
|
Weighted average number of shares in issue during the year |
68,216,532 |
68,133,218 |
Dilutive effect of potential ordinary shares: |
n/a |
691,392 |
Diluted weighted average number of shares in issue during the year |
n/a |
68,824,610 |
Basic and diluted loss/earnings per share for the year are as follows:
|
Basic |
Diluted |
Basic |
Diluted |
|
2024 |
2024 |
2023 |
2023 |
|
|
|
|
|
(Loss)/Earnings per share (pence) |
(8.85) |
n/a |
0.40 |
0.39 |
6 Dividends
The final dividend for the year ended 31 January 2023 of 0.41p per share was paid on 25 July 2023. The interim dividend for the year ended 31 January 2024 of 0.205p per share (2023: 0.2p per share) was paid on 29 December 2023. The Board are not proposing to pay a final dividend (2023: 0.41p per share).
7 Intangible assets
|
|
|
Intangible assets |
Development |
Intellectual |
|
|
|
|
|
|
Goodwill |
acquired |
costs |
property |
Software |
Total |
|
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost |
|
|
|
|
|
|
|
|
|
At 1 February 2022 |
7,610 |
5,528 |
4,127 |
276 |
756 |
18,297 |
|
|
|
Additions |
- |
- |
1,976 |
- |
140 |
2,116 |
|
|
|
Disposals |
- |
- |
(6) |
- |
- |
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 January 2023 |
7,610 |
5,528 |
6,097 |
276 |
896 |
20,407 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions |
- |
12 |
1,135 |
- |
63 |
1,210 |
|
|
|
Additions arising on business combinations |
328 |
- |
- |
- |
- |
328 |
|
|
|
At 31 January 2024 |
7,938 |
5,540 |
7,232 |
276 |
959 |
21,945 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortisation and impairment |
|
|
|
|
|
|
||
|
At 1 February 2022 |
- |
1,028 |
780 |
276 |
388 |
2,472 |
|
|
|
Charge for the year |
- |
605 |
157 |
- |
169 |
931 |
|
|
|
At 31 January 2023 |
- |
1,633 |
937 |
276 |
557 |
3,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge for the year |
- |
605 |
338 |
- |
201 |
1,144 |
|
|
|
Impairment |
- |
- |
4,120 |
- |
- |
4,120 |
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31 January 2024 |
- |
2,238 |
5,395 |
276 |
758 |
8,667 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value |
|
|
|
|
|
|
|
|
|
At 31 January 2024 |
7,938 |
3,302 |
1,837 |
- |
201 |
13,278 |
|
|
|
At 31 January 2023 |
7,610 |
3,895 |
5,160 |
- |
339 |
17,004 |
|
|
The Group tests goodwill for impairment on an annual basis, or more frequently if there are indications that the goodwill may be impaired. The recoverable amounts of the cash-generating unit are determined from value in use calculations. The key assumptions for the value in use calculations are the discount and growth rates used for future cash flows and the anticipated future changes in revenue and costs. The assumptions used reflect the past experience of management and future expectations.
The forecasts covering a five-year period are based on the detailed budget for the year ended 31 January 2025 approved by the Board. The cashflows beyond the budget period are extrapolated for a further four-years based on future expectations. This forecast is then extrapolated to perpetuity using a 2.0% (2023: 2.0%) growth rate.
Annual growth rates for revenues for the five-year forecast period have been included between 5% and 7.5% year-on-year and costs between 3% and 5% year-on-year. A post-tax discount rate of 12.5% (2023: 13.0%) has been used in these calculations. The discount rate uses weighted average cost of capital which is reflective of a medical device Company operating both domestically and internationally. A discount rate of 13.3% (2023: 19%) would need to be applied for there to be zero headroom.
|
Leasehold improvements |
Fixtures and fittings |
Plant, machinery, office equipment |
Motor |
Total |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
Cost |
|
|
|
|
|
At 1 February 2022 |
1,146 |
106 |
1,887 |
58 |
3,197 |
Additions |
5,894 |
6 |
326 |
- |
6,226 |
Disposals |
- |
- |
(6) |
- |
(6) |
At 31 January 2023 |
7,040 |
112 |
2,207 |
58 |
9,417 |
Additions |
168 |
11 |
255 |
- |
434 |
Disposals |
(289) |
(45) |
(23) |
(8) |
(365) |
At 31 January 2024 |
6,919 |
78 |
2,439 |
50 |
9,486 |
|
|
|
|
|
|
Accumulated Depreciation |
|
|
|
||
At 1 February 2022 |
129 |
68 |
1,178 |
24 |
1,399 |
Charge for the year |
241 |
8 |
257 |
17 |
523 |
Disposals |
- |
- |
(2) |
- |
(2) |
At 31 January 2023 |
370 |
76 |
1,433 |
41 |
1,920 |
Charge for the year |
375 |
7 |
290 |
13 |
685 |
Disposals |
(192) |
(41) |
(19) |
(4) |
(256) |
At 31 January 2024 |
553 |
42 |
1,704 |
50 |
2,349 |
|
|
|
|
|
|
Net book value |
|
|
|
|
|
At 31 January 2024 |
6,366 |
36 |
735 |
- |
7,137 |
At 31 January 2023 |
6,670 |
36 |
774 |
17 |
7,497 |
8 Property, Plant and Equipment
Depreciation charged for the financial year is split between cost of sales
9 Inventory
|
2024 |
2023 |
|
£'000 |
£'000 |
Raw materials |
7,623 |
7,749 |
Work in progress |
1,897 |
563 |
Finished goods |
4,223 |
1,623 |
Total |
13,743 |
6,449 |
Inventories are presented net of provisions of
10 Trade and other receivables
|
2024 |
2023 |
|
£'000 |
£'000 |
Trade receivables |
8,071 |
10,393 |
Loss allowance |
(498) |
(266) |
Net trade receivables |
7,573 |
10,127 |
UK corporation tax receivable |
- |
143 |
Other taxes and social security |
- |
304 |
Net investment in leases |
489 |
616 |
Other receivables |
245 |
183 |
Prepayments and accrued income |
362 |
515 |
Total |
8,669 |
11,888 |
11. Trade and other payables
|
|
2024 |
2023 |
|
|
£'000 |
£'000 |
|
|
|
|
Trade payables |
|
4,359 |
4,081 |
UK corporation tax |
|
82 |
- |
Other taxes and social security |
|
583 |
257 |
Other payables |
|
606 |
434 |
Accrued expenses |
|
961 |
1,040 |
Total |
|
6,591 |
5,812 |
12. Borrowings
|
|
2024 |
2023 |
|
|
£'000 |
£'000 |
Current liabilities |
|
|
|
Invoice Financing |
|
1,654 |
2,079 |
Non-current liabilities |
|
|
|
Revolving Credit Facility |
|
5,002 |
4,000 |
Total |
|
6,656 |
6,079 |
Invoice Financing Facility
The Group continues to benefit from an invoice financing facility to borrow against notifiable trade receivables. The arrangement with the bank is such that the customers remit cash directly with the bank and invoices are settled against the facility. The Group continues to bear the credit risk relating to any defaulting customers and therefore the related trade receivables continue to be recognised on the Group's Statement of Financial Position. Availability under the facility is capped at
Revolving Credit Facility ('RCF')
On 22 February 2024, the Group renewed and extended its
The movement in the RCF facility during the year was as follows:
|
|
2024 |
2023 |
|
|
£'000 |
£'000 |
At 1 February |
|
4,000 |
- |
Proceeds from drawdown of loans |
|
1,002 |
4,000 |
At 31 January |
|
5,002 |
4,000 |
13 Business Combinations
On 3 January 2024, the Group purchased 100% of the share capital in Airon Corporation, a specialist respiratory device company based in Florida, USA.
Airon Corporation is recognised as a leading manufacturer of specialist pneumatic oxygen-powered life support ventilators. These devices have diverse applications, including use in Magnetic Resonance Imaging (MRI) machines and transportation for neonates to adults. The company also offers a range of continuous positive airway pressure (CPAP) devices, crucial in emergency medicine for supporting children and adult patients.
Details of the consideration paid, the provisional fair value of assets acquired and liabilities assumed, and goodwill arising are as follows:
|
|
Book value £'000 |
Adjustments £'000 |
Fair value £'000 |
|
|
|
|
|
Non-current assets |
|
|
|
|
Intangible assets |
|
- |
12 |
12 |
Right of use assets |
|
- |
50 |
50 |
|
|
- |
62 |
62 |
Current assets |
|
|
|
|
Inventories |
|
430 |
- |
430 |
Trade and other receivables |
|
217 |
- |
217 |
Short-term investments |
|
197 |
- |
197 |
Cash and cash equivalents |
|
64 |
- |
64 |
|
|
908 |
- |
908 |
Total assets |
|
908 |
62 |
970 |
|
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
|
(67) |
- |
(67) |
Lease liabilities |
|
- |
(50) |
(50) |
|
|
(67) |
(50) |
(117) |
Non-current liabilities |
|
|
|
|
Deferred tax liability |
|
- |
(2) |
(2) |
|
|
- |
(2) |
(2) |
Total liabilities |
|
(67) |
(52) |
(119) |
Net assets |
|
841 |
10 |
851 |
|
|
|
|
|
Goodwill |
|
|
|
328 |
Total Consideration |
|
|
|
1,179 |
|
|
|
|
|
Satisfied by Cash consideration |
|
|
|
1,179 |
Net cash outflow arising on acquisition |
|
|
|
|
Cash consideration |
|
|
|
1,179 |
Cash acquired |
|
|
|
(65) |
|
|
|
|
1,114 |
In the period from acquisition to 31 January 2024, Airon contributed
Acquisition-related fees amounting to
Goodwill arising on acquisition
Goodwill arose in the acquisition because the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, in particular associated with the ability to commercialise the Group's products in the USA. These benefits are not recognised separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets.
None of the goodwill is expected to be deductible for tax purposes.
Contingent consideration
Contingent consideration is due to the shareholders of Airon, based on revenue targets for the 12month period ending on 30 April 2025. The maximum amount payable is
Airon revenues in the initial months post-acquisition have shown growth due to a number of factors that have arisen since the year end, that if maintained for the whole of the earn out period, would result in the maximum contingent consideration being paid.
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