INSPIRATION HEALTHCARE GROUP PLC

Earnings Release • May 3, 2017

National Storage Mechanism | Additional information

You don't have Javascript enabled. For full functionality this page requires javascript to be enabled.

RNS Number : 9695D

Inspiration Healthcare Group PLC

03 May 2017

Inspiration Healthcare Group plc

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

Preliminary Results for the year ended 31 January 2017

Inspiration Healthcare Group plc (AIM: IHC), the global medical device company, today announces its preliminary results for the twelve months ended 31 January 2017.

Highlights:

·      Revenue increased by 9.4 % to £14.3 million

·      International revenue up by 9.9%

·      Domestic revenue increased by 9.1%

·      R&D spend up to 4.4% of revenue

·      Inditherm product manufacturing outsourced

·      Rotherham factory closed

·      New corporate head office opened in Crawley

Commenting on the results, Neil Campbell, Chief Executive Officer of Inspiration Healthcare Group plc, said:

"Our growth in the year ending January 2017 is extremely pleasing, and in line with expectations, maintaining the momentum of the private company as we transitioned fully into a public traded company.  To have achieved this at the same time as restructuring the company is a credit to the whole team.  We have prioritised our product development and will continue to invest in our infrastructure, staff and management systems to grow our business and realise its full potential."

Enquiries:

Inspiration Healthcare Group plc Neil Campbell, Chief Executive Officer Mike Briant, Chief Financial Officer	Tel: 01455 840555
Nominated Adviser & Broker Cenkos Securities plc Bobbie Hilliam (NOMAD)	Tel: 0207 397 8900
Cadogan PR                                                                                          Alex Walters	Tel: 07771 713608

About Inspiration Healthcare

Inspiration Healthcare (AIM: IHC) is a global supplier of medical technology for critical care, operating theatre and home healthcare. The Company provides high quality innovative products to patients and caregivers around the world that help to improve patient outcomes and efficiencies of healthcare organisations with patient focused customer service and technical support.

The Company's own brand of critical care solutions span non-invasive respiratory management, thermoregulation and diagnostics, and patient warming for newborns through to adults in intensive care and the operating theatre, whilst the distribution business supplies solutions to support specialised surgical procedures and infusion therapies.

Present in over 50 countries worldwide, Inspiration Healthcare's success has been built on continuous innovation, excellent customer service and an inherent commitment to improving the quality of life of patients, working in close collaboration with key opinion leaders and stakeholders in the clinical and medical community across the globe.

Chairman's Report

A year ago I introduced the first annual report of a newly merged Group, Inspiration Healthcare Group plc. This year I am delighted to report on the excellent progress that has been made across the Group in its first full year of trading.

The Group's revenue increased to £14.3 million for the year ended 31 January 2017 ("2017") (2016: £13.1 million), a rise of 9.4% over last year. The increase is measured against the 2016 revenue shown in the unaudited Proforma Consolidated Income Statement set out overleaf (and included in last year's annual report) as it is used for comparison by the Board, representing 12 months of trading of both Inspiration Healthcare Limited and Inditherm plc for 2016.

As a result of the reverse acquisition of Inditherm plc by Inspiration Healthcare Limited, the statutory basis for reporting results for the year ended 31 January 2016 ("2016") showed revenue of £12.3 million and thus reported revenue growth for 2017 is 16.7%.

Compared to the statutory results for 2016, the unaudited Proforma Consolidated Income Statement set out overleaf, includes an additional 20 weeks of Inditherm plc's results prior to the reverse acquisition which has the impact on 2016 of increasing revenue by £0.8 million and reducing the operating profit before impairment charges and exceptional items by £0.2 million.

	Proforma Consolidated Income Statement (unaudited)
			Actual	Proforma
			2017	2016
			£'000	£'000
	Revenue		14,323	13,096
	Cost of sales		(7,965)	(7,118)
	Gross profit		6,358	5,978
	Operating expenses		(5,913)	(6,553)
	Other income		-	295
	Operating profit/(loss)		445	(280)
	Analysed as:
	Operating profit before impairment of goodwill and intangible
	Assets arising on acquisition and exceptional items		1,163	1,109
	Impairment of goodwill and intangible assets		-	(517)
	Exceptional items		(718)	(872)
	Operating profit/(loss)		445	(280)
	Net Finance (Expense) / Income		(1)	3
	Profit/(loss) on ordinary activities before		444	(276)
	Income tax expense		(132)	(136)
	Profit/(loss) for the year attributable to owners of the parent company		312	(412)
	Earnings per share before impairment of goodwill and intangible assets arising on acquisition and exceptional items, attributable to the owners of the parent company during the period - basic and diluted		3.4	3.4

Adjusted earnings per share is included as, in the opinion of the Directors, this will allow shareholders to gain a clearer understanding of the trading performance of the Group for the period.

It is pleasing that good sales growth was achieved both Domestically (UK and Ireland) and Internationally, at 9.1% and 9.9%, respectively (on a proforma basis). Sales continue to do well in the USA with our Tecotherm product and our Inspire nCPAP range continues to grow around the world using our distribution partners and strategic alliances.

The main fall-out from Brexit was the volatility of exchange rates which has impacted our cost of goods, particularly of distributed products. However, we have been able to take some actions to partly mitigate the impact: including selective price increases, renegotiating purchase prices as well as benefiting from currency movements on international sales. The net result for the Group has been a slight decline in gross margin.

Our 2017 Operating Profit (before exceptional items) at £1.2m was in line with expectations and reflects an increase on the 2016 Proforma Operating Income of 5%.

The first full year results as a combined entity reflect a continuation of the sales momentum from the privately held company and we expect this to continue throughout next year, albeit we face headwinds in our growth programme as a tougher regulatory environment will slow new product introductions.

Regulatory standards for Medical Device companies have continued to become more stringent over recent years. Patient safety is paramount and underpins everything we do. The exhaustive testing for verification and validation of innovative new products is necessary to ensure the safety of our products. The Group will be making further investments in Regulatory Affairs and R&D resources to increase our capacity to meet the heightened regulatory requirements and minimise any impact on speed to market of new products.

During the year, we were delighted to attract some significant new shareholders to the business, following a secondary placement by the founder shareholders. The founder Director shareholders still retain 28% of the shares.

It was a sad moment when we closed the manufacturing facility in South Yorkshire and it is a testament to the staff that were affected, who remained loyal and professional throughout the process. On behalf of the Board I would like to thank them for this and wish them well for the future. We remain convinced that this was an important and correct decision and we will benefit from outsourced manufacturing giving greater flexibility in the future.

Employees

We are delighted to report that we are a Living Wage employer, accredited by the Living Wage Foundation. The Living Wage Foundation recognises employers that pay all employees at or above an hourly rate calculated based on the cost of living in the UK.

We are committed to attracting, retaining, engaging and developing the best people. We know that creating and sustaining an inclusive work environment is critically important, offering equal opportunity from the Boardroom down regardless of race, gender, gender identity or reassignment, age, disability, religion or sexual orientation.

We have continued our policy of retaining our loyal staff through the short-term peaks and troughs of demand. We acknowledge the hard work and endeavour from our staff and on behalf of the Board, I thank them most sincerely for their continued support.

Looking forward

This year, we believe we will benefit from the marketing groundwork on our products focused around birth and the first few moments of life, along with new products in development that should reach the market.

We intend to strengthen our internal resources and invest in our systems and processes to keep pace with the greater regulatory requirements referred to above in order to enhance our platform for future growth. Accordingly, we expect some additional expenses going forward and that some sales will move from the first half to the second half.

The impact of Brexit and the value of sterling still presents some challenges to a company of our size that both imports and exports goods. Our cash reserves and cash collection remain strong and we believe that we are well positioned for the year ahead.

Our expectations for underlying full year growth remain robust and unchanged albeit new product growth will inevitably be slowed as explained above. Notwithstanding the additional revenue investment, we plan to maintain our returns on a growing revenue line.

Mark Abrahams

Chairman

3 May 2017

Operating and Financial Review*

Our revenue grew by 9.4% during the year ended 31 January 2017 ("2017") with good growth being achieved both domestically and internationally.

Operating profit before impairment charges and exceptional items was £1.2 million (2016: £1.1 million on a proforma basis) and in line with expectations. Underlying operating margin for 2017 was 8.1% (2016: 8.5%). Profit after tax was £0.3 million, up £0.7 million on 2016. Adjusted EPS** was constant at 3.4p per share.

On a statutory basis reported operating profit was £0.4 million for the year (2016: £0.1 million) with operating profit before exceptional items of £1.2 million (2016: before impairment charges and exceptional items, £1.3 million). Profit after tax increased by £0.3 million from 2016. Adjusted EPS** declined from 4.1p to 3.4p as the statutory results for 2016 do not include a full year of trading losses of Inditherm plc.

Revenue

From a revenue perspective, the overall performance of the Group was in line with expectations at £14.3 million (2016: £13.1 million), an increase of 9.4%. Domestic revenue growth was 9.1% and international revenue grew by 9.9%. On a statutory basis 2016 revenue was £12.3 million.

Critical Care

(£10.0 million, +11% year on year)

Our Critical Care business grew strongly with domestic sales up 10.4% and international sales up 13.0%. The re- organisation of the UK salesforce in 2016 to create a dedicated team including a full time Critical Care sales manager has reaped benefits and underpinned the sales growth in this division. Whereas the Domestic market is particularly important to us in our distribution model, the real growth from our own products in the longer term will be attained internationally. During the financial year, we have made strong progress in both North America and Europe.

Our Technical Support department has contracts with NHS Trusts for planned preventative maintenance. Additionally, we also carry out ad hoc repairs chargeable by the hour and supply spare parts. Technical Support is a core part of our business, which adds value to distribution and helps differentiate us from competitors. Our service offering includes 24/7 emergency hire of life support equipment. Service revenues increased 17% year on year.

Operating Theatre

(£1.9 million, -5% year on year)

Our Operating Theatre business includes the original Inditherm surgical warming products as well as some distributed products in the UK that can add value to customers in this area. As expected, the performance reflects a slight decline in revenue for the products acquired from Inditherm in the reverse takeover in 2015 as we restructured this area of the business. Not only have we rationalised the product range to improve manufacturing efficiency, outsourcing production and closing our Rotherham facility towards the end of the year, we also commenced the repositioning of the pricing proposition. By challenging the commercial offering in the UK to offer longer term managed service contracts, thus generating recurring revenue over three years or more rather than an outright one-off sale, we can access NHS revenue budgets.

We expect to continue to increase the customer base and long term revenue as we continue to roll out this new offering to the NHS. We have been extremely pleased in the interest from new and existing customers who were previously unable to secure the large initial capital funding to proceed with our offering. Removing this barrier has significantly strengthened our position in this ever-competitive price sensitive market.

*In the Operational and Financial Review, all comparatives to 2016 are, unless otherwise stated, to the unaudited Proforma Consolidated Income Statement for 2016 ("Proforma") as set out in the Chairman's Report. The Proforma has the impact on 2016 of increasing revenue by £0.8 million and reducing operating profit (before impairment charges and exceptional items) by £0.2 million.

**EPS before impairment charges and exceptional items

Home Healthcare

(£2.4 million, +14% year on year)

We continue to see growth in our parenteral feeding product offering sharing experience with other infusion based products in the portfolio.

The industrial business of Inditherm has made a small contribution to this segment in 2017, but following a strategic review of the business, the decision to close the Rotherham facility during the year resulted in this business being discontinued.

Gross Profit

Gross Profit at £6.4 million increased by 6.4% over 2016 (£6.0 million). Gross margin declined to 44% from 46% due to the impact of exchange rate movements between Sterling and the Euro since "Brexit". This adversely impacted the gross margin of Distributed products which are sourced in Euro and largely sold domestically in Sterling. Some mitigation of the impact of exchange rates was achieved through selected price increases and supplier negotiations. Gross margins of Inspiration Branded products have held up well.

Operating Expenses

The year on year increase in operating expenses (before impairment charges and exceptional items) of £0.5 million is primarily due to higher investment in people-related  costs  to  strengthen  Sales and Marketing. Operating expenses (before impairment charges and exceptional items) amounted to 36.3% of revenue, improved from 37.2% in 2016.

Other Income

Other income was £nil in 2017 compared to £0.3 million in 2016, all of which related to one-time grant income received during that year. The Company will seek to apply for grants as and when the opportunity arises and the qualifying conditions can be met without compromising the direction or timing of the R&D project.

Exceptional Items

The Group presents certain items as exceptional items that are non-recurring and significant. These relate to items which, in the Board's judgement, need to be disclosed by virtue of their size and incidence in order to obtain a more meaningful understanding of the financial information. The exceptional items reported in 2017 consist of £0.1 million of severance costs following the change of Group Finance Director and £0.6 million for the closure of the Rotherham facility and associated impacts. See note 4 for more detail.

Taxation

The Group has recorded an income tax expense of £132,000 (2016: £136,000). For more detail see note 5.

Cashflow

The year-end cash and cash equivalents reduced to £2.2 million from £2.3 million in 2016. Cash generated from operations of £0.8 million was offset by payment of taxation £0.2 million and investing activities of £0.7 million. The primary areas of investment activity related to property, plant and equipment £0.3 million, including the new Corporate Head Office in Crawley, and £0.3 million of capitalised research and development expenditure.

Review of Business and Future Developments

On a Group basis the future prospects are set out in the Chairman's Report above. Due to the change in the structure of the business following the reverse acquisition during the year ended 31 January 2016 the Directors have included within the Chairman's Report a 12 month Proforma Consolidated Income Statement (unaudited) for 2016 as a comparison of performance to 2017. This comparison for 2016 is used by the Board as the basis for comparisons of financial performance for the year. The Board believes that overall the Annual Accounts and Consolidated Financial Statements are fair, balanced and understandable.

Share Price during the Year

The range of market prices during the period 1 February 2016 to 31 January 2017 as 34.0p to 73.5p and the market price of the Company's shares at 31 January 2016 was 60.5p.

Mike Briant

Chief Financial Officer

3 May 2017

Consolidated Statement of Comprehensive Income for the year ended 31 January 2017

			2017	2016
			£'000	£'000
	Revenue		14,323	12,279
	Cost of sales		(7,965)	(6,764)
	Gross profit		6,358	5,515
	Operating expenses		(5,913)	(5,664)
	Other operating income		-	295
	Operating profit		445	146
	Analysed as:
	Operating profit before impairment of goodwill and intangible
	assets and exceptional items		1,163	1,305
	Impairment of goodwill and intangible assets		-	(517)
	Exceptional items		(718)	(642)
	Finance income		3	3
	Finance costs		(4)	(1)
	Profit before tax		444	148
	Income tax expense		(132)	(136)
	Total comprehensive income for the year attributable to
	owners of the parent company		312	12
	Earnings per share, attributable to owners of the
	parent company- basic and diluted		1.02p	0.04p

Consolidated Statement of Financial Position as at 31 January 2017

			*Restated
		2017	2016
		£'000	£'000
Assets
Non-current assets
Intangible assets		535	242
Property, plant and equipment		365	166
Deferred tax asset		-	45
Investments		106	100
		1,006	553
Current assets
Inventories		778	780
Trade and other receivables		2,491	2,147
Cash and cash equivalents		2,165	2,319
		5,434	5,246
Total assets		6,440	5,799
Liabilities
Current liabilities
Trade and other payables		(2,893)	(2,502)
Obligations under finance leases		(16)	(17)
Deferred income		(368)	(340)
		(3,277)	(2,859)
Non-current liabilities
Deferred income		(25)	(72)
Obligations under finance leases		-	(16)
Deferred tax liability		(13)	(39)
		(38)	(127)
Total liabilities		(3,315)	(2,986)
Net assets		3,125	2,813
Shareholders' equity
Called up share capital		3,067	3,067
Share premium account		9,929	9,929
Merger reserve		4,600	4,600
Reverse acquisition reserve		(16,164)	(16,164)
Retained earnings		1,693	1,381
Total equity attributable to owners of the parent company		3,125	2,813

*Restated: Split of deferred income between current and non-current.

Consolidated Statement of Changes in Shareholders' Equity

	Issued	Share		Reverse
	share	premium	Merger	acquisition	Retained
	capital	account	reserve	reserve	earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000
At 31 January 2015	511	9,929	-	(10,440)	1,540	1,540
Profit for the year and total
comprehensive income	-	-	-	-	12	12
Dividends paid	-	-	-	-	(171)	(171)
Arising on reverse acquisition	-	-	-	(5,724)	-	(5,724)
Shares issued as consideration	2,556	-	4,600	-	-	7,156
At 31 January 2016	3,067	9,929	4,600	(16,164)	1,381	2,813
Profit for the year and total
comprehensive income	-	-	-	-	312	312
At 31 January 2017	3,067	9,929	4,600	(16,164)	1,693	3,125

Consolidated Cash Flow Statement for the year ended 31 January 2017

			*Restated
		2017	2016
		£'000	£'000
Cash flows from operating activities
Cash generated from operations		771	1,793
Interest paid		(4)	(1)
Taxation paid		(203)	(172)
Net cash inflow from operating activities		564	1,620
Cash flows from investing activities
Interest received		3	2
Purchase of property, plant and equipment		(313)	(132)
Purchase of intangible assets		(58)	(169)
Capitalised development costs		(327)	-
Cash and cash equivalents acquired under reverse acquisition		-	894
Acquisition of investment		(6)	(100)
Net cash (used in) / generated from investing activities		(701)	495
Cash flows from financing activities
Finance leases		(17)	33
Dividends paid prior to reverse acquisition		-	(171)
Net cash used in financing activities		(17)	(138)
Net (decrease)/ increase in cash and cash equivalents		(154)	1,977
Cash and cash equivalents at the beginning of the year		2,319	342
Cash and cash equivalents at the end of the year		2,165	2,319

*Restated: prior year previously showed interest paid under Investing activities

Notes

1    Accounting Policies

Basis of preparation

The Final Results have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the European Union ('Adopted IFRSs'), issued by the International Accounting Standards Board (IASB), including interpretations by the International Financial Reporting Interpretations Committee (IFRIC), and the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial statements are prepared under the historical cost convention, as modified for any financial assets which are stated at fair value through operating profit or loss and for share based payments which are measured at fair value.

The consolidated financial statements cover the twelve months ended 31 January 2017. The financial statements for the comparative twelve months ended 31 January 2016 represent the substance of the reverse acquisition of Inditherm plc and are those of Inspiration Healthcare Limited.

This announcement does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. This announcement has been agreed with the Company's auditors for release. It contains information extracted from the audited financial statements of the Group for the year ended 31 January 2017 which were approved by the Board on 3 May 2017 and include an audit report which was unqualified and which did not contain a statement   under Section 498 of the Companies Act 2006.

Alternative financial measures

In the reporting of its financial performance, the Group uses certain measures that are not defined under IFRS, the Generally Accepted Accounting Principles (GAAP) under which the Group reports. The Directors believe that these non-GAAP measures assist with the understanding of the performance of the business. These non-GAAP measures are not a substitute for, or superior to, any IFRS measures of performance but they have been included as the Directors consider them to be an important means of comparing performance year-on-year and they include key measures used within the business for assessing performance.

2      Segmental analysis

Inspiration Healthcare Group's sales activities are split into three market sectors, Critical Care, Operating Theatre and Home Healthcare and the revenue segments are defined and reported in Our business and the Operating and financial review. There is no inter-segment trading.

The Group's Chief Operating Decision Maker is the Board of Directors. Following the restructuring during the year of the Group's manufacturing operations and the integration of the activities previously conducted in the Rotherham facility into the function-based management structure at our Leicester and Crawley facilities, the Board of Directors consider that it is more appropriate to report results as one single business segment, i.e. Critical Care Medical Devices. This is consistent with management accounting information reported regularly to the Board.

3      Revenue

Geographical analysis of revenue for the years ended 31 January 2017 and 31 January 2016 is as follows:

				*Restated
			2017	2016
			£'000	£'000
UK			9,770	8,505
Europe			2,728	2,048
Asia Pacific			438	321
Middle East & Africa			424	833
Americas			963	572
Total			14,323	12,279

*Restated: Prior year geographical split has been reanalysed: UK increased by £120,000, Europe reduced by £279,000, Asia Pacific reduced by £65,000, Middle East & Africa reduced by £11,000, Americas increased by £235,000.

Significant categories of revenue
			2017	2016
			£'000	£'000
Goods sold			12,543	10,586
Services			1,780	1,693
			14,323	12,279

No single customer accounted for more than 10% of revenue.

4      Exceptional items

		2017	2016
		£'000	£'000
	Professional fees in relation to the reverse acquisition	(62)	472
	Severance and related costs	136	170
	Closure of facilities	644	-
	Total exceptional items	718	642

5      Taxation

(a)  Analysis of tax charge for the year

		2017	2016
		£'000	£'000
	Domestic current year tax
	UK corporation tax -
	current year	153	268
	prior year adjustment	(40)	-
	UK corporation tax credit -
	current year	-	(20)
	prior year adjustment	-	(81)
	Total current tax	113	167
	Deferred tax
	origination and reversal of temporary timing differences	23	(29)
	prior year adjustment	(4)	(2)
	Total deferred tax	19	(31)
	Tax on profit on ordinary activities	132	136

(b)  Factors affecting tax charge for the year

The tax assessed for the year is higher (2016: higher) than the standard rate of corporation tax in the UK 20% (2016: 20.16%) as explained below:

	2017	2016
	£'000	£'000
Profit on ordinary activities before taxation	444	148
Tax using the UK corporation tax rate of 20% (2016: 20.16%)	89	30
Effects of:
Fixed asset differences	5	-
Non-deductible expenses	128	330
Chargeable losses	-	(57)
Tax losses utilised for research and development claim	10	28
Additional deduction for research and development	(52)	(19)
Adjustments to tax charge from pre reverse acquisition earnings	-	(73)
Adjustments to tax charge in respect of prior years	(44)	(2)
	136	237
Research and development tax credit -
current year	(4)	(20)
prior year	-	(81)
Total tax charge/(credit)	132	136

(c)  Factors that may affect future tax charges

The group has gross unused losses estimated at £7,596,000. Brought forward losses transferred to the Group due to the reverse acquisition amount to £7,373,000 and are potentially available for relief against future trading profits.

6      Earnings per ordinary share

Basic earnings per share for the year is calculated by dividing the profit attributable to ordinary shareholders for the year after tax by the weighted average number of shares in issue. Basic diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue to assume conversion of all potential dilutive ordinary shares.

	2017	2016
	£'000	£'000
Profit
Profit attributable to equity holders of the company	312	12
Impairment of goodwill and intangible assets	-	517
Exceptional items	718	642
Numerator for adjusted earnings per share calculation	1,030	1,171

The weighted average number of shares in issue and the diluted weighted average number of shares in issue were as follows:

	2017	2016
Shares
Weighted average number of ordinary shares in issue during the year
for the purposes of basic earnings per share	30,667,548	28,665,055
Dilutive effect of potential Ordinary shares:
share options	-	55,000
Diluted weighted number of shares in issue during the year
for the purposes of diluted earnings per share	30,667,548	28,720,055

The basic and diluted earnings per share for the year are as follows:

	Basic	Diluted	Basic	Diluted
	2017	2017	2016	2016
	pence	pence	pence	pence
Earnings per share	1.02	1.02	0.04	0.04

The adjusted basic and diluted earnings per share for the year are as follows:

	Basic	Diluted	Basic	Diluted
	2017	2017	2016	2016
	pence	pence	pence	pence
Adjusted earnings per share	3.36	3.36	4.09	4.08

An adjusted earnings per share and an adjusted diluted earnings per share have also been calculated as in the opinion of the Directors this will allow shareholders to gain a clearer understanding of the trading performance of the Group. These adjusted earnings per share exclude:

•                                  Re-organisation and other significant non-recurring costs

•                                  Impairment of goodwill and intangible assets

•                                  The taxation effect at the appropriate rate on adjustments

Other than £110,000 of dilapidation cost, tax on exceptional items has been provisionally disallowed pending finalisation of the group tax computations. The tax impact of this is £22,000.

7      Intangible assets
		Development	Intellectual	Software
		costs	property	costs	Goodwill	Total
		£'000	£'000	£'000	£'000	£'000
	Cost
	At 1 February 2015	-	395	59	-	454
	Arising on reverse acquisition	-	139	-	378	517
	Additions on reverse acquisition	129	136	-	-	265
	Capitalised in the year	-	1	168	-	169
	Disposals in year	-	(10)	-	-	(10)
	At 1 February 2016	129	661	227	378	1,395
	Capitalised in the year	327	-	58	-	385
	At 31 January 2017	456	661	285	378	1,780
	Amortisation
	At 1 February 2015	-	318	-	-	318
	Additions on reverse acquisition	126	136	-	-	262
	Impairment of intangible assets	-	139	-	378	517
	Charge in the year	1	33	26	-	60
	Disposals in year	-	(4)	-	-	(4)
	At 1 February 2016	127	622	26	378	1,153
	Charge in the year	1	33	58	-	92
	At 31 January 2017	128	655	84	378	1,245
	Net book value
	At 31 January 2017	328	6	201	-	535
	At 31 January 2016	2	39	201	-	242

8      Property, plant and equipment

			Plant,
		Fixtures	machinery,
Leasehold		and	office	Motor
	improvements	fittings	equipment	vehicles	Total
	£'000	£'000	£'000	£'000	£'000
Cost
At 1 February 2015	5	32	159	23	219
Additions on reverse acquisition	-	237	198	10	445
Reclassification	-	-	503	-	503
Additions in the year	-	-	132	-	132
Disposals in year	-	-	(14)	-	(14)
At 1 February 2016	5	269	978	33	1,285
Additions in the year	221	1	91	-	313
Disposals in year	-	(6)	(76)	-	(82)
At 31 January 2017	226	264	993	33	1,516
Depreciation
At 1 February 2015	3	23	92	11	129
Additions on reverse acquisition	-	234	168	10	412
Reclassification	-	-	474	-	474
Charge in the year	1	3	108	6	118
Disposals in year	-	-	(14)	-	(14)
At 1 February 2016	4	260	828	27	1,119
Charge in the year	2	2	102	6	112
Disposals in year	-	(4)	(76)	-	(80)
At 31 January 2017	6	258	854	33	1,151
Net book value
At 31 January 2017	220	6	139	-	365
At 31 January 2016	1	9	150	6	166

9      Cash and cash equivalents

Cash and cash equivalents comprise solely of cash at bank and cash in hand held by the Group.

The carrying amounts of the Group's cash and cash equivalents are denominated in the following currencies:

	2017	2016
	£'000	£'000
Pounds sterling	1,715	1,979
Euro	77	160
US Dollars	373	142
JPY	-	38
	2,165	2,319

10    Provision for other liabilities and charges

The provision for closure of facilities relates to the exceptional cost taken in the year and includes redundancy, dilapidations, project management, obsolete inventory and dual running lease and similar costs. The provision has arisen due to expected timing of cash outflows along with associated uncertainty regarding their final values, but is expected to be fully utilised in the coming financial year. 

		Closure of
	Regulatory	facilities	Total
	£'000	£'000	£'000
At 31 January 2016	103	-	103
Charged / (credited) to the Income Statement
- Additional provisions	-	644	644
- Unused amounts reversed	(62)	-	(62)
- Used during the period	(41)	(272)	(313)
At 31 January 2017	-	372	372

11    Note to the Consolidated Statement of Cash Flows

	2017	2016
	£'000	£'000
Profit before taxation	444	148
Adjustments for:
Net finance costs / (income)	1	(2)
Impairment of goodwill	-	378
Impairment of intangible assets	-	139
Depreciation and amortisation	204	178
Loss on disposal of intangible asset	-	6
Loss on disposal of tangible asset	2	-
Decrease in inventories	2	14
(Increase) / decrease in trade and other receivables	(461)	379
Increase in trade and other payables	598	579
(Decrease) in deferred income	(19)	(26)
Net cash generated from operations	771	1,793

12    Events after the reporting period

The closure of the corporate head office and manufacturing site at Rotherham was completed and lease surrendered on 10th March 2017 on completion of its term.

The new corporate office and R&D centre at Crawley, West Sussex officially opened in March 2017 and former R&D facility at Albourne was vacated.

There was no additional cost other than as recognised at balance sheet date.

Forward looking statements

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

Annual Report

A further announcement will be made when the 2017 Annual Report and Financial Statements is available on the Company's website (www.inspiration-healthcare.com) and copies are sent to shareholders.

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR GMGGKNZZGNZM