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14 December 2022
One Health Group plc
(“One Health” or “OHG” or the “Company”)
Interim Results for the Six Months to 30 September 2022
One Health (AQSE: OHGR), a provider of NHS-funded medical procedures, announces its unaudited interim results for the six months ended 30 September 2022. Subsequent to the period end, on 24 November 2022 the Company was admitted to the Apex segment of the AQSE Growth Market following a Placing of and Subscription for ordinary shares at 150p per share.
Adam Binns, Chief Executive Officer, said:
“One Health performed well in the first six months of the financial year with turnover up 17.2% to £9.83m and underlying EBITDA up 15% to £0.51m. We have seen new patient referrals 11% above the level experienced in the first half of the year to 31 March 2020, being the last year prior to the COVID-19 pandemic.
“The Board has declared an interim dividend of 1.66p per share to be paid on 13 January 2023 to shareholders on the register as at close of business on 23 December 2022. Subject to the Company’s financial position and other financial obligations, the Directors intend to declare an aggregate annual dividend of up to 50% of annual profits after taxation in respect of each full financial year.
“We are delighted to have joined AQSE and to see our shares start trading on a public market. We have continued to invest in the growth of the business and perform in line with the commentary in our Admission document*. We are confident in the future prospects for One Health.”
For more information, please contact:
One Health Group plc via Square1 Consulting
Oberon Capital – AQSE Corporate Adviser and Broker +44 203 179 5300
Square1 Consulting +44 207 929 5599
David Bick +44 7831 381201
About One Health Group
One Health engages over 100 NHS Consultants who sub-specialise in the various surgeries offered by the Company, through a growing network of community-based outreach clinics and surgical operating locations. One Health provides services to over 10,000 new patients every year, using surgeons and anaesthetists that are mostly employed by the NHS, on a consultancy basis. It currently works with over 100 professionals across 7 hospitals and approximately 30 CQC registered outreach clinics.
One Health’s activities are focused on areas where the patient needs are under-supplied by the local NHS service as well as locations where population density is relatively high, and the level of private medical insurance is relatively low. One Health has also sought to expand geographically from its Head Office in Sheffield into neighbouring counties, which meet the required criteria. Currently, the Company’s activities are focused in Yorkshire, Lincolnshire, Derbyshire, Nottinghamshire and Leicestershire. Revenue in the year to 31 March 2022 was derived from 40 Clinical Commissioning Groups in addition to contracts directly with NHS hospitals to help reduce internal waiting lists.
One Health’s business model has focused to date on four main areas: being Spine, Orthopaedics, General Surgery and Gynaecology. The split of inpatient procedures in the year to 31 March 2020 was as follows: Spine 32% Orthopaedics 27% General Surgery 29% Gynaecology 12%.
Spine and orthopaedics are particularly attractive areas for One Health as the Directors believe that they benefit from powerful growth drivers in terms of an ageing demographic, physical inactivity and an increasing proportion of the population being categorised as obese. Within orthopaedics, the most common surgeries performed by One Health are knee and hip replacements.
One Health delivered 4,870 procedures in the year to 31 March 2022 and the Directors expect the Company to deliver approximately 5,500 procedures in the year to 31 March 2023.
One Health Group plc
Notes to the Interim Results
for the Period 1 April 2022 to 30 September 2022
1. STATUTORY INFORMATION
One Health is a public company, limited by shares, registered in England and Wales. The company's registered number is 04201068 and registered office address is 131 Psalter Lane, Sheffield, South Yorks, S11 8UX.
The Interim Results have been reviewed, not audited, and were approved by the Board of Directors on 13th December 2022.
2. ACCOUNTING POLICIES
Basis of preparing the Interim Results
These Interim Results have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The Interim Results have been prepared under the historical cost convention as modified by the revaluation of certain assets.
The Interim Results have been prepared on a going concern basis. The Directors have reviewed and considered relevant information, including the annual budget and future cash flows in making their assessment. The Directors have tested their cash flow analysis to take into account the impact on their business of possible scenarios, alongside the measures that they can take to mitigate the impact of possible scenarios. Based on these assessments, given the measures that could be undertaken to mitigate the current adverse conditions, and the current resources available, the Directors have concluded that they can continue to adopt the going concern basis in preparing the annual report and accounts.
The accounts are presented in Sterling currency and rounded to the nearest pound.
Financial Reporting Standard 102 - reduced disclosure exemptions
The group has taken advantage of the exemption from disclosing the company key management personnel compensation, as required by FRS 102 paragraph 33.7.
Basis of consolidation
The Interim Results include the interim financial information of the company and all of its subsidiary undertakings, together with the group's share of the results of associates made up to 30 September.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Where the group owns less than 50% of the voting powers of an entity but controls the entity by virtue of an agreement with other investors which give it control of the financial and operating policies of the entity, it accounts for that entity as a subsidiary.
Where a subsidiary has different accounting policies to the group, adjustments are made to those subsidiary financial statements to apply the group’s accounting policies when preparing the consolidated Interim Results.
Any subsidiary undertakings or associates sold or acquired during the year are included up to, or from, the dates of change of control or change of significant influence respectively.
All intra-group transactions, balances, income, and expenses are eliminated on consolidation. Adjustments are made to eliminate the profit or loss arising on transactions with associates to the extent of the group’s interest in the entity.2. ACCOUNTING POLICIES - continued
Significant judgements and estimates
In preparing the Interim Results it is necessary to make certain judgements, estimates and assumptions that affect the amounts recognised in the financial information presented in the Interim Results. These assumptions are reassessed annually as part of the interim and year end accounts preparation process.
The critical judgments that the directors have made in the process of applying the Group's accounting policies that have the most significant effect on the Interim Results are discussed below.
(I) Assessing indicators of impairment
In assessing whether there have been any indicators of impairment assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. There have been no indicators of impairments identified during the current financial year.
Key sources of estimation uncertainty
(i) Determining useful economic lives of tangible fixed assets
The Group depreciates tangible fixed assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on variety of factors, including technological innovation, product life cycles and maintenance programmes.
The judgment is applied by management when determining the residual values for tangible fixed assets. When determining the residual value management aim to assess the amount that the Group would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful life. Where possible this is done with reference to external market prices.
(ii) Recoverability of debtors
The Group establishes a provision for debtors that are estimated not to be recoverable. When assessing recoverability, the directors have considered factors such as the ageing of debtors, past experience of recoverability and the credit profile of individual or groups of customers.
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
Turnover consists of the provision of medical and clinical services, sale of medical implants, and recharge of direct costs incurred. All turnover is generated in the United Kingdom.
Dividend income is recognised when the right to receive payment is established.
Tangible fixed assets
Tangible assets are started at cost less accumulated depreciation and accumulated impairment losses. Depreciation on other assets is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.
2. ACCOUNTING POLICIES - continued
The assets' residual values. useful lives and depreciation methods are reviewed, if appropriate at the end of each reporting period. The effect of any change is accounted for prospectively.
Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in the Statement of Income and Retained Earnings.
Investment in a subsidiary company
Investment in subsidiary company is held at cost less accumulated impairment losses.
The Group has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments.
Basic financial assets, including trade and other receivables, cash and bank balances and investments in commercial paper, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Such assets are subsequently carried at amortised cost using the effective interest method.
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
Basic financial liabilities, including trade and other payables, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
2. ACCOUNTING POLICIES - continued
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
Distributions to equity holders
Dividends and other distributions to the company’s shareholders are recognised as a liability in the Interim Results in the period in which the dividends and other distributions are approved by the company’s shareholders. These amounts are recognised in the statement of changes in equity.
Related party transactions
The Group discloses transactions with related parties which are not wholly owned with the same group. It does not disclose transactions with its parent or with members of the same group that are wholly owned.
Taxation for the period comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.
Current or deferred taxation assets and liabilities are not discounted.
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the Interim Results. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Hire purchase and leasing commitments
Rentals paid under operating leases are charged to the Statement of Income and Retained Earnings on a straight line basis over the period of the lease.
Pension costs and other post-retirement benefits
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to the Statement of Income and Retained Earnings in the period to which they relate.
The group provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements and defined benefit and defined contribution pension plans.
Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.
2. ACCOUNTING POLICIES - continued
The group operates a number of country-specific defined contribution plans for its employees. A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. Once the contributions have been paid the group has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the balance sheet. The assets of the plan are held separately from the group in independently administered funds.
The group operates a number of annual bonus plans for employees. An expense is recognised in the profit and loss account when the group has a legal or constructive obligation to make payments under the plans as a result of past events and a reliable estimate of the obligation can be made.
The group provides share-based payment arrangements to certain employees. Equity-settled arrangements are measured at fair value (excluding the effect of non– market based vesting conditions) at the date of the grant. The fair value is expensed on a straight-line basis over the vesting period. The amount recognised as an expense is adjusted to reflect the actual number of shares or options that will vest.
Where equity-settled arrangements are modified, and are of benefit to the employee, the incremental fair value is recognised over the period from the date of modification to date of vesting. Where a modification is not beneficial to the employee there is no change to the charge for share-based payment. Settlements and cancellations are treated as an acceleration of vesting and the unvested amount is recognised immediately in the income statement.
3. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.
Underlying EPS is calculated using underling EBITDA, which excludes costs relating to the IPO and share adjustments.
One Health Group utilises specialist consultants and healthcare managers working together to provide the best possible diagnosis and treatment for our patients.