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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Inspiration Healthcare Group Plc | LSE:IHC | London | Ordinary Share | GB00BXDZL105 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 16.75 | 16.50 | 17.00 | 16.75 | 16.75 | 16.75 | 134,637 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Home Health Care Services | 41.23M | 272k | 0.0040 | 41.88 | 11.42M |
From May 2019 to May 2024
TIDMIHC
RNS Number : 3458K
Inspiration Healthcare Group PLC
21 April 2020
FORMATTING AMMENT
The 'Final Results' announcement released on 21 April 2020 at 7am under RNS No 2704K has been reformatted.
All material details remain unchanged.
The full text is shown below.
21 April 2020
Inspiration Healthcare Group plc
("Inspiration Healthcare" or the "Group")
Unaudited Preliminary Results for the year ended 31 January 2020
Inspiration Healthcare Group plc (AIM: IHC), the global medical technology company, today announces its unaudited preliminary results for the twelve months ended 31 January 2020 ("FY2020").
Financial highlights:
-- 15% revenue growth to GBP17.8m including contribution from Viomedex(1) , above original forecasts
-- 12% revenue growth on like-for-like basis, above original forecasts -- Revenue from Inspiration Branded products up 12% -- Gross margin improved from 45.5% to 48.2% -- Operating Profit (before exceptional items) up 24% to GBP1.5m -- EBITDA(2) increased 29% to GBP2.1m; EBITDA(2) margin up to 12% (FY2019:11%) -- Profit before tax GBP1.1m (FY2019: GBP1.2m) after exceptional items
-- Viomedex(2) performed in line with financial expectations for the four months from acquisition
-- Strong cash position at GBP4.5m
(1) On 24 September 2019 the Group acquired the entire issued share capital of Vio Holdings Limited, the holding company of Viomedex Limited (together "Viomedex"). Viomedex designs, manufactures and supplies single-use respiratory products and sterile medical consumables, principally for the respiratory care market.
(2) Earnings before interest, tax depreciation, amortisation, share based payments and exceptional items, including the impact of Viomedex(1) but on a basis consistent with prior year which is before applying IFRS 16, Leases (see note 13 for analysis of the impact of IFRS 16)
All figures reported in these Preliminary Results include the impact of Viomedex where relevant unless otherwise stated.
Operational highlights:
Progress made on all three major elements of our strategic growth plan:
Organic growth:
-- Large order for Hypothermia workstations in Sri Lanka, record order for Poland Patient Warming Systems shipped.
-- Launched specialist neonatal patient warming controller 'CosyTherm(2) ' -- Received Queens Award for Enterprise: International Trade -- CE marking of Inspiration Healthcare products extended to May 2024
Investment in disruptive technologies:
-- Prototypes finalised for Project Wave device and undergoing final testing prior to submission for clinical trial.
-- Patents granted for Project Wave(1)
Acquisitions:
-- First acquisition - Viomedex, completed in September 2019
-- Oversubscribed for our first fundraise with additional cash taken to support future business development
(1) Project Wave Intellectual Property is used under licence.
Neil Campbell, Chief Executive Officer, said today: " FY2020 has been a very successful year and I am particularly delighted to report progress on all three of the major elements of our strategy: double digit revenue growth, advancement of Project Wave and completing our first acquisition in Viomedex. Whilst being acutely aware of the nearer term uncertainties in the economy arising from Covid-19, I am confident that our approach in developing novel technology such as Project Wave, acquiring small to medium size businesses and the organic growth of our core business will continue to add value to our Group over the coming years."
Chairman's Report
I am pleased to be introducing this year's annual result which outlines the Group's strong performance including record revenue resulting in double-digit growth. This result was better than our initial expectations, despite the external challenges we had to overcome.
Group revenues for the year ended 31 January 2020 ("FY2020") rose to record levels after a flat year previously and totalled GBP17.8 million for the year, up from GBP15.5 million in FY2019. This included a first-time revenue contribution of GBP0.4 million from the acquisition of Viomedex. On a like-for-like basis, the Inspiration business grew by 12% from the previous year which was a pleasing outcome given the backdrop of Brexit uncertainty and the ongoing regulatory challenges facing the global industry.
We comfortably exceeded our expectations this year by achieving an operating profit before exceptional items of GBP1.5 million for the Group in FY2020 compared to GBP1.2 million for FY2019. EBITDA(1) grew by 28% to GBP2.1 million for the year (FY2019: GBP1.65 million). This was achieved through the growth in revenue and improving overall gross margins from 45.5% to 48.2%. Underlying Diluted Earnings per Share(2) ("EPS") increased from 3.4p to 3.6p.
A key event in the year was the successful acquisition of Vio Holdings Ltd (referred to as "Viomedex" or "Viomedex acquisition"), a company that owned our key supplier Viomedex Ltd and was of strategic importance for us to develop our leading position in the Neonatal Intensive Care sector. The consideration of GBP3.25 million(3) was funded through a share placement raising GBP4.25 million and we thank our shareholders for supporting this. The additional cash raised (GBP0.9 million net of costs) will be used to strengthen the Company's balance sheet to support the continued growth of the business.
Viomedex already supplies key products to the Group, allowing us to gain cost leadership and retain manufacturing margins, they also have a number of products for Neonatal Intensive Care that we can put through our distribution network and drive revenue growth in future years. For the part of the year they were under our ownership, Viomedex performed in line with expectations. Our teams are working well on the integration to ensure that we achieve all the synergies from the acquisition that we identified in our planning.
Our Research and Development team have been mainly focused on progressing Project Wave, our novel respiratory support device, which we believe can disrupt the market in future years. During the year, we also launched a range extension of our Patient Warming System, a CosyTherm(2) controller specifically designed for neonatal intensive care and I'm pleased to report that this was well received by existing customers and has opened up new sales opportunities.
Our international markets continue to reward us. At the beginning of the year we shipped our largest ever order of Patient Warming Systems with our new AlphaCore(5) product to Poland. We also won a large order from Sri Lanka for our Hypothermia workstations opening up a new market for us.
Every year I am proud of the way our employees go about their business, the enthusiasm they show towards the markets we serve and the dedication they display towards the patients our products treat is truly inspiring. Across the Group, whether it is one of our 'per diem homecare nurses' visiting a sick patient, or the Quality Engineers ensuring the products we supply conform to systems, processes and the quality we insist upon, everyone plays an integral part to our success and on behalf of the Board, I thank them yet again for their hard work in delivering an outstanding year for the Group.
