Building foundations
for success & growth
ANNUAL REPORT
2022
2022 Highlights
Revenue(u)
EBITDA(u)
EBITDA(x)
$202.8m
$24.5m
Increased by 44.4%
Increased by 14.3%
$40.0m*
CAGR of 45%
(FY19-FY23)
*Assumes no further impacts
from COVID-19
NPATA(u)
$9.2m
Increased by 3.8%
Clinician
Retention
Rates
83.8%
No. of
Appointments
Over 1.6m
Patients seen in FY22
Capital
Deployed
$111.3m
Increased by 78.5%
Yearly Target >$20m
Number of
Clinics
307
Increased by 195%
since listing on the ASX
in September 2018
Grad Clinicians
154
Up from 64 in FY21
Graduate clinicians
have assisted growth
or help provide
staffing stability
during the pandemic
Healthia at a glance
Our Purpose
To connect people with exceptional
allied healthcare products and
services, creating healthier lives and
happier communities
Our Strategies
Connect
We will connect:
Our Vision
To be the leading diversified
allied healthcare provider
across Australia and New
Zealand
• With each other as a Healthia family
• Our teams with tailored, unique and fulfilling career journeys
• With a diverse array of clients; and
• Our clients to their individual allied health care requirements
Working together to ensure connections have a positive social impact on the communities around us
Quality
Deliver quality
and excellence
in products & services
to our clients above all
else. No compromise.
Innovation
Continuous
improvement &
innovation, ensuring
we are seen as leaders
in allied health.
Growth
Strong performance
& compliance will
drive growth & provide
opportunities for The
Consolidated Entity
team members
& clients.
Extensive
Coverage
Ongoing sustainable
expansion to deliver
a products & services
network accessible to
50% of Australia and
New Zealand.
Our Core Philosophies
Our strategies outline how we will work to achieve our vision and purpose; however, our businesses
operate on a set of core philosophies that guide and enable us to work towards achieving these goals.
These core philosophies shape our teams’ behaviors and the way we connect to each other as a family,
to our clients and to the communities we operate in.
Excellence
We pursue excellence
in everything we do
by bringing diversity
& innovation to health
care, by taking care of
our teams & the clients
we treat & by serving
the communities that
we are a part of.
Everyone
We embrace a team
approach that values
and encourages
collaboration and
mutual respect for
everyone, delivering
exceptional results for
clients and our fellow
team members.
Empathy
We are understanding
and supportive, giving
clients the advocacy
and excellence in
health care that
is specific to their
needs through our
collaborative health
care approach.
Education
We are committed
to our own personal
and professional
development by
engaging in a wide
range of learning
opportunities, fostering
a culture of continuous
improvement.
Healthia Divisions at a glance
Bodies & Minds
Feet & Ankles
Eyes and Ears
Our Bodies & Minds division
consists of our network of
physiotherapy, hand therapy,
occupational therapy and
speech pathology clinics
located throughout Australia
and New Zealand.
Our Feet & Ankles division
consists of our network of
podiatry clinics and retail
footwear stores located
throughout Australia and
USA. The Feet & Ankles
division also includes orthotic
manufacturing business
iOrthotics and podiatry
wholesale business DBS.
Our Eyes & Ears division
consists of our network of
optometry and audiology
stores located throughout
Australia. The Eyes & Ears
divisions also include eye
frame distibutor AED.
148
no of clinics
104
no of clinics
55
no of clinics
+83 since 1 July 2021
+1 since 1 July 2021
+11 since 1 July 2021
Revenue
$110m
+85% vs FY21
+163% vs FY20
Revenue
$53m
-7%% vs FY21
+17% vs FY20
Revenue
$37m
+83% vs FY21
N/A vs FY20
55%
of group revenue
27%
of group revenue
18%
of group revenue
82.5%
Net promoter score
85.2%
Net promoter score
80.0%
Net promoter score
Support Office
The Consolidated Entity operates a centralised
support function which includes administrative
tasks such as bookkeeping, payroll, marketing,
information technology, education and operational
business support. During the financial year a
restructure occurred ensuring efficiencies and
effectiveness of this function.
