Post-period end Trading Update
21 April 2022, 07:00 UTC By inhc
21 April 2022, 07:00 UTC By inhc
Induction Healthcare Group PLC
(“Induction”, the “Company”, or the “Group”)
Post-period end Trading Update
Very significant FY 2022 growth in-line with market expectations
Strong cash position and breakeven at the adjusted EBITDA level
Growing Annual Recurring Revenue stream and investment plan for future growth
Induction (AIM: INHC), a leading digital health platform driving transformation of healthcare systems worldwide, provides an update on continued strong trading and outlook following the year ended 31 March 2022 (“FY22”).
Following on from other recent positive announcements, Induction has seen a very strong finish to trading for FY22. Contracted annual recurring revenues (“ARR”), a key metric for the business, has grown significantly to c. £15m (31 March 21: £1.8m). Results for FY22 are in-line with already upgraded market expectations for revenue and adjusted EBITDA (£12m and breakeven, respectively) (31 March 21: £1.5m and £-4.8m). In addition, following the placing to raise £25m in June 2021, net cash as at 31 March 2022 was inline with expectations at c. £8m (31 March 21: £2.4m). Furthermore, following strong renewals of NHS England Induction Attend Anywhere (“AA”) contracts, the Group’s cash position has further increased significantly, post period end.
FY22 has been a transformational year for Induction following the acquisition and successful integration of AA. Induction has consolidated its leading position within secondary care across the British Isles, and has established a business with strong and growing ARR. As per recent announcements, the contract renewals for video consultation services across NHS England, NHS Scotland and the Scottish Government, as well as the contract renewal for AA in Wales earlier in FY22, have validated the Board’s decision to make the AA acquisition. Notably it has delivered a strong base of recurring revenues with the majority of contracts moving to multi-year deals.
The contract win with the Department of Work and Pensions, announced in November, also confirms the adaptability of Induction’s solutions and how they can be applied beyond a healthcare setting. There is significant potential to grow revenues further from AA across non-NHS services throughout the British Isles and to replicate the success of the platform, within both healthcare and non-healthcare settings, in other global jurisdictions.
Induction Zesty (“Zesty”), a digital patient portal that allows patients to book and manage their hospital appointments, view their letters and clinical records and provide data remotely, has also seen a dramatic increase in ARR during the period, up c. 100% year-on-year.
The strong FY22 performance provides Induction with a robust base on which to further expand total contracted ARR, and hence recognised revenues, into FY23 and FY24 respectively. In addition to the noted opportunities to expand ARR from AA, the Board believes there is an opportunity to significantly increase the adoption of Zesty ahead of original expectations. This is supported by on-going nationally funded NHS programmes to ensure that every NHS acute trust has in place, or is in the process of implementing, a patient portal within this financial year. With an established market presence, and through strategic collaborations with third-parties such as the Cerner Corporation (NASDAQ: CERN), Induction is in a leading position to roll-out Zesty as part of an integrated solution supporting this Government-led drive for digital transformation.
To take advantage of this major opportunity, Induction will utilise its strong cash generation to invest above current expectations in development, delivery and commercial resources. This will not only underpin and de-risk FY23 growth forecasts, but also accelerate both contracted ARR and recognised revenue growth into FY24 and beyond. With the strong cash position that Induction now enjoys, this investment ahead of growth can be made at the same time as ensuring there is sufficient working capital within the business to get it to a cashflow positive position in FY24.
Induction CEO, James Balmain, said: “We are delighted that our FY22 performance has shown such considerable growth in-line with market expectations which had already been upgraded during the year. Annual recurring revenues – a key measure of our ongoing success – have continued to grow and, with the recent AA NHS England renewals in particular, we have generated more cash post-period end than expected. Looking forward we see the scale of the opportunity for Induction Zesty has materially increased in recent months. We will use the extra cash that has been generated to accelerate investment into our product development and delivery capability, where we expect to see further growth in high quality, stable revenues as the push for the digital transformation of the NHS continues. We’re very excited about the future prospects of this business.”
James Balmain, Chief Executive Officer and Guy Mitchell, Chief Financial Officer will be hosting a live online presentation relating to the Trading Update via the Investor Meet Company platform at 16:30 BST on Thursday 12 May. The presentation is open to all existing and potential shareholders.
Investors can sign up to Investor Meet Company for free and register for the presentation here: https://www.investormeetcompany.com/induction-healthcare-group-plc/register-investor
Investors who already follow Induction on the Investor Meet Company platform will automatically be invited.
James Balmain, Chief Executive Officer
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|Guy Mitchell, Chief Financial Officer|
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About Induction – www.inductionhealthcare.com
Induction (AIM: INHC) Induction delivers a suite of software solutions through a single integrated platform that transform care delivery. Our system-wide applications help healthcare providers and administrators to deliver care at any stage remotely as well as face-to-face – giving the communities they serve greater flexibility, control and ease of access. Purpose-built for integration with leading Electronic Medical Record (EMR) platforms, our products offer immediate stand-alone value that becomes even greater when integrated with pre-existing systems.
Used at scale by national and regional healthcare systems, as well non-health government services, our applications are relied upon by hundreds of thousands of clinicians and millions of patients across almost every hospital in the British Isles.