TIDMKOO
RNS Number : 1166N
Kooth PLC
21 September 2023
21 September 2023
Kooth Plc
("Kooth", the "Company" or the "Group")
Half Year Results
Strategic momentum and revenue growth of 29%
Full year revenue guidance of at least GBP34m
Kooth (AIM: KOO), a global leader in youth digital mental
well-being, announces unaudited half year results for the six
months ended 30 June 2023. All figures relate to this period unless
otherwise stated.
Strategic and post period end highlights
-- Transformational US contract win in California, $188m minimum value
-- On track for California go-live in January 2024, notably with the Kooth mobile app and hires
-- Number one provider of mental health access for children and young people to NHS England
-- Significant uptake of Kooth in Pennsylvania pilot, providing
access to c.100,000 school students
-- Ongoing investment in business development, platform investment and US expansion
Financial Highlights
-- Revenues up 29% to GBP11.7m (2022: GBP9.0m)
-- Annual Recurring Revenue (ARR) up 16% to GBP21.4m (2022: GBP18.5m)
-- Gross margin of 66.8% (2022: 68.4%)
-- Adjusted EBITDA of GBP0.01m (2022: GBP0.5m) reflecting
investment in US setup and business development
-- Recurring Revenue from contracts 12 months or longer 94% (2022: 95%)
-- Robust balance sheet; net cash of GBP5.9m plus successful
gross fundraise of GBP10m post half-year end supports investment
for long-term growth
Outlook
-- Significant opportunity for Kooth in the US driven by the
continued need from both US State governments and Medicaid payers
to invest further in youth mental health
-- For the UK, we expect the headwinds to remain, reflecting a
focus on NHS cost saving and acute care backlog. Our focus remains
on continuing to demonstrate the impact and savings that Kooth
generates when commissioned in a region
-- The Group remains confident of delivering revenue for the
full year in line with our revised market guidance of no less than
GBP34 million
-- Our robust balance sheet enables us to invest to meet
long-term, increasing demand for Kooth's services
Tim Barker, Chief Executive Officer of Kooth, said:
The first six months of 2023 have been a period of significant,
and positive, change for Kooth. In March we announced our largest
contract to date with the State of California which was finalised,
post-period end, as a four year, $188m minimum value agreement.
This marked Kooth's second major engagement in the US, alongside
Pennsylvania, which was agreed in October 2022. During the period,
and over the last 12 months, we have developed a significant
operation in the United States as we look to capture the
opportunity this major healthcare market brings. We look forward to
leveraging our platform to increase the size of our business
further and, more importantly, help improve mental health provision
to as many young people as possible.
In the UK, we are not immune to the broader healthcare and
economic environment, which sees commissioning across the NHS
structure under stress as Integrated Care Systems prioritise a
reduction in costs and tackling an acute mental healthcare backlog.
In response, we have taken proactive steps to position ourselves to
best respond to this environment, including developing new services
to help tackle waiting lists.
I would like to thank our team for their work which has
delivered transformational gains during the period and beyond as we
look to leverage our position as a pioneer and innovator in digital
mental healthcare to deliver the care needed to help tackle the
growing crisis in global mental health.
Financial headlines
Six months Six months Change
ended 30 June ended 30 June
2023 2022
GBP'000 GBP'000
Revenue
Total revenue 11,660 9,022 +29.2%
Annual Recurring Revenue 21,376 18,483 +15.7%
Gross profit 7,788 6,170 +26.2%
Gross margin 66.8% 68.4% -2.3ppt
Adjusted EBITDA 9 539 -98.3%
Profit/(Loss) after tax for
the period (525) (342) -53.5%
Cash generation (2,642) 1,231 -314.6%
Cash position 5,850 8,310 -29.6%
Earnings per share (GBP) (0.02) (0.01) -58.8%
Enquiries
Kooth plc
Tim Barker, CEO investorrelations@kooth.com
Sanjay Jawa, CFO
Panmure Gordon, Nominated Adviser and
Joint Broker
Corporate Finance: Dominic Morley, James
Sinclair-Ford, Daphne Zhang
Corporate Broking: Rupert Dearden, James
Todd +44 (0) 20 7886 2500
Stifel Nicolaus Europe Limited, Joint
Broker
Ben Maddison, Nick Adams, Nicholas Harland,
Richard Short +44 (0) 20 7710 7600
FTI Consulting kooth@fticonsulting.com
Jamie Ricketts, Alex Shaw, Usama Ali
About Kooth
Kooth (AIM:KOO) is a global leader in youth digital mental
well-being. Our mission is to provide accessible and safe spaces
for everyone to achieve better mental health. Our platform is
clinically robust and accredited to provide a range of therapeutic
support and interventions. All our services are predicated on easy
access to make early intervention and prevention a reality.
Our three services are:
-- Kooth: for children and young people
-- Kooth: for adults
-- Kooth Work: for frontline employees
Kooth is a fully safeguarded and pre-moderated community with a
library of peer and professional created content, alongside access
to experienced online counsellors. There are no thresholds for
support and no waiting lists. Currently, Kooth sees more than 4,000
logins a day.
Kooth is the only digital mental health provider to hold a
UK-wide accreditation from the British Association of Counselling
and Psychotherapy (BACP) and according to NHS England data for
2021/22 is now the largest single access provider for mental health
support for under 18s.
In 2021, Kooth began executing on its international expansion
strategy, with an initial focus on the US market. This focus is due
to the growing recognition of the importance of improving youth
mental health in this key global healthcare market, with 1-in-6
people aged 6-17 experiencing a mental health disorder each year.
Kooth's first major pilot contract in the US was signed in October
2022 with the State of Pennsylvania followed in July 2023 by a
four-year contract to cover all six million 13-25 year-olds in the
State of California.
Chief Executive's Review
Transformational strategic progress
With the award of a $188m four-year state-wide contract with
California, the last six months demonstrate the significant
opportunity for Kooth in the US as federal and state governments
invest to transform youth mental health care.
As one of the work streams within the State of California's $4.7
billion youth masterplan, this investment arguably represents the
world's most progressive initiative to improve youth mental health.
This was evident at the September UN Congress General Assembly
meeting, to which Kooth was invited. The key question is "how"
rather than "if" this problem should be addressed. We remain deeply
humbled to be entrusted with the opportunity to be at the forefront
of supporting a landmark programme in the most populous state in
the US, in what we believe will be a template for future
governments and health care systems on how to safeguard the mental
health of the next generation.
I have been very proud to see how our whole team has stepped up
to the opportunity in California, with both the work undertaken to
win the contract in March and then subsequently the shift into the
delivery phase. This is hard but purposeful work across 30
workstreams spanning the development of our next-generation
platform, marketing and promotion strategy, as well as building our
workforce and organisational infrastructure.
We are on track for the launch of our contract in California in
January 2024, with all major milestones and deliverables to date
met:
- All our US VP-level hires are in place to support go-live,
with talent joining the existing team from organisations including
Headspace, Crisis Text Line and Oracle Cerner. Hiring for other
roles is broadly on track, with Kooth's fiscal rigour, transparency
and growth as a public company adding appeal to candidates, in a
market where many VC backed organisations are shedding staff to
reduce cash burn.
- A beta version of Kooth's new mobile app is live in two
counties in California as part of a 'soft launch' test. Over the
next few months we will be adding, iterating, and gathering
feedback from young people to help optimise the app and experience
ahead of go-live in January.
Beyond California, our pilot project in Pennsylvania reached a
significant milestone with almost 100,000 students having access to
Kooth in the school year, with 1 in 10 high school students having
used the platform, an uptake which surpassed our expectations based
on our UK experience.
In the UK, following on from the reorganisation of NHS England
from 135 Care Commissioning Groups into 42 Integrated Care Systems
("ICSs"), the headwinds in commissioning remain challenging, as
ICSs adapt to a new funding environment. In 2023/24, ICSs must
deliver 6% in real term efficiency savings, at a time when there is
a 16% annual increase in demand for mental health support.
While Kooth is an advocate for digital transformation to address
this challenge, we have seen Commissioners faced with tough
short-term decisions to divert funds into acute care and reduce
investments elsewhere. This is a challenge being experienced across
the industry and is not unique to Kooth. While we have seen an
increase in contracts that expand upon renewal to 52% (2022: 32%),
gains were offset by GBP2.4m of churn, a combination of funding
unavailable to continue pilot contracts, reductions as contracts
consolidated and increased competition. Overall net revenue
retention was 100% (2022: 107%).
In response to the current commissioning environment, we have
used our market leading position to take action and better position
ourselves for the future:
-- We have restructured our commercial team with a focus on
adding seniority and stakeholder management to engage NHS
commissioners and Integrated Care Boards ("ICBs").
-- We have grown and invested further in both our
commissioner-marketing and user-marketing teams.
-- We have launched an Integrated Digital Pathway ("IDP")
service to help reduce pressure on CAMHS and IAPT services by
providing support to individuals while on a waiting list, with the
goal of discharging individuals if appropriate, or preventing
further deterioration while awaiting treatment. We are currently
piloting this unique service in two regions.
Management believes that these actions will help Kooth respond
to the long-term opportunity that remains in helping ICSs to
deliver on their vision to transform healthcare services, focus on
prevention, and support the population health of their regions.
Kooth Adult (UK)
As a result of the pressures described above, our Kooth Adult
services have been impacted more so than our service for children
and young people, with ARR standing at GBP2.6m (FY2022: GBP3.0m).
This is primarily due to newer contracts not being continued after
a first year of piloting, as local commissioners seek to make
budget available for acute service delivery.
Kooth Children and Young People (UK)
In contrast to the challenging commissioning environment in
England, Kooth continues to expand in Scotland with new commissions
in East Ayrshire, Inverclyde and North Lanarkshire.
From a product/service perspective, we anticipate strong
interest from both children and young people, and commissioners in
learning how our enhanced platform could better serve their needs.
When California is live we intend to use this showcase to better
demonstrate the step change that is possible through digital
transformation in delivering a population-wide mental health
strategy.
Current trading and outlook
Kooth will continue to invest significantly in its technology
platform, systems and talent to deliver on our next generation
platform for California. We will then bring these innovations to
all US and UK customers to deliver enhanced support for all.
We continue to see both US State governments and Medicaid payers
recognise the need to invest further in youth mental health and are
optimistic about the significant opportunity that Kooth has in the
US. For the UK, we expect the current situation to remain for some
time, with our focus being on continuing to demonstrate the impact
and savings that result when Kooth is commissioned in a region.
The Group remains confident of delivering revenue for the full
year in line with our revised market guidance of no less than GBP34
million.
Our robust balance sheet enables us to invest to meet long-term,
increasing demand for Kooth's services. We will continue this
investment in our talent and technology to enable us to scale up to
tackle what is one of the world's biggest challenges.
Tim Barker
Chief Executive
Chief Financial Officer's review
Kooth delivered a strong performance in the period supported by
an increase across revenue and annual recurring revenue, a good
gross margin as well as continuing to invest in our platform and
the business for the half year ended 30 June 2023 as compared to
the six months ended 30 June 2022.
Key Performance Indicators
Total Revenue
GBP11.7m GBP9.0m GBP8.0m GBP5.9m
H1 2023 H1 2022 H1 2021 H1 2020
As we continue to invest in and grow our business, revenue
growth demonstrates the progress we are making.
Annual Recurring Revenue
GBP21.4m GBP18.5m GBP16.6m GBP13.1m
H1 2023 H1 2022 H1 2021 H1 2020
Annual Recurring Revenue ("ARR") is the annualised revenue of
customers engaged or closed as at the period end and is an
indication of the upcoming annual value of the recurring revenue.
This is used by management to monitor the long term revenue growth
of the business.
Gross Margin
66.8% 68.4% 69.4% 69.6%
H1 2023 H1 2022 H1 2021 H1 2020
Gross Profit as a percentage of revenue. Direct costs are the
costs of our practitioners directly involved in the delivery of our
services.
Adjusted EBITDA
GBP0.0m GBP0.5m GBP1.1m GBP0.5m
H1 2023 H1 2022 H1 2021 H1 2020
Earnings before interest, tax, depreciation and amortisation in
the period, adjusted for share based payments and exceptional
costs. This metric provides a more comparable indication of the
Group's core business performance by removing the impact of
non-trading items that are reported separately.
Number of customers
149 141 142 104
H1 2023 H1 2022 H1 2021 H1 2020
The total number of live contracts with customers. As the NHS
finalised the consolidation from 135 Clinical Commissioning Groups
to 42 Integrated Care Systems in the last year, we are seeing a
shift to fewer, larger contracts spanning the whole population
within an ICS region.
Service user logins
1.4m 1.4m 1.2m 1.0m
H1 2023 H1 2022 H1 2021 H1 2020
The number of logins to Kooth from users, demonstrating uptake
of our service.
Revenue
Revenue increased by 29% to GBP11.7m (2022 H1: GBP9.0m), Annual
Recurring Revenue grew by 16% to GBP21.4m (2022 H1: GBP18.5m), with
ten new contracts won in the first half of 2023. The revenue
increase is predominantly attributable to US revenue of GBP1.8m in
H1 2023 (2022 H1: GBPNil) where we now have three contracts and
included non-recurring revenue from the state of California for
one-off research and pilot study work. This led to a slight
decrease in recurring revenue (which comprises income invoiced for
services that are repeatable, consumed and delivered on a monthly
basis over the term of a customer contract) as a percentage of
overall revenue from 95% to 94%.
Churn was 13% giving net revenue retention (measured by the
total value of on-going ARR at the period-end from clients in place
12 months earlier as a percentage of the opening ARR from those
clients) for the period to 30 June 2023 of 100%. This has decreased
from 107% recorded in H1 2022 which is a result of an increase in
churn within our English contracts where we are seeing the impact
of funding being redirected to more acute care, a resizing of pilot
adult contracts and a slowdown in uplifts as well as budgetary
pressures as the NHS transitioned from a CCG to ICS structure.
Gross Profit
Gross Profit increased 26% from GBP6.2m to GBP7.8m with gross
margin slightly down at 66.8% (2022 H1: 68.4%). Direct costs are
the costs of the practitioners directly involved in the delivery of
our services, a total of 251 at the period-end (2022 H1: 213
heads). Gross margin dropped in the UK as salary increases at the
start of 2023 reflected inflationary pressures and we took a
decision to enhance contract performance for the protection of
longer-term growth. These were partially offset by the end of the
1.25% Health and Social Care Levy and a positive mix impact as our
new US contracts ramped up.
Adjusted EBITDA
Adjusted EBITDA in the period decreased from GBP0.5m to GBP0.01m
with an increased gross profit offset by a 38% increase in
administrative expenses (excluding amortisation, depreciation and
share based payments). Whilst UK costs increased in line with
salary inflation and revenue growth requiring increased promotion
spend, the majority of the increase related to the build out of the
US teams supporting our Pennsylvania and California contracts.
The total charge for share based payments in the period was
GBP0.4m (2022 H1: GBP0.02m). The increase reflects the annual issue
of three year grants to all staff and a credit in 2022 following a
reassessment of those grants subject to performance criteria.
Depreciation and amortisation increased to GBP1.5m (2022 H1
GBP1.1m) as capital expenditure commenced on the US platform
build.
Taxation
The overall tax credit for the six months ended 30 June 2023
(GBP1.2m) and 2022 (GBP0.2m) relate to Research and Development
expenditure credits in addition to the movement in the deferred tax
asset with the increase reflecting greater R&D spend and an
increase in the effective tax rate on losses.
Loss after tax
The Group loss after tax for the period was GBP0.5m (2022 H1:
GBP0.3m).
Balance Sheet
The strength of the Group's balance sheet with net assets of
GBP10.6m (30 June 2022: GBP10.6m), plus a successful gross
fundraise of GBP10m post half year end, and high levels of
recurring revenue provide the Group with financial strength to
execute on its investment strategy which continues to focus on US
business development and platform investment.
Cash flow and financing
Cash outflow during the six months was GBP2.6m (2022 H1: GBP1.2m
inflow). The focus on US platform investment gave rise to capital
expenditure of GBP3.5m (2022 H1: GBP1.3m), offset by cash inflows
from operating activities of GBP0.8m including receipt of an
R&D government tax credit of GBP0.6m giving a net cash position
at 30 June 2023 of GBP5.9m (2022 H1: GBP8.3m).
The Group remains debt free.
Forward-looking statements
Certain statements in this half year report are forward looking.
Although the Group believes that the expectations reflected in
these forward-looking statements are reasonable, it can give no
assurance that these expectations will prove to have been correct.
Because these statements involve risks and uncertainties, actual
results may differ materially from those expressed or implied by
these forward-looking statements.
Dividends
The Group's intention in the short to medium term is to invest
in order to deliver capital growth for shareholders. The Board has
not recommended an interim dividend payment in respect of the six
months ended 30 June 2023 (2022: GBPnil) and does not anticipate
recommending a dividend within the next year but may do so in
future years.
Sanjay Jawa
Chief Financial Officer
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2023
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2023 2022 2022
Note Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Revenue 8 11,660 9,022 20,120
Cost of sales (3,872) (2,852) (6,265)
Gross profit 7,788 6,170 13,855
Administrative expenses (9,606) (6,758) (14,767)
Operating loss (1,818) (588) (912)
Analysed as:
Adjusted EBITDA 9 539 1,612
Depreciation & amortisation 11 (1,451) (1,109) (2,232)
Share based payment expense (376) (18) (292)
Operating loss (1,818) (588) (912)
------------------------------- ---- -------------- -------------- ------------
Interest income 91 17 81
Loss before tax (1,727) (571) (831)
Tax 9 1,202 229 115
Total comprehensive loss for
the period (525) (342) (716)
-------------- -------------- ------------
Loss per share - basic (GBP) 10 (0.02) (0.01) (0.02)
Loss per share - diluted (GBP) 10 (0.02) (0.01) (0.02)
Condensed Consolidated Balance Sheet
As at 30 June 2023
31 December
30 June 2023 30 June 2022 2022
Note Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Goodwill 511 511 511
Development costs 11 5,794 3,075 3,681
Right of use asset 53 - 68
Property, plant and equipment 150 96 122
Deferred tax asset 1,626 420 -
Total non-current assets 8,134 4,102 4,382
Current assets
Trade and other receivables 12 2,355 2,632 2,618
Contract assets 180 426 649
Cash and cash equivalents 5,850 8,310 8,492
Total current assets 8,385 11,368 11,759
Total assets 16,519 15,470 16,141
Liabilities
Current liabilities
Trade payables (1,047) (331) (680)
Contract liabilities (3,096) (2,797) (2,583)
Lease liability (54) - (68)
Accruals and other creditors (913) (737) (977)
Deferred tax liabilities - - (348)
Tax liabilities (769) (956) (967)
Total current liabilities (5,879) (4,821) (5,623)
Net current assets 2,506 6,547 6,136
Net assets 10,640 10,649 10,518
------------ ------------ -----------
Equity
Share capital 1,653 1,653 1,653
Share premium account 14,229 14,229 14,229
Retained earnings (3,120) (2,221) (2,595)
Share-based payment reserve 1,867 977 1,221
Capital redemption reserve 115 115 115
Merger reserve (4,104) (4,104) (4,104)
Total equity 10,640 10,649 10,518
------------ ------------ -----------
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2023
Six months Six months Year ended
ended 30 ended 30 31 December
June 2023 June 2022 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Loss for the period (525) (342) (716)
Adjusted for:
Depreciation & amortisation 1,451 1,109 2,232
Income tax received 569 330 330
Share based payment expense 376 18 292
Tax income recognised (1,202) (229) (115)
Interest income (91) - (81)
Movements in working capital:
(Increase) / decrease in trade and other
receivables 651 (369) 78
Increase / (decrease) in trade and other
payables (384) 2,009 2,364
---------- ---------- ------------
Net cashflow from operating activities 845 2,527 4,384
Cash flows from investing activities
Purchase of property, plant and equipment (70) (28) (100)
Additions to intangible assets (3,508) (1,268) (2,952)
---------- ---------- ------------
Net cash used in investing activities (3,578) (1,296) (3,052)
Cash flows from financing activities
Interest income 91 - 81
---------- ---------- ------------
Net cash from financing activities 91 - 81
Net increase / (decrease) in cash and
cash equivalents (2,642) 1,231 1,413
Cash and cash equivalents at the beginning
of the period 8,492 7,079 7,079
---------- ---------- ------------
Cash and cash equivalents at the end
of the period 5,850 8,310 8,492
---------- ---------- ------------
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2023
Share Share Share Retained Capital Merger Total
Capital Premium Based earnings Redemption reserve Equity
Payment Reserve
Reserve
Balance at 1 January 2022 1,653 14,229 959 (1,879) 115 (4,104) 10,973
Share based payments - - 18 - - - 18
Total comprehensive income
for the period - - - (342) - - (342)
-------- -------- -------- --------- ----------- -------- -------
As at 30 June 2022 1,653 14,229 977 (2,221) 115 (4,104) 10,649
Balance at 1 July 2022 1,653 14,229 977 (2,221) 115 (4,104) 10,649
Share based payments - - 244 - - - 244
Total comprehensive income
for the period - - - (374) - - (374)
-------- -------- -------- --------- ----------- -------- -------
As at 31 December 2022 1,653 14,229 1,221 (2,595) 115 (4,104) 10,519
Balance at 1 January 2023 1,653 14,229 1,221 (2,595) 115 (4,104) 10,519
Share based payments - - 646 - - - 646
Total comprehensive income
for the period - - - (525) - - (525)
-------- -------- -------- --------- ----------- -------- -------
As at 30 June 2023 1,653 14,229 1,867 (3,120) 115 (4,104) 10,640
Notes to the half year financial statements
1. General information
The unaudited interim consolidated financial statements for the
six months ended 30 June 2023 and the six months ended 30 June 2022
do not constitute statutory accounts within the meaning of Section
434 of the Companies Act 2006. Statutory accounts for the year
ended 31 December 2022 were approved by the Board of Directors on 3
April 2023 and delivered to the Registrar of Companies. The
auditor's report on those accounts was unqualified, did not contain
an emphasis of matter paragraph and did not contain any statement
under Section 498 (2) or (3) of the Companies Act 2006.
These condensed half year financial statements were approved for
issue by the Board of Directors on 21 September 2023.
2. Basis of preparation
This unaudited condensed consolidated financial information
which incorporate the financial information of the Group, have been
prepared in accordance with Accounting Standard IAS 34 'Interim
Financial Reporting' as contained in UK - adopted International
Accounting Standards and IFRIC interpretations and with those parts
of the Companies Act 2006 applicable to companies reporting under
IFRS.
The interim condensed consolidated financial statements do not
include all the information and disclosures required in the annual
financial statements and should be read in conjunction with the
Group's annual consolidated financial statements prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 for the year ended
31 December 2022.
Trading for the half year ended 30 June 2023 is aligned with the
Board's expectations, and expectations for the full year remain
unchanged. Further details are given in the CEO's overview, the
operational review and the financial review.
The Group is in a net asset position of GBP10.6m as at 30 June
2023 (2022: net assets of GBP10.6m) and has no debt facilities in
place. Management have prepared forecasts up until 12 months from
the date of approval of these financial statements which have been
approved by the Board, and after enquiry and review of these
forecasts and other available financial information, the Directors
have formed the conclusion that the Group has adequate resources to
continue to operate for the foreseeable future and that it is
therefore appropriate to continue to adopt the going concern basis
of accounting in the preparation of these interim condensed
consolidated half year financial statements.
The financial information is presented in sterling, which is the
functional currency of Kooth plc. All financial information
presented has been rounded to the nearest thousand.
3. Accounting policies
The accounting policies applied in these interim financial
statements are the same as those applied in the Group's annual
report and accounts for the year ended 31 December 2022.
Current taxes on income in the half year period are accrued
using the tax rates that would be applicable to expected total
annual profits. Deferred taxes on income are calculated based on
the standard rates that are enacted as at the balance sheet date
.
4. Critical accounting judgements and key sources of estimation
uncertainty
Any critical accounting judgements and key sources of estimation
uncertainty that carry a significant risk of material change to the
carrying value of assets and liabilities within the next year are
the same as those applied in the 2022 Group Annual Report.
5. Principal risks and uncertainties
The 2022 Group annual report and accounts describes the
principal risks and uncertainties that could impact the Group's
performance. These risks primarily relate to system outages,
safeguarding incidents, cyber security and data protection and
clinical safety. These remain unchanged since the annual report was
published and are not expected to change for the remaining six
months of the financial year.
The Group actively manages these risks through risk management
procedures and actions are taken to mitigate risk wherever
possible.
6. Financial risk management
The Group is exposed to financial risks including market risk,
currency risk, credit risk and liquidity risk.
These interim condensed consolidated financial statements do not
include all financial risk management information and disclosures
required in the annual financial statements and therefore should be
read in conjunction with the 2022 Group annual report and
accounts.
7. Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the executive directors that make
strategic decisions. Kooth plc opened its first international
subsidiary in the USA at the start of 2022. The Group won a
contract with Pennsylvania Department of Human Services in
September 2022 and a contract with the Department of Healthcare
Services in California which was finalised in July 2023, and
launches at the start of 2024. Segmental reporting of the USA
operation is not deemed appropriate at this stage as operations
remain relatively small in comparison to UK operations. Segmental
reporting may be deemed to be appropriate for the full year 2023
results.
8. Revenue analysis
Revenue relates to the provision of online counselling
services.
Six months Six months Year ended
ended 30 ended 30 31 December
June 2023 June 2022 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Provision of online counselling
- UK 9,817 9,022 18,648
Provision of online counselling
- US 1,843 - 1,472
---------- ---------- ------------
11,660 9,022 20,120
---------- ---------- ------------
9. Taxation
The income tax credit recognised of GBP1.2m (2022 H1: GBP0.2m)
reflects management's estimate of the tax credit for the current
period. This calculation takes into consideration the estimated
taxable loss incurred from operational activities during the
period, as well as additional relief under the UK R&D scheme.
The assessment utilises the average UK corporation tax rate for the
current financial year of 23.5% (2022: 19%).
10. Earnings per share (EPS)
The calculation of basic and diluted EPS is based on the
following earnings and number of shares:
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2023 2022 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Earnings used in calculation of earnings
per share
Loss for the purposes of basic and
diluted loss per share being net loss
attributable to owners of the Company (525) (342) (716)
Number of shares
Weighted average number of ordinary
shares for the purposes of basic and
diluted earnings per share 33,055,776 33,055,776 33,055,776
Loss per share (GBP) (0.02) (0.01) (0.02)
The loss per ordinary share and diluted loss per share are equal
because share options are only included in the calculation of
diluted earnings per share if their issue would decrease the net
profit per share. The number of potentially dilutive shares not
included in the calculation above due to being anti-dilutive in the
periods presented was 1,943,400 (2022 H1: 1,011,867).
11. Development costs
GBP'000
Cost
At 1 January 2022 7,363
Additions 1,268
At 30 June 2022 8,631
Additions 1,684
At 31 December 2022 10,315
Additions 3,508
-------
At 30 June 2023 13,823
-------
Amortisation
At 1 January 2022 (4,496)
Amortisation (1,060)
At 30 June 2022 (5,556)
Amortisation (1,078)
At 31 December 2022 (6,634)
Amortisation (1,395)
-------
At 30 June 2023 (8,029)
-------
Carrying amount
At 1 January 2022 2,867
At 30 June 2022 3,075
At 31 December 2022 3,681
-------
At 30 June 2023 5,794
-------
12. Trade and other receivables
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2023 2022 2022
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Trade receivables 1,767 1,909 1,110
Prepayments and other receivables 588 723 1,508
-------------- -------------- ------------
2,355 2,632 2,618
-------------- -------------- ------------
All amounts shown above are short term. The net carrying value
of trade receivables is considered a reasonable approximation of
fair value.
13. Post balance sheet events
A significant four year US contract was finalised in July 2023
with the Department of Healthcare Services of California for a
minimum net revenue value of $188m.
In July 2023, the Group completed an equity fundraise with gross
proceeds of GBP10m to accelerate investment within the
business.
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END
IR BUGDCUXDDGXG
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