Final Results

RNS Number : 5776W

Inspiration Healthcare Group PLC

28 April 2016

 

Inspiration Healthcare Group plc

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

Audited Final Results

Inspiration Healthcare Group plc (AIM: IHC), the international suppliers of Neonatal Intensive Care and patient warming equipment, today reports its audited final results for the year ended 31 January 2016.

Highlights

●	Reverse acquisition completed successfully
●	Underlying revenue growth of 15% on an unaudited proforma basis
●	Strong balance sheet with £2.3 million cash at the year end
●	Restructured sales team already showing benefits
●	Critical Care international growth driven by own brand/IP products
●	R&D programme prioritised and more resources committed

Commenting on the outlook, Mark Abrahams, Chairman of Inspiration Healthcare Group plc, said:

"It is pleasing to see how much progress has been made in the enlarged group. The complementary product ranges and routes to market, together with a strong balance sheet, provide a solid foundation for the progress we expect to continue across the business this year."

Footnote:

The results reflect the reverse acquisition of Inditherm plc by Inspiration Healthcare Limited which completed on 24 June 2015.  In accordance with the provisions of IFRS 3 (Revised) 'Business Combinations', the results are deemed to be a continuation of the "accounting parent" which in this case is Inspiration Healthcare Limited and incorporate the results of the business that was formally known as Inditherm plc from 24 June 2015.  Further details are set out in the notes attached to this announcement.

In order to assist in the understanding of year on year trading performance of the enlarged group, an unaudited Proforma Consolidated Income Statement has been prepared for the 12 months ended 31 January 2016 along with comparatives for the previous year.

- Ends -

For further information, please contact:

Inspiration Healthcare Group plc	www.inspiration-healthcare.com
Neil Campbell, Chief Executive [e-mail]	Tel: [phone]
Ian Smith, Finance Director [e-mail]

W H Ireland (Nominated Adviser and Broker)
Tim Feather Liam Gribben	Tel: [phone]

Cadogan PR
Alex Walters	Tel: [phone]

Chairman's Statement

It gives me great pleasure to report the first annual results of the newly formed Inspiration Healthcare Group plc which came about following the reverse acquisition of Inditherm plc by Inspiration Healthcare Limited.

Transactions of this type are complex but I am pleased say that the teams from both sides did an excellent job and the transaction was completed in a professional and enjoyable way.  I look forward to the merged business providing real value for shareholders in the future.

On 24 June 2015, when the transaction became unconditional, Inditherm plc acquired 100% of the share capital of Inspiration Healthcare Limited in a transaction which under IFRS 3 was deemed to be a reverse acquisition.  The enlarged group has been renamed Inspiration Healthcare Group plc.  The transaction has brought a strong management team with a proven track record of growth and profitability.  The Group has a much broader range of innovative products which predominantly serve the medical markets specialising in Critical Care and the Operating Theatre.

The re-structured business will provide a strong platform for growth in important areas of the medical technology market with scale and additional resources.

Under the provisions of IFRS 3 the results are reported as a continuation of Inspiration Healthcare Limited with the results of the former Inditherm plc consolidated from the point that the transaction was completed and the shares of the enlarged entity admitted to AIM.  Accordingly, the trading for the year to 31 January 2016 reflects twelve months of Inspiration Healthcare Limited and approximately thirty-two weeks from Inditherm plc as previously constituted.

The statutory results for the year ended 31 January 2016 show revenue of £12.3 million, operating profit of £1.3 million before impairment charges and exceptional items arising on the reverse acquisition of £1.2 million and an operating profit of £0.1 million. Reported revenue growth was 29% of which 15% was organic and the balance due to incorporating the Inditherm business.

To help shareholders to assess the Group, an unaudited Proforma Consolidated Income Statement has been produced, which reflects twelve months of trading from both entities.  The Board believes that this statement represents the most appropriate basis for future comparison of operating performance.

Proforma Consolidated Income Statement (unaudited)

			12 months ended 31 January	12 months ended 31 January
			2016 £'000	2015 £'000
Revenue			13,096	11,409
Cost of sales			(7,118)	(6,344)
Gross profit			5,978	5,065
Operating expenses			(6,553)	(4,806)
Other income			295	-
Operating (loss)/profit			(280)	259
Analysed as:
Operating profit before impairment of goodwill and intangible assets and exceptional items			1,109	302
Impairment of goodwill and intangible assets			(517)	-
Exceptional items			(872)	(43)
Operating (loss)/profit			(280)	259
Finance income			3	6
(Loss)/profit on ordinary activities before taxation			(277)	265
Income tax expense			(136)	(229)
(Loss)/profit for the period attributable to owners of the parent company			(413)	36
Earnings per share, before impairment of goodwill and intangible assets and exceptional items, attributable to owners of the parent company during the period - basic and diluted			3.4p	2.9p

Adjusted earnings per share has been included as, in the opinion of the Directors, this will allow shareholders to gain an understanding of the underlying trading performance of the Group for the period.

Compared to the statutory results, the unaudited proforma consolidated income statement basis includes an additional 20 weeks of Inditherm plc's results prior to the reverse acquisition which has the impact of increasing revenue by £0.8 million and reducing the operating profit before impairment charges and exceptional items by £0.2 million.  On the proforma basis revenue increased by 15% and operating profit before goodwill and impairment charges and exceptional items increased by £0.8 million from £0.3 million to £1.1 million compared to the previous 12 months.

There is a great deal of synergy between the two groups' product ranges.  The majority of the Inspiration product range focuses on the new born in Neonatal Intensive Care Units (NICU) as does the Inditherm infant warming range.  Additionally in the UK, Inspiration sell a range of products into the Operating Theatre, to which adding the Inditherm patient warming mattresses gives scale to the sales team and will unlock more value from this sector.

Interest in the Inditherm products has also grown especially in the LifeStart range.  We believe that this product has significant potential and it is gaining interest in both regular usage and also in the academic world where clinicians are looking at the benefits of deferred cord clamping.  The interest in this topic is gaining momentum with ongoing clinical trials and we look forward to realising the full potential of the product in the forthcoming years.

Some of our R&D developed products were slower to gain regulatory clearance than we had hoped but our market research shows substantial interest in these products and we remain confident in the potential of our new product pipeline.

I would like to offer my sincere thanks to our staff who have worked diligently and tirelessly throughout the year to maintain the momentum required to grow our Group during the merger and integration process.  Their endeavour is appreciated by the entire Board.

Forward looking statement

The Group is well positioned to realise its potential with a newly restructured sales team and a pipeline of products through a prioritised R&D programme.  We believe the market is right for the products we have developed especially with our comprehensive neonatal offering where we can help affect the outcome of babies from before the first breath of life.

The market in the UK continues to be unpredictable for capital purchases by the NHS.  However, our managed service offering helps to remove such barriers for the NHS to acquire our patient warming system for surgery.  We also have strong recurring revenue through our disposable product and Technical Support contracts that reduce reliance on capital budgets.

We believe that our own branded products are well placed in our key export markets to drive growth in our business, whilst we will continue to look for products to distribute in the UK that would add value to our existing portfolio.

The new financial year has started well and on plan and we expect to continue our progress across the business this year.

MARK ABRAHAMS

Chairman

28 April 2016

Operating and Financial Review

Our underlying revenue grew during the year, embracing the challenges of merging the Inspiration and Inditherm businesses.  The biggest thank you I can say is to all our staff who have helped complete the merger smoothly and have driven the Group  forward. I am delighted with the response we have had from all our staff who have brought about the successful integration.

On a statutory basis reported operating profit was £0.1 million (2015: £1.0 million) with operating profit before impairment charges and exceptional items of £1.3 million (2015: £1.0 million).  On a proforma basis, operating profit before impairment charges and exceptional items improved to £1.1 million (2015: £0.3 million).  Profit after tax and earnings per share (EPS) were minimal, reflecting the impact of non-recurring impairment charges of £0.5 million and £0.7 million of exceptional costs.  Underlying profit margin was 8.5% and adjusted EPS increased from 2.9p to 3.4p per share on a proforma basis (2.9p to 4.1p on a statutory basis).

Sales of the Inspiration Healthcare Limited business increased to £11.2 million from £9.5 million, with the balance of revenue generated by the former Inditherm business.  Sales grew 21% in Critical Care to £8.8 million (2015: £7.3 million) and 39% in Home Healthcare to £2.1 million (2015: £1.5 million).

The overall performance of the Group was in line with our plans at £12.3 million of revenue (2015: £9.5 million).  As expected, this represented a flat period for the Inditherm range, which was achieved with a lower cost base as the product range was integrated into the Inspiration offering.  Looking forward, in the short to medium term, we expect to achieve growth as we develop more appropriate channels and products.

Critical Care (£8.8 million, +21% growth year on year)

Our Critical Care business grew strongly with UK sales up 17% and international sales up 27%.  Whereas the UK market is particularly important to us in our distribution model, the real growth from our own products in the longer term will be attained internationally.  During the financial year we have made reasonable progress in North America and we had our largest ever order shipped to Saudi Arabia (£0.7 million).

Our sales team has now been re-organised in the UK to give a focus on the different aspects of our business.  We now have a dedicated Critical Care sales team, including a full time National Sales Manager.  This approach will give more focus to the team and better reporting and visibility of opportunities.

Our service department has contracts with NHS Trusts for planned preventative maintenance.  Additionally we also carry out ad hoc repairs chargeable by the hour and supply spare parts.  Technical service is a core part of our business, which adds value to distribution and helps differentiate us from competitors.  Our service offering includes 24/7 emergency hire of life support equipment.

Operating Theatre (£1.3 million, +82% year on year)

Our Operating Theatre business includes the original Inditherm surgical warming products as well as some distributed products in the UK that can add value to customers in this area.  Again, as with the Critical Care sales team, we have re-organised the sales team to deliver a more focused service to the customer when it comes to discussing surgical needs and patient requirements led by a National Sales Manager.

The sales growth reflects the impact of the acquisition, the Inditherm Alpha mattress system for warming patients during surgery had a challenging financial year, although we managed to win a substantial managed service contract in the UK.  Further development of the managed service business is being undertaken to see how far we can progress with this offering as we believe it demonstrates savings to our customers more clearly.

Home Healthcare (£2.1 million, +39% year on year)

We have seen significant growth in our parenteral feeding product lines sharing experience with other infusion based products in the portfolio.

The industrial business of Inditherm is making a small but valuable contribution and following the transaction the focused resource is starting to show benefits with increased interest in this area.

Review of Business and Future Developments

Due to the change in the structure of the business following the reverse acquisition the Directors have included a 12 month Proforma Consolidated Income Statement (unaudited) within the Chairman's Statement. The Directors believe that this year on year comparison represents the most appropriate basis for future comparisons of financial performance and that overall the Annual Accounts and Consolidated Financial Statements are fair, balanced and understandable.

Taxation

The Group has recorded an income tax expense of £136,000 (2015: £229,000).  Within this amount the Group has benefitted from a deferred tax credit on recognition of the future benefit of capital allowances (not previously claimed by Inditherm plc) as a deferred tax asset of £45,000 (2015: £nil).  Further benefit is gained from Research and Development tax credits resulting in £115,000 (2015: £nil) of UK corporation tax recoverable at the year end.  £80,000 of the amount recoverable relates to previous financial years.

Cashflow

The year-end cash and cash equivalents improved to £2.3 million from £0.3 million in 2015 due to cash generated from trading of £1.1 million (2015: decrease £0.2 million) and £0.9 million assumed from Inditherm plc when the reserve acquisition was completed.  The Group has no borrowings (other than £33,000 (2015: £nil) of finance leases).  The Directors believe that the currently planned growth in the business can be funded from ongoing operations.

Exceptional Items

The Group presents certain items as exceptional items that are non-recurring and significant.  These relate to items which, in management's judgement, need to be disclosed by virtue of their size and incidence in order to obtain a more meaningful understanding of the financial information.

The exceptional items reported relate to reverse acquisition transaction and re-organisation costs of £0.7 million.  The amount comprised two main categories of non-recurring items.  Firstly, professional fees of £0.5 million including brokerage, legal fees, accounting and taxation advice, stamp duty and public relations fees in relation to the reverse acquisition.  Secondly, non-recurring severance costs of £0.2 million including payments for loss of office and redundancy.

Impairment of Goodwill and Intangible Assets

The impairment of goodwill and intangible assets arising on reverse acquisition of £0.5 million comprise the impairment of intellectual property of £0.1 million and impairment of goodwill of £0.4 million both recognised following a review of the carrying value of the assets at the year-end.

NEIL CAMPBELL

Chief Executive Officer

28 April 2016

Consolidated Statement of Comprehensive Income (Audited) for the year ended 31 January 2016

				2016 £'000	2015 £'000
Revenue				12,279	9,538
Cost of sales				(6,764)	(5,507)
Gross profit				5,515	4,031
Operating expenses				(5,664)	(3,053)
Other operating income				295	-
Operating profit				146	978
Analysed as:
Operating profit before goodwill and impairment of intangible assets and exceptional items				1,305	978
Impairment of goodwill and intangible assets				(517)	-
Exceptional items				(642)	-
Net finance income				2	2
Profit before tax				148	980
Income tax expense				(136)	(229)
Total comprehensive income for the year attributable to owners of the parent company				12	751
Earnings per share, attributable to owners of the parent company- basic and diluted				0.04p	2.94p

Consolidated Statement of Financial Position (Audited) as at 31 January 2016

		31 January	31 January
		2016	2015
		£'000	£'000
Assets
Non-current assets
Intangible assets		242	136
Property, plant and equipment		166	90
Deferred tax asset		45	-
Investments		100	-
		553	226
Current assets
Inventories		780	664
Trade and other receivables		2,147	2,143
Cash and cash equivalents		2,319	342
		5,246	3,149
Total assets		5,799	3,375
Liabilities
Current liabilities
Trade and other payables		(2,502)	(1,559)
Obligations under finance leases		(17)	-
Deferred income		(276)	(251)
		(2,795)	(1,810)
Non-current liabilities
Deferred income		(136)	-
Obligations under finance leases		(16)	-
Deferred tax liability		(39)	(25)
		(191)	(25)
Total liabilities		(2,986)	(1,835)
Net assets		2,813	1,540
Shareholders' equity
Called up share capital		3,067	511
Share premium account		9,929	9,929
Merger reserve		4,600	-
Reverse acquisition reserve		(16,164)	(10,440)
Retained earnings		1,381	1,540
Total equity attributable to owners of the parent company		2,813	1,540

Consolidated Statement of Changes in Shareholders' Equity (Audited)

	Issued Share Capital £'000	Share premium account £'000	Merger reserve £'000	Reverse Acquisition reserve £'000	Retained earnings £'000	Total £'000
At 31 January 2014	511	9,929	-	(10,440)	1,197	1,197
Profit for the year and total comprehensive income	-	-	-	-	751	751
Dividends paid	-	-	-	-	(408)	(408)
At 31 January 2015	511	9,929	-	(10,440)	1,540	1,540
Profit for the year and total comprehensive income	-	-	-	-	12	12
Dividends paid	-	-	-	-	(171)	(171)
Arising on reverse acquisition	-	-	-	(5,724)	-	(5,724)
Shares issued as consideration	2,556	-	4,600	-	-	7,156
At 31 January 2016	3,067	9,929	4,600	(16,164)	1,381	2,813

Consolidated Cash Flow Statement (Audited) for the year ended 31 January 2016

		2016 £'000	2015 £'000
Operating profit for the financial year		146	978
Impairment of goodwill		378	-
Impairment of intangible assets		139	-
Depreciation and amortisation		178	67
Loss on disposal of intangible asset		6	-
Net finance income		2	2
Decrease/(increase) in inventories		14	(185)
Decrease/(increase) in trade and other receivables		379	(979)
Increase in trade and other payables		579	456
(Decrease)/increase in deferred income		(26)	98
Taxation paid		(172)	(123)
Net cash inflow from operating activities		1,623	314
Cash flow from investing activities
Interest paid		(1)	-
Purchase of property, plant and equipment		(132)	(120)
Purchase of intangible assets		(169)	-
Cash and cash equivalents acquired under reverse acquisition		894	-
Acquisition of investment		(100)	-
Net cash generated from/(used in) investing activities		492	(120)
Cash flows from financing activities
Finance leases		33	-
Dividends paid prior to reverse acquisition		(171)	(408)
Net cash used in financing activities		(138)	(408)
Net increase/(decrease) in cash and cash equivalents		1,977	(214)
Cash and cash equivalents at the beginning of the year		342	556
Cash and cash equivalents at the end of the year		2,319	342

 NOTES 

1	The final results have been prepared in accordance with International Financial Reporting Standards ("IFRSs") and IFRIC interpretations as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRSs.  This announcement does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.  This announcement has been agreed with the Company's auditors for release. This results announcement contains information extracted from the audited financial statements of the group for the year ended 31 January 2016. The final audited results were approved by the Board on 27 April 2016. The Annual Report and Financial Statements of Inspiration Healthcare Group plc (previously Inditherm plc) for the year ended 31 December 2014, which have been delivered to the Registrar of Companies, included an audit report which was unqualified and which did not contain a statement under Section 498 of the Companies Act 2006.
2	Reverse acquisition accounting
	On 24 June 2015, the Company, by way of a share exchange, acquired the entire issued ordinary share capital of Inspiration Healthcare Limited through issuing 25,556,290 ordinary shares of 10p to the shareholders of Inspiration Healthcare Limited. The acquisition of Inspiration Healthcare Limited by Inspiration Healthcare Group plc (previously Inditherm plc) is deemed to be a reverse acquisition under the provisions of IFRS 3 (Revised) 'Business Combinations'. In accounting for a reverse acquisition (rather than an acquisition) the combined financial statements are deemed to be a continuation of the books of the legal acquiree (Inspiration Healthcare Limited) rather than a continuation of those of the legal acquirer (Inspiration Healthcare Group plc, previously Inditherm plc). The assets and liabilities of Inspiration Healthcare Limited are recognised and measured in the Group financial statements at the pre-combination carrying amounts, without restatement to fair value and no goodwill arises in relation to them. Conversely, the assets of Inspiration Healthcare Group plc (previously Inditherm plc) are consolidated at their fair values. The overall effect is that the consolidated financial statements are prepared from an Inspiration Healthcare Limited perspective rather than Inspiration Healthcare Group plc, in summary this means: ·      The comparative consolidated financial information is that of Inspiration Healthcare Limited rather than that of Inspiration Healthcare Group plc (previously Inditherm plc). ·      The results for the year and consolidated cumulative profit and loss reserves are those of Inspiration Healthcare Limited plus the post-acquisition results of Inspiration Healthcare Group plc (previously Inditherm plc). ·      A reverse acquisition reserve of £16,164,000 has been created. ·      The share capital, share premium account and merger reserve are that of Inspiration Healthcare Group plc (previously Inditherm plc). ·      The cost of the combination has been determined from the perspective of Inspiration Healthcare Limited. Goodwill arises on the reverse acquisition when comparing the deemed fair value consideration of Inspiration Healthcare Limited acquiring the shares of Inspiration Healthcare Group plc (previously Inditherm plc).  The fair value of the consideration is the market capitalisation of Inspiration Healthcare Group plc at acquisition based on the average share price over the five days preceding the date the transaction became unconditional. Book value Adjustment Fair Value Recognised amount £'000 £'000 £'000 £'000 Fair value of consideration 1,431 Net assets acquired: Intangible assets 3 139 142 Tangible assets 33 - 33 Inventories 157 - 157 Trade and other receivables 267 - 267 Current tax asset 18 - 18 Trade and other payables (270) - (270) Deferred income (188) - (188) Cash and bank balances 894 - 894 914 139 1,053 1,053 Goodwill arising on reverse acquisition 378 The acquisition consideration, net assets and goodwill are based upon the reverse acquisition of Inspiration Healthcare Group plc (previously Inditherm plc) by Inspiration Healthcare Limited.  The fair value of the consideration is the market capitalisation of Inspiration Healthcare Group plc (previously Inditherm plc) at acquisition.  The value of the consideration shares was £7,156,000 based upon the market price of shares on re-admission to trading on AIM for 28p per share. Transaction costs of equity transactions relating to the issue and re-admission of the Company's shares are accounted for as a deduction from equity where they relate to the issue of new shares and listing costs are charged to the Consolidated Statement of Comprehensive Income. The fair value of the net assets acquired and shown in the table above was £1,053,000.  The fair value of the consideration was £1,431,000 resulting in goodwill on reverse acquisition of £378,000.  In addition, the fair value of intellectual property arising on reverse acquisition was £139,000.
3	Exceptional Items
	12 months 12 months ended 31 January ended 31 January 2016 £'000 2015 £'000 Professional fees in relation to the reverse acquisition 472 - Severance costs on reorganisation 170 - Total exceptional items 642 - The Group presents certain items as non-recurring and significant.  These relate to items which, in management's judgement, need to be disclosed by virtue of their size and incidence in order to obtain a more meaningful understanding of the financial information. The exceptional items reported relate to reverse acquisition transaction and re-organisation costs of £642,000.  The Group incurred a total cost during the process of reverse acquisition and subsequent restructuring of £873,000.  The amounts in the consolidated results of the Group reflect that £231,000 of these were incurred by Inspiration Healthcare Group plc prior to the date when the transaction became unconditional on 24 June 2015. Professional fees of £472,000 include brokerage, legal fees, accounting and taxation advice, stamp duty and public relations fees.  Severance costs of £170,000 include payments for loss of office and redundancy.  All amounts were paid before the end of the financial year.
4	Intangible Assets and Goodwill
	Goodwill and acquisition related intellectual property recognised have arisen from the reverse acquisition of Inspiration Healthcare Limited in June 2015.  The intangible assets and liabilities of the Group have been measured at their reverse acquisition date fair values as required by IFRS 13 "Fair Value Measurement". Intellectual property of £139,000 was separately identified and recognised on reverse acquisition following an independent valuation using the relief from royalty approach.  The royalty rate was determined at 2.5% by comparing similar market transactions.  The discount factor applied in the calculation of the net present value of future cash flows was 16.0%, comprising the weighted average cost of capital of 14% with a margin of 2%. Goodwill reflects the future economic benefits arising from assets that are not capable of being identified individually and recognised as separate assets.  The goodwill reflects the anticipated profitability and synergistic benefits arising from the Group structure.  The goodwill is the balance of the total consideration less fair value of assets acquired and identified.  In accordance with IFRS 3 the Group considers that, on reverse acquisition, there are future economic benefits arising from other assets that are not individually identified and recognised.  The deemed consideration payable on reverse acquisition was £1,431,000 (see note 2).  The Group has recognised goodwill of £378,000 as an intangible asset. Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units (CGU's) that are expected to benefit from that business combination. The recoverable amounts are determined from value in use calculations.  The key assumptions for the value in use calculations are the discount rate used for future cash flows and the anticipated future changes in revenue, direct costs and indirect costs of the Group.  The assumptions used reflect the past experience of management and future expectations. The carrying value of the intellectual property and goodwill arising on reverse acquisition have been reviewed for impairment and fully impaired in the year.
5	Earnings per share
	Basic 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.  Basic diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue to assume conversion of all potential dilutive ordinary shares. 12 months 12 months ended 31 January ended 31 January 2016 £'000 2015 £'000 Profit Profit attributable to equity holders of the company 12 751 Impairment of goodwill and intangible assets 517 - Exceptional items 642 - Numerator for adjusted earnings per share calculation 1,171 751 The weighted average number of shares in issue and the diluted weighted average number of shares in issue were as follows: 12 months 12 months ended 31 January ended 31 January 2016 £'000 2015 £'000 Shares Weighted average number of ordinary shares in issue during the year for the purposes of basic earnings per share 28,665,055 25,556,290 Dilutive effect of potential Ordinary share: share options 55,000 - Diluted weighted number of shares in issue during the year for the purposes of diluted earnings per share 28,720,055 25,556,290 The basic and diluted earnings per share and adjusted basic and diluted earnings per share for the year are as follows: 12 months ended 31 January 2016 12 months ended 31 January 2016 12 months ended 31 January 2015 Basic pence Diluted pence Basic & diluted pence Earnings per share 0.04p 0.04p 2.94 Adjusted earnings per share 4.09p 4.08p 2.94                 An adjusted earnings per share and an adjusted diluted earnings per share have also been calculated as in the opinion of the Directors this will allow shareholders to gain a clearer understanding of the trading performance of the Group.  These adjusted earnings per share exclude: ·           Re-organisation and other significant non-recurring costs ·           Impairment of goodwill and intangible assets ·           The taxation effect at the appropriate rate on adjustments
6	Segmental analysis
	Inspiration Healthcare Group's activities are organised into four segments: three trading segments, being Critical care, Operating Theatre and Home Healthcare; and Central and Unallocated costs which are not allocated to trading segments. There is no inter-segmental trading. The Group's operations are based in the United Kingdom and it operates in a worldwide market. The Group's Chief Operating Decision Maker is the Board of Directors. Critical care Critical care encompasses different Intensive Care Units: i.e. Neonatal Intensive Care (NICU), Paediatric Intensive Care (PICU) and Adult Intensive Care (sometimes referred to as ITU - Intensive Therapy Unit).  Products that are identified in this segment are products that provide life and respiratory support and monitoring that are predominantly used in this clinical area, along with longer term (more than 6 hours) thermo-regulation products for cooling or warming patients, positioning aids.  Warming solutions include those to prevent hypothermia and heat therapy systems for the treatment of injuries and enhancing intravenous therapies for both staff and patients. The Group has broadened its offerings in the target markets with products that complement their warming systems.  In neonatal patient warming applications the greatest success has been in the intensive and special care units, with a growing uptake in delivery suites, post-natal wards and patient transport. Operating Theatre In the Operating Theatre the Group's products are used in conjunction with specialised surgical procedures.  There is an overlap with critical care as in the Operating Theatre the products  supplied are to support the anaesthetist such as a Jet ventilator during ENT (Ear, Nose and Throat) or Thoracic surgery and to support the perfusionist such as extra-corporeal oxygenation systems during cardiac surgery.  Additionally the Group has recently launched a range of pumps to help with post-operative pain management. Home Healthcare The Group sells other products that encompass pumps for parenteral nutrition, as well as chemotherapy and other applications.  Also products for emergency medicine such as Emox and devices that regulate gas supplies and the range of Inditherm's industrial products. Central and Unallocated costs This segment includes the costs of the Board of Directors, costs attributable to the business' status as a public limited company on the AIM market, together with shared support functions such as accounting and sales administration. An allocation of these costs to the three trading segments has not been done because it is the Board's opinion that it would be too subjective and could lead to distorted decision making. Segmental information for the years ended 31 January 2016 and 2015 is as follows: 2016 Critical Care  £'000 Operating Theatre £'000 Home Health-care £'000 Central  and unallocated costs £'000 Total £'000 Revenue 8,792 1,342 2,145 - 12,279 Depreciation and amortisation (48) (5) (1) (124) (178) Operating profit 2,372 380 694 (3,300) 146 Analysed as: Before impairment of goodwill and intangible assets and exceptional items 2,372 380 694 (2,141) 1,305 Impairment of goodwill and intangible assets - - - (517) (517) Exceptional items - - - (642) (642) Trade receivables 1,225 201 297 - 1,723 2015 Critical Care  £'000 Operating Theatre £'000 Home Health-care £'000 Central  and Unallocated costs £'000 Total £'000 Revenue 7,253 737 1,548 - 9,538 Depreciation and amortisation (33) - - (34) (67) Operating profit 2,092 116 386 (1,616) 978 Analysed as: Before impairment of goodwill and intangible assets and exceptional items 2,092 116 386 (1,616) 978 Impairment of goodwill and intangible assets - - - - - Exceptional items - - - - - Trade receivables 1,697 28 299 - 2,024 Geographical analysis of revenue for the years ended 31 January 2016 and 2015 is as follows: 2016 Critical Care  £'000 Operating Theatre £'000 Home Healthcare £'000 12 months Total £'000 UK 5,107 1,157 2,121 8,385 Europe 2,229 87 11 2,327 Asia Pacific 316 62 8 386 Middle East & Africa 816 25 3 844 Americas 324 11 2 337 Total 8,792 1,342 2,145 12,279 2015 Critical Care  £'000 Operating Theatre £'000 Home Healthcare £'000 12 months Total £'000 UK 4,378 736 1,548 6,662 Europe 1,785 1 - 1,786 Asia Pacific 323 - - 323 Middle East & Africa 534 - - 534 Americas 233 - - 233 Total 7,253 737 1,548 9,538 No single customer accounted for more than 10% of revenue. Significant categories of revenue 12 months ended 31 January 2016 12 months ended 31 January 2015 £'000 £'000 Goods sold 10,586 7,886 Services 1,693 1,652 12,279 9,538 No analysis of the Consolidated Statement of Financial Position has been included as this information is not reported on internally. Reconciliation of segmental operating profit and profit for the year attributable to the owners of the parent company: 12 months ended 31 January 2016 12 months ended 31 January 2015 £'000 £'000 Operating profit 146 978 Finance income 2 2 Taxation charge (136) (229) Profit for the year attributable to the owners of the parent company 12 751

Forward looking statements

Certain statements contained in this document constitute forward-looking statements. Such forward-looking statements involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of Inditherm plc to be materially different from any future results, performance or achievements expressed or implied by such statements.  Such risks, uncertainties and other factors include, among others: general economic conditions and the business environment.

Annual Report

A further announcement will be made when the 2016 Annual Report and Financial Statements is available on the Company's website and copies are sent to all shareholders.

 

END

 

 

FR UBRBRNUASUAR