$12m
Total support cost
For the year ended
30 June 2022
$8m
Total support cost
For the year ended
30 June 2021
Healthia Limited and its Controlled Entities
ACN 626 087 223
Annual Report - 30 June 2022
Healthia Limited and its Controlled Entities
Contents
30 June 2022
Corporate directory
Chairperson's letter
Managing Director's letter
Directors' report
Auditor's independence declaration
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Note 1. General information
Note 2. Significant accounting policies
Note 3. Critical accounting judgements, estimates and assumptions
Note 4. Segment Information
Note 5. Revenue from contracts with customers
Note 6. Other income
Note 7. Expenses
Note 8. Income tax
Note 9. Cash and cash equivalents
Note 10. Trade and other receivables
Note 11. Inventories
Note 12. Other assets
Note 13. Investments accounted for using the equity method
Note 14. Property, plant and equipment
Note 15. Right-of-use assets
Note 16. Intangibles
Note 17. Trade and other payables
Note 18. Borrowings
Note 19. Lease liabilities
Note 20. Derivative financial instruments
Note 21. Employee benefit obligations
Note 22. Provisions
Note 23. Other liabilities
Note 24. Issued capital
Note 25. Reserves
Note 26. Non-controlling interest
Note 27. Dividends
Note 28. Financial instruments
Note 29. Fair value measurement
Note 30. Key management personnel disclosures
Note 31. Remuneration of auditors
Note 32. Contingent liabilities
Note 33. Related party transactions
Note 34. Parent entity information
Note 35. Business combinations
Note 36. Interests in subsidiaries
Note 37. Cash flow information
Note 38. Earnings per share
Note 39. Share-based payments
Note 40. Events after the reporting period
Directors' declaration
Independent auditor's report to the members of Healthia Limited
Shareholder information
1 (Annual Report - 30 June 2022)
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Healthia Limited and its Controlled Entities
Corporate directory
30 June 2022
Directors
Dr Glen Richards
Paul Wilson
Lisa Dalton
Wesley Coote
Darren Stewart
Colin Kangisser
Lisa Roach (appointed as Director on 21 April 2022)
Anthony Ganter (resigned as Director on 22 April 2022)
Company Secretaries
Christopher Banks
Julia Murfitt (appointed as Company Secretary on 23 February 2022)
Notice of annual general meeting
The Annual General Meeting of Healthia Limited is expected to be held on 23
November 2022.
Registered office
Share register
Auditor
Solicitors
Level 4, East Tower
25 Montpelier Road
Bowen Hills QLD 4006
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
www.linkmarketservices.com.au
BDO Audit Pty Ltd
Level 10, 12 Creek Street
Brisbane QLD 4000
www.bdo.com.au
Clayton Utz
Level 28, Riparian Plaza
71 Eagle Street
Brisbane QLD 4000
www.claytonutz.com.au
Colin Biggers & Paisley
Level 35, 1 Eagle Street
Brisbane QLD 4000
www.cbp.com.au
Website
www.healthia.com.au
Corporate Governance Statement
The Consolidated Entity's directors and management are committed to conducting
the company's business in an ethical manner and in accordance with the highest
standards of corporate governance. The Consolidated Entity has adopted and
substantially complies with the ASX Corporate Governance Principles and
Recommendations (4th Edition) to the extent appropriate to the size and nature of the
company's operations. The Consolidated Entity's policies can be found on its website:
https://www.healthia.com.au/corporate-governance/
2 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Chairperson’s Letter
30 June 2022
Dear Fellow Shareholders,
As the pandemic continued through FY2022, it is pleasing to see our exceptional team members prioritise their patients, customers and the
communities around them. More importantly, they have continued to support each other, each playing their part in ensuring that quality
health care continues to be delivered throughout the COVID-19 pandemic. We have seen our teams really live our core philosophies
comprising Excellence, Everyone, Empathy and Education. The Board and I recognise and celebrate the dedication and achievements of
the Consolidated Entity’s team members this year, despite the many challenges they faced.
While the pandemic threw us another curve ball in H222, with higher than normal staff absenteeism and patient and customer appointment
cancellations due to illness, FY2022 was a year of transformation and growth for the Consolidated Entity. During the year, the Consolidated
Entity deployed $111.3m of capital on new business acquisitions, including $91.7m for the acquisition of the 63 Back In Motion clinics.
FY2022 saw us grow to over 300 allied health businesses, enter the New Zealand market and increase team member numbers to over
2,425. We finish FY2022 having transformed into a robust and scalable allied health platform, seeing us become one of Australia and New
Zealand’s largest allied health providers, while positioning ourselves for continued growth into the future.
In the Review of Operations, we summarise the Consolidated Entity’s operational and financial performance for FY2022. You will note that
performance was impacted during FY2022 due to COVID-19 associated lockdowns in H122, followed by an increase in staff absenteeism,
and patient and customer appointment cancellations in H222 once borders reopened and the COVID-19 omicron variant spread throughout
Australia and New Zealand.
