Final results for the year ended 31 March 2021

RNS Number : 6769M

Induction Healthcare Group PLC

23 September 2021

 

Induction Healthcare Group PLC

("Induction", the "Company", or the "Group")

Final results for the year ended 31 March 2021

Induction (AIM: INHC), a leading virtual care platform driving digital transformation of healthcare systems worldwide, announces its audited final results for the year ended 31 March 2021.

Financial Highlights

· Revenues of £1,513k (FY20: £148k)

· Average monthly revenues increasing by 79% year on year

· Reported revenue from Induction Guidance grew to £636k (2020: £148k representing five months of revenue recognised post acquisition)

· Cash position at 31 March 2021 was £2,472k (2020: £10,718k)

Operational Highlights

· 68% increase in users of Induction platforms

· Clinical users increased to 217,000 (57% yoy) for Induction Switch1

· Registered patients increased to 212,000 (176% yoy) for Induction Zesty2

· Clinical users increased to 215,000 (27% yoy) for Induction Guidance3

· Acquisition of Zesty   Limited in June 2020

· Strategic collaboration with Cerner to resell Induction Zesty patient portal platform to Cerner customers in UK and Ireland

· Collaboration with Apple, Cerner and Milton Keynes University Hospital NHS Trust to enable Health Records on iPhone, a 'first of type' NHS innovation for patients

· Contract for Induction Zesty with the Royal Free London NHS Foundation Trust ("RFL") to deliver the My RFL Care patient portal as the first phase of an ambitious roadmap for RFL's digital patient services

· Public sector and academic contracts with the University of the West of England and South Gloucestershire Council for Induction Booking

· Three-year contract for Induction Switch with a London-based NHS Foundation Trust

Post Period Highlights

· £25 million fundraise through a placing of 35,714,285 new Ordinary Shares

o  Completion of the acquisition of Attend Anywhere Pty Ltd in June 2021 for a cash consideration of £16.34 million plus the issue of 14,285,714 consideration shares with a value of £10.0m  

· Attend Anywhere delivered £10.4 million in revenues and £4.5 million in EBITDA in the full year to 30 June 2021 (unaudited)

·     Strong sales momentum with three prominent hospitals across South East England, contracting to deploy Induction Zesty to deliver their digital patient portals, worth a total of £440k

· NHS Wales renewed its existing annual contract with Attend Anywhere in July 2021 with an expansion of its previous scope, for £1.63m (prior year £1.2m).

· Cash position of £13.5m as at 31 August 2021 (post fundraise and acquisition of Attend Anywhere Pty Ltd).

· Unaudited revenue in the five months to 31 August 2021 stands at £3.48m and the Group currently has £7.5m of contracted revenues for final seven months of FY22.

· The Board's expectations for the remainder of FY22 remain unchanged.

James Balmain, CEO of Induction, said :   "Despite the pandemic we have had a solid year with average monthly revenues increasing by 79%, and with the Global Virtual Healthcare Market predicted to grow significantly, Induction is well placed to be a major competitor in this international space.

" Post period end, the fundraise and acquisition of Attend Anywhere has positioned us well for the next 12 months. As we look to move beyond secondary care, the post period end acquisition of Attend Anywhere will aid us in offering a more complete, 'whole system' platform which will be beneficial to patient and clinical users, both of which have increased as a result of the pandemic.

"I would like to thank the Induction team for their hard work over a challenging 12 months and look forward keeping investors updated as we continue to enhance our 'Induction Anywhere' platform."

Annual Report and Accounts and Notice of AGM

The Annual Report and Accounts and notice of AGM, will be available later this morning on the Company's website; https://inductionhealthcare.com/investors/financial-reports-and-publications/ , in accordance with AIM Rule 20.  Copies will be posted to shareholders in due course.

Investor Presentation

James Balmain, Chief Executive Officer, and Olly Drake, Interim Chief Financial Officer, will be hosting a live online presentation relating to the annual report via the Investor Meet Company platform at 4.30pm (BST) on Monday 4 October 2021 . The presentation is open to all existing and potential shareholders.

Investors can sign up to Investor Meet Company for free and register for the presentation here:

https://www.investormeetcompany.com/induction-healthcare-group-plc/register-investor  

A recording of the presentation, a PDF of the slides used, and responses to the Q&A session will be available on the Investor Meet Company platform afterwards .

-ENDS-

ENQUIRIES

Induction James Balmain, Chief Executive Officer	Via Walbrook PR Ltd: [e-mail]
Singer Capital Markets (Nominated Adviser and Broker)	[phone]
Philip Davies / Kailey Aliyar
Walbrook PR Ltd	[e-mail]
Paul McManus / Alice Woodings	Mob: [phone]

About Induction -   www.inductionhealthcare.com

Induction (AIM: INHC) is a leading virtual care platform driving digital transformation of healthcare systems worldwide. Induction solutions enhance the investments hospitals have made and lay the foundation for their future. Our products can enable information sharing between busy doctors, alleviate operational burdens on hospitals or put patients in better control of their care, all while ensuring the highest standards of clinical safety and information security. We unchain staff and patients from the limitations of paper-based and desktop systems, creating substantial time and cost efficiencies.

More than 225,000 hospital doctors across multiple territories, including the UK, Ireland, Australia and South Africa, as well as a rapidly growing number of more than 300,000 UK patients, choose Induction solutions.

Induction Switch is the number one healthcare collaboration app in the UK, used by the majority of hospital doctors within the NHS. The app helps to increase productivity and enhance communication by securely sharing phone numbers and bleeps, bookmarks, documents and messages in a clinical setting.

Induction Guidance provides medical organisations, including most hospital trusts within the NHS, with the ability to collaboratively create, edit, and publish their own local medical guidelines in a secure and locally administrated environment. This increases knowledge of, and adherence to, guidance.

Induction Zesty is a market-leading digital platform for patients visiting hospitals. The platform allows patients to book and access their appointments, read their clinical letters, store a copy of their clinical record and provide data to their care teams remotely. It is not just a compelling patient experience, but also delivers significant cost benefits to hospitals.

Induction Attend Anywhere   is the UK market leader in secondary care video consultations. It helps hospitals, health systems and other customers offer video consultations to patients and service users as a normal part of day-to-day clinical activity. Our vision is for video consultations to improve lives and help address social, access, equity and sustainability challenges by allowing healthcare providers to determine how and when they see a patient based on each individual case: in-person, via video or on the telephone .

Induction HealthStream is a proprietary data integration platform that reads and writes patient demographic, appointment and clinical record data between a growing number of hospital EHR systems and the Induction platforms. This connectivity between stakeholders and legacy IT systems adds substantial value to pre-existing health IT investment and allows large-scale adoption of Induction app-based services.

 

Chair's statement

Despite the pandemic, Induction has had a strong year as the Company has continued to deliver on the objectives set out when it joined AIM in May 2019. In the financial year to 31 March 2021, Induction has seen its first full year of revenues of £1.5m and an average increase of 68% in users of Induction platforms.

The fiscal year ended with a strong pipeline and solid order book as the Group saw an increase in patients and clinical users. Induction's suite of SaaS tools has been established to combine to deliver a comprehensive virtual care platform and, while the Group has a continued focus on UK secondary care markets, it has the scope to further grow into new local markets and internationally.

Key Achievements

Following the acquisition of Zesty Limited in June 2020, in October 2020 a strategic collaboration agreement was signed with Cerner Corporation (Nasdaq: CERN) in the UK and Ireland to jointly develop patient engagement solutions for NHS hospitals with Induction Zesty. Cerner is a leader in health care technology interoperability and a patient facing platform that represents the best of Induction Zesty and the best of Cerner presents a great solution for both existing and new Cerner customers. As part of the Cerner agreement, NHS Trusts that are already Cerner clients will also have access to the Company's Induction Zesty patient portal under their existing contractual arrangements.

Following this, Induction Zesty collaborated with Apple and Cerner to support the roll out of "Health Records on iPhone" to patients at Milton Keynes University Hospital NHS Trust (MKUH), one of the first two NHS hospital trusts to launch this feature in the UK. As at the end of July 2021 over 94,000 patients are registered at Milton Keynes to be able to access this functionality on their iPhones and the Group is looking forward to continuing the partnership with Apple, Cerner and many more hospitals in the UK so they can offer Health Records on iPhone to their patients.

The Company has seen excellent commercial momentum with the NHS over the last twelve months including new contracts with Royal Free London, Sussex Community NHS Foundation Trust, and East & North Hertfordshire NHS Trust. Broader public sector contracts include the University of the West of England and South Gloucestershire Council, for the Induction Booking app to enable the booking of COVID-19 lateral flow tests.

Sales momentum has accelerated in recent months for Induction Switch and in May 2021 we concluded a three- year contract with a London- based NHS Foundation Trust to support its 10,000 clinicians and staff. Post-year end the sales pipeline has continued to mature with three prominent hospitals across South East England, contracting to deploy Induction Zesty to deliver their digital patient portals. These contracts are worth a total of £440k with time periods that range between 12 to 20 months.

The acquisition of Attend Anywhere in June 2021 is pivotal for Induction going forward as it reinforces the Group's already strong NHS footprint and brings £7.7m in annual contract value across 183 NHS England Trusts, £2.1m in Scotland and £1.6m in Wales.

People

Following our acquisition of Zesty Limited, on 8 June 2020, our Board was strengthened with the arrival of Andy Williams to the Board as a Non-Executive Director and James Balmain as joint CEO alongside Hugo Stephenson.

Chris Ryan, Attend Anywhere's former CEO, joined the Company's executive management team in June 2021, and we are delighted to welcome him as his expertise and industry knowledge will be instrumental to the Group's business going forward.

I would especially like to thank the entire Induction team for their incredible work over the last twelve months. The pandemic has been challenging for all and the Group could not have reached these significant milestones without the dedication and resilience of its employees.

Strategy

The Board has set an ambitious growth trajectory including international expansion, and a move beyond secondary care, to offer a more complete, 'whole system' platform. Induction's M&A strategy will act as a rapid enabler for this. Induction has continued to execute its "buy and build"' strategy successfully, acquiring four businesses since its AIM IPO in May 2019 (Attend Anywhere post year-end), and considers itself well placed to hold a strong market position in a significant area of growth and investment.

Outlook

Whilst the impact of COVID-19 caused difficulties for the business in engaging with clients, more importantly it has also been a significant driver for uptake of Induction's virtual care platforms and has brought to the foreground the momentum to digitally transform healthcare. The NHS spends around £1bn on technology systems each year and the existing evidence of significant usage proves that our solutions are not only efficient but also the preferred platforms of healthcare professionals.

The current financial year is an opportunity for Induction to help the NHS to deliver the benefits of this momentum. The flexibility and adaptability of Induction's SaaS platforms and focus on evidence-based sales is driving growth in all areas of the business. Alongside this, the post year end acquisition of Attend Anywhere further enhances our combined product offering, increasing our attraction to investors and customers alike.

Chris Spencer, Chair

Executive Directors' Statement

Overview

The Group has made solid progress in the last 12 months, completing the acquisition of Zesty amidst the lockdown and laying the foundation during the latter months of FY21 for acquiring Attend Anywhere in June. In the meantime, Induction's core products going into the year -Induction Switch and Induction Guidance - have been greatly relied upon by clinical users during the COVID-19 pandemic.

FY21 has been a challenging year for many businesses, particularly technology start-ups like Induction Healthcare. Throughout the year we have faced significant and unforeseeable business challenges as a result of the COVID-19 pandemic, including the heavy reliance of front-line clinical users on our core Induction Switch and Induction Guidance applications, while at the same time facing healthcare administrations naturally focused on emergent priorities and unable to spare bandwidth for monetisation discussions around Switch, or deep system integrations with Zesty - despite their ability to unlock future operational efficiencies. For many of our clients, hospitals and healthcare systems, FY21 was crisis unfolding in both slow motion and at warp speed. Despite these challenges, we ended the year having closed the acquisition of Zesty during a lockdown, as well as signing a value-added reseller agreement with Cerner Corporation, the first of its type for Cerner in the UK digital healthcare market. We also supported Apple in the launch of their Health Records on iPhone service at Milton Keynes hospital. This is the first time that secondary care health records have been available through patient Apple devices in the UK.

For an organisation that began FY21 with an almost universally used but unmonetised app (Induction Switch), and the then recent acquisition of MicroGuide (Induction Guidance) still early in its soon to be successful earn-out journey, Induction Healthcare entered FY22 as one of the leading providers of health IT across the UK, with a comprehensive toolkit - used at national scale across the secondary healthcare systems - enabling digital collaboration between healthcare providers, administrators and patients. Over the last quarter of the year, we made significant progress towards the acquisition of Attend Anywhere - a complex international transaction that was completed after year end. At the same time, we managed to roll out major new features to all our products with software teams working entirely remotely and dealt with the challenges of completing major due diligence and team integration projects without ever being able to meet in person.

Prior to the acquisition of Attend Anywhere, Induction ended FY21 with revenue growing to £1.5 million (FY20: £0.1 million), clinical users growing to 217,000 (57% yoy) and registered patients growing to 212,000 (176% yoy). Induction Guidance remains prevalent in the clinical guidance market in the UK, with average monthly revenues increasing by 79% year on year. Our Induction Switch platform currently has more than 230,000 clinical users and; while we made the decision to keep much of Induction Switch available free of charge during the pandemic, we have now commenced the monetisation journey for this platform with a three-year deal signed at the Royal Free London.

Landmark deployments of Induction Zesty at the Royal Free London and The Royal Wolverhampton act as exemplar reference cases for the platform to the wider English NHS secondary care market. In a first-of-type regional outpatient transformation platform, Induction Zesty achieved preferred supplier status with the South West London integrated care system (ICS) in conjunction with our partner Cerner - allowing patients who visit any of the four acute or three community providers within the ICS to manage their care directly and access records, appointments and care pathway information through a single platform. Our integrated platform, currently in development, will also directly onboard patients to telephone or video consultations via Attend Anywhere.

The post year end acquisition of the video consultation platform Attend Anywhere is our most significant to date and establishes our promise of flexible care at a national scale across the UK. Our toolkit now enables providers to engage with other providers (Induction Switch), healthcare institutions to engage with their providers (Induction Guidance), patients to engage with their healthcare institutions (Induction Zesty), and - most importantly - patients to engage with healthcare providers (Attend Anywhere). We entered FY22 managing some of the most used tools in each of these domains, and now covering the complete secondary care patient pathway by offering pre-treatment patient support via digital correspondence, appointment booking and remote data capture, the full range of in- person, telephone or live-video consultations and post treatment follow up support.

Attend Anywhere is a strongly accretive acquisition, delivering £10.4 million in revenues and £4.5 million in EBITDA in the year to 30 June 2021 (unaudited). Induction's platforms are most effective and exciting when they are synergised as an end-to-end platform. Going forward, our 'Induction Anywhere' solution will retain their flexibility as standalone tools and create a new level of efficiency and value for our clients when they are used together.

Upsell in existing channels

Following the acquisition of Attend Anywhere, Induction is now contracted with over 80% of NHS Secondary trusts in England and holds national contracts in Scotland, Wales and the Republic of Ireland (ROI), enabling significant scope to support our customers with further group products. Whilst Induction Zesty has a key role to play in enhancing the provider benefit and patient experience of Attend Anywhere our Induction Switch and Induction Guidance products offer further benefits as we move forwards with regional deals in line with the roll out of ICSs.

Complementary adjacent sectors

As health and social care become more tightly connected and regional funding is made available for healthcare providers, local authorities and national services need to support a more flexible approach to citizen engagement, our tried and tested national capability is a credible proposition for central payers. We are actively pursuing complementary sectors, whilst ensuring our relentless focus on excellent user experience.

Equally important is the shift towards regional patient engagement, regardless of care setting. We remain actively interested in opportunities to expand more directly into primary and community care, whilst retaining our market lead and expertise in secondary care.

We see expansion into new territories as a vital part of our medium-term strategy. Following the acquisition of Attend Anywhere, we now have a team in Melbourne, Australia and intend to launch Attend Anywhere in the Australian market in the coming months, generating revenues during FY23. Key partnerships, including our landmark Value-Added Reseller agreement with the Cerner Corporation, provide an exciting route to market.

Accretive M&A

We continue to evaluate our global market for potential acquisitions. We're most focused on targets that will accelerate our entry into new territories, whilst delivering EBITDA to the group.

People

Despite the challenges of remote working, we've made great in-year and post year end progress on attracting top talent to Induction. Building a focused and highly skilled team is critical to our growth. Notable hires include a Group Chief Revenue Officer, Chief Legal and Admin Officer (with a core M&A skillset) and more recently a highly experienced Chief Technical Officer.

We're equally focused on developing talent and supporting our people to grow and excel in their roles, ensuring that incentives are aligned with shareholder value and our people are rewarded via stock options.

Operational execution

We've made good progress in building out our product, development, account management, customer success and sales teams. Induction will always be a group with product at its core and we've taken huge steps forward in engaging with our customers and closing the loop on user feedback. We've established our target operating model, successfully integrating our acquisitions into a group wide functional organisational structure, avoiding siloed teams by product line.

Critically, we're working at pace to instill P&L accountability throughout the organisation - with a clear focus to reach EBITDA neutrality by the end of FY22, moving towards cash generation by the end of FY23.

Diversity and inclusion

The global events of the last 12 months have reinforced our belief that a diverse and inclusive workforce are not just a social good, but a commercial advantage. Fair practices in hiring and talent development, as well as maintaining safe and supportive company cultures, are key to the Group's success and the encouragement of diverse voices within it.

 

Climate and the Environment

Digital tools and transformation are the basis of our products and we are in a privileged position to support our clients and champion positive change on sustainability and our environment. We will do this in four ways:

• ensure we continue to be the best corporate citizen we can possibly be;

• ensure sustainability is at the heart of the workforce and how we operate;

• influence customers to make sustainable choices whenever we do work for them; and

• create new products that help our customers rethink their services for the challenges and opportunities ahead.

Outlook

The Global Virtual Healthcare Market is predicted to grow by 23.31%4 by 2025 and Induction is well placed to be a major competitor in this international space. The Company has strong sales momentum, recurring revenue, and a pipeline of orders with multi-year contracts, as well as proven ability to create value for healthcare systems at a regional and national level.

In our view, our current leading market position is due to Induction's ability to work alongside existing systems. We can operate our platforms at scale without loss of functionality, efficiency or margin. The establishment of a scalable SaaS platform that provides value to all stakeholders:

· administrators, healthcare providers and patients

· means that we help existing healthcare systems evolve to become what they want to be, rather than compete with these systems and disrupt what they do.

As the COVID-19 pandemic recedes around the world, we are incredibly excited at the Group's enviable position in the UK market and scope for significant global growth in the next 3-5 years.

Dr Hugo Stephenson, Group Executive Director

James Balmain, Chief Executive Officer

Financial Review

Revenue

For the year ended 31 March 2021, reported revenue increased to £1,513k (2020: £148k).

Reported revenue from Induction Guidance (Horizon Strategic Partners Limited) grew to £636k (2020: £148k representing five months of revenue recognised post acquisition). The principal drivers for this growth have been upselling new product lines and the sale to the Mexico Better Health Programme in June 2020.

Reported revenue from Induction Zesty of £872k reflects just under 10 months of revenue recognised since the acquisition of Zesty Limited. Induction Zesty's revenues were certainly impacted by COVID-19 as many of our existing and potential customers were understandably focused on initially treating acute patients and subsequently implementing the national vaccine. On the other hand, COVID-19 has strongly demonstrated the need for our leading technology and, aligned with our Cerner partnership, we are confident of a stronger year to 31 March 2022.

Whilst Induction Switch has seen a continued increase in its user numbers and some sales traction post year end, reported revenues of £5k from Induction Switch in the year have not been as expected. Whilst the Board sees great value in the user base and further monetisation, the Group's strategy is to focus attention and investment on higher value revenue streams which in turn are complemented and supported by the Induction Switch user base. The impairment review noted that the carrying value of Induction Switch significantly exceeded the value in use calculation, which used cash flow projections over a five-year period. The Board therefore determined that the value of goodwill and intangible assets should be impaired by £1.37 million (2020: £nil)

 

	2021 £'000	2020 £'000
United Kingdom	1,342	131
Europe	13	2
United States	23	11
Rest of World	135	4
	1,513	148

Operating Costs

Administration costs have increased to £5,052k (2020: £2,330k). This mainly relates to an increase in headcount from the acquisition of Zesty Limited and a full year of trading post acquisition of Horizon Strategic Partners Limited in the prior year. The Group capitalises software development and hosting costs which depreciate over three to five years, resulting in capitalisation of £1,660k (2020: £761k).

Reported loss before tax for the year was £8,117k (2020: £3,527k).

Core performance measures

Core performance measures are alternative performance measures (APM) which are adjusted and non-IFRS measures. These measures cannot be derived directly from our consolidated financial statements. We believe that the following non-IFRS performance measures, when provided in combination with reported performance, will provide investors, analysts and other stakeholders with helpful complementary information to better understand our financial performance and our financial position from period to period. The measures are not substitutable for IFRS results and should not be considered superior to results presented in accordance with IFRS.

We considered the adjusting items, including explanations of why they were either not related to the performance of the business or impacted the comparability of the Group's results year-on-year. We also reviewed the FRC's guidance, considered adjusting items used by the Group's peers and have concluded that the appropriate disclosure of those items has been included.

The Group incurred several exceptional items during the year as per the table below which shows adjusted operating loss before depreciation, amortisation, impairment and exceptional costs of £4,775k (2020: £2,736k).

	2021 £'000	2020 £'000
Loss before tax	(8,117)	(3,527)
Add / (Less): Net finance expense / (income)	2	(47)
Add: Impairment losses	1,366	-
Add: Depreciation and amortisation	1,356	324
Operating loss before depreciation, amortisation and impairment	(5,393)	(3,250)
Adjusted for exceptional costs:
- IPO costs expensed1	-	281
- Acquisition related transaction costs2	375	150
- Fair value adjustments on contingent consideration and contract liabilities3	243	83
Adjusted Operating loss before, depreciation, amortisation, impairment and exceptional costs	(4,775)	(2,736)

1.  The prior year saw £281k of IPO costs expensed through the Income Statement. These costs have been excluded as they are non-recurring and do not relate to the underlying trading of the Group.

2.  These costs are directly attributable to business combinations and are excluded from underlying performance as they would not have been incurred had the business combination not occurred. They do not relate to the underlying trading of the Group and are added back to aid comparability of the Group's profitability year-on-year.

3.  The unwinding of the discount on these liabilities and contingent consideration is also excluded from underlying performance on the basis that it is non-cash and the balance is driven by the Group's assessment of the time value of money and this exclusion ensures comparability.

 

Cash

The Group's cash position at 31 March 2021 was £2,472k (2020: £10,718k). The operating cash outflow was focused on investment in our developers and products and ongoing AIM listing costs, as we build the framework and foundations. Investment outlay of £3,652k (2020: £1,727k) includes a £1,500k earnout payment for Horizon Strategic Partners Limited and £1,660k for capitalised development costs. Financing cash outflows include the repayment of a third-party loan of £501k, which was repaid following the acquisition of Zesty Limited.

The Directors regularly monitor cash usage and forecast cashflows to ensure that the projected business needs are supported, and future acquisitions can be delivered as part of the overall strategy to grow the business.

	2021 £'000	2020 £'000
Operating cash flows	(4,012)	(3,346)
Cash balance	2,472	10,718

Assets and Liabilities

Goodwill at 31 March 2021 of £9,373k (2020: £1,553k) and Intangibles of £5,884k (2020: £2,349k) are derived from two acquisitions, Zesty Limited during the year and Horizon Strategic Partners Limited in the prior year.

As previously noted, the carrying value of Induction Switch goodwill and intangible assets has been impaired by £1,366k.

	2021 £'000	2020 £'000
Goodwill	9,373	1,553
Intangible assets	5,884	2,349

Post Balance Sheet Events

On 8 June 2021, the Company announced that it had raised £25 million through a placing of 35,714,285 new Ordinary Shares at a price of 70p per share. On the 9 June 2021, the Company announced the Completion of the acquisition of Attend Anywhere Pty Ltd for a cash consideration of £16.34 million, which included £0.79 million as payment for Attend Anywhere's net assets at completion and the issue of 14,285,714 consideration shares (having a value equivalent to £10 million at the placing price).

The acquisition of Attend Anywhere Pty Ltd adds critical mass, transformational revenues but another profitable and cash generative business to the Group.

 

Consolidated Statement of Profit or Loss

For the year ended 31 March 2021

 

	2021 £000	2020 £000
Revenue	1,513	148
Cost of Sales	(636)	(73)
Gross Profit	877	75
Sales and marketing expenses	(590)	(274)
Administrative expenses	(5,052)	(2,330)
Development expenses	(1,893)	(962)
Impairment Losses	(1,366)	-
Loss from Operations	(8,024)	(3,574)
Finance income	3	47
Finance Expense	(5)	-
Fair value losses on contingent consideration	(91)	(83)
Loss before tax	(8,117)	(3,527)
Tax credit	503	-
Loss for the year	(7,614)	(3,527)

 

 Consolidated Statement of Comprehensive Income

For the year ended 31 March 2021

 

	2021 £000	2020 £000
Loss for the year	(7,614)	(3,527)
Exchange (losses)/gains arising on translation on foreign operations	(9)	8
Reclassified to profit and loss during the year	(7)	(1)
	(16)	7
Other comprehensive income for the year, net of tax	(16)	7
Total comprehensive income	(7,630)	(3,520)
Loss per share attributable to the ordinary equity holders of the parent
Profit or Loss
Basic	(0.19)	(0.13)
Diluted	(0.19)	(0.13)

 

Consolidated Statement of Financial Position

As at 31 March 2021

	2021 £000	2020 £000
Assets
Non-current assets
Property, plant and equipment	15	-
Intangible assets	5,884	2,349
Goodwill	9,373	1,553
Deferred tax assets	880	97
Total non-current assets	16,152	3,999
Current assets
Contract assets	155	23
Trade and other receivables	896	140
Cash and cash equivalents	2,472	10,718
Other current financial assets	447	-
Total current assets	3,970	10,881
Total assets	20,122	14,880
Liabilities
Non-current liabilities
Contract liabilities	187	38
Deferred tax liability	1,048	321
Total non-current liabilities	1,235	359
Current liabilities
Trade and other payables	1,396	402
Contract liabilities	1,027	263
Other financial liabilities	-	1,409
Total current liabilities	2,421	2,074
Total liabilities	3,656	2,433
Net assets	16,466	12,447
Equity attributable to equity holders of the parent
Share capital	210	148
Share premium reserve	18,432	18,432
Merger reserve	10,879	(10)
Foreign exchange reserve	(9)	7
Other reserves	792	94
Retained earnings	(13,838)	(6,224)
Total equity	16,466	12,447

Consolidated Statement of Changes in Equity

As at 31 March 2021

 

	Share capital £000	Share premium £000	Merger reserve £000	Foreign exchange reserve £000	Other reserves £000	Retained earnings £000	Total equity £000
At 1 April 2019	66	-	-	(1)	-	(2,707)	(2,642)
Comprehensive income for the year
Loss for the year	-	-	-	-	-	(3,527)	(3,527)
Other comprehensive loss for the year	-	-	-	8	-	-	8
Total comprehensive loss for the year	-	-	-	7	-	(3,527)	(3,520)
Transactions with owners, recorded directly in equity
Reserves arising on acquisition of subsidiaries	-	-	(10)	-	-	10	-
Issue of shares pre-Initial Public Offering	9	1,991	-	-	-	-	2,000
Issue of shares to settle loans and borrowings	9	1,991	-	-	-	-	2,000
Issue of shares as consideration for a business combination	2	398	-	-	-	-	400
Issue of shares on Initial Public Offering	62	14,521	-	-	-	-	14,583
Share issue costs	-	(469)	-	-	-	-	(469)
Equity settled share-based payments	-	-	-	-	94	-	94
Total contributions by and distributions to owners	82	18,432	(10)	-	94	10	18,608
At 31 March 2020 and 1 April 2020	148	18,432	(10)	7	94	(6,224)	12,447
Comprehensive income for the year
Loss for the year	-	-	-	-	-	(7,614)	(7,614)
Other comprehensive loss for the year	-	-	-	(16)	-	-	(16)
Total comprehensive income for the year	-	-	-	(16)	-	(7,614)	(7,630)
Transactions with owners, recorded directly in equity
Issue of shares as consideration for a business combination	62	-	10,953	-	-	-	11,015
Share issue costs	-	-	(64)	-	-	-	(64)
Equity settled share-based payments	-	-	-	-	698	-	698
Total contributions by and distributions to owners	62	-	10,889	-	698	-	11,649
At 31 March 2021	210	18,432	10,879	(9)	792	(13,838)	16,466

 

Consolidated Statement of Cash Flows

For the year ended 31 March 2021

	2021 £000	2020 £000
Cash flows from operating activities
Loss for the year	(7,614)	(3,527)
Adjustments for
Depreciation of property, plant and equipment	7	-
Amortisation of intangible fixed assets	1,340	323
Impairment losses on intangible assets	1,366	-
Finance income	(3)	(47)
Finance expense	5	-
Fair value adjustments on financial liabilities	91	83
Share-based payment expense	698	94
Net foreign exchange loss/(gain)	3	(7)
Income tax credit	(503)	-
	3,004	446
Movements in working capital:
(Increase) / decrease in trade and other receivables and contract assets	(485)	29
Increase / (decrease) in trade and other payables and contract liabilities	1,085	(342)
Interest received	3	47
Interest paid	(5)	-
Net cash (used in)/from operating activities	(4,012)	(3,346)
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired	(1,987)	(976)
Purchases of property, plant and equipment	(5)	-
Repayments by related parties	-	10
Payment of software development costs	(1,660)	(761)
Net cash used in investing activities	(3,652)	(1,727)
Cash flows from financing activities
Issue of ordinary shares	-	16,584
Share issue costs	(64)	(469)
Proceeds from related party borrowings	-	500
Repayment of bank borrowings	(501)	-
Repayment of related party borrowings	-	(1,000)
Net cash (used in)/from financing activities	(565)	15,615
Net cash (decrease)/increase in cash and cash equivalents	(8,230)	10,542
Cash and cash equivalents at the beginning of year	10,718	169
Exchange (loss)/gains on cash and cash equivalents	(16)	7
Cash and cash equivalents at the end of the year	2,472	10,718

NOTES TO THE YEAR END RESULTS

 

1.  Basis of preparation

The financial information in these results has been prepared using the recognition and measurement principles of

International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the United Kingdom (collectively Adopted IFRSs). The principal accounting policies used in preparing the results are those the Group has applied in its financial statements for the year ended 31 March 2021.

The financial information set out above does not constitute the group's statutory accounts for the years ended 31 March 2020 or 31 March 2021 but is derived from those accounts. The statutory accounts for the year ended 31 March 2020 have been delivered to the Registrar of Companies and those for 2021 will be delivered following the group's annual general meeting. The auditors have reported on these accounts, their reports were unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports, and did not contain statements under s.498(2) or (3) of the Companies Act 2006. The information contained in this statement does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.

2.  Going concern

The Group has recognised revenues from commercial deals during the year of £1,513k (2020: £148k), however it is still largely reliant on cash from financing activities to fund on-going operations.

The Group made adjusted operating losses before interest, tax, depreciation, amortisation, impairment and exceptional costs for the year ended 31 March 2021 of £4,775k (2020: £2,736k) and had cash balances at 31 March 2021 of £2,472k (2020: £10,718k) with cash outflows from operating activities during the year of £3,948k (2020: £3,347k).

On 8 June 2021, the Company announced that it had raised £25 million through a placing of 35,714,285 new Ordinary Shares at a price of 70p per share (refer note 12).  On the 9 June 2021, the Company announced the completion of the acquisition of Attend Anywhere Pty Ltd for a cash consideration of approximately £16,348k, which included approximately £788k as payment for Attend Anywhere's net assets at completion; and the issue of 14,285,714 Consideration Shares (having a value equivalent to £10 million at the Placing Price).

Following the share placing and acquisition the Group has seen an incremental increase in cash reserves of £10 million, which will be used to support product development and international expansion.

In assessing the appropriateness of the going concern assumption, the Board of Directors has reviewed the projected cash flow forecasts to 31 March 2023 of the enlarged Group and other relevant information, together with considering scenarios with adverse impacts across the Group's principal risks relating to COVID-19 and macro-economic conditions. Management's base case going concern assessment allows investment in the full range of planned market and product development activities, to achieve revenue targets over this forecast period. Management has considered a severe but plausible downside scenario whereby the Group sees six-month delays in signing new revenues and a 33% reduction in renewals of Attend Anywhere Pty Limited's existing contracts, together with a series of mitigating actions, which resulted in the Group remaining viable over the going concern period.

After due consideration, the Board has concluded that there is a reasonable expectation that the Group and Company have adequate resources to meet its liabilities as they fall due for at least 12 months from the date of this report, and therefore these financial statements are prepared on a going concern basis.

 

3.  Revenue

The following is an analysis of the Group's revenue for the year from continuing operations:

	2021 £000	2020 £000
Provision of software	1,340	148
Post-contract support and maintenance	73	-
Text message revenue	100	-
	1,513	148

The following is an analysis of revenue by country of destination:

	2021 £000	2020 £000
United Kingdom	1,342	131
Europe	13	2
United States	23	11
Rest of World	135	4
	1,513	148

The following is an analysis of revenue by product line.  Zesty Limited (Induction Zesty) was acquired on 8 June 2020, see Note 8 for further information.

	2021 £000	2020 £000
Induction Zesty	872	-
Induction Guidance	636	148
Induction Switch	5	-
	1,513	148

Timing of revenue recognition:

	2021 £000	2020 £000
Services transferred over time	1,347	148
Services at point in time	165	-
	1,513	148

4. Expenses by nature

	2021 £000	2020 £000
Employee costs	5,123	2,106
Depreciation of property, plant and equipment	7	-
Amortisation of intangible assets	1,340	323
Impairment of goodwill and intangible assets	1,366	-
Contractors' costs	1,103	538
Acquisition related transaction costs	375	150
Professional and legal fees	359	583
Research and development expense capitalised	(1,660)	(761)
Share-based payment charge	698	94
Fair value adjustments on financial liabilities	91	83
Fair value adjustments on contract liabilities	152	-

Fair value adjustments on contract liabilities relate to the unwinding of adjustments made to the contract liabilities of acquirees at acquisition. These adjustments unwind as the revenue to which the contract liability balance relates is recognised.

5. Employee benefit expenses

	2021 £000	2020 £000
Employee benefit expenses (including directors) comprise:
Wages and salaries	3,583	1,717
Social security costs	414	191
Defined contribution pension cost	140	96
Share-based payment expenses	698	94
Other employee benefits	288	8
Total employee benefit expense	5,123	2,106

The monthly average number of persons, including the directors, employed by the Group during the year was as follows:

	2021 No. of employees	2020 No. of employees
Development	23	11
Sales and Marketing	12	2
General and Administrative	6	3
Total Average FTE	41	16

The remuneration of the highest paid director was £259k (2020: £303k). Included in other employee benefits is £30k (2020: £Nil) compensation for loss of office paid to a former director of the group.

The Group operates a defined contribution pension plan which was put in place in October 2018. The total expense relating to the plan in the year was £140k (2020: £94k).

6. Tax expense

6.1 Income tax recognised in profit or loss

	2021 £000	2020 £000
Current tax
Research & development tax credit	(446)	-
Induction Switch	5	-
Total current tax	1,513	-
Deferred tax expense
Origination and reversal of timing differences	(116)	-
Prior year deferred tax movement	59	-
Total deferred tax	(57)	-
Tax income on loss on ordinary activities	(503)	-

 

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:

	2021 £000		2020 £000
Loss for the year	(8,117)	(3,527)
Tax at the standard rate of corporation tax of 19% (2020: 19.11%)	(1,561)	(674)
Non-tax deductible amortisation of goodwill and impairment	9	(1)
Expenses not deductible for tax purposes, other than goodwill, amortisation and impairment	301	108
Depreciation on tangible assets	-	-
Share-based payments	124	18
Prior year adjustments	(386)	-
Deferred tax not recognised	961	550
Other	(50)	-
Total tax income	(503)	-

6.2 Current tax assets and liabilities

	2021 £000	2020 £000
Current tax assets
R&D tax credit receivable	446	-
	446	-

Current tax assets relate to research and development tax credits in respect of a subsidiary, for the years ended 31 March 2019 and 31 March 2020. The claim for the year ended 31 March 2019 was submitted to HMRC and settled post-year end. Other subsidiaries do not have a recent history of claims and therefore an estimate for these has not been made, due to the uncertainty regarding timing and amount of such claims.

6.3 Deferred tax balances

A deferred tax liability of £791k (2020: £321k) has been recognised in relation to fair value adjustments of intangible assets acquired in business combinations. A deferred tax asset of £791k (2020: £97k) was recognised in relation to unused tax losses acquired in business combinations. This deferred tax asset was recognised only to the extent that there are deferred tax liabilities available with the same tax authority and which will be unwound in the same period as the deferred tax asset.

A deferred tax asset of £2,787k (2020: £1,058k) has not been recognised due to uncertainty that the asset will be utilised in the foreseeable future as the Group has yet to obtain significant sources of income. The unrecognised deferred tax asset includes those in relation to tax losses of £14,605k (2020: £6,144k). These amounts exclude amounts related to Horizon Strategic Partners Limited, which is expected to generate profits and for which a deferred tax asset of £89k (2020: £97k) has been recognised.

7. Loss per share

(i)  Basic loss per share

	2021 £	2020 £
From continuing operations attributable to the ordinary equity holders of the Group	(0.19)	(0.13)
Total basic loss per share attributable to the ordinary equity holders of the Group	(0.19)	(0.13)

(ii)  Diluted loss per share

	2021 £	2020 £
From continuing operations attributable to the ordinary equity holders of the Group	(0.19)	(0.13)
Total diluted loss per share attributable to the ordinary equity holders of the Group	(0.19)	(0.13)

(iii)  Reconciliation of loss used in calculating loss per share

	2021 £000	2020 £000
Profit attributable to the ordinary equity holders of the Group used in calculating basic loss per share and diluted loss per share:
From continuing operations	(7,614)		(3,527)
	(7,614)		(3,527)

(iv)  Weighted average number of shares used as the denominator

	2021 number	2020 number
Shares in issue at the beginning of the period	29,626,201	65,591
Shares issued on share split	-	13,052,609
Shares issued	-	3,826,086
Shares issued on IPO	-	12,681,915
Shares issued on business combination	12,424,527	-
Issued ordinary shares as at the end of the period	42,050,728	29,626,201
Weighted average number of ordinary shares used as the denominator in calculating basic loss per share	39,701,981	26,189,458

On 9 June 2021, the Group acquired Attend Anywhere Pty Ltd ("Attend Anywhere"). The consideration for the acquisition included the issue of 14,285,714 new Ordinary Shares.