Outlook
Looking forward, our Inspiration Branded products will create new opportunities for us on an international stage against a background of ever-increasing new regulations which will continue to present a challenge. At the same time, we will explore all ways to maximise the success of the products we have developed recently, as we look to gain regulatory clearance for these products in further target markets.
We remain confident that the new challenges that we will face as a consequence of Brexit and the transition to the Medical Device Regulation can be overcome with minimum disruption and that we will build on our successes. With one successful acquisition behind us, we continue to identify further acquisition targets that will support our growth ambitions in our targeted sector of Neonatal Intensive Care.
While there is considerable uncertainty in the world over the impact of Covid-19 on the economy as a whole, most of the Group's own branded products are sold to neonatal intensive care units around the world and their use is not something that can be reduced by election or choice. Consequently, demand for the Group's own branded products is likely to continue during the period of the Covid-19 virus outbreak and beyond.
The Group is engaged directly in the provision of critical care equipment and services to the UK's NHS, at this time proactively sourcing ventilators to supply to the NHS under our framework agreement with NHS Supply Chain. In addition, we have been providing market and sector expertise to the 'Ventilator Challenge UK' consortium one of the many consortia that took up the Prime Minister's challenge of trying to scale the UK supply of ventilators. We were also contracted through Cabinet Office to extend our own 24/7 helpline to include any 'UK Ventilator Challenge' ventilators.
Whilst we recognise that there is an advantage to staff to be furloughed (for childcare or voluntary work), as a company with a proud tradition of generating our own cash and being financially self-sufficient, we have not had the need to utilise the UK Government's Coronavirus Job Retention Scheme. We have already taken many mitigating actions both to support our customers and employees, the majority of whom are working from home with full access to the Group's systems. For our colleagues who work in production and logistics roles, where home working is not practical, we introduced revised shift patterns and strict safety, hygiene and social distancing measures. With our strong balance sheet, clear purpose, intensive care expertise and the commitment, loyalty and determination of our employees we believe the Group is well placed to not only trade through this period of uncertainty but to make a valuable contribution to the response to this pandemic.
As a result of all activities associated with the pandemic, we expect that the incremental increase in revenues will at least offset any short-term operational impacts.
We continue to invest in all three strategic areas of our business: organic growth, disruptive technologies and future acquisitions. Whilst we are subject to a number of factors which are outside of our control, particularly in the supply chain but also the indirect effects of the wider economic impact of Covid-19 , we have started the current year well and despite the uncertainties we expect to build on our success of last year and again achieve strong revenue growth.
Mark Abrahams
Chairman
21 April 2020
(1) Earnings before interest, tax depreciation, amortisation, share based payments and exceptional items, including the impact of Viomedex and on a basis consistent with the prior year which is before applying IFRS 16, Leases.
(2) Underlying Diluted EPS - adjusted for exceptional items, deferred tax charge on intangible assets recognised on the acquisition of Vio Holdings Limited and significant prior year tax amendments.
(3) Deferred Consideration Shares amounting to GBP750,000 originally anticipated to be part of the consideration were not issued as the conditions as set out in the sale and purchase agreement were, in the opinion of the Board having taken legal advice, not met.
Going Concern
The Group provides critical care equipment to the NHS, to NHS suppliers and to distributors who provide the equipment to other healthcare systems internationally. With a focus on neonatal intensive care the use of the Group's products is not something that can reduced by election or choice and consequently demand for the Group's products is likely to continue or increase in a situation like the Covid-19 virus outbreak. Although the Group has no information to suggest such a scenario might occur the Group have modelled a significant downside scenario based on the main risks to the Group associated with Covid-19.
Based on the above, available funds of GBP4.5 million at 31 March 2020 and the ability to implement some mitigating actions identified by the Board in response to a significant Covid-19 trading downturn, the Board believes that the Group has sufficient liquidity to meet obligations as they fall due for at least twelve months from 21 April 2020. Consequently, the financial statements have been prepared on a going concern basis.
Operating and Financial Review
Group revenue for the year ended 31 January 2020 ("FY2020") increased 15% to GBP17.8 million (FY2019: GBP15.5 million) with the inclusion of Viomedex Limited, the subsidiary of Vio Holdings Limited which the Group acquired on 24 September 2019. On a like-for-like basis excluding Viomedex, Group revenue grew by 12%.
EBITDA(1) increased by 28% to GBP2.1 million (FY2019: GBP1.65 million). Operating profit and operating margin, before exceptional items, were GBP1.5 million (FY2019: GBP1.2 million) and 8.6% (FY2019: 7.8%) respectively. In this review both EBITDA(1) and operating profit are stated before the impact of adopting IFRS 16 - Leases, which has been adopted for the first time in FY2020, for greater ease of comparison to prior year (see section below).
Profit after tax was GBP0.7 million, lower than FY2019 (GBP1.1 million) due principally to exceptional items of GBP0.4 million and an increased deferred tax charge. Diluted EPS was 2.2p per share (FY2019: 3.6p). Underlying diluted EPS(2) increased by 6% to 3.6p per share (FY2019: 3.4p).
Acquisition of Vio Holdings Limited
The acquisition of Vio Holdings Limited and its subsidiary Viomedex Limited (together "Viomedex") was completed on 24 September 2019. The acquired entities have been consolidated into the Group Financial Statements from the date of acquisition to the year ended 31 January 2020 the impact of which is deemed immaterial to the Group.
The consideration was GBP3.25 million, split between GBP3.0 million cash and GBP0.25 million in shares issued to the vendors. The acquisition was funded through a share placement raising GBP4.25 million. After costs the net additional cash raised of GBP0.9 million will be used to strengthen the Company's balance sheet to support the continued growth of the Group's business. Deferred Consideration Shares amounting to GBP750,000 originally anticipated to be part of the consideration were not issued as the conditions as set out in the sale and purchase agreement were, in the opinion of the Board having taken legal advice, not met.
Impact of IFRS 16
IFRS 16 - Leases has been adopted for the first time this financial year. The new standard has been implemented using the modified retrospective approach which does not require restatement of comparative years. The adoption impacts operating profit, profit attributable to owners of the parent company, EBITDA(1) , non-current assets and both current and non-current liabilities. EBITDA and Operating Profit (before exceptional items) after adoption of IFRS16 were GBP2.3 million and GBP1.5 million, respectively. See the table below for a reconciliation of these figures pre and post adoption of IFRS 16.
Revenue
At GBP17.8 million (FY2019: GBP15.5 million), Group revenue exceeded our original forecast, an increase of 15% with the inclusion of Viomedex. Organic revenue growth increased by 12% on a like-for-like basis. As in prior years, revenues were weighted towards the second half ("H2") which accounted for GBP9.3 million (FY2019: GBP8.1 million) or 54% of full year revenues on a like-for-like basis.
Our international revenue grew by 12.3% to GBP6.0 million, with particularly strong growth in Europe (up 29%) due mainly to increased sales of our AlphaCore(5) Patient Warming System, primarily into the neonatal critical care market. Our continued track record for international growth was recognised during the year through being awarded the Queen's Award for Enterprise: International Trade.
Domestic revenue increased by 16%, largely due to an increase in Home Healthcare products - see below for more information.
Revenue from Inspiration Branded products increased 12% year-on-year to GBP8.1m (FY2019: GBP7.2m) and accounted for 45% of revenue (FY2019: 46%). Revenue from new products launched in the last 3 years accounted for 15% of revenue (FY2019: 9%). Revenue from our Distributed Products was up by 19% to 7.6m and accounted for 43% of revenue. The growth was mainly as a result of strong performance in the Micrel Distributed Product range.
Market Sectors
Critical Care GBP11.4 million, + 7% year-on-year
Our Critical Care sector increased by 7%, largely due to the increased sales of our AlphaCore(5) Patient Warming System placed into the neonatal critical care market as mentioned above. Building on the success of the Patient Warming System, the Cosytherm(2) controller was launched which is specifically designed for neonatal care.
Operating Theatre GBP1.7 million, +1% year-on-year
Revenue from operating theatre is in line with both prior year and expectations.
Home Healthcare GBP4.6 million, +50% year-on-year
Growth in revenue of our Distributed Product range of parenteral feeding products was particularly strong during the year. We were able to capitalise on certain opportunities in the market during the year which are outlined below.
The Home Healthcare sector benefited from unprecedented demand for parenteral feeding products from Micrel. One of the largest UK homecare providers who look after patients had a problem in supplying the 'food' due to regulatory issues. Working with Micrel a solution was found that allowed patients to get the nutrition they needed and led to a significant increase in revenues in this sector. Conversely, products from another of our principals suffered due to regulatory issues and this limited growth in both our Critical Care and Operating Theatre sectors.
Gross Profit
Gross Profit of GBP8.6 million (FY2019: GBP7.0 million) increased by 22% due to both a year-on-year increase in revenue and an improved gross margin which increased from 45.5% to 48.2%. Gross margins primarily benefited from a combination of a year-on-year increase in service revenue and the acquisition of Viomedex (GBP0.4 million), eliminating manufacturer margins on a number of Group products.
Operating Expenses
Operating expenses including exceptional items amounted to GBP7.4 million, GBP7.1 million excluding exceptional items (FY2019: GBP5.8 million). The year-on-year increase is primarily due a number of factors being: the full year impact of the prior year investment in the management team, increased investment in headcount during the year, a year-on-year increase in both commission and bonus expense related to the growth in both revenue and operating profit, as well as GBP0.2 million from the inclusion of Viomedex.
Exceptional Items
The Group presents certain items as exceptional items that are non-recurring and significant. These relate to items which, in the Board'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 for FY2020, totalling GBP0.4 million, primarily consist of GBP0.2 million relating to the acquisition of Viomedex and GBP0.1 million relating to the impairment of the Group's investment in Neuroprotexeon Limited. See notes 3 and 8 for further information.
EBITDA(1)
EBITDA(1) amounted to GBP2.1 million, an increase of GBP0.5 million over the prior year mainly due to increased gross profit. EBITDA(1) margin improved from 10.7% to 11.9%. EBITDA(1) is stated before the impact of IFRS 16 - Leases which has been adopted for the first time. EBITDA(1) amounted to GBP2.27 million including the impact of IFRS 16 - Leases.
(1) EBITDA Reconciliation
(1) Earnings before interest, tax depreciation, amortisation, share based payments and exceptional items, including the impact of Viomedex and on a basis consistent with the prior year which is before applying IFRS 16, Leases
Hot Features
Premium
FY2020 FY2019
Reconciliation from operating profit GBP000's GBP000's
Operating Profit per Income Statement 1,138 1,213
Exclude exceptional items 383 -
Operating profit before exceptional items 1,521 1,213
Add Back:
Depreciation and amortisation 463 364
Impairment of intangible assets 72 -
Share based payments 62 71
Less: IFRS 16 impact on operating profit (5) -
EBITDA pre IFRS 16 - Lease adjustments 2,113 1,648
IFRS 16 - Reclassification of rental payments 148 -
IFRS 16 - Release of rent provision 11 -
EBITDA post IFRS 16 - Lease adjustments 2,272 1,648
----------------------------------------------- --------- ---------
Operating Profit
Operating profit before exceptional items increased by GBP0.3 million to GBP1.5 million, with the higher year-on-year increase in gross profit offsetting the increase in operating expenses.
Taxation
The Group has recorded a tax charge of GBP393,000 (FY2019: GBP116,000), including a deferred tax charge of GBP117,000 relating to intangible assets recognised on the acquisition of Viomedex in accordance with IAS12. The effective tax rate in FY2020 was 35% due primarily to deferred tax and impairments which are not deductible from taxable profits. For more detail see note 4.
Profit after tax
Profit after tax decreased by GBP0.4 million to GBP0.7 million (FY2019: GBP1.1 million) for reasons mentioned above. Since its acquisition Viomedex contributed GBP0.1 million to the Group's profit after tax.
Earnings Per Share
EPS (basic) was 2.2p per share (FY2019: 3.6p); diluted EPS (allowing for the weighted average of shares issued in relation to the acquisition of Viomedex, plus share options outstanding) was 2.2p per share (FY2019: 3.6p). Underlying diluted EPS(2) was 3.6p per share, up 6% on FY2019 3.4p. The year-on-year increase is due mainly to the improved growth in operating profit as set out above.
(2) EPS Reconciliation
Reconciliation from Diluted EPS
FY2020 FY2019
Pence Pence
Diluted Earnings per share 2.15 3.56
--------------------------------------------------- ------ ------
Adjust for:
Significant prior year tax amendments - (0.16)
Exceptional items 1.13 -
Deferred tax charge on intangible assets acquired
from the acquisition of Vio Holdings Limited 0.34 -
--------------------------------------------------- ------ ------
Underlying diluted earnings per share 3.62 3.40
--------------------------------------------------- ------ ------
Cash flow
Cash and cash equivalents as at 31 January 2020 amounted to GBP4.5 million, an increase of GBP2.0 million over the year. Net cash generated from operating activities was GBP1.5 million, GBP0.6 million higher than in FY2019. Investing activities totalled GBP3.6 million (FY2019: GBP0.4 million), of which GBP3.25 million related to the acquisition of Viomedex. The remaining GBP0.35 million consisting of capitalised development expenditure and the purchase of property, plant and equipment. Investing activities are offset by financing activities of GBP4.1 million (net of direct share issue costs) relating mainly to the proceeds obtained from the Group's fund raise in relation to the acquisition of Viomedex.
Net Assets
The value of non-current assets as 31 January 2020 totalled GBP4.7 million (FY2019: GBP1.8 million). The year-on-year increase of GBP2.9 million relates mainly to: a GBP2.5 million addition of goodwill and intangible assets on the acquisition of Viomedex; the addition of a GBP0.5 million right of use asset on implementation of IFRS 16; and the GBP(0.1) million impairment of the Group's 8.6% fully diluted holding in Neuroprotexeon Limited ("NPXe"). For more information on the impairment in NPXe see note 8.
Inventory increased to GBP3.1 million (FY2019: 0.7 million) as a result of Brexit contingency planning, GBP0.7 million acquired on the purchase of Viomedex and a one-time GBP1.4 million purchase (approximately 24 months' supply) of the Group's Tecotherm product delivered just before year end. The Tecotherm product is manufactured by the Group's German developer and licensed to the Group. Rather than bring the existing Tecotherm product in-line with the new European regulations the developer has taken the decision to focus its resources on the next generation device for which the Group has first refusal to take the licence. Given the switch in focus the Group decided to secure supply of the existing product. Payment for the inventory is spread over a period that is equivalent to what would have been a normal buying pattern and should closely match inventory utilisation.
Trade and other receivables increased to GBP4.2 million (FY2019: GBP3.1 million) due primarily to a GBP0.8 million increase in trade debtors driven by the increase in revenue and GBP0.2 million acquired on the purchase of Viomedex. Trade and other payables increased by GBP2.5 million to GBP4.7 million (FY2019: GBP2.2 million) reflecting GBP1.4 million included within trade creditors due to the one-off purchase of Tecotherm inventory mentioned above, GBP0.3 million acquired on the purchase of Viomedex and an increased commission and bonus accruals.
Net Assets increased by GBP5.2 million or 95% to GBP10.7 million inclusive of the cash raised from the share placement on the acquisition of Viomedex.
Review of Business and Future Developments
On a Group basis the business review and future prospects are set out in the Chairman's Report above. The Board believes that overall this statement is fair, balanced and understandable.
Share Price during the Year
The range of market prices during the year 1 February 2019 to 31 January 2020 was 52.0p to 70.0p and the mid-market price of the Company's shares at 31 January 2020 was 64.5p.
Mike Briant
Chief Financial Officer
21 April 2020
Consolidated Income Statement
for the year ended 31 January 2020
2020 2019
Note GBP'000 GBP'000
Revenue 2 17,775 15,487
Cost of sales (9,203) (8,445)
Gross profit 8,572 7,042
Administrative expenses (7,434) (5,829)
Operating profit 1,138 1,213
Analysed as:
Operating profit before exceptional items 1,521 1,213
Exceptional items 3 (383) -
------------------------------------------- ---- ------- ------------------
Finance income 9 6
Finance costs (21) -
Profit before tax 1,126 1,219
Income tax 4 (393) (116)
Profit for the year attributable to
owners of the parent company 733 1,103
Earnings per share, attributable to owners
of the
parent company
Basic expressed in pence per share 5 2.19p 3.60p
Diluted expressed in pence per share 5 2.15p 3.56p
Consolidated Statement of Comprehensive Income
for the year ended 31 January 2020
2020 2019
Note GBP'000 GBP'000
Profit for the year 733 1,103
Other comprehensive expense
Items that may be reclassified to profit
or loss
Cash flow hedges (31) (6)
Total other comprehensive expense for the
year (31) (6)
Total comprehensive income for the year 702 1,097
The Company has elected to take the exemption under section 408 of the Companies Act 2006 from presenting the Company profit and loss account.
Consolidated and Company Statements of Financial Position
as at 31 January 2020
Group Company
2020 2019 2020 2019
Note GBP'000 GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 6 3,655 1,293 - -
Property, plant and equipment 496 408 - -
Right of use assets 7 553 - 8 -
Investments 8 - 111 10,406 7,156
Deferred tax asset - - 31 11
4,704 1,812 10,445 7,167
Current assets
Inventories 3,091 718 -
Trade and other receivables 4,205 3,107 1,339 37
Cash and cash equivalents 9 4,480 2,539 1,775 675
11,776 6,364 3,114 712
Total assets 16,480 8,176 13,559 7,879
Liabilities
Current liabilities
Trade and other payables (3,988) (2,210) (1,020) (127)
Lease liabilities 10 (132) - (6) -
Financial liability (40) (9) - -
Contract liabilities (376) (319) - -
(4,536) (2,538) (1,026) (127)
Non-current liabilities
Trade and other payables (742) - - -
Lease liabilities 10 (426) - - -
Deferred tax liability (227) (105) - -
(1,395) (105) (2) -
Total liabilities (5,931) (2,643) (1,028) (127)
Net assets 10,549 5,533 12,531 7,752
Shareholders' equity
Called up share capital 3,838 3,067 3,838 3,067
Share premium account 3,475 - 3,475 -
Reverse acquisition reserve (16,164) (16,164) - -
Share based payment reserve 153 91 308 246
Other reserves (34) (9) 6 -
Retained earnings 19,281 18,548 4,904 4,439
Total equity 10,549 5,533 12,531 7,752
The Company's profit for the year ended 31 January 2020 is GBP465,000 (2019: GBP761,000)
Consolidated and Company Statements of Changes in
Shareholders' Equity
Group Share
Issued Share Reverse based
share premium acquisition payment Other Retained
capital account reserve reserve Reserves earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 February 2018 3,067 - (16,164) 20 (3) 17,445 4,365
Profit for the year - - - - - 1,103 1,103
Other comprehensive
expense - - - - (6) - (6)
Total comprehensive
income/
(expense) for the
year - - - - (6) 1,103 1,097
----------------------------- ------- ------- ----------- ------- -------- -------- -----------------
Transactions with
owners in
their capacity of
owners
Employee share scheme
expense - - - 71 - - 71
Total transactions
with owners - - - 71 - - 71
At 31 January 2019 3,067 - (16,164) 91 (9) 18,548 5,533
Profit for the year - - - - - 733 733
Other comprehensive
expense - - - - (31) - (31)
Total comprehensive
income/ - - - - (31) 733 702
(expense) for the
year
----------------------------- ------- ------- ----------- ------- -------- -------- -----------------
Transactions with
owners in
their capacity of
owners
Employee share scheme
expense - - - 62 - - 62
Issue of ordinary
shares as consideration
for a business combination,
net of transaction
costs and tax 771 - - - - - 771
Proceeds from shares
issued, net of transaction
costs and tax - 3,475 - - - - 3,475
deferred tax - - - - 6 - 6
Total transactions
with owners 771 3,475 - 62 6 - 4,314
At 31 January 2020 3,838 3,475 (16,164) 153 (34) 19,281 10,549
Consolidated Cash Flow Statement
for the year ended 31 January 2020
2020 2019
Note GBP'000 GBP'000
Cash flows from operating activities
Cash generated from operations 11 1,616 995
Interest paid (21) -
Taxation received 104 -
Taxation paid (235) (147)
Net cash generated from operating activities 1,464 848
Cash flows from investing activities
Payment for acquisition of subsidiary,
net of cash acquired 12 (3,000) -
Interest received 9 6
Purchase of property, plant and equipment (163) (101)
Purchase of intangible assets (24) (24)
Capitalised development costs (192) (276)
Net cash used in investing activities (3,370) (395)
Cash flows from financing activities
Proceeds from issues of shares 4,246 -
Share issue costs (250)
Principal elements of lease payments (149) -
Net cash generated from financing activities 3,847 -
Net increase in cash and cash equivalents 1,941 453
Cash and cash equivalents at the beginning
of the year 2,539 2,086
Cash and cash equivalents at the end
of the year 4,480 2,539
Notes forming part of the Financial Statements
1 Accounting Policies
Inspiration Healthcare Group plc (the Company) is a public limited company incorporated in England and Wales and domiciled in England. The Company's registered address is Unit 2, Satellite Business Village, Crawley, West Sussex, RH10 9NE and the registered company number is 03587944. The Company's ordinary shares are traded on the AIM Market of the London Stock Exchange plc.
The principal activities of Inspiration Healthcare Group plc and its subsidiaries (together, the "Group") continue to be the sale, service and support of critical care equipment to the medical sector including hospitals.
Basis of preparation
The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied unless otherwise stated.
There is no ultimate controlling party.
The individual financial statements of each entity in the Group are presented in the currency of the primary economic environment in which it operates (the functional currency). The Group financial statements are presented in pounds sterling, which is the presentation currency of the Group.
Significant changes in the current year
The financial position and performance of the group was particularly affected by the following events and transactions during the year:
-- The adoption of IFRS 16, Leases under the modified retrospective approach from 1 February 2019, see note 13.
-- The acquisition of Vio Holdings Limited and its subsidiary, Viomedex Limited, on 24 September 2019 (see note 12), which resulted in an increase in property, plant and equipment and the recognition of goodwill, other intangible assets and net working capital.
Going concern basis
The Group provides critical care equipment to the NHS, to NHS suppliers and to distributors who provide the equipment to other healthcare systems internationally. With a focus on neonatal intensive care the use of the Group's products is not something that can reduced by election or choice and consequently demand for the Group's products is likely to continue or increase in a situation like the Covid-19 virus outbreak. Although the Group has no information to suggest such a scenario might occur the Group have modelled a significant downside scenario based on the main risks to the Group associated with Covid-19.
Based on the above, available funds of GBP4.5 million at 31 March 2020 and the ability to implement some mitigating actions identified by the Board in response to a significant Covid-19 trading downturn, the Directors believe that the Group has sufficient liquidity to meet obligations as they fall due for at least twelve months from 21 April 2020 and, therefore, consider it appropriate to prepare the financial statements on the going concern basis. Further information on the Group's cash resources is given in note 9.
Alternative financial measures
In the reporting of its financial performance, the Group uses certain measures that are not defined under IFRS, the Generally Accepted Accounting Principles (GAAP) under which the Group reports. The Directors believe that these non-GAAP measures assist with the understanding of the performance of the business. These non-GAAP measures are not a substitute for, or superior to, any IFRS measures of performance but they have been included as the Directors consider them to be an important means of comparing performance year-on-year and they include key measures used within the business for assessing performance.
2 Revenue
The Group derives revenue from the transfer of goods and services over time and at a point in time in the following geographical split:
Geographical analysis of revenue for the years ended 31 January 2020 and 31 January 2019 is as follows:
2020 2019
GBP'000 GBP'000
Domestic
* UK 11,300 9,772
* Ireland 450 351
International
* Europe 3,686 2,853
* Asia Pacific 579 320
* Middle East & Africa 648 782
* Americas 1,112 1,409
Total 17,775 15,487
Significant categories
of revenue
2020 2019
GBP'000 GBP'000
Revenue recognised at
a Point in Time
* Own Branded Products 8,052 7,180
* Distributor Products 7,574 6,341
* Other 201 272
Revenue recognised Over
Time
* Technical Support 1,948 1,694
Total 17,775 15,487
3 Exceptional items
Group Company
2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
Expenses relating to the acquisition
of Vio Holdings Limited and subsidiary
undertakings 217 - 192 -
Other acquisition expenses 55 - 55 -
Impairment of investment in Neuroprotexeon
Limited 111 - - -
383 - 247 -
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 nature in order to obtain a more meaningful understanding of the financial information. These are all included within operating expenses in the Consolidated Statement of Comprehensive Income.
Exceptional items relating to the acquisition of Vio Holdings Limited and subsidiary undertakings relate principally to legal fees of GBP100k, professional services of GBP40k, stamp duty of GBP26K and dual running costs of GBP25k.
Other acquisition exceptional items relate to the exploration of additional potential acquisitions during the year.
The investment in Neuroprotexeon Limited has been impaired in full due to Neuroprotexeon filing a voluntary petition to reorganize under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware, see note 8.
4 Income tax
(a) Analysis of tax charge for the
year
2020 2019
GBP'000 GBP'000
Domestic current year tax *
UK corporation tax -
current year 275 149
prior year adjustment - (104)
Total current tax expense 27 5 45
Deferred tax
origination and reversal of temporary
timing differences 84 15
prior year adjustment 34 56
Total deferred tax 118 71
Tax expense on profit on ordinary
activities 393 116
* All tax in both 2020 and 2019 arose in the UK.
(b) Analysis of current corporation
tax assets and liabilities
2020 2019
GBP'000 GBP'000
Net asset/(liability) at 1 February
2020 30 (70)
Tax payments
Final payments relating to prior year 74 70
Payments on account relating to current
year 161 77
Total tax payments made during the
year 235 147
Tax receipts in relation to prior
year (104) -
Current year UK corporation tax charge (275) (149)
Other (9) (2)
Prior year adjustment - 104
Net (liability)/asset at 31 January
2020 (123) 30
(c) Factors affecting tax charge for the year
The tax assessed for the year is higher (2019: lower) than the standard rate of corporation tax in the UK 19.00% (2019: 19.00%) as explained below:
Effective Tax
Rate
2020 2019 2020 2019
GBP'000 GBP'000 % %
Profit on ordinary activities
before taxation 1,126 1,219
--------------------------------------- ------- ------- ------- ------
Tax using the effective UK corporation
tax rate of 19.00% (2019: 19.00%) 214 232 19.0 19.0
Effects of:
Non-deductible expenses 86 14 7.6 1.2
Additional deduction for research
and development (49) (63) (4.4) (5.1)
Intangibles arising on business
combinations 117 - 10.4 -
Amendments to deferred tax and
timing 25 (67) 2.3 (5.6)
--------------------------------------- ------- ------- ------- ------
Total tax expense 393 116
--------------------------------------- ------- ------- ------- ------
Effective tax rate 34.9 9.5
--------------------------------------- ------- ------- ------- ------
Effective tax rate adjusted for
significant prior year amendments - 13.5
--------------------------------------- ------- ------- ------- ------
The effective tax rate for FY2020 is higher than FY2019. The largest factors impacting the increased effective tax rate are the charge relating to intangibles arising on the acquisition of Vio Holdings Limited, the non-deductible impairment (see note 8) and the value of R&D tax credits. The value of R&D tax credits depends upon the level of expenditure incurred in research and development on qualifying projects, which may vary from year to year.
In the Spring Budget 2020, the Government announced that from 1 April 2020 the corporation tax rate would remain at 19% (rather than reducing to 17%, as previously enacted). This new law was substantively enacted on 17 March 2020. As the proposal to keep the rate at 19% had not been substantively enacted at the balance sheet date, its effects are not included in these financial statements. However, it is likely that the overall effect of the change, had it been substantively enacted by the balance sheet date, would be to increase the tax expense by GBP27,000, to increase the deferred tax liability by GBP27,000.
(d) Factors that may affect future tax charges
The Group has gross unused losses estimated at GBP7,596,000. Brought forward losses transferred to the Group due to the reverse acquisition amount to GBP7,596,000 and are potentially available for relief against future trading profits generated from the same trade
5 Earnings per ordinary 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.
2020 2019
GBP'000 GBP'000
Profit
Profit attributable to equity holders
of the company 733 1,103
Add back exceptional items 383 -
Add back deferred tax charge on intangible
assets acquired from the acquisition
of Vio Holdings Limited 117 -
Numerator for underlying earnings
per share calculation 1,233 1,103
The weighted average number of shares in issue and the diluted weighted average number of shares in issue were as follows:
2020 2019
Shares
Number of ordinary shares in issue at
the beginning of the year 30,667,548 30,667,548
Weighted average number of shares issued
during the year 2,747,203 -
------------------------------------------- ---------- ----------
Weighted average number of ordinary shares
in issue during the year 33,414,751 30,667,548
for the purposes of basic earnings per
share
Dilutive effect of potential ordinary
shares:
Weighted average number of share options 583,941 316,520
Diluted weighted average number of shares
in issue during the year
for the purposes of diluted earnings
per share 33,998,692 30,984,068
GBP3.0m of the GBP4.25m proceeds from the 7,327,500 shares issued during the year was used to fund the acquisition and related expenses of Vio Holdings Limited and subsidiary Viomedex Limited, see note 12. These have been prorated for the time they have been in place.
The basic and diluted earnings per share for the year are as follows:
Basic Diluted Basic Diluted
2020 2020 2019 2019
pence pence pence Pence
Earnings per share 2.19 2.15 3.60 3.56
----------------------------- ----- ------- ------ -------
Adjust for:
Significant prior year
tax amendments - - (0.16) (0.16)
Exceptional items 1.15 1.13 - -
Tax charge on intangible
assets acquired from the
acquisition of Vio Holdings
Limited 0.36 0.34
Underlying earnings per
share 3.69 3.62 3.44 3.40
An underlying earnings per share and an underlying 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.
6 Intangible assets
Intangible
Group assets Development Intellectual Software
Goodwill acquired costs property costs Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 February 2018 - - 1,018 276 353 1,647
Capitalised in the
year - - 276 - 24 300
Disposals in the
year - - - - (5) (5)
At 1 February 2019 - - 1,294 276 372 1,942
Capitalised in the
year - - 192 - 24 216
Acquisition of business
(note 12) 2,021 492 - - - 2,513
At 31 January 2020 2,021 492 1,486 276 396 4,671
Accumulated Amortisation
At 1 February 2018 - - 9 275 154 438
Charge in the year - - 130 1 82 213
Disposals in the
year - - - - (2) (2)
At 1 February 2019 - - 139 276 234 649
Charge in the year - 43 181 - 71 295
Impairment - - 72 - - 72
At 31 January 2020 - 43 392 276 305 1,016
Net book value
At 31 January 2020 2,021 449 1,094 - 91 3,655
At 31 January 2019 - - 1,155 - 138 1,293
All intangible assets have finite useful lives except goodwill.
Intangible assets are amortised on a straight line basis and the amortisation is included within Operating expenses within the Group's Consolidated Income Statement.
Software costs relating to the ERP system are held at cost GBP328,000 (2019: GBP328,000), net book value GBP57,000 (2019: GBP112,000) and have a remaining economic life of 1 year.
Intangible assets acquired within the year are held at cost and relate to the following:
-- customer contacts/relationships - cost GBP360,000 (2019: GBPnil), net book value GBP324,000 (2019: nil) and have a remaining economic life of 4.6 years
-- Tradename - cost GBP58,000 (2019: GBPnil), net book value GBP55,000 (2019: nil) and have a remaining economic life of 6.6 years
-- Technology - cost GBP74,000 (2019: GBPnil), net book value GBP70,000 (2019: nil) and have a remaining economic life of 6.6 years.
The carrying value of development costs have been reduced to the recoverable amount through recognition of an impairment charge which is included in operating expenses in the Group's Consolidated Income Statement. The recoverable amount is arrived at by comparing the year end net book value to the expected future discounted cash flows of each development project.
The impairment for the year of GBP72,000 (2019: nil) relates to 1 project for which the year-end net book value exceeded the expected future discounted cash flows.
7 Right of use assets
The balance sheet shows the following amounts relating to leases:
Group Company
2020 2019 2020 2019
Right if use asset GBP'000 GBP'000 GBP'000 GBP'000
Properties 534 - - -
Cars 11 - - -
Equipment 8 - 8 -
553 - 8 -
------------------- ------- ------- ------- -------
The Consolidated Income Statement shows the following amounts relating to leases:
Group
2020 2019
Depreciation charge of right
of use assets GBP'000 GBP'000
Properties 95 -
Cars 53 -
Equipment 6 -
154 -
-------------------------------- ------- -------
Interest expense (included
in finance cost) 21 -
---------------------------------- ------- -------
The total cash outflow for leases during the year was GBP149,000 (2019: 168,000).
In the previous year, the Group only recognised operating leases under IAS 17, 'Leases'. No lease assets or liabilities were recognised.
For adjustments recognised on adoption of IFRS 16 on 1 February 2019, refer to note 13.
8 Investments
Group GBP'000
Financial asset at fair value through
profit or loss
Cost
At 31 January 2020 and 2019 111
----------------------------------------- ---------------------
Impairment
At 1 February 2019 - -
Charge in the year (111) -
----------------------------------------- ---------------------
At 31 January 2020 (111)
----------------------------------------- ---------------------
Net book value
----------------------------------------- ---------------------
At 31 January 2020 -
At 31 January 2019 111
The Group is an investor in Neuroprotexeon Limited, a drug device technology company which is pioneering the use of the inert gas, Xenon, as a neuro-protectant.
The Group has a holding of 8.6% on a fully diluted basis taking into account share options and loan conversion rights of other investors) at 31 January 2020.
Neuroprotexeon has filed a voluntary petition to reorganize under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Neuroprotexeon has also filed a motion seeking authorisation to pursue an auction and sale process under Section 363 of the U.S. Bankruptcy Code
The Board has considered the value of the investment and concluded to fully impair.
9 Cash and cash equivalents
Cash and cash equivalents comprise solely of cash at bank and cash in hand held by the Group.
The carrying amounts of the Group's cash and cash equivalents are denominated in the following currencies:
Group Company
2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
Pounds sterling 4,293 1,946 1,775 664
Euro 128 328 - 6
US Dollars 58 259 - 5
JPY 1 6 - -
Balances per statement of cash
flows 4,480 2,539 1,775 675
The Group currently use three banks; Royal Bank of Scotland plc, HSBC Bank plc and Bank of Scotland. Moody's give long-term ratings of A2 for Royal Bank of Scotland plc and Aa3 for both HSBC Bank plc and Bank of Scotland plc as at 31 January 2020.
Group Company
2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
Royal Bank of Scotland plc 2,275 1,864 - -
HSBC Bank plc 1,775 675 1,775 675
Bank of Scotland plc 430 - - -
Balances per statement of cash
flows 4,480 2,539 1,775 675
10 Lease Liabilities
Group Company
2020 2019 2020 2019
GBP'000 GBP'000 GBP'000 GBP'000
Current 132 - 6 -
Non-current 426 - 2 -
558 - 8 -
In the previous year, the group only recognised lease liabilities in relation to leases that were classified as 'finance leases' under IAS 17 for which there were none.
For adjustments recognised on adoption of IFRS 16 on 1 February 2019, refer to note 13.
11 Note to the Consolidated Statement of Cash Flows
2020 2019
GBP'000 GBP'000
Profit before taxation 1,126 1,219
Adjustments for:
Net finance expense/(Income) 12 (6)
Depreciation and amortisation 617 364
Impairment of investment 111 -
Impairment of intangible assets 72 -
Employee share scheme expense 62 71
Loss on disposal of tangible asset 3 3
Loss on disposal of intangible asset - 3
Increase in inventories (1,696) (158)
Increase in trade and other receivables (889) (11)
Increase/(decrease) in trade and other payables 2,141 (474)
Increase in contract liabilities 57 (16)
Cash generated from operations 1,616 995
----------------------------------------------------- ------------ ------------------------
2020 2019
GBP'000 GBP'000
Cash and cash equivalents 4,480 2,539
Lease Liabilities
* Current liabilities (132) -
* Non-current liabilities (426) -
Net debt at 31 January 2020 3,922 2,539
------------------------------------- ------------ ------------
12 Business combinations
On 24 September 2019, the Group acquired 100% of the share capital of Vio Holdings Limited and its subsidiary company Viomedex Limited for GBP3.25 million on a cash and debt free basis. Viomedex Limited designs, manufacturers and supplies disposable healthcare products in the respiratory care market worldwide.
As a result of the acquisition, the group is expected to benefit from both revenue and cost synergies while the acquired manufacturing capability will allow the Group to improve gross margins.
Details of the purchase consideration, the net assets acquired and goodwill are as follows:
Purchase consideration GBP'000 ------------------------------ -------- Cash paid 3,000 Ordinary shares issued 250 Total purchase consideration 3,250 ------------------------------ --------
The cash consideration was raised via the issue of new ordinary shares.
The fair value of the 385,802 ordinary shares issued as part of the consideration paid for Vio Holdings Limited was based on a weighted average share price of 64.8p per share over the 30 days to 2 September 2019. Issue costs of GBP250,000 which were directly attributable to the issue of the shares have been netted off against share premium
Deferred Consideration Shares amounting to GBP750,000 were not issued as the conditions to be achieved per the sale and purchase agreement were, in the opinion of the Board having taken legal advice, not met. We have received notice from the previous shareholders of Viomedex that the non-issue of the Deferred Consideration Shares is disputed. If the full Deferred Consideration Shares had been issued then the total purchase consideration would have been GBP4 million.
The assets and liabilities recognised as a result of the acquisition are as follows:
Fair Value
GBP'000
---------------------------------- -------------------------
Property, plant and equipment 96
Right of use asset 191
Inventories 678
Trade and other receivables 239
Trade and other payables (266)
Lease liability (191)
Deferred tax liabilities (10)
Net identifiable assets acquired 737
Add:
Goodwill 2,021
Intangible Assets (note 6) 492
Net assets acquired 3,250
---------------------------------- -------------------------
-
---------------------------------- -----------------------
The goodwill is not deductible for tax purposes.
The fair value of trade and other receivables is GBP239,000 and includes trade receivables with a fair value of GBP181,000. The gross contractual amount for trade receivables due is GBP181,000.
The acquired business contributed revenues of GBP354,000 and profit after tax of GBP134,000 to the group for the period from 24 September 2019 to 31 January 2020. If the acquisition had occurred on 1 February 2019, consolidated pro-forma revenue and profit for the year ended 31 January 2020 would have been GBP1,127,000 and GBP454,000 respectively. These amounts have been calculated using the entities' results and adjusting them for differences in the accounting policies between the group and the subsidiary.
Acquisition related costs of GBP217,000 have been charged to exceptional items in the consolidated income statement for the year ended 31 January 2020.
There were no acquisitions in the year ended 31 January 2019.
13 Changes in accounting policies
This note explains the impact of the adoption of IFRS 16, 'Leases', on the Group's financial statements.
The Group has adopted IFRS 16 under the modified retrospective approach from 1 February 2019 and has therefore not restated comparatives for the prior reporting periods. The reclassification and the adjustments arising from the new leasing rules are therefore recognised in the opening balance sheet on 1 February 2019 .
Adjustments recognised on adoption of IFRS 16
On adoption of IFRS 16, the group recognised lease liabilities in relation to leases which had previously been classified as 'operating leases' under IAS 17, 'Leases'. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as at 1 February 2019 of between 3.50% to 3.75%.
The associated right of use assets were measured at the amount equal to the lease liability. There were no onerous lease contracts that would have required an adjustment to the right-of-use asset at the date of initial application.
The tables below details the impact of IFRS 16 to both the Consolidated Income Statement and Consolidated Statement of Financial Position:
Consolidated Income Statement Profit
attributable
to the
owners
of the
Operating Interest parent
EBITDA profit payable company
GBP'000 GBP'000 GBP'000 GBP'000
12 months ended 31 January 2020
- Pre IFRS 16 adjustment 2,113 1,133 - 749
IFRS 16 adjustments
Depreciation - (154) - (154)
Reclassification of rental payments
from operating expense to lease
liabilities 148 148 - 148
Release of rent provision 11 11 - 11
Change in operating profit - - - -
Interest - - (21) (21)
------------------------------------- -------- ---------- --------- ----------------
Total IFRS 16 adjustments 159 5 (21) (16)
12 months ended 31 January 2020
- Post IFRS 16 adjustment 2,272 1,138 (21) 733
------------------------------------- -------- ---------- --------- ----------------
Consolidated Statement of Financial Right
Position of use Lease
asset liability
GBP'000 GBP'000
12 months ended 31 January 2019
- Pre IFRS 16 adjustment - -
IFRS 16 adjustments
Recognised right of use asset and
lease liability at 1 February 2019 516 (516)
Additional right of use asset and
lease liability acquired through
the acquisition of Vio Holdings
Limited 191 (191)
Depreciation (154) -
Reclassification of rental payments
from operating expense to lease
liabilities - 148
Reclassification of rental payments
from prepayments to lease liabilities - 22
Interest - (21)
------------------------------------------
Total IFRS 16 adjustments 553 (558)
12 months ended 31 January 2020
- Post IFRS 16 adjustment 553 (558)
------------------------------------------ -------- -----------
2020
Reconciliation of opening lease commitments GBP'000
Operating lease commitments disclosed as at 31 January
2019 579
Discounted using the groups incremental borrowing rate
of 3.75% 513
Less: short term leases not recognised as a liability (1)
Add: adjustments as a result of a different treatment of
extension and termination options 4
Lease liability recognised as at 1 February 2019 516
---------------------------------------------------------- --------
The total lease liability recognised as at 1 February 2019 of GBP516,000 was split between current lease liability of GBP124,000 and non-current lease liability of GBP392,000.
In applying IFRS 16 for the first time, the group has used the following practical expedients permitted by the standard;
-- The use of a single discount rate to a portfolio of leases with reasonably similar characteristics;
-- The accounting for operating leases with a remaining lease term of less than 12 months as at 1 February 2019 as short term leases;
-- The exclusion of initial direct costs for the measurement of the right of use asset at the date of initial application; and
-- The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
The group also elected not to apply IFRS 16 to contracts that were not identified as containing a lease under IAS 17 and IFRIC 4, 'Determining whether an Arrangement contains a Lease'.
14 Related party transactions
Neuroprotexeon Limited
At the year end date the Group held 8.6% (2019: 8.7%) of the issued ordinary share capital of Neuroprotexeon Limited on a fully diluted basis. Further information relating to the investment is disclosed in note 8.
During the prior year, Neil Campbell resigned as Non-executive Director of Neuroprotexeon Limited on 21 June 2018.
Key management
Directors control 22.8% (2019: 28%) of the voting shares of the legal parent company. Key management comprise the Group's Executive and Non-executive Directors.
Lease of Leicestershire Facility
The Leicestershire facility at Earl Shilton is rented on an arms length basis for GBP22,000 per annum (2019: GBP22,000) from a self-invested pension plan controlled by Neil Campbell, Toby Foster, Simon Motley, Malcolm Oxley and Graham Walls. The lease was renewed on an arm's length basis during April 2018.
Non-Executive Directors
Brook Nolson was paid GBP27,000 for additional days worked during the year.
Statement of directors' responsibilities
In preparing this preliminary announcement and summary financial statements the directors have considered their statutory responsibilities in relation to the preparation and approval of the annual report and financial statements. In preparing the summary financial statements, the directors have:
-- selected suitable accounting policies and then apply them consistently;
-- stated whether applicable IFRSs as adopted by the European Union have been followed for the Group summary financial statements and United Kingdom Accounting Standards, comprising FRS 101, have been followed for the Company financial statements, subject to any material departures disclosed and explained in the summary financial statements;
-- made judgements and accounting estimates that are reasonable and prudent; and
-- prepared the summary financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
In the case of each director in office at the date the summary financial statements are approved:
-- so far as the director is aware, there is no relevant audit information of which the Group and Company's auditors are unaware; and
-- they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the Group and Company's auditors are aware of that information.
Publication of non-statutory accounts
The financial information is unaudited and does not constitute statutory accounts within the meaning of Section 434(3) of the Companies Act 2006. The audit is not yet complete, the related statutory accounts will be finalised on the basis of the financial information presented by the Directors in the preliminary statement and will be delivered to the Registrar of Companies. Statutory accounts for the year to 31 January 2019 have been delivered to the Registrar of Companies. The audit report for those accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under 498(2) or (3) of the Companies Act 2006.
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 Inspiration Healthcare Group 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 business environment.
Annual Report
A further announcement will be made when the 2020 Annual Report and Financial Statements are available on the Company's website (www.inspiration-healthcare.com) and copies are sent to shareholders.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR GCGDSBSDDGGB
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