During H222, the Board undertook a strategic review of the Consolidated Entity, and as a result, have refreshed and reset the Consolidated
Entity’s strategic fundamentals. This update to the Consolidated Entity’s vision, purpose, and strategic focus was driven by the significant
growth achieved since listing on the ASX in 2018. The resulting updates better reflect the Consolidated Entity’s current size and scale, and
will position the Consolidated Entity for success moving forward.
The Consolidated Entity’s purpose is to connect our patients and customers with allied health products and services, assisting them to live
happier and healthier lives. One key strategy to support this is the development of a technology platform across the business that better
links our patients and customers to our products and services. Moreover, technology that enables our team members to provide products
and services to our patients and customers in an efficient, timely and cost-effective way. Our “Healthia Technology Roadmap” (the
Roadmap) has been developed and execution of various associated projects have commenced. Once completed, this Roadmap is
expected to assist future organic growth and increase operational efficiencies across our businesses.
The Board has been monitoring trading conditions closely and has seen demand for our allied health products and services stabilise in
Australia since May 2022. However, we are still experiencing fluctuating trading conditions in our New Zealand clinics (which represents
approximately only 0.8% of group revenue). Whilst we are still experiencing some impacts from staff absenteeism and patient and customer
appointment cancellations, the trading stability in our Australian clinics has provided confidence that the Consolidated Entity is well placed
to deliver the stated EBITDA(u) target of greater than $40m in FY2023.
We are also committed to continued portfolio expansion through the disciplined acquisition of complementary businesses which support
long-term value accretion. Current acquisition pipeline continues to grow with over 110 allied health businesses being reviewed as part of
our active pipeline.
However, after incurring significant acquisition, integration and restructuring costs as a result of the 95 allied health businesses acquired
during the period, and due to the volatility created from COVID during FY2022, the Board has resolved to take a more conservative approach
to cash flow and balance sheet management. The Consolidated entity launched a 1 for 12.5 pro rata accelerated non-renounceable
entitlement offer to raise up to $15 million, partly underwritten to $10 million, on 8 September. Completion of the $10 million underwritten
accelerated rights issue occurred on 12 September 2022, with the remaining $5 retail offer to close on 30 September 2022. The equity
raising allows the Consolidated Entity to capitalise on accretive and strategic near-term acquisition opportunities as well as provide additional
financial flexibility.
As at the date of signing the financial report, the Directors of Healthia Limited have not declared the payment of a final dividend for 2022.
This decision has been made within the context of the significant one-off costs incurred during the period, in addition to the significant growth
opportunities (both organic and inorganic) available to the Consolidated Entity. The Consolidated Entity plans to resume its stated dividend
policy, of distributing between 40% to 60% of underlying NPATA, during the next financial year.
The Executive team are committed to delivering quality, innovation and organic growth, while continuing portfolio growth. This focus will
ensure we are looking after our team members, our patients and customers and that we are working positively towards our goal of becoming
Australia and New Zealand’s leading diversified allied healthcare provider.
Thank you again to Healthia’s team members for the ongoing dedication and commitment and to our shareholders for their continued
support.
3 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Chairperson’s Letter
30 June 2022
Dr Glen Richards
Chairperson
4 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Managing Director’s Letter
30 June 2022
Dear Fellow Shareholders,
As we progress further into the global COVID-19 pandemic, we continue to face new challenges. The financial year commenced with
several states in Government-imposed lockdowns, before Australia and New Zealand borders reopened, and the nation experienced its
largest wave of COVID-19 cases through the insurgence of the Delta and Omicron COVID-19 variants. This resulted in a material disruption
across the Consolidated Entity network caused by increased staff absenteeism and patient and customer appointment cancellations due to
illness.
The impacts from staff absenteeism and patient and customer appointment cancellations were greatest when mandatory isolation rules
applied to “close contacts”. As these Government imposed rules and regulations were eased, we saw trading conditions improve, and since
May 2022, we have seen consistent and stable trading conditions across the Australian portfolio. Trading conditions in New Zealand continue
to fluctuate, however, this portfolio contributes only 0.8% of our group revenue.
While trading conditions have stabilised, there are still improvements to be made. These improvements will come when staff absenteeism
and patient and customer appointment cancellations due to illness normalise closer towards historical levels; the timing of which remains
unknown at this stage.
Despite the ongoing disruptions from COVID-19, for the period 1 May 2022 to 31 August 2022, we can confirm unaudited EBITDA(u) for
the 4-month period was circa $13.0m. When annualised (and considering seasonality), we are pleased to confirm that EBITDA(u) continues
to track to our guidance of greater than $40m.
This is a testament to the dedication of Healthia’s team members and the strength and resilience of the underlying business of the
Consolidated Entity.
Financial Year 2022 In Review
Despite the impacts and challenges from COVID-19, the Consolidated Entity’s underlying revenue grew strongly to $202.8m (FY2021:
$140.4m), up 44.4%. See Table 1 below for year-on-year revenue since FY19, showing the strong revenue growth achieved by the
Consolidated Entity since listing on the ASX.
Table 1: Healthia Revenue
FY22
$'000's
FY21
$'000's
202,759 140,407
FY20
$'000's
92,493
FY19
$'000's
65,929
Underlying Revenue
CAGR (FY19-FY22)
Underlying revenue reflects statutory profit as adjusted to reflect the Directors’
assessment of the result for the ongoing business activities of the Consolidated Entity,
in accordance with AICD/Finsia principles.
45.4%
Whilst overall revenue growth was 44.4%, Same Clinic Growth revenue was down 8.1% (FY2021: up 4.7%) due largely to the resulting
impacts from COVID-19, comprising Government-mandated lockdowns, staff absenteeism, and patient and customer cancellations due to
illness.
FY2021 revenue was positively impacted by Government stimulus and pent-up demand. Therefore, when comparing FY2022 to FY2020,
Same Clinic revenue growth was up by 3.4%. This demonstrates the resilient and non-discretionary nature of the Consolidated Entity’s
revenue.
Other highlights during the financial year included:
• During the period we deployed over $111.3m of capital on portfolio expansion growing from 212 businesses to 307 businesses,
being an increase of 44%. This growth results in the Consolidated Entity becoming one of Australia and New Zealand’s largest
allied health businesses, creating solid foundations for continued expansion and success;
• We completed our largest acquisition since listing with the Back In Motion Group, consisting of 63 physiotherapy clinics in Australia
and New Zealand. Total consideration for Back In Motion was $91.7m, and was expected to contribute $62.3m and $12.2m of
annualised revenue and EBITDA(u) respectively. Historically operating under a franchise business model, each clinic was
immediately transitioned to the Consolidated Entity’s clinic class share ownership model upon settlement, with franchisees retaining
ownership of between 10% to 48% in their respective clinic. The franchisee clinic settlements occurred between October 2021
and December 2021, meaning the Consolidated Entity’s part ownership during the financial-year was negatively impacted by the
COVID-19 omicron wave that hit Australia and New Zealand in December 2021. This COVID-19 outbreak had negative impacts
on trading due to abnormally high rates of staff absenteeism and patient and customer appointment cancellations due to illness,
peaking between January 2022 and April 2022. Trading stabilised in May 2022 (but is still not back to expected levels), with
unaudited revenue and EBITDA(u) for the period 1 May 2022 to 31 August 2022 expected to be $15m and $3m respectively.
• As part of the Back In Motion acquisition, the Consolidated Entity acquired a 33% stake in Software Group Holdings Pty Ltd, the
owner of proprietary software used by the Back In Motion Group, EVOSuite. This prompted a full review of our centralised
5 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Managing Director’s Letter
30 June 2022
technology and IT systems with the final result being the documentation of the “Healthia Technology Roadmap”. This 2-year
roadmap includes a number of key projects that will merge EVOSuite together with existing systems of the Consolidated Entity.
Some systems will, and have already been, made redundant. Furthermore, various other group-wide technology related
communication projects are well underway, most notably the recent launch of the “Healthia Hub” and “Workplace”. Our goal is to
be a global leader with the systems we use to support and operate our clinics and the systems used to provide products and
services to our patients and customers.
•
Integration of the Back In Motion Group was more costly than originally anticipated, which included acquisitions costs ($6.9m) and
a number of integration ($1.5m) and restructuring costs ($2.2m). Restructuring costs included the rationalisation of the Back In
Motion support office located in Melbourne and the decommissioning of a number of systems not required moving forward.
Integration has now largely been completed, with only those costs associated with the merging and decommissioning of certain
systems as part of the Healthia Technology Roadmap remaining. Cultural integration is also nearing completion with a number of
key events bringing together our clinic partners and teams taking place over the last 3 months. The final major cultural integration
initiative will be the Healthia conference, to be held in October 2022.
• We successfully negotiated an increase in our existing finance facility with our banks, from $70 million to $100 million, providing
headroom to continue the stated strategy of providing extensive coverage across the Australia and New Zealand allied health
markets.
• We trained and inducted 154 new graduate clinicians, up from 64 in the prior corresponding period. These graduates assist with
vