TIDMINHC
RNS Number : 9115U
Induction Healthcare Group PLC
28 November 2019
28 November 2019
Induction Healthcare Group PLC
("Induction", the "Company, or the "Group")
Half year results
Induction, a global healthcare technology company that helps
healthcare professionals deliver better care more efficiently,
announces its results for the six months ended 30 September
2019.
The Group currently has two platforms, Induction Switch and
MicroGuide, supporting healthcare professionals in multiple
markets, including the UK, Ireland, Australia and South Africa.
Induction Switch is the number one healthcare collaboration app in
the UK, used by the majority of doctors within the NHS. The app
helps more than 110,000 users - mostly doctors - to increase
productivity and enhance communication by securely sharing phone
numbers and bleeps, bookmarks, documents and messages in a clinical
setting. MicroGuide (part of the post period end acquisition)
enables medical organisations to collaboratively create, edit, and
publish their own local medical guidelines in a secure and locally
administrated environment. The MicroGuide platform is used by the
majority of trusts within the NHS.
Period highlights
-- Induction Switch: strong growth in registered user base and deepening engagement
- 38% increase in the number of registered users to 109,537 in
the last six months
- Over 49% growth of directory and guideline lookups in the last
six months
-- In the UK, the majority of NHS doctors (excluding GPs) use the Induction Switch app*
* NHS Workforce Statistics - August 2019 (latest available
version)
Post period end acquisition
First step in buy-and-build strategy: acquisition of Horizon
Strategic Partners Limited ("Horizon") for up to GBP2.5m, as
announced on 6(th) November 2019
-- Includes leading guidance management platform, MicroGuide, for healthcare professionals
-- Access to an established customer base including the majority
of UK NHS Trusts as well as hospitals in international markets
-- Expansion of Induction's user base - adding additional junior
doctors within the NHS and international markets, as well as
consultants, senior medical staff, nurses and pharmacists
-- Induction Switch and MicroGuide rank as either number one or
number two most used healthcare apps for healthcare professionals
in many UK NHS Trusts
Current trading and outlook
-- Continued growth in users and engagement - in the month to 31 October 2019:
- Registered user base grew further 4% to 114,074.
- Growth in lookups (directory / guidelines), calls and document
downloads at 7% each
-- Ongoing development and release of new Induction Switch
features including secure messaging, and document exchange within
clinical teams
-- Healthy acquisition pipeline targeting new and complementary products and geographies
-- Expectation that Induction Switch app will generate revenues
in 2020 (in addition to MicroGuide, which is already
revenue-generating)
Ibs Mahmood, CEO of Induction, said:
"I am pleased with our progress since our IPO in May 2019. We
have a large, established, and engaged user base among healthcare
professionals. In line with our growth strategy, I am excited by
our first acquisition - the MicroGuide platform and app which
extends our capability and generates revenue. With the addition of
MicroGuide, Induction apps are relied upon by the majority of not
only doctors but also the majority of trusts in the UK to improve
productivity and deliver better care through faster communication
and access to critical information. MicroGuide also gives the Group
a broader global footprint.
Our progress brings us nearer to our clear and simple vision: to
produce technology that healthcare professionals choose to use to
provide better, and more efficient, care. We look forward to
updating the market on further progress in the second half of the
financial year."
ENQUIRIES
Induction Healthcare Group PLC via FTI Consulting
Ibs Mahmood, Chief Executive Officer
Numis Securities (Nominated Adviser and
Broker)
James Black / Freddie Barnfield / Huw Jeremy
/ Matthew Jones +44 (0) 207 260 1000
FTI Consulting
Brett Pollard / Jamie Ricketts / Elena
Kalinskaya / Sam Purewal / Mary Whittow +44 (0) 203 727 1000
About Induction
Induction Healthcare Group PLC is a global healthcare technology
company that helps healthcare professionals deliver better care
more efficiently. The Group has two platforms, Induction Switch and
MicroGuide, that support healthcare professionals in multiple
markets, including UK, Ireland, Australia and South Africa.
Induction Switch is the number one healthcare collaboration app in
the UK. The app helps more than 110,000 users - mostly doctors - to
increase productivity and enhance communication by securely sharing
phone numbers and bleeps, bookmarks, documents and messages in a
clinical setting. The MicroGuide platform provides medical
organisations with the ability to collaboratively create, edit, and
publish their own local medical guidelines in a secure and locally
administrated environment. The Induction switch app is used by the
majority of doctors within the NHS. The MicroGuide platform is used
by the majority of trusts within the NHS.
As at 31 October 2019, the Induction Switch app had 114,074
registered users, primarily in the UK. The registered user base
grew by 43% from 31 March 2019 to 31 October 2019.
CEO Review
At Induction we believe that there is a moral and economic
imperative to deliver better healthcare more efficiently around the
world. We believe that the increased burden of non-clinical work
and administrative activities on healthcare professionals is a
barrier to productivity and quality care for patients. As a result,
we focus on producing tools that healthcare professionals choose to
use to streamline their delivery of care. We are grateful to our
investors that recognise both our market opportunity, but - more
importantly - the reason why we are doing this: freeing up
healthcare professionals' time to look after patients more
effectively.
Our strategy follows three steps:
1. Build a large user base of healthcare professionals who choose our tools;
2. Increase engagement, trust and loyalty within this growing user base; and
3. Deliver features that - in combination with our engaged user
base - allow healthcare organisations and systems to improve
productivity, reduce costs and solve problems that are barriers to
better patient care.
Over the last six months we have made important progress against
these objectives and expect to continue to do so over the next six
months. We expect our Induction Switch app to generate revenues in
the 2020 calendar year.
Our user base continued to grow strongly, as expected, with
114,074 registered users at 31 October 2019, an increase of 43%
compared to 31 March 2019, meaning the majority of NHS hospital
doctors use Induction Switch.
Induction also enjoyed a faster than expected increase in 'user
engagement', i.e. the amount each registered user uses our app.
1.8m extension numbers were looked up in Induction hosted
directories, half a million calls placed, and over ten thousand
guidelines accessed in the last three months. This represents 27%,
24% and 109% growth respectively on the previous quarter. An
unprecedented 248 private workspaces were set up with 3,323 users
within these workspaces. The Induction Switch directory is accessed
more than once every five seconds.
During the period our software team completed the core Induction
Switch platform. My huge thanks goes to the Development team for
delivering a potent core Induction Switch product primed for future
premium features. Over the coming months we expect the development
focus to shift towards the production of these premium features
that can be activated on a Trust by Trust, hospital by hospital, or
team by team basis.
We also expect to add further solutions via acquisitions. For
example, the acquisition of the MicroGuide app post period-end
provides Induction with a premium solution that complements our
existing document sharing capability with a market-leading guidance
authorship and management platform. MicroGuide serves the majority
of Trusts in the UK, as well as organisations in other markets,
with functionality to create, edit, and publish their own local
medical guidelines in a secure and locally administrated
environment. Induction acquired MicroGuide for up to GBP2.5
million, as announced on 6 November 2019. We plan to expose
MicroGuide generated content through the Induction Switch document
sharing capability - in addition to the existing MicroGuide app -
to help healthcare professionals access the information they need
in one place to look after patients more effectively, securely and
rapidly.
Business review
Our key performance indicators show progress increasing user
numbers and building even greater user engagement.
Key Performance Indicators (as at 30 September 2019)
-- 109,537 registered users, an increase of 38% over the six month period;
-- 50,075 average monthly users in September 2019, an increase
of 23% over the six month period;
-- Users looked up 9.5m numbers in the directory, made 2.2m
calls using Induction Switch and looked up 61,250 guidelines to
date;
-- 693 UK healthcare institutions and 165 overseas healthcare
institutions using Induction Switch; and
-- 248 private workspaces set up with 3,323 "Level 1" users
("Level 1" users have free access to the basic package of features
such as directory, dialer, guidelines and messaging, as well as an
administrator who controls membership and content through an
administrative portal).
Financial review
The Group's result showed a loss for the period of GBP2.2m. The
business continues to invest in its technology platforms to further
develop new modular features to grow the user base and engagement.
Administrative expenses included GBP0.7m of non-recurring costs
relating to the acquisition of Podmedics and the IPO on AIM in May
2019. Product development incurred GBP0.5m of which the majority
was staff and contractor costs (excluding GBP0.2m of capitalised
development spend).
Balance Sheet
As at 30 September 2019 the Group had paid its outstanding loans
and closed the period with cash and cash equivalents of GBP13.6m.
Intangible assets reflect the acquisition of Podmedics Limited of
GBP0.5m and capitalised development spend relating to Induction
Switch.
The share capital increased during the period to GBP19.1m (2018:
GBP0.1m) as a result of the Podmedics acquisition and IPO which
raised funds of GBP16.5m. The total number of ordinary shares as at
30 September 2019 was 29,626,201 (2018: 65,591), driven by the
creation of Induction Healthcare Group PLC with a share for share
transfer from Induction Healthcare Limited as the original parent,
which was split from 65,591 shares to 13,118,200 ordinary shares,
with the further issuance of 16,508,001 ordinary shares in
connection with the acquisition of Podmedics and the issuance of
new ordinary shares as a result of the IPO. For further detail
refer to note 6.
Working capital
The Group's net cash outflows from operating activities was
GBP2.4m in the six months ended 30 September 2019 due to the
investment in development of the Induction Switch app following the
successful IPO on AIM and the acquisition of Podmedics, both of
which were one off costs.
The Group's strategy is to manage its cash balance to focus
on:
(1) supporting the development of its products;
(2) sourcing, completing and integrating acquisitions that align
with the Induction Healthcare mission; and (3) promoting market
synergies between Induction's products and markets to maximize
opportunities for cross-selling, develop new customers and expand
into new markets.
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2019
Note 30 September 30 September
2019 2018
Unaudited Unaudited
GBP000 GBP000
Revenue 2,3 - -
Cost of sales (46) (31)
Gross loss (46) (31)
Distribution expenses (76) (149)
Development expenses (497) (678)
Administrative expenses (1,587) (170)
Other operating expenses (9) (2)
Operating loss 2 (2,215) (1,030)
Financial income 4 17 -
Loss before tax (2,198) (1,030)
Taxation 5 - -
Loss for the period (2,198) (1,030)
Attributable to:
Equity holders of the Parent (2,198) (1,030)
(2,198) (1,030)
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2019
Note 30 September 30 September
2019 2018
Unaudited Unaudited
GBP000 GBP000
Loss for the period (2,198) (1,030)
Other comprehensive income
Items that will be reclassified
to profit or loss
Foreign currency translation
differences - foreign operations (1) (1)
Other comprehensive loss
for the period (1) (1)
Total comprehensive loss
for the period (2,199) (1,031)
Attributable to:
Equity holders of the Parent (2,199) (1,031)
(2,199) (1,031)
2019 2018
Pence Pence
Earnings per share:
Basic loss per share 6(0.10) (40.35)
Diluted loss per share 6(0.10) (40.35)
Condensed Consolidated Statement of Financial Position
For the six months ended 30 September 2019
Note 30 September 31 March
2019 2019
Unaudited Audited
GBP000 GBP000
Non-current assets
Intangible assets 7 928 222
928 222
Current assets
Other financial assets 8 - 100
Other receivables 9 61 128
Cash and cash equivalents 10 13,560 169
13,621 397
Total assets 14,549 619
Current liabilities
Trade and other payables 11 366 761
Other financial liabilities - -
Loans and borrowings 12 - 2,500
366 3,261
Total liabilities 366 3,261
Net Assets 14,183 (2,642)
Equity attributable to equity
holders of the parent
Share capital 19,050 66
Translation reserve (1) (1)
Other reserves 39
Accumulated deficit (4,905) (2,707)
Total equity 14,183 (2,642)
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 September 2019
Share Accumulated
capital Translation/ other reserves Deficit Total equity
GBP000 GBP000 GBP000 GBP000
Balance at 1 April 2019 66 (1) (2,707) (2,642)
Total comprehensive loss for the period
Loss for the period - - (2,198) (2,198)
Other comprehensive loss for the period - 39 - 39
Total comprehensive loss for the period 66 38 (4,905) (4,801)
Transactions with owners, recorded directly in
equity
Issue of share premium 18,902 - - 18,902
Issue of share nominal 82 82
Total contributions by and distributions to owners 18,984 - - 18,984
Balance at 30 September 2019 19,050 38 (4,905) 14,183
Share Accumulated
capital Translation/ other reserves Deficit Total equity
GBP000 GBP000 GBP000 GBP000
Balance at 5 March 2018 (date of incorporation) - - - -
Total comprehensive loss for the period
Loss for the period - - (1,030) (1,030)
Foreign currency translation differences - (1) - (1)
Total comprehensive loss for the period - (1) (1,030) (1,031)
Transactions with owners, recorded directly in
equity
Issue of ordinary shares 66 - - 66
Total contributions by and distributions to owners 66 - - 66
Balance at 30 September 2018 66 (1) (1,030) (965)
Induction Healthcare Group PLC was incorporated 28th February
2019. The shareholders in Induction Healthcare Limited executed a
share for share exchange whereby Induction Healthcare Group PLC
acquired 100% of the share capital of Induction Healthcare Limited
on the basis of one ordinary share in Induction Healthcare Group
PLC for each ordinary share in Induction Healthcare Limited.
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 September 2019
30 September 30 September
2019 2018
Unaudited Unaudited
GBP000 GBP000
Cash flows from operating activities
Loss for the period (2,198) (1,030)
Adjustments for:
Depreciation, amortisation and impairment 9 2
Foreign exchange losses - -
Financial income (17) -
Increase in trade and other receivables 166 (188)
Increase in trade and other payables (395) 250
Net cash used in operating activities (2,435) (967)
Cash flows from financing activities
Proceeds from the issue of share
capital 15,809 30
Proceeds from new loan - 1,819
Interest 17 -
Net cash from financing activities 15,826 1,849
Net increase in cash and cash equivalents 13,391 883
Cash and cash equivalents at 1 April
2019 169 -
Effect of exchange rate fluctuations
on cash held (1) (1)
Cash and cash equivalents at 30
September 2019 13,560 882
Notes to the Condensed Consolidated Interim Financial
Statements
1. General Information
Reporting entity
Induction Healthcare Group PLC ("Induction" the "Parent" or the
"Company") is publicly listed on the AIM market of the London Stock
Exchange ("LSE") incorporated, domiciled and registered in the
United Kingdom. The registered number is 11852026 and the
registered address is Wework C/O Induction Healthcare, 12
Hammersmith Grove, London, United Kingdom, W6 7AP. Induction is a
leading healthcare technology company helping to streamline
delivery of care by providing software to healthcare
professionals.
As of 30 September 2019, Induction Healthcare Group PLC
comprised of four legal subsidiaries, that are majority owned and
controlled, and therefore fully consolidated in the Company's
consolidated financial statements. Details of the Company's
subsidiaries are included in note 13.
Basis of preparation
These interim financial statements have been prepared and
approved by the directors in accordance with International
Financial Reporting Standards as adopted by the EU ("Adopted
IFRSs"). They do not include all the information required for a
complete set of IFRS financial statements. However, selected
explanatory notes are included to explain events and transactions
that are significant to an understanding of the changes in the
Group's financial position and performance since the last annual
consolidated financial information included in the annual report
and accounts as of and for the year ended 31 March 2019.
Subsidiaries are fully consolidated from the date of
acquisition, being the date on which the Parent obtained control
and continue to be consolidated until the date when such control
ceases. The financial information of the subsidiaries is prepared
for the same reporting period as the Parent, using consistent
accounting policies. All intra-group balances, transactions,
unrealised gains and losses resulting from intra-group transactions
are eliminated in full.
Changes in the Parent's interest in a subsidiary that do not
result in a loss of control are accounted for as equity
transactions.
When the Parent loses control over a subsidiary, the assets and
liabilities are derecognised along with any related non-controlling
interest and other components of equity. Any resulting gain or loss
is recognised in profit or loss. Any interest retained in the
former subsidiary is measured at fair value when control is
lost.
These interim financial statements are unaudited and were
approved by the Board of Directors and authorised for issue on 28
November 2019 and are available on the Company's website at
www.inductionhealthcare.com under "Investors - Financial reports
& publications".
Going concern
For the period ended 30 September 2019, the group made a loss of
GBP2,197,773 and had net current assets of GBP13,255,519. The
following matters have been considered by the directors in
determining the appropriateness of the going concern basis of
preparation in the historical financial information:
-- Prepared cashflow forecasts for a period of 12 months from
the date of approval of these financial statements which indicate
that, taking account of reasonably possible downsides, the company
will have sufficient funding to meet its liabilities as they fall
due for that period.
As a result, the directors are of the opinion that the Group
will have sufficient working capital to enable it to meet its
objectives and financial obligations. Further, the directors are of
the opinion that no asset is likely to be realised for
Notes to the Condensed Consolidated Interim Financial
Statements
General Information (continued)
an amount less than the amount at which it is recorded in this
historical financial information as at 30 September 2019.
Accordingly, no adjustments have been made to this historical
financial information relating to the recoverability and
classification of the asset carrying amounts or the amounts and
classification of liabilities that might be necessary should the
Group not continue as a going concern.
2. Accounting policies
The accounting policies applied by the Group in these
half-yearly results are the same as those which formed the basis of
the Annual Report and Financial Statements for the period ended 31
March 2019.
Foreign currency
Transactions in foreign currencies are translated to the
respective functional currencies of Group entities at the foreign
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
consolidated balance sheet date are retranslated to the functional
currency at the foreign exchange rate ruling at that date. Foreign
exchange differences arising on translation are recognised in the
consolidated income statement. Non-monetary assets and liabilities
that are measured in terms of historical cost in a foreign currency
are translated using the exchange rate at the date of the
transaction. Non-monetary assets and liabilities denominated in
foreign currencies that are stated at fair value are retranslated
to the functional currency at foreign exchange rates ruling at the
dates the fair value was determined.
The functional currency of the Company is Sterling. The assets
and liabilities of foreign operations with functional currencies
other than Sterling, including fair value adjustments arising on
consolidation, are translated to the Group's presentational
currency, Sterling, at foreign exchange rates ruling at the
consolidated balance sheet date. The revenues and expenses of
foreign operations are translated at an average rate for the year
where this rate approximates to the foreign exchange rates ruling
at the dates of the transactions.
Exchange differences arising from this translation of foreign
operations are reported as an item of other comprehensive income
and accumulated in the translation reserve.
Exchange differences arising from a monetary item receivable
from or payable to a foreign operation, the settlement of which is
neither planned nor likely in the foreseeable future, are
considered to form part of a net investment in a foreign operation
and are recognised directly in equity in the translation
reserve.
When a foreign operation is disposed of in its entirety or
partially such that control is lost, the cumulative amount in the
translation reserve related to that foreign operation is
reclassified to profit or loss as part of the gain or loss on
disposal.
Fair value measurement
Financial instruments measured at fair value are classified into
a fair value hierarchy based on the valuation technique used to
determine fair value as follows:
-- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
-- Level 2: inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either
directly (i.e., as prices) or indirectly (i.e., derived from
prices)
-- Level 3: inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a
liability fall into different levels of the fair value hierarchy,
then the fair value measurement is categorised in its entirety in
the same level of the fair value hierarchy as the lowest level
input that is significant to the entire measurement.
Notes to the Condensed Consolidated Interim Financial
Statements
Accounting policies (continued)
Classification of financial instruments issued by the Group
Financial instruments issued by the Group are treated as equity
only to the extent that they meet the following two conditions:
(a) they include no contractual obligations upon the group to
deliver cash or other financial assets or to exchange financial
assets or financial liabilities with another party under conditions
that are potentially unfavourable to the group; and
(b) where the instrument will or may be settled in the company's
own equity instruments, it is either a non-derivative that includes
no obligation to deliver a variable number of the company's own
equity instruments or is a derivative that will be settled by the
company exchanging a fixed amount of cash or other financial assets
for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of
issue are classified as a financial liability. Where the instrument
so classified takes the legal form of the company's own shares, the
amounts presented in this historical financial information for
called up share capital and share premium account exclude amounts
in relation to those shares.
Financial instruments
Recognition and initial measurement
Non-derivative financial instruments comprise other receivables,
cash and cash equivalents, loans and borrowings, and trade and
other payables. All financial assets and liabilities are initially
recognised when the Group becomes a party to the contractual
provisions of the instrument. Financial assets and liabilities are
initially measured at fair value plus, for items measured at
amortised cost, transaction costs directly attributable to its
acquisition or issue.
Financial assets - classification and subsequent measurement
On initial recognition, a financial asset is classified as
measured at amortised cost or fair value through profit or loss
("FVTPL"). The Group has no financial assets measured at fair value
through other comprehensive income ("FVOCI"). A financial asset is
measured at amortised cost if it is both: held within a business
model whose objective is to hold assets to collect contractual cash
flows; and its contractual terms give rise to cash flows that are
solely payments of principal and interest on the amount
outstanding. For the purposes of this assessment, "principal" is
defined as the fair value of the financial asset on initial
recognition, and "interest" is defined as consideration for the
time value of money and for the credit risk associated with the
principal amount outstanding. In assessing whether the contractual
cash flows are solely payments of principal and interest, the Group
considers the contractual terms of the instrument, including any
terms which may affect the timing or amount of contractual cash
flows. All financial assets not measured at amortised cost are
measured at FVTPL.
Financial assets at FVTPL are subsequently measured at fair
value with net gains and losses, including any interest or dividend
income, recognised in profit or loss. Financial assets measured at
amortised cost are subsequently measured at amortised cost using
the effective interest method. The amortised cost is reduced by
impairment losses. Interest income, foreign exchange gains and
losses, and impairment are recognised in profit or loss. Any gain
or loss on derecognition is recognised in profit or loss.
Financial liabilities - classification and subsequent
measurement
Financial liabilities are classified as measured at amortised
cost or FVTPL. A financial liability is classified as at FVTPL if
it is classified as held-for-trading, it is a derivative or it is
designated as such on initial recognition. Financial liabilities at
FVTPL are measured at fair value and net gains and losses,
including any interest expense, are recognised in profit or loss.
All other financial liabilities are subsequently measured at
amortised cost using the effective interest method. Interest
expense and foreign exchange gains and losses are recognised in
profit or loss. Any gain or loss on derecognition is also
recognised in profit or loss.
Notes to the Condensed Consolidated Interim Financial
Statements
Accounting policies (continued)
Financial instruments (continued)
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call
deposits. Bank overdrafts that are repayable on demand and form an
integral part of the Group's cash management are included as a
component of cash and cash equivalents for the purpose only of the
consolidated cash flow statement.
Derivative financial instruments and other financial assets
Other financial assets comprise call options. Options are
initially classified as FVTPL and recognised at fair value based on
the consideration paid for the option. Subsequently, the options
are measured at fair value and the gain or loss on remeasurement to
fair value is recognised immediately in profit or loss.
Business model assessment
The Group makes an assessment of the objective of the business
model in which a financial asset is held at a portfolio level as
this best reflects the way the business is managed and information
provided to management. The assessment includes consideration of
the stated objectives of the portfolio, the performance of the
portfolio, the risks that affect the performance of the business
model, and the frequency, volume and timing of sales of financial
assets.
Derecognition
The Group derecognises a financial asset when the contractual
rights to receive cash flows from the asset expire, or when it
transfers the rights to receive the contractual cash flows in a
transaction in which substantially all of the risks and rewards of
ownership are transferred.
The Group derecognises a financial liability when its
contractual obligations are discharged or cancelled, or expire.
Business combinations
All business combinations are accounted for by applying the
acquisition method. Business combinations are accounted for using
the acquisition method as at the acquisition date, which is the
date on which control is transferred to the Group.
The Group measures goodwill at the acquisition date as:
-- the fair value of the consideration transferred; plus
-- the recognised amount of any non-controlling interests in the acquiree; plus
-- the fair value of the existing equity interest in the acquiree; less
-- the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is
recognised immediately in profit or loss.
Costs related to the acquisition, other than those associated
with the issue of debt or equity securities, are expensed as
incurred.
Any contingent consideration payable is recognised at fair value
at the acquisition date. If the contingent consideration is
classified as equity, it is not remeasured, and settlement is
accounted for within equity. Otherwise, subsequent changes to the
fair value of the contingent consideration are recognised in profit
or loss.
On a transaction-by-transaction basis, the Group elects to
measure non-controlling interests, which have both present
ownership interests and are entitled to a proportionate share of
net assets of the acquiree in the event of liquidation, either at
its fair value or at its proportionate interest in the recognised
amount of the identifiable net assets of the acquiree at the
acquisition date. All other non-controlling interests are measured
at their fair value at the acquisition date.
Notes to the Condensed Consolidated Interim Financial
Statements
Accounting policies (continued)
Intangible assets
Research and development
Expenditure on research activities is recognised in the
consolidated income statement as an expense as incurred.
Expenditure on development activities is capitalised if the
product or process is technically and commercially feasible and the
Group intends to and has the technical ability and sufficient
resources to complete development, future economic benefits are
probable and if the Group can measure reliably the expenditure
attributable to the intangible asset during its development.
Development activities involve a plan or design for the production
of new or substantially improved products or processes. The
expenditure capitalised includes the cost of materials, direct
labour and an appropriate proportion of overheads and capitalised
borrowing costs. Other development expenditure is recognised in the
consolidated income statement as an expense as incurred.
Capitalised development expenditure is stated at cost less
accumulated amortisation and less accumulated impairment
losses.
Other intangible assets
Expenditure on internally generated goodwill and brands is
recognised in the consolidated income statement as an expense as
incurred. Other intangible assets that are acquired by the Group
are stated at cost less accumulated amortisation and accumulated
impairment losses.
Amortisation
Amortisation is charged to the consolidated income statement on
a straight-line basis over the estimated useful lives of intangible
assets unless such lives are indefinite. Intangible assets with an
indefinite useful life and goodwill are systematically tested for
impairment at each balance sheet date. Other intangible assets are
amortised from the date they are available for use. The estimated
useful lives are as follows:
up to 5 years
* patents and trademarks
up to 5 years
* capitalised development costs
up to 5 years
* other intellectual property
Impairment
Non-derivative financial assets
The Group recognises loss allowances for expected credit losses
("ECLs") on financial assets measured at amortised cost. The Group
measures loss allowances at an amount equal to lifetime ECLs,
except for cash and cash equivalents which is measured using
12-month ECLs. ECLs are a probability-weighted estimate of credit
losses and are measured as the present value of all cash shortfalls
expected on financial assets, using the effective interest rate of
the financial asset. Lifetime ECLs are the ECLs which result from
all possible default events over the expected life of a financial
instrument. When determining ECLs, the Group considers reasonable
and supportable qualitative and quantitative information that is
relevant and available without undue cost or effort. The Group
considers a financial asset to be in default when the borrower is
unlikely to pay its obligations to the Group in full without
recourse by the Group to actions such as realising security (if any
held) or when the financial asset is more than 90 days overdue.
Loss allowances for financial assets measured at amortised cost
are deducted from the gross carrying amount of the assets. The
carrying amount of a financial asset is written off when the Group
has no reasonable expectation of recovering a financial asset in
its entirety or a portion thereof.
Non-financial assets
The carrying amounts of the Group's non-financial assets are
reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the
asset's recoverable amount is estimated. For intangible assets that
have indefinite useful lives or that are not yet available for use,
the recoverable amount is estimated each period end.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value less costs to
sell. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset. For the purpose of impairment
testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that
Notes to the Condensed Consolidated Interim Financial
Statements
Accounting policies (continued)
generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or groups of assets
(the "cash-generating unit" or "CGU").
An impairment loss is recognised if the carrying amount of an
asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss.
Employee benefits
Short term employee benefits
Short term employee benefits are expensed as the related service
is provided. A liability is recognised if the Group has a present
legal or constructive obligation to pay an amount as a result of
past employee service and the obligation can be estimated
reliably.
Defined contribution plans
A defined contribution plan is a post-employment benefit plan
under which the company pays fixed contributions into a separate
entity and will have no legal or constructive obligation to pay
further amounts. Obligations for contributions to defined
contribution pension plans are recognised as an expense in the
consolidated income statement in the periods during which services
are rendered by employees.
Share-based payment transactions
Share-based payment arrangements in which the Group receives
goods or services as consideration for its own equity instruments
are accounted for as equity-settled share-based payment
transactions, regardless of how the equity instruments are obtained
by the Group.
The grant date fair value of share-based payment awards granted
to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period that the
employees become unconditionally entitled to the awards. The fair
value of the options granted is measured using an option valuation
model, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of awards for which the
related service and non-market vesting conditions are expected to
be met, such that the amount ultimately recognised as an expense is
based on the number of awards that do meet the related service and
non-market performance conditions at the vesting date. For
share-based payment awards with market and non-vesting conditions,
the grant date fair value of the share-based payment is measured to
reflect such conditions and there is no true-up for differences
between expected and actual outcomes.
Share-based payment transactions in which the Group receives
goods or services by incurring a liability to transfer cash or
other assets that is based on the price of the Group's equity
instruments are accounted for as cash-settled share-based payments.
The fair value of the amount payable to employees is recognised as
an expense, with a corresponding increase in liabilities, over the
period in which the employees become unconditionally entitled to
payment. The liability is remeasured at each balance sheet date and
at settlement date. Any changes in the fair value of the liability
are recognised as personnel expenses in profit or loss.
Provisions
A provision is recognised in the consolidated balance sheet when
the Group has a present legal or constructive obligation as a
result of a past event, that can be reliably measured, and it is
probable that an outflow of economic benefits will be required to
settle the obligation. Provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects risks
specific to the liability.
Revenue
Revenue comprises the fair value of consideration received or
receivable for access to the Induction Switch Platform, the Group's
proprietary application which facilitates communication between
healthcare professionals, in the ordinary course of the Group's
activities. Revenue is shown net of value added tax and trade
discounts and is reported as follows:
Notes to the Condensed Consolidated Interim Financial
Statements
Accounting policies (continued)
-- On a per-user basis whereby users are charged a monthly fee
to access the Induction Platform, with the pricing depending on the
features selected by users. Invoices are issues monthly and settled
via a credit or debit card. Revenue is recognised on a monthly
basis reflecting the period during which they have access to the
Induction Platform.
-- On a healthcare institution basis whereby healthcare
institutions are charged a subscription for making the Induction
Platform available to users. This revenue is recognised rateably
over the period of the subscription.
Expenses
Cost of sales
Cost of sales consists of the direct costs associated with the
Induction Switch Platform, the Group's proprietary application,
including costs incurred for server hosting and data
population.
Operating lease payments
Payments made under operating leases are recognised in the
consolidated income statement on a straight-line basis over the
term of the lease. Lease incentives received are recognised in the
consolidated income statement as an integral part of the total
lease expense.
Financial income
Financing expenses comprise interest payable, finance charges on
shares classified as liabilities and finance leases recognised in
profit or loss using the effective interest method, unwinding of
the discount on provisions, and net foreign exchange losses that
are recognised in the income statement (see foreign currency
accounting policy). Borrowing costs that are directly attributable
to the acquisition, construction or production of an asset that
takes a substantial time to be prepared for use, are capitalised as
part of the cost of that asset. Financial income comprises interest
receivable on loans issued by the Group and is recognised in profit
or loss as it accrues, using the effective interest method. Foreign
currency gains and losses are reported on a net basis.
Taxation
Tax on the profit or loss for the year comprises current and
deferred tax. Tax is recognised in the consolidated income
statement except to the extent that it relates to items recognised
directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the
taxable income or loss for the period, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment
to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: the initial recognition
of goodwill; the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit other than in a
business combination, and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in
the foreseeable future. The amount of deferred tax provided is
based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the temporary difference can be utilised. Deferred tax assets
are reviewed at each reporting date and recognised to the extent
that it has become probable that future taxable profits will be
available against which they can be used.
Notes to the Condensed Consolidated Interim Financial
Statements
Accounting policies (continued)
Adopted IFRS not yet applied
The following Adopted IFRSs have been issued but have not been
applied by the Group in these financial statements. Their adoption
is not expected to have a material effect on the historical
financial information unless otherwise indicated:
-- IFRS 16 Leases (effective date 1 January 2019) - the Group
has no leases which would fall within the scope of IFRS 16.
-- IFRIC 22 Foreign Currency Transactions and Advance
Consideration (effective date to be confirmed).
-- IFRIC 23 Uncertainty over Income Tax Treatments (effective date to be confirmed).
-- Annual Improvements to IFRS Standards 2014-2016 Cycle (effective date to be confirmed).
-- Amendments to IFRS 2: Classification and Measurement of
Share-based Payment Transactions (effective date to be
confirmed).
3. Revenue
30 September 2019 30 September 2018
GBP000 GBP000
Rendering of services - -
Total Revenue - -
4. Financial income
30 September 2019 30 September 2018
GBP000 GBP000
Interest income on unimpaired financial assets 17 -
Total finance income
17 -
----------------- -----------------
Notes to the Condensed Consolidated Interim Financial Statements
- continue
5. Taxation
Reconciliation of effective tax rate
30 September 30 September
2019 2018
GBP000 GBP000
Loss for the period (2,198) (1,030)
Tax using the UK corporation tax rate of 19% 418 196
Non-deductible expenses (2) (1)
Current year losses for which no deferred tax asset was recognised (415) (195)
Total tax expense - -
A deferred tax asset of GBP415,248 arises from unused tax losses
of GBP2,197,773, however given the early stage nature of the
business the deferred tax asset has not been recognised.
6. Earnings per share
The calculation of basic and fully diluted earnings per share
has been based on the following loss attributable to ordinary
shareholders and weighted-average number of ordinary shares
outstanding.
Loss attributable to ordinary shares 30 September 30 September
(basic and diluted) 2019 2018
GBP000 GBP000
Loss attributable to ordinary shares
(basic and diluted) (2,199) (1,031)
(2,199) (1,031)
Weighted average number of ordinary 2019 2018
shares (basic and diluted)
GBP000 GBP000
Issued ordinary shares as at 1 April
2019 (5 March 2018) 66 20
Shares issued on 1 May 2019 (4 September
2018) 1,739 10
Shares issued on 7 May 2019 (5 September
2018) 15,139 36
Shares issued on 22 May 2019 12,682 -
Issued ordinary shares as at 30 September 29,626 66
Weighted-average number of ordinary
shares (basic and diluted) 22,791 26
Basic loss per share (0.10) (40.35)
Diluted loss per share (0.10) (40.35)
Notes to the Condensed Consolidated Interim Financial Statements
- continue
7. Intangible assets
Acquired Intangibles Development costs
GBP000 GBP000
Cost
Balance at 1 April 2019 36 197
Acquisitions 501 214
Balance at 30 September 2019 537 411
Amortisation and impairment
Balance at 1 April 2019 11 -
Amortisation for the year 9 -
Net book value
At 1 April 2019 25 197
At 30 September 2019 517 411
8. Other financial assets
30 September 31 March
2019 2019
GBP000 GBP000
Other financial assets designated
as fair value through profit or loss - 100
- 100
During the Period ended 31 March 2019, the Group entered into an
option to acquire the shares or assets of Podmedics Limited, that
consideration was GBP100,000. On 7 May 2019, Induction Healthcare
Limited and Podmedics Limited entered into a share purchase
agreement pursuant and acquired the entire issued share capital of
Podmedics Limited. The consideration payable under the share
purchase agreement was GBP399,999.90 which was satisfied following
Admission by the issue of Ordinary Shares of the Induction
Healthcare Group PLC. As a result of the acquisition Induction
Healthcare Limited has intangible of GBP493,620.25 as at 30
September 2019, being consideration of cash and shares, stamp duty
and assets acquired from Podmedics Limited which has been amortised
until end of period 30 September 2019.
9. Other receivables
30 September 31 March
2019 2019
GBP000 GBP000
Loans to director and employees - 10
Other receivables 41 102
Prepayments 20 16
61 128
Notes to the Condensed Consolidated Interim Financial Statements
- continue
10. Cash and cash equivalents
30 September 2019 31 March
2019
GBP000 GBP000
Cash and cash equivalents per consolidated balance sheet 13,560 169
------------------ ---------------
Cash and cash equivalents per consolidated cash flow statement 13,560 169
------------------ ---------------
11. Trade and other payables
30 September 2019 31 March
2019
GBP000 GBP000
Trade payables 112 107
Non-trade payables and accrued expenses 254 654
----------------- --------
366 761
Included within trade and other payables is GBPnil expected to
be settled in more than 12 months.
12. Loans and borrowings.
Terms and debt repayment schedule
Nominal interest
Currency rate Year of maturity
30 September 31 March
2019 2019
GBP000 GBP000
Loan from
Director GBP 0% 2019 - 2,500
- 2,500
This note provides information about the contractual terms of
the Group's interest-bearing loan and borrowings, which are
measured at amortised cost. The loan was settled on 4 June 2019,
post Initial Public Offering ("IPO") 22nd May 2019.
Notes to the Condensed Consolidated Interim Financial Statements
- continue
13. Investments in subsidiaries
The Group has the following investments in subsidiaries:
Registered Class Ownership
Company Registered office address number of 2019
shares
held
12, Hammersmith Grove,
Induction Healthcare London, United Kingdom,
Limited W6 7AP 11232772 Ordinary 100%
12, Hammersmith Grove,
Induction Healthcare London, United Kingdom,
(UK) Limited W6 7AP 11237890 Ordinary 100%
Induction Healthcare 23 Regent Street, Prahran,
Pty Ltd Victoria 3181, Australia 625119397 Ordinary 100%
12, Hammersmith Grove,
London, United Kingdom,
Podmedics Limited W6 7AP 06840040 Ordinary 100%
14. Share-based payment
Long Term Incentive Plan
On the admission to the AIM market 22 May 2019, the Group
established the Company Share Option Plan ("CSOP") that awarded
executive directors, management and other employees share options.
The award is granted in the form of share options over ordinary
share of 0.5pence each with the intent of normal vesting after a
minimum period of three years from the date of grant. Vesting is
subject to the achievement of certain performance conditions and
continued services of the participant.
As of 30 September 2019, the Company had awarded 405,821 stock
options under CSOP to management and other employees.
Number of share Contractual life
Grant date options Vesting conditions of options
3 years' service
22-May-19 273,909 of grant 10 years
119,147 3 years' service
01-Sep-19 of grant 10 years
12,765 3 years' service
20-Sep-19 of grant 10 years
405,821
====================================
Notes to the Condensed Consolidated Interim Financial Statements
- continue
15. Subsequent Events
On 6th November 2019, Induction announced the acquisition of
Horizon for total consideration of GBP2,500,000, comprising an
initial payment of GBP1,000,000 and deferred contingent
consideration of up to GBP1,500,000 which can be settled for cash
and Induction shares determined by performance deliverables before
30 September 2020. Horizon owns MicroGuide - a revenue-generating
app providing medical organisations with functionality to create,
edit, and publish their own local medical guidelines in a secure
and locally administrated environment. These guidelines can be
accessed by clinicians, at the point of care, either on a mobile
device or an intranet.
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
IR KMMZMNNLGLZM
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