As part of the transaction, the Group also completed a fundraise by issuing 35,714,285 new Ordinary Shares.

Both the above transactions would have significantly changed the number of shares outstanding used to calculate the loss per share, if they had occurred prior to 31 March 2021.

8. Business combinations during the year

8.1 Subsidiaries acquired

On 8 June 2020, Induction Healthcare Group plc acquired 100% of the share capital of Zesty Limited for a consideration comprising £500k in cash, plus the issue of 12,424,527 New Ordinary Shares.

Name	Principal activity		Date of acquisition	Proportion of voting equity interests acquired %	Consideration transferred £000
Zesty Limited	Provision of software to healthcare organisations		08/06/20	100	11,514

8.2 Consideration transferred

The following represents the consideration transferred to the owners of Zesty Limited.

	Zesty Limited £000
Cash	500
Equity consideration	11,014
Total consideration	11,514

The fair value of cash consideration equals its carrying value. The fair value of the equity consideration has been determined with references to the market value of the shares of Induction Healthcare Group plc immediately prior to the issue of the consideration shares, adjusted for the impact of a lack of marketability discount of 10%.

8.3 Assets acquired and liabilities recognised at the date of acquisition

The following represents assets acquired and liabilities recognised on acquisition.

	Zesty Limited £000
Non-current assets
Property, plant and equipment	18
Intangible assets	4,163
Other non-current assets	884
Current assets
Cash and cash equivalents	13
Other current assets	313
Non-current liabilities
Loans and borrowings	(417)
Deferred tax liabilities	(791)
Current liabilities
Other current liabilities	(821)
Loans and borrowings	(85)
Total identifiable net assets at fair value	3,277

The separately identifiable intangible assets and valuation techniques used to measure the fair value of these material assets acquired were as follows:

Assets acquired	Valuation technique
Trade Name	Relief-from-royalty savings method. This method considers the discounted estimated royalty payments that are expected to be avoided as a result of the patents being owned.
Users	Premium profits method. This method estimates the value of customer-related assets by quantifying the impact on cash flows under a scenario in which the customer related assets must be replaced, assuming all of the assets required to operate the business are in place except the customer-related assets.
Technology	Replacement cost method. This method establishes value based on the cost of reproducing or replacing the asset, less depreciation from functional or economic obsolescence. A corroborating analysis was performed using the multi-period excess earnings method. The multi-period excess earnings method considers the present value of net cash flows expected to be generated by the customer relationships, by excluding any cash flows related to contributory assets.

8.4 Goodwill arising on acquisition

	Zesty Limited £000
Consideration transferred	11,514
Total identifiable net assets at fair value	3,277
Goodwill arising on acquisition	8,237

 

8.5 Net cash outflow on acquisition

	2021 £000
Consideration paid in cash	(500)
Transaction costs of the acquisition (included in cash flows from operating activities)	(269)
Transaction costs attributable to the issuance of shares (included in cash flows from financing activities, net of tax)	(64)
Less: cash and cash equivalent balances acquired	13
Net cash flow on acquisition	(820)

Acquisition related costs of £269k were recognised in administrative expenses. Acquisition related costs of £64k relate to the issuance of shares and were capitalised to share premium. All issue costs were recognised.

8.6 Impact of acquisition on the results of the Group

From the date of acquisition, Zesty Limited contributed £872k to the revenue of the group and net losses of £1,921k to the loss before tax from continuing operations of the Group. If the acquisition had taken place at the beginning of the year, contribution to revenue from continuing operations would have been £954k and contribution to loss before tax from continuing operations for the Group would have been £2,306k.

9. Goodwill

The following represents the carrying value of goodwill as at 31 March 2021.

	2021 £000	2020 £000
Cost	9,790	1,553
Accumulated impairment	(417)	1,136
	9,373	1,553

	2021 £000	2020 £000
Cost
At 1 April	1,553	-
Additions as a result of business combinations	8,237	1,553
As at 31 March	9,790	1,136
Accumulated impairment
Impairment charge	417	-
At 31 March	417	-

9.1 Allocation of goodwill to cash generating units

Goodwill is allocated to the Group's cash generating unit as follows:

	2021 £000	2020 £000
Induction Zesty	8,237	-
Induction Guidance	1,136	1,136
Induction Switch	-	417
	9,373	1,553

 

Induction Zesty

The Zesty CGU consists of the assets and cash flows related to the Zesty patient portal product. The recoverable amount of the Zesty CGU of £10,902k as at 31 March 2021 has been determined based on a value-in-use calculation using cash flow projections for a five-year period. The pre-tax discount rate applied to cash flow projections is 17.4% and cash flows beyond the five-year period are extrapolated using a declining growth rate, determined using the H-model. The recoverable amount of this CGU exceeded its carrying amount by £1,334k. No impairment charge resulted from this analysis. Refer to sensitivity disclosures below.

Induction Guidance

The Induction Guidance CGU consists of the assets and cash flows related to the Induction Guidance product line (formerly MicroGuide, acquired as part of the acquisition of Horizon Strategic Partners). The recoverable amount of the Induction Guidance CGU of £3,385k as at 31 March 2021 (2020: £3,830k) has been determined based on a value-in-use calculation using cash flow projections for a five-year period. The pre-tax discount rate applied to cash flow projections is 17.7% (2020: 10.6%) and cash flows beyond the five-year period are extrapolated using a 2% growth rate (2020: 2.7%). The recoverable amount of this CGU exceeded its carrying amount by £1,231k. No impairment charge resulted from this analysis. Refer to sensitivity disclosures below.

Induction Switch

The Induction Switch CGU consists of the assets and cash flows related to the Induction Switch app. During the year ended 31 March 2021, the performance of the Induction Switch app did not align to management's previous expectations and forecasts. This was due to challenges in monetising the app, due to the COVID-19 pandemic changing priorities for the customers of the Group. As a result of this, management's forecasts of future cash inflows were updated to reflect these delays in monetisation. The recoverable amount of the Induction Switch CGU of £Nil as at 31 March 2021 (2020: £11,441k) has been determined based on a value-in-use calculation using cash flow projections for a five year period. The pre-tax discount rate applied to cash flow projections is 16.7% (2020: 17.9%) and cash flows beyond the five-year period are extrapolated using a 2% growth rate (2020: 2%). An impairment charge of £1,366k was recognised on the Induction Switch CGU, and would have been included in administrative expenses if presented by function on the statement of profit and loss. This impairment charge was allocated to all identifiable individual assets within the CGU as follows: £418k to goodwill; £33k to intangible assets acquired in a business combination; and £915k to capitalised development costs (refer Note 10). Management does not expect any further impairment of the assets related to the Induction Switch CGU. Refer to sensitivity disclosures below.

Key assumptions used in value-in-use calculations and sensitivity to changes in assumptions. The calculation of value-in-use for all 3 CGU's is most sensitive to the following assumptions:

· Earnings before interest, tax, depreciation and amortisation ("EBITDA") margins

· Discount rates

· Growth rates used to extrapolate cash flows beyond the forecast period.

EBITDA - EBITDA is determined by deducting the budgeted costs to be incurred (cash outflows) from payments received from customers. Cash inflows are determined based on detailed budgets for the first 2 years of the forecast period, and then extrapolated for the remaining forecast period using an appropriately declining growth rate to reach the terminal growth rate.

Detailed budgets are determined using assumptions on existing customer renewal rates; sales of additional services to existing customers; sales made to new customers; and pricing assumptions based on a standard price list as determined by the Group's pricing policy. Cash outflows are based on values achieved in the year to 31 March 2021, adjusted for an appropriate growth rate depending on the nature of the cash outflow. Decreased demand can lead to a decline in EBITDA. A reasonable possible decrease of 1% in EBITDA would not result in an impairment of either the Zesty or Induction Guidance CGU. A reasonably possible decrease of 7.4% would result in the impairment of the Zesty CGU. A decrease of 32.6% would result in the impairment of the Induction Guidance CGU.

Discount rates - Discount rates represent the current market assessment of the risks specific to each CGU, taking into account the time value of money and individual risks of the underlying assets that have been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Group and is derived from the weighted average cost of capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Group's investors. The cost of debt is based on the interest-bearing borrowings the Group is obliged to service. CGU specific risk is incorporated by applying individual beta factors. The beta factors were evaluated for the first time in the year ended 31 March 2020, based on publicly available market data. Adjustments to the discount rate are made to factor in the specific amount and timing of the future tax flows in order to reflect a pre-tax discount rate. The assumptions made in determining the discount rate were updated during the year ended 31 March 2021 to reflect the changes in the nature of the business as a result of the acquisition of Zesty Limited.

A reasonable possible rise in the pre-tax discount rate of 1% to 18.4% in the Zesty CGU would result in an impairment of the CGU. A rise in the pre-tax discount rate of 5.5% to 23.2% in the Induction Guidance CGU would result in an impairment of the CGU.

Terminal growth rate

The terminal growth rate is the growth rate used to forecast cash inflows and outflows into perpetuity. As the terminal growth rate for the Induction Guidance and Induction Zesty CGU's is 2%, there would be no material impact to the recoverable amount of any decreases in the terminal growth rate.

10. Intangible assets

	Capitalised development costs £000	Trade name £000	Users £000	Technology £000	Total £000
Cost
At 1 April 2019	197	-	-	36	233
Additions internal	761	-	-	-	761
Acquired through business combinations	229	264	919	277	1,689
At 31 March 2020	1,187	264	919	313	2,683
Additions - internally developed	1,660	-	-	-	1,660
Acquired through business combinations	1,081	369	507	2,205	4,162
At 31 March 2021	3,928	633	1,426	2,518	8,505

	Capitalised development costs £000	Trade name £000	Users £000	Technology £000	Total £000
Accumulated amortisation and impairment
At 1 April 2019	-	-	-	10	10
Charge for the year	224	15	53	31	323
At 31 March 2020	224	15	53	41	333
Charge for the year	851	61	189	239	1,340
Impairment charge	915	7	23	3	948
At 31 March 2021	1,990	83	265	283	2,621
Net book value
At 1 April 2019	197	-	-	26	223
At 31 March 2020	963	249	866	271	2,349
At 31 March 2021	1,939	550	1,161	2,234	5,884

The impairment charge of £948k recognised on capitalised development costs and acquired intangible assets relates to the allocation of the impairment loss recognised in the Induction CGU to individual assets within the CGU.

 

11. Cash and cash equivalents

	2021 £000	2020 £000
Cash at banks and on hand	872	671
Short-term deposits	1,600	10,047
Cash and cash equivalents per the statement of financial position and cash flow statement	2,472	10,718

Cash at banks earn interest at floating rates based on daily bank deposit rates. Short-term deposits are made on weekly basis, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

12. Events after the reporting date

On 9 June 2021, the Group acquired Attend Anywhere Pty Ltd ("Attend Anywhere"), a private Australian-based video consultation provider in the UK. The Acquisition (which comprised the acquisition of 818 shares in Attend Anywhere together with the acquisition of 1 share in A.C.N. 167 231 307 Pty Ltd, a company which owns the remaining shares in Attend Anywhere) resulted in Induction owning the whole issued share capital (100%) and voting rights of Attend Anywhere.

The acquisition of Attend Anywhere is an opportunity for the Induction Healthcare Group to provide a comprehensive virtual care platform for hospitals, doctors and patients. Attend Anywhere extends the Group's existing product set with a mature video consultation platform already being widely used by NHS hospitals across the UK. It will also deliver Attend Anywhere customers an even higher standard of user support, technical resilience and customer service, via the Group's existing UK based infrastructure.

The consideration for the Acquisition comprised £16,348k in cash including an amount equal to Attend Anywhere's net assets at completion of the Acquisition as calculated in accordance with the SPA (estimated to be £788k) and the issue of 14,285,714 new Ordinary Shares (the "Consideration Shares").

As part of the transaction, on 8 June 2021, the Company announced that it had raised £25 million through a placing of 35,714,285 new Ordinary Shares at a price of 70p per share. Part of the proceeds of the Placing was used to fund the Cash Consideration and fees in respect of the Acquisition and the remainder will be used to provide the Group with additional working capital.

Following completion of the Acquisition, Chris Ryan, Attend Anywhere's CEO, joined the Company's executive management team and holds 11,002,445 Ordinary Shares.

The Group is in the process of determining the accounting impacts of the acquisition and completing the purchase price allocation in accordance with IFRS 3, however this is not yet complete. Therefore, the Group has determined that providing the disclosures required by IFRS 3 for business combinations effected after the reporting date is not practicable.

 

---

[1] P.2

[2] P.2

[3] P.2

[4] Global Virtual Healthcare Market, Cumulative Impact of COVID-19", p31

 

END

 

 

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