Induction Healthcare Group PLC
(“Induction”, the “Company”, or the “Group”)
Unaudited Interim Results
for the six months ended 30 September 2021
Induction provides innovative technology solutions for providers across the secondary and community healthcare markets to enhance communications and connectivity for staff and patients while ensuring the highest standards of clinical safety and information security. Post-period end, Induction solutions have been contracted in other public sector environments, further diversifying the Company’s revenue base.Outlook
Financial Highlights
Operational Highlights
Post-period end Highlights
James Balmain, CEO of Induction, said: “We are delighted to have reported such strong revenue growth, alongside a significant improvement in our underlying profitability. We’ve seen strong user growth across our range of products and are continuing to integrate and reduce costs at Attend Anywhere which we bought after a successful fundraising in June. We’ve delivered a recordlevel of ARR at the period end which puts us on track to exceed market expectations for EBITDA in FY22. “A key focus for the Group is the renewal of Induction Attend Anywhere contracts in England. The majority of these are one year contracts expiring in March 2022. We currently expect to renew a very high proportion of all existing Induction Attend Anywhere contracts in England, and with many for a longer term of two years or more, although likely at a slightly lower contract value than under the previous one year terms.“We continue to build our management team, welcoming Dave Williams as group CTO and Guy Mitchell as Chief Financial Officer. Their knowledge and expertise will enhance our business greatly going forward.” Analyst BriefingA briefing for equity analysts will take place today at 09:30 GMT. For further details analysts should emailinduction@walbrookpr.com or call +44 (0)20 7933 8780. Investor Briefing James Balmain, Chief Executive Officer and Guy Mitchell, Chief Financial Officer will be hosting a live online presentation relating to the interim results via the Investor Meet Company platform at 15:00 GMT today. The presentation is open to all existing and potential shareholders.Investors can sign up to Investor Meet Company free and register for the presentation here:https://www.investormeetcompany.com/induction-healthcare-group-plc/register-investorA recording of the presentation, a PDF of the slides used, and responses to the Q&A session will be available on the Investor Meet Company platform and the Company’s investor website afterwards.ENQUIRIES InductionJames Balmain, Chief Executive OfficerVia Walbrook PR Ltd: induction@walbrookpr.com Singer Capital Markets (Nominated Adviser and Broker)+44 (0) 20 7496 3000Philip Davies / Kailey Aliyar Walbrook PR Ltd induction@walbrookpr.comPaul McManus / Alice Woodings / Megan BoxallMob: +44(0)7980 541 893 / +44 (0)7407 804 654 / +44 (0)7788 151 967 About Induction - www.inductionhealthcare.comInduction (AIM: INHC) is a leading flexible care platform driving digital transformation of healthcare systems worldwide. Induction solutions enhance the investments hospitals have made and lay the foundation for their future. Our products can enable information sharing between busy doctors, alleviate operational burdens on hospitals or put patients in better control of their care, all while ensuring the highest standards of clinical safety and information security. We unchain staff and patients from the limitations of paper-based and desktop systems, creating substantial time and cost efficiencies.More than 225,000 hospital doctors across multiple territories, including the UK, Ireland, Australia and South Africa, as well as a rapidly growing number of more than 300,000 UK patients, choose Induction solutions.Induction Switch is the number one healthcare collaboration app in the UK, used by the majority of hospital doctors within the NHS. The app helps to increase productivity and enhance communication by securely sharing phone numbers and bleeps, bookmarks, documents and messages in a clinical setting.Induction Guidance provides medical organisations, including most hospital trusts within the NHS, with the ability to collaboratively create, edit, and publish their own local medical guidelines in a secure and locally administrated environment. This increases knowledge of, and adherence to, guidance.Induction Zesty is a market-leading digital platform for patients visiting hospitals. The platform allows patients to book and access their appointments, read their clinical letters, store a copy of their clinical record and provide data to their care teams remotely. It is not just a compelling patient experience, but also delivers significant cost benefits to hospitals.Induction Attend Anywhere is the UK market leader in secondary care video consultations. It helps hospitals, health systems and other customers offer video consultations to patients and service users as a normal part of day-to-day clinical activity. Our vision is for video consultations to improve lives and help address social, access, equity and sustainability challenges by allowing healthcare providers to determine how and when they see a patient based on each individual case: in-person, via video or on the telephone.Induction HealthStream is a proprietary data integration platform that reads and writes patient demographic, appointment and clinical record data between a growing number of hospital EHR systems and the Induction platforms. This connectivity between stakeholders and legacy IT systems adds substantial value to pre-existing health IT investment and allows large-scale adoption of Induction app-based services. CEO REVIEW Overview On the heels of a successful fund raise of £25 million and the acquisition of Induction Attend Anywhere in June, Induction has experienced a transformational leap in ARR. This puts the Company firmly on the path towards an adjusted EBITDA breakeven position and cash generation before the end of FY23. As health systems around the world engage in their post-pandemic recovery, digital platforms are playing a vital role and with Induction Attend Anywhere, Induction is operating at scale on the ground floor of this opportunity.Our vision of a ‘flexible care’ platform – comprising a comprehensive and integrated suite of telehealth applications - is rapidly becoming reality, allowing health providers to capture data from patients remotely, provide video consultations at scale, empower patients to self-manage their hospital appointments, and distribute information to patients quickly and cost effectively. As the NHS focuses on elective recovery, Induction’s tried and tested technologies come into their own.The Induction Attend Anywhere platform was nationally contracted in multiple markets before the outbreak of COVID19, however the pandemic has acted as a ‘super-catalyst’ to adoption, leading to delivery of more than 4.5 million secondary care video consultations, covering more than 2,031,009 hours of care.A recent report by Edge Health, commissioned by NHS England and NHS Improvement, found outpatient appointments delivered via video, using the Induction Attend Anywhere platform, saved 4.64 million hours in patient travel and wait times and £40 million in patient travel costs and parking charges over the course of a year. Induction Attend Anywhere is now the embedded system of choice across the British Isles, creating a compelling case for upsell with our other Induction applications.In the English market, where the focus lies on the formation of Integrated Care Systems (“ICS”), Induction is strongly positioned in this evolving landscape, having achieved preferred supplier status with the South West London ICS for the Induction Zesty platform, alongside our partner the Cerner Corporation, with whom we have a value-added reseller agreement.NHS Wales renewed their contract with Induction Attend Anywhere in June, increasing the annual value from £1.2 million to £1.6 million. More recently, Induction won a landmark contract with the Department of Work and Pensions, who will use Induction Attend Anywhere to selectively virtualise the English benefits system. This is the first step to expanding Group revenue generation beyond the NHS while taking our offer beyond secondary care.Users continue to engage with the Company’s other digital health tools with another period of record user growth, up 68% year on year, with growth to more than 250,000 clinical users on Induction Switch and 360,000 registered patients on Induction Zesty. There continues to be significant user interest in interoperability between Induction applications, creating an opportunity for cross-selling within our existing client base, as well as expanding the Company’s presence outside the UK’s secondary care market. Financial Review For the period ended 30 September 2021, reported revenues increased in line with management expectations to £4.59 million (H1 FY21: £582K).Reported revenue from Induction Guidance grew to £322K (H1 FY21: £274K) in its first full period post-acquisition. Induction Zesty revenue more than doubled to £617K (H1 FY21: £306K), reflecting the contracts signed with three South East England hospitals worth £440K.Induction Attend Anywhere delivered a total of £10.4 million in revenue and £4.5 million in EBITDA in the full year to 30 June 2021. £3.6 million of revenue was delivered from the date of its acquisition.Induction Switch is in strong demand from its users but struggled to monetise during the COVID19 pandemic. In the six months to September 2021, Switch delivered £16K of revenues. Whilst the Board continues to focus the majority of the Company’s attention on more immediately valuable revenue streams, monetisation efforts are currently underway within the English secondary care market.At the period end, the Group was reporting £14.4 million of annual recurring revenue, up 929% year-on-year. Recurring revenue for the period accounted for 95% of the total revenue.Costs have unsurprisingly increased alongside the enlarged customer base, but management are working hard to keep administrative expenses in check while directing expenditure into the continued growth of the business. Development expenses rose to £2.71 million in the period (H1 FY21: £990K). As a result of the higher expenditure following the acquisition of Induction Attend Anywhere, operating losses rose to £5.59 million (H1 FY21: £3.19 million). The adjusted loss before tax for the Group was £2.3 million (H1 FY21: £2.9 million). The adjustments relate to the unwinding of acquisition date fair value adjustments to the contract liabilities of Induction Attend Anywhere (made as part of the purchase price allocation calculations) of £1.7 million (H1 FY21: nil); and acquisition costs of £1.6 million (H1 FY21: £0.3 million). The Group also capitalised software development expenditure of £1.2 million (H1 FY21: £0.7 million) during the period.The Group ended the first half of FY22 in a strong cash position with £12.8 million on the balance sheet. Board CommitteesAndy Williams, non-executive Director, is joining each of the Group’s board committees (Audit, Remuneration and Nomination) with immediate effect and will chair the Nomination Committee. Outlook When the Group joined AIM in May 2019, management set out its intention to deliver care more effectively through a portfolio of digital applications brought together through a buy-and-build strategy. At the time, the Group had 76,000 registered users, predominately in the UK, and no revenues. In less than two years, strategic acquisitions and investment in organic growth have resulted in a Group with four key digital applications providing healthcare connectivity and communications in multiple geographies.Induction ended the first half of the year with £11.4 million of contracted revenue for the full year FY22. Since the period end, the Group has added its first non-healthcare contract with the DWP. This contract is worth up to £2.6 million to the Group for the initial two years. There is also the potential to deliver up to £5.2 million, in aggregate, if the contract is extended across four years. The scope for further public sector contracts outside of the healthcare space is an exciting new potential area of revenue growth.A key focus for the Group is the renewal of Induction Attend Anywhere contracts in England. The majority of these are one year contracts expiring in March 2022. We currently expect to renew a very high proportion of all existing Induction Attend Anywhere contracts in England, and with many for a longer term of two years or more, although likely at a slightly lower contract value than under the previous one year terms.With £12.8million of cash on the balance sheet at 30 September 2021, Induction is well placed to continue to deliver on its buy-and-build strategy while maintaining investment in its existing businesses to drive organic growth. The Group continues to have strong sales momentum, recurring revenues, and a pipeline of orders with multi-year contracts. The Board intends to maintain tight control of costs and is confident of exceeding market expectations on EBITDA for the year ending 31 March 2022.The Board continues to be very positive about the Group’s prospects for significant growth in the next 3-5 years as Induction expands its offering globally and beyond secondary care. James BalmainChief Executive Officer Condensed Consolidated Statement of Comprehensive Income (Unaudited)For the six months ended 30 September 2021 30 September 2021 30 September 2020 Unaudited UnauditedNote £’000 £’000Revenue from contracts with customers24,593582Cost of sales(997)(304)Gross Profit 3,596 278Sales and marketing expenses 3(514)(296)Development expenses 3(2,711)(991)Administrative expenses 3(5,959)(2,087)Other operating expenses 3-(91)Operating loss before highlighted items (660) (2,408)Highlighted items4(4,928)(779)Operating loss (5,588) (3,187)Finance Costs (12)(4)Finance Income-2Loss before tax and highlighted items(672) (2,410)Highlighted items4(4,928)(779)Loss before tax (5,600) (3,189)Taxation(404)7Loss for the financial period (6,004) (3,182)Attributable to: Equity holders of the parent(6,004)(3,182) (6,004) (3,182)Loss per share from operations- Basic5 (0.08) (0.09)- Diluted 5 (0.08) (0.09)Condensed Consolidated Statement of Comprehensive Income (Unaudited)For the six months ended 30 September 202130 September 2021 30 September 2020Unaudited Unaudited Note£'000 £'000Loss for the period(6,004) (3,182) Other comprehensive incomeItems that may be reclassified to profit or lossForeign currency translation differences (59) (4)Reclassified to profit and loss during the period 9 (7)Other comprehensive income for the financial period 50 (11) Total comprehensive loss for the financial period(6,054) (3,193)Attributable to:Equity holders of the parent(6,054)(3,193)(6,054) (3,193)Loss per share:Basic loss per share (£)5 (0.08) (0.09)Diluted loss per share (£)5 (0.08) (0.09) Condensed Consolidated Statement of Financial PositionAs at 30 September 2021 30 September 2021 31 March 2021 Unaudited Audited Note£'000 £'000Non-current assetsGoodwill818,6039,373Intangible Assets820,2985,884Property, Plant and Equipment1115Deferred tax assets880880 39,792 16,152Current assetsTrade and other receivables91,697896Contract Assets2399155Other current financial assets239447Cash and cash equivalents1012,8422,472 15,177 3,970Total assets54,969 20,122 Non-current liabilitiesContract liabilities2(147)(187)Deferred tax liabilities(4,753)(1,048) (4,900) (1,235)Current liabilitiesTrade and other payables11(2,816)(1,396)Contract liabilities 2(2,510)(1,027) (5,326) (2,421)Total liabilities(10,226) (3,656)Net assets/(liabilities)44,743 16,466Equity attributable to equity holders of the parentShare capital12460210Share premium1243,25318,432Translation reserve12(59)(9)Other reserves 121,124792Merger reserve1219,80710,879Accumulated deficit(19,842)(13,838) Total equity44,743 16,466 Condensed Consolidated Statement of Changes in EquityFor the six months ended 30 September 2021ShareShareTranslationOtherMerger Accumulated TotalCapitalPremiumreservereservereservedeficitequity£'000£'000£'000£'000£'000£'000£'000Balance at 1 April 202121018,432(9)79210,879(13,838)16,466 Total comprehensive loss for the periodLoss for the period-----(6,004)(6,004)Other comprehensive loss for the period--(50)---37Total comprehensive loss for the period-- (50)--(6,004)(6,004)Transactions with owners, in their capacity as ownersIssue of ordinary shares17924,821----25,000Issue of ordinary shares as consideration for a business combination71---8,928-9,000Equity-settled share-based payments---332--332Total contributions by and distributions to owners 250 28,821 - 332 8,928 - 34,332Balance at 30 September 2021 460 43,253 (59) 1,124 19,807 (19,842) 44,747 Condensed Consolidated Statement of Changes in EquityFor the six months ended 30 September 2020 ShareShareTranslationOtherMerger Accumulated Total CapitalPremiumreservereservereservedeficitequity Note£'000£'000£'000£'000£'000£'000£'000Balance at 1 April 202014818,432794(10)(6,224)12,447 Total comprehensive loss for the periodLoss for the period-----(3,182)(3,182)Other comprehensive loss for the period--(11)---(11)Total comprehensive loss for the period--(11)- (3,182)(3,193)Transactions with owners, in their capacity as ownersIssue of ordinary shares as consideration for a business combination6210,953----11,015Share-issue costs-(64)----(64)Equity-settled share-based payments---262--262Total contributions by and distributions to owners6210,889-262--11,213Balance at 30 September 2020 21029,321(4)356(10)(9,405)20,468Condensed Consolidated Statement of Cash FlowsFor the six months ended 30 September 2021 For the period ended For the period ended Note30 September 2021 30 September 2020 £’000 £’000Cash flows from operating activitiesLoss for the financial period(6,004)(3,182)Adjustments for:Depreciation of property, plant and equipment4-Amortisation and impairment of intangible assets1,569561Finance costs124Finance income-(2)Share-based payment expense332262Net foreign exchange differences49(10)Fair value adjustment of contingent consideration-91Net loss arising on fair value adjustments of deferred income1,742-Taxation404(7)(1,892)(2,283)Decrease / (Increase) in trade and other receivables and contract assets3,911(75)(Decrease) / Increase in trade and other payables and contract liabilities(1,491)(79)Interest received-2Interest paid(12)(4)Income taxes paid(404)-Net cash generated from / (used in) operating activities112(2,439)Cash flows from investing activitiesPayments for acquiring businesses, net of cash acquired(13,486)(1,987)Payment of software development costs(1,207)(687)Acquisitions of property, plant and equipment-(3)Net cash from investing activities (14,693)(2,677)Cash flow from financial activities Repayments of loans and borrowings-(514)Share issue costs-(64)Share issue proceeds25,000-Net cash from financing activities 25,000(578)Net increase in cash equivalents 10,419(5,694)Cash and cash equivalents at the beginning of the financial period2,47210,718Effects of exchange rate changes on cash and cash equivalents(49)(10)Cash and cash equivalents at the end of the financial period12,8425,014Notes to the Condensed Consolidated Interim Financial Statements
Induction Healthcare Group PLC (“Induction”, the “Group” or the “Company”) is publicly quoted on the AIM market of the London Stock Exchange (“LSE”), and incorporated, domiciled and registered in the United Kingdom. The registered number is 11852026 and the registered address is 20 St. Dunstan’s Hill, London, United Kingdom, EC3R 8HL. Induction is a leading healthcare technology company helping to streamline delivery of care by providing software to healthcare professionals.As of 30 September 2021, Induction Healthcare Group PLC comprised of nine legal subsidiaries, that are majority owned and controlled, and therefore fully consolidated in the Company’s consolidated financial statements. Details of the Company’s subsidiaries are included in note 6.
These interim financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards (“Adopted IFRSs”). They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group’s financial position and performance since the most recent annual consolidated financial information included in the annual report and accounts as of and for the year ended 31 March 2020.The accounting policies applied are consistent with those applied in the most recent consolidated annual report and accounts for the year ended 31 March 2021, which are available on the Company’s website at www.inductionhealthcare.com under “Investors – Financial reports & publications”Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtained control and continue to be consolidated until the date when such control ceases. The financial information of the subsidiaries is prepared for the same reporting period as the Group, using consistent accounting policies. All intra-group balances, transactions, unrealised gains and losses resulting from intra-group transactions are eliminated in full.Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.When the Group loses control over a subsidiary, the assets and liabilities are derecognised along with any related non-controlling interest and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.These interim condensed consolidated financial statements are unaudited and were approved by the Board of Directors and authorised for issue on 1 December 2021 and are available on the Company’s website at www.inductionhealthcare.com under “Investors – Financial reports & publications”.
Period to 30 September 2021 Period to 30 September 2020 £’000 £’000Provision of software 4,382582Post-contract support and maintenance76-Set-up services 3 -Text message revenue 132 -Total Revenue from contracts with customers 4,593 582
Period to 30 September 2021 Period to 30 September 2020 £’000 £’000United Kingdom4,528529Europe 6 4United States 8 13Rest of World 51 37Total Revenue from contracts with customers 4,593 582
Period to 30 September 2021 Period to 30 September 2020 £’000 £’000Induction Anywhere3,638-Induction Zesty 617 306Induction Guidance 322 274Induction Switch 16 2Total Revenue from contracts with customers 4,593 582
Period to 30 September 2021 Period to 30 September 2020 £’000 £’000Services transferred over time 4,451582Services transferred at a point in time142-Total Revenue from contracts with customers 4,593 582
30 September 2021 31 March 2021 £’000 £’000Trade receivables 1,039723Contract assets 399155Contract liabilities(2,657)(1,214)
The following represents the performance obligations that are expected to be fulfilled within one year, and after more than one year. Performance obligations to be fulfilled within one year include performance obligations for which a contract is in existence, but where the full amount related to the contract has not yet been invoiced and therefore has not yet been recognised in contract liabilities. Period to 30 September 2021 Period to 30 September 2020 £’000 £’000Within one year 6,146298More than one year 147274 6,292572
Period to 31 September 2021 Period to 30 September 2020£’000 £’000Employee benefit expense3,4441,963Contractors1,520370Fundraise and acquisition related transaction costs1,613218Amortisation of intangible assets1,568557Depreciation of property, plant and equipment43Professional and legal fees56234Research and development expense capitalised(1,207)(687)Remeasurement of contingent consideration-92Fair value adjustments on contract liabilities1,742-Fundraise and acquisition related transaction costs for the period ended 30 September 2021 include the legal, tax, accounting and other professional fees incurred as a result of the £25.0 million fundraise (refer note 11), and the acquisition of Attend Anywhere (refer Note 5). Fundraise and acquisition related transaction costs for the period ended 30 September 2020 include amounts for the acquisition of Zesty Limited, as well as further costs related to the valuation of Horizon Strategic Partners Limited.Fair value adjustments on contract liabilities represent the unwinding of the acquisition date fair value adjustment to the contract liabilities of Attend Anywhere, made as part of the purchase price allocation and valuation of identifiable net assets and liabilities. The fair value adjustment is reversed through profit and loss, in the same pattern as the derecognition of the contract liability (ie as the revenue is recognised).
30 September 2021 30 September 2020 £’000 £’000Non-recurring fundraise & acquisition related transaction costs1,613218Fair value adjustments on contract liabilities1,742-Other highlighted items3,355 218Amortisation and depreciation1,573561Total highlighted items4,928 779Highlighted items charge to operating profit comprise significant non-cash charges and major one-off costs, which are highlighted in the income statement because, in the opinion of the Directors, separate disclosure is helpful in understanding the underlying performance and future profitability of the business.
Basic EPS is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. Diluted EPS is calculated by dividing the profit attributable to ordinary equity holders of the parent (after adjusting for interest on the convertible preference shares) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. The following table reflects the income and share data used in the basic and diluted EPS calculations:Loss attributable to ordinary shares (basic and diluted) 30 September 2021 30 September 2020 £’000 £’000Loss attributable to ordinary shares (basic and diluted)(6,004)(3,182) (6,004) (3,182)Weighted average number of ordinary shares (basic and diluted) Period to 30 September 2021 Period to 30 September 2020Shares in issue on 1 April 42,050,728 29,626,201Shares issued35,714,285-Shares issued in a business combination14,285,71412,424,527Issued ordinary shares as at the end of the period 92,050,727 42,050,728Weighted-average number of ordinary shares (basic and diluted) 72,925,044 37,366,070Basic loss per share(0.08)(0.09)Diluted loss per share(0.08)(0.09)
On 9 June 2021, Induction Healthcare Group plc acquired 83.5% of the share capital of Attend Anywhere Pty Limited (“AA”) and 100% of the share capital of A.C.N. 167 231 307 PTY Ltd (“A.C.N.”), which owns 16.5% of the share capital of Attend Anywhere, thereby obtaining 100% control over Attend Anywhere. Attend Anywhere Pty Limited owns 100% of the share capital of Attend Anywhere Limited, a UK subsidiary.The consideration included payments of £838k in cash for the purchase of net assets at the completion date, cash consideration of £15,560k, plus the issue of 14,285,714 New Ordinary Shares which had a fair value of £9,000k. This brings the total consideration to £25,398k prior to transaction costs.Attend Anywhere is a leading provider of video consultations in the UK secondary care market, holding national contracts with NHS Scotland, NHS Wales and the HSE in Ireland, alongside a number of regional contracts in England. Attend Anywhere’s proprietary technology, allows users to easily access and use the video service via a common browser, without the need for plug-ins or downloading a native app.The Group’s strategy is to build a leading and future-forward integrated virtual care platform, incorporating patient onboarding, clinical guidelines, digital communications, online appointment management and, via the acquisition of Attend Anywhere, video consultations. While the current focus is on secondary care, there is scope to migrate into allied care settings, such as primary care, mental health and community care.Attend Anywhere is a clear strategic fit with Induction and the acquisition will provide a number of commercial, operational and financial benefits, which are expected to create value for shareholders.NamePrincipal activityDate of acquisitionProportion of voting equity interest acquiredConsideration transferred£000Attend Anywhere Pty LimitedProvision of video consulting software09/06/202183.5%21,207A.C.N. 167 231 307 PTY LtdInvestment holding company09/06/2021100%4,191Attend Anywhere LimitedProvision of support services to group entities09/06/2021100%- The valuation of separately identifiable assets and liabilities acquired and the determination of goodwill recognised, as disclosed in this note, is presented on a provisional basis and is unaudited.
The following represents the consideration transferred to the owners of Attend Anywhere Pty Limited and A.C.N. 167 231 307 PTY Ltd.£000Share consideration9,000Cash consideration16,398Total consideration transferred25,398The fair value of cash consideration equals its carrying value. The fair value of the equity consideration has been determined with references to the market value of the shares of Induction Healthcare Group plc immediately prior to the issue of the consideration shares, adjusted for the impact of a lack of marketability discount of 10%.
The following represents assets acquired and liabilities recognised on acquisition.NoteFair Value recognised on acquisition £’000Non-current assetsIntangible Assets714,825Current assetsCash and cash equivalents2,912Other current assets4,751Non-current liabilitiesDeferred tax liability(3,706)Other non-current liabilities(85)Current liabilitiesDeferred revenue(1,782)Other current liabilities(746)Total identifiable net assets at fair value16,168 The separately identifiable intangible assets and valuation techniques used to measure the fair value of these material assets acquired were as follows: Customer contracts and relationshipsIncome Approach: With and without method. This method estimates the value of customer related assets by quantifying the impact on cash flows under a scenario in which the customer-related assets must be replaced. The projected revenues, operating expenses, and cash flows are calculated in a “With” and “Without” scenario, and the differential between the cash flows from the two scenarios serve as the basis for estimating the fair value of the customer-related asset.TechnologyExcess Earnings Method: a stream of revenue and expenses are identified with a particular group of assets that are necessary to support the earnings associated with the subject intangible asset. By identifying and subtracting contributory assets, the residual earnings are estimated to be attributable to the subject intangible asset and are discounted to present value at an appropriate discount rate.Replacement cost method. This method establishes value based on the cost of reproducing or replacing the asset, less depreciation from functional or economic obsolescence. A corroborating analysis was performed using the multi-period excess earnings method. The multi-period excess earnings method considers the present value of net cash flows expected to be generated by the customer relationships, by excluding any cash flows related to contributory assets.
£’000Consideration transferred 25,398Total identifiable net assets at fair value 16,168Goodwill arising on acquisition 9,230
£’000Consideration paid in cash(16,398)Transaction costs of the acquisition (included in cash flows from operating activities)(707)Transaction costs attributable to the issuance of shares (included in cash flows from financing activities, net of tax)-Less: cash and cash equivalent balances acquired2,912Net cash flow on acquisition(14,193)Impact of acquisition on the results of the GroupFrom the date of acquisition, Attend Anywhere Pty Limited and A.C.N. 167 231 307 PTY Ltd contributed £3,638k to the revenue of the group and net profits of £1,993k to the loss before tax from continuing operations of the Group. If the acquisition had taken place at the beginning of the year, contribution to revenue from continuing operations would have been £5,886k and contribution of profits to loss before tax from continuing operations for the Group would have been £2,765k.
CompanyRegistered number Principal activitiesCountry of incorporationOwnership30 Sept 202131 March 2020Induction Healthcare Limited11232772Investment Holding CompanyUnited Kingdom100%-Induction Healthcare (UK) Limited11237890Provision of software to healthcare providersUnited Kingdom100%100%Induction Healthcare Pty Ltd625119397Provision of software to healthcare providersAustralia100%100%Podmedics Limited6840040DormantUnited Kingdom100%100%Horizon Strategic Partners Limited6285278Provision of software to healthcare providersUnited Kingdom100%100%Zesty Limited08294659Provision of software to healthcare providersUnited Kingdom100%100%Attend Anywhere Pty Ltd081211707Provision of software to healthcare providersAustralia100%-Attend Anywhere Limited11883931Provision of software to healthcare providersUnited Kingdom100%-A.C.N. 167 231 307 Pty Ltd167231307Investment Holding CompanyAustralia100%-
GoodwillTechnologyUsersTradenameDevelopment costsTotal£’000£’000£’000£’000£’000£’000Cost Balance at 31 March 20219,7902,5181,4266333,92818,295Recognised on acquisitions9,2305,8356,618-2,37324,056Internally developed----1,2071,207Translation differences----(48)(48)At 30 September 202119,0208,3538,0446337,46043,510AmortisationBalance at 31 March 2021417283265831,9903,038Recognised on acquisitions------Provided during the year-494433316111,569Translation differences----22At 30 September 20214177776981142,6034,609Net book valueAt 31 March 20219,3732,2341,1615501,93915,257At 30 September 202118,6037,5767,3465194,85738,901
30 September 2021 31 March 2021 £’000 £’000Receivables from third-party customers1,038723Other receivables2022Prepayments224151Social security and other taxes receivable4150 1,697 896Allowance for credit losses - - 1,697 896Trade receivables are non-interest bearing and are generally on terms of 30 days. Included within trade and other receivables is £nil expected to be recovered in more than 12 months.
30 September 2021 31 March 2021 £’000 £’000Cash at banks and on hand8,242 872Short-term deposits4,6001,600Cash and cash equivalents per the statement of financial position and cash flow statement 12,842 2,472Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made on a weekly basis, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.
30 September 2021 31 March 2021 £’000 £’000Trade payables 1,217 289Accruals 1,021760Social security and other taxes 193 277Other payables 6670Current tax payable 319 - 2,816 1,396Included within trade and other payables is £nil expected to be settled in more than 12 monthsAll trade and other payables are non-interest bearing and are normally settled on 30 day terms.
2021 2020 No. of shares (‘000)£’000No. of shares (‘000)£’000 In issue at 1 April 42,05121029,627148Issue of ordinary shares as consideration for a business combination14,2867112,42562Issue of ordinary shares35,714179--In issue at 30 September 92,05146042,052210
2021 2020£'000 £’000 (Restated)At 1 April 18,43218,432Issue of ordinary shares as consideration for a business combination24,821-At 30 September 43,253 18,432
2021 2020£'000 £'000 (Restated)At 1 April10,879(10)Issue of ordinary shares as consideration for a business combination8,92810,953Transaction costs on issue of shares-(64)At 30 September19,807 10,879During the completion of the annual report and accounts for 31 March 2021, amounts recognised in share premium that related to the issuance of ordinary shares as consideration for a business combination were reclassified to the merger reserve. Management have therefore restated the amounts presented for the merger reserve and for the share premium for the 6 months ended 30 September 2020 to reflect this.
Transactions with key management personnelThe compensation of key management personnel (directors) is as follows:30 September 2021 30 September 2020£’000 £’000Short-term employee benefits384 431Post-employment pension and other benefits6 25Termination benefits - - Share based payment transactions 123 148Key management remuneration including social security costs 513 605Total compensation paid to key management personnel 513 605
