One Health Group Plc

Earnings Release • Dec 4, 2023

National Storage Mechanism | Additional information

RNS Number : 4710V

One Health Group PLC

04 December 2023

4 December 2023

One Health Group plc

("One Health" or "OHG" or the "Group")

Half Year results for the Six Months to 30 September 2023 (unaudited)

& Declaration of Interim Dividend

Underlying EBITDA 48% ahead of prior year

New surgical capacity coming on stream to meet massive demand for NHS-funded surgery

One Health (AQSE: OHGR), a provider of NHS-funded medical procedures, is pleased to announce its unaudited interim results for the six months ended 30 September 2023.

Financial Highlights

The Group has performed well in the first half with excellent increases in revenues, profitability and cash. The interim dividend has been increased by 22% to 2.03p per share.

Financial Summary	Current period	Prior Year	Increase %
Turnover	£11.06m	£9.83m	+13%
Underlying EBITDA	£0.787 m	£0.532 m	+ 48 %
Underlying EPS	5.15 pence	3.91 pence	+ 32%
Cash balance	£3.64 m	£2.68 m	+ 36 %
Interim dividend	2.03 pence	1.66 pence	+ 22 %

Declaration of Interim Dividend

One Health Group plc is pleased to announce that the Board of Directors has declared an interim dividend at the rate of 2.03 pence per share, to be paid on on 12 January 2024 to shareholders on the register as at close of business on 22 December 2023.  The ex-dividend date will be 21 December 2023.

Operational Highlights

·      New patient referrals increased by 12%

·      Surgical procedures carried out on some 3,000 NHS patients, a 7% increase

·      Surgical activity started at a new independent hospital in a new geographical area

·      Additional capacity sourced within two current independent hospital partners

·      Attracted 15 new clinicians to the business to support growth.,

·      Increased demand for Waiting List transfers with two new NHS Trust contracts

·      National media campaign launched by the NHS to promote knowledge of 'Patient Choice' will increase GP referrals.

Planned developments & Potential Profit Impact

·      Another 30 clinicians in the application process.

·      Surgical hubs are being actively pursued to increase the Group's surgical capacity to help to satisfy the demand from the NHS.

Review of the period

Operationally, 2023 has seen a further increase in the national NHS waiting list and industrial action causing disruption to NHS patients care caused by cancelations. As a result demand for support by the independent sector remained high during the first half of the year. During the period we saw an increased demand for waiting list transfers and direct referrals from NHS Trusts. The Group has attracted 15 new clinicians to the Group into new geographical areas and continues to expand surgical capacity in existing areas, meaning One Health is well placed to support the NHS in the second half of the year, traditionally our busiest period. The Group continues to work closely with NHS trusts to support the reduction of waiting lists for elective care.

From a financial perspective One Health has performed well in the first half of the year. Financial performance is in line with management and market expectations and as we enter our busiest period of the year, we are confident we will achieve full year revenue and profit expectations.

Cash reserves at the end of September 2023 of £3.64m support ongoing investment in growth and our progressive dividend policy. The Board is therefore declaring an increased interim dividend of 2.03p per Ordinary Share (H1 22/23: 1.66p per share) to be paid on 12 January 2024 to shareholders on the register as at close of business on 22 December 2023. Last year's interim dividend was agreed by the Board before the business was listed and was paid in January 2023. Following the IPO in November 2022, the Group is adjusting the profile of dividend payments and expects the interim dividend to represent 1/3 of the full year dividend going forward.

Adam Binns, Chief Executive Officer, said:

"One Health has performed well in the first six months of the financial year, with turnover up 13% to £11.06m, underlying EBITDA up 48% to nearly £0.8m and new patient referrals up 12% at 6,094.

"Notably these referrals include an increasing number of NHS patients transferring to One Health from local Trust waiting lists to help them reduce their internal waiting lists, with two new contracts secured in H1. The Trust transfer activity is in addition to patients received through the traditional route by choosing to be referred to One Health through 'Patient Choice' after visiting their GP.

"We are pleased with performance in the first half of the year and expect to achieve our year end forecasts."

About One Health Group

One Health engages over 100 NHS Consultants who sub-specialise in the various surgeries offered by the Group, through a growing network of community-based outreach clinics and surgical operating locations. In the year to March 2023 One Health serviced almost 12,000 new patients, through over 29,000 consultations and performed 5,790 surgical procedures. One Health uses surgeons and anaesthetists that are mostly employed by the NHS, on a consultancy basis. It currently works with over 100 professionals across seven hospitals and over 30 CQC registered clinics.

One Health's activities are focused on areas where the patient needs are under-supplied by the local NHS service as well as locations where population density is relatively high, and the level of private medical insurance is relatively low. One Health has also sought to expand geographically from its head office in Sheffield, South Yorkshire into neighbouring counties, which meet the required criteria. Currently, the Group's activities are focused in Yorkshire, Lincolnshire, Derbyshire, Nottinghamshire and Leicestershire. Revenue in the year to 31 March 2023 was derived from 60 Clinical Commissioning Groups in addition to contracts directly with NHS hospitals to manage their internal waiting lists.

One Health's business model has focused to date on four main areas: being Spine, Orthopaedics, General Surgery and Gynaecology. The split of inpatient procedures in the year to 31 March 2023 was as follows: Orthopaedics 44% Spine 27% General Surgery 22% Gynaecology 7%.

Orthopaedics and Spine are particularly attractive areas for One Health as the Directors believe that they benefit from powerful growth drivers in terms of an ageing demographic, physical inactivity and an increasing proportion of the population being categorised as obese. Within orthopedics, the most common surgeries performed by One Health are knee and hip replacements.

*(https://www.onehealth.co.uk/investors)

The Directors of One Health Group plc accept responsibility for the contents of this announcement.

For more information, please contact:

One Health Group plc                                                                                         via Square1 Consulting

Oberon Capital - AQSE Corporate Adviser and Broker                               +44 203 179 5300

Nick Lovering

Mike Seabrook

Adam Pollock

Square1 Consulting                                                                                             +44 207 929 5599

David Bick                                                                                                              +44 7831 381201

Consolidated Statement of Income and Retained Earnings

For the six months to 30 September 2023

		6 months to			6 months to			Year to
		30 September 2023			30 September 2022			31 March 2023
		£	£		£	£		£	£
TURNOVER			11,062,281			9,831,204			20,501,807
Cost of Sales			(9,104,582)			(8,184,746)			(16,865,547)
GROSS PROFIT			1,957,699			1,646,458			3,636,260
Administrative Expenses		(1,278,873)			(1,298,153)			(3,051,263)
Share option charge		0			(119,487)			(360,443)
Adjusted Administrative Expenses			(1,278,873)			(1,417,640)			(3,411,706)
Other Operating Income			54,600			47,571			104,209
OPERATING PROFIT			733,426			276,389			328,763
Loss on revaluation of investment property								(170,620)
Interest receivable and similar income		35,775			3,317			18,909
			35,775			3,317			(151,711)
Interest payable and similar expenses			(62,483)			(23,848)			(96,907)
PROFIT BEFORE TAXATION			706,718			255,858			80,145
Tax on profit			(165,709)			(46,616)			(19,842)
PROFIT FOR THE FINANCIAL PERIOD			541,009			209,242			60,303
Other comprehensive income			0			0			195,339
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD			541,009			209,242			255,642
Profit attributable to owners of the parent			541,009			209,242			255,642
Underlying EBITDA*			786,550			532,128			1,532,386
Retained earnings at beginning of period			4,916,111			5,012,465			5,012,465
Profit attributable to owners of the parent			541,009			209,242			60,303
Transfers to reserves			0			0			553,698
Dividends			(413,733)			(560,280)			(710,355)
RETAINED EARNINGS OF THE GROUP			5,043,387			4,661,427			4,916,111
Earnings per share
Underlying*			5.15	p		3.91	p		11.29	p
Basic			5.15	p		2.09	p		0.60	p
Diluted			5.06	p		2.09	p		0.58	p

*Excludes costs relating to exceptional items as detailed in Note 3

Consolidated Statement of Financial Position

As at 30 September 2023

	As at 30 September 2023			As at 30 September 2022			As at 31 March 2023
	£	£		£	£		£	£
FIXED ASSETS
Tangible Assets		1,646,788			1,109,100			1,346,897
Investment Property		1,691,285			1,861,905			1,691,285
		3,338,073			2,971,005			3,038,182
CURRENT ASSETS
Debtors	4,582,583			5,842,346			4,326,079
Cash at bank and at hand	3,642,649			2,683,143			3,284,548
	8,225,232			8,525,489			7,610,627
Amounts falling due within one year	4,627,816			5,260,976			3,833,191
NET CURRENT ASSETS		3,597,416			3,264,513			3,777,436
TOTAL ASSETS LESS CURRENT LIABILITIES		6,935,489			6,235,518			6,815,618
Amounts due after more than one year		(1,063,717)			(1,059,031)			(1,071,122)
Provisions for liabilities		(59,794)			2,935			(59,794)
NET ASSETS		5,811,978			5,179,422			5,684,702
CAPITAL AND RESERVES
Called up share capital		52,551			10,000			52,551
Share premium		365,448			0			365,448
Revaluation reserve		107,934			83,215			107,934
Share option reserve		242,658			424,780			242,658
Retained earnings		5,043,387			4,661,427			4,916,111
SHAREHOLDERS' FUNDS		5,811,978			5,179,422			5,684,702

Consolidated Cashflow Statement

For the six months to 30 September 2023

	6 months to 30 September 2023	6 months to 30 September 2022	Year to 31 March 2023
	£	£	£
Cash flows from operating activities
Cash generated from operations	1,159,301	(375,482)	209,363
Interest paid Tax paid	(62,483) 0	(23,848) 0	(96,907) (152,353)
Net cash from operating activities	1,096,918	(399,330)	(39,897)
Cash flows from investing activities
Purchase of tangible fixed assets	(353,354)	(19,144)	(23,840)
Sale of tangible fixed assets	0	0	1,061
Interest received	35,775	3,317	18,909
Net cash from investing activities	(317,579)	(15,827)	(3,870)
Cash flows from financing activities
Loan repayments in year	(26,400)	(26,400)	(52,800)
Accrued loan interest	18,995	0	38,491
Share issue Equity dividends paid	0 (413,733)	0 (560,280)	367,999 (710,355)
Net cash from financing activities	(421,138)	(586,680)	(356,665)
(Decrease)/increase in cash and cash equivalents during the period	358,101	(1,001,837)	(400,432)
Cash and cash equivalents at beginning of period	3,284,548	3,684,980	3,684,980
Cash and cash equivalents at end of period	3,642,649	2,683,143	3,284,548

One Health Group plc

Notes to the Interim Results

for the Period 1 April 2023 to 30 September 2023

1.            STATUTORY INFORMATION

One Health is a public Group, limited by shares, registered in England and Wales. The Group's registered number is 04201068 and registered office address is 131 Psalter Lane, Sheffield, South Yorks, S11 8UX.

The Interim Results have been reviewed, not audited, and were approved by the Board of Directors on 1st of December 2023.

2.                ACCOUNTING POLICIES

Basis of preparing the Interim Results

These Interim Results have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The Interim Results have been prepared under the historical cost convention as modified by the revaluation of certain assets.

The Interim Results have been prepared on a going concern basis. The Directors have reviewed and considered relevant information, including the annual budget and future cash flows in making their assessment. The Directors have tested their cash flow analysis to account for the impact on their business of possible scenarios, alongside the measures that they can take to mitigate the impact of possible scenarios. Based on these assessments, given the measures that could be undertaken to mitigate the current adverse conditions, and the current resources available, the Directors have concluded that they can continue to adopt the going concern basis in preparing the annual report and accounts.

The accounts are presented in Sterling currency and rounded to the nearest pound.

Financial Reporting Standard 102 - reduced disclosure exemptions

The Group has taken advantage of the exemption from disclosing the Group key management personnel compensation, as required by FRS 102 paragraph 33.7.

Basis of consolidation

The Interim Results include the interim financial information of the Group and all of its subsidiary undertakings, together with the Group's share of the results of associates made up to 30 September.

A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Where the Group owns less than 50% of the voting powers of an entity but controls the entity by virtue of an agreement with other investors which give it control of the financial and operating policies of the entity, it accounts for that entity as a subsidiary.

Where a subsidiary has different accounting policies to the Group, adjustments are made to those subsidiary financial statements to apply the Group's accounting policies when preparing the consolidated Interim Results.

Any subsidiary undertakings or associates sold or acquired during the year are included up to, or from, the dates of change of control or change of significant influence respectively.

All intra-Group transactions, balances, income, and expenses are eliminated on consolidation. Adjustments are made to eliminate the profit or loss arising on transactions with associates to the extent of the Group's interest in the entity.

2.       ACCOUNTING POLICIES - continued

Significant judgements and estimates

In preparing the Interim Results it is necessary to make certain judgements, estimates and assumptions that affect the amounts recognised in the financial information presented in the Interim Results. These assumptions are reassessed annually as part of the interim and year end accounts preparation process.

The critical judgments that the directors have made in the process of applying the Group's accounting policies that have the most significant effect on the Interim Results are discussed below.

i)      Assessing indicators of impairment

In assessing whether there have been any indicators of impairment assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. There have been no indicators of impairments identified during the current financial year.

Key sources of estimation uncertainty

i)      Determining useful economic lives of tangible fixed assets

The Group depreciates tangible fixed assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on variety of factors, including technological innovation, product life cycles and maintenance programmes.

The judgment is applied by management when determining the residual values for tangible fixed assets. When determining the residual value management aim to assess the amount that the Group would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful life. Where possible this is done with reference to external market prices.

(ii) Recoverability of debtors

The Group establishes a provision for debtors that are estimated not to be recoverable. When assessing recoverability, the directors have considered factors such as the ageing of debtors, past experience of recoverability and the credit profile of individual or Groups of customers.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Turnover consists of the provision of medical and clinical services, sale of medical implants, and recharge of direct costs incurred.  All turnover is generated in the United Kingdom.

Dividend income is recognised when the right to receive payment is established.

Tangible fixed assets

Tangible assets are started at cost less accumulated depreciation and accumulated impairment losses. Depreciation on other assets is provided at the following annual rates in order to write off the cost, less estimated residual value of each asset over its estimated useful life.

Freehold property	2% straight line
Long leasehold	10% straight line
Plant and machinery	15% straight line
Fixtures and fittings	20% straight line
Computer equipment	25% straight line

2.      ACCOUNTING POLICIES - continued

The assets' residual values. useful lives and depreciation methods are reviewed, if appropriate at the end of each reporting period. The effect of any change is accounted for prospectively.

Investment property

Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in the Statement of Income and Retained Earnings.

Investment in a subsidiary company

Investment in subsidiary company is held at cost less accumulated impairment losses.

Financial instruments

The Group has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments.

Basic financial assets, including trade and other receivables, cash and bank balances and investments in commercial paper, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

Basic financial liabilities, including trade and other payables, bank loans, loans from fellow Group companies and preference shares that are classified as debt, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

2.      ACCOUNTING POLICIES - continued

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Distributions to equity holders

Dividends and other distributions to the company's shareholders are recognised as a liability in the Interim Results in the period in which the dividends and other distributions are approved by the company's shareholders. These amounts are recognised in the statement of changes in equity.

Related party transactions

The Group discloses transactions with related parties which are not wholly owned with the same Group. It does not disclose transactions with its parent or with members of the same Group that are wholly owned.

Taxation

Taxation for the period comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the Interim Results. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to the Statement of Income and Retained Earnings on a straight-line basis over the period of the lease.

Pension costs and other post-retirement benefits

The Group operates a defined contribution pension scheme. Contributions payable to the Group's pension scheme are charged to the Statement of Income and Retained Earnings in the period to which they relate.

Employee benefits

The Group provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements and defined benefit and defined contribution pension plans.

Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.

2.      ACCOUNTING POLICIES - continued

The Group operates a number of country-specific defined contribution plans for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the balance sheet. The assets of the plan are held separately from the Group in independently administered funds.

The Group operates a number of annual bonus plans for employees. An expense is recognised in the profit and loss account when the Group has a legal or constructive obligation to make payments under the plans as a result of past events and a reliable estimate of the obligation can be made.

The Group provides share-based payment arrangements to certain employees. Equity-settled arrangements are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of the grant. The fair value is expensed on a straight-line basis over the vesting period. The amount recognised as an expense is adjusted to reflect the actual number of shares or options that will vest.

Where equity-settled arrangements are modified, and are of benefit to the employee, the incremental fair value is recognised over the period from the date of modification to date of vesting. Where a modification is not beneficial to the employee there is no change to the charge for share-based payment. Settlements and cancellations are treated as an acceleration of vesting and the unvested amount is recognised immediately in the income statement.

3.      ADJUSTED EARNINGS PER SHARE

The Directors believe adjusted earnings per share is a better representation of underlying business performance after allowing for significant, non-recurring costs, not related to core activities.

The full year to March 2023 was primarily impacted by costs associated with the IPO in November 2022 and a share option charge associated with the employee share option scheme under FRS 102, section 26.

This creates an alternative performance measure which better reflects a fair estimate of ongoing profitability and performance. The calculated Adjusted EBITDA for the accounting periods shown is as follows:

		30 Sep 2023		30 Sep 2022		31 Mar 2023
Reported Profit		541,009		209,242		60,303
Depreciation		53,124		28,563		52,624
Interest		26,708		20,531		77,998
Tax		165,709		46,616		19,842
Statutory EBITDA		786,550		304,952		210,767
Adjust for non-operating items
IPO related and other one off costs		0		107,689		790,556
Costs related to share options		0		119,487		360,443
Loss on revaluation of investment property		0		0		170,620
Adjusted EBITDA		786,550		532,128		1,532,386

4.      EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.

Underlying EPS is calculated using underling EBITDA, which excludes costs relating to the IPO and share adjustments.

		30 Sep 2023		30 Sep 2022		31 Mar 2023
Basic EPS
Profit per interims		541,009		209,242		60,303
Weighted average number of shares		10,510,093		10,000,000		10,053,619
Earnings per share (Pence)		5.15		2.09		0.60
Fully Diluted EPS
Profit per interims		541,009		209,242		60,303
Weighted average number of shares		10,701,978		10,000,000		10,417,424
Fully Diluted Earnings per share (Pence)		5.06		2.09		0.58
Underlying EPS
Adjusted EBITDA		786,550		532,128		1,532,386
Depreciation		-53,124		-28,563		-52,624
Interest		-26,708		-20,531		-77,998
Underlying profit before taxation		706,718		483,034		1,401,764
Taxation		-165,709		-91,776		-266,335
Underlying earnings		541,009		391,258		1,135,429
Weighted average number of shares		10,510,093		10,000,000		10,053,619
Underlying Earnings per share (Pence)		5.15		3.91		11.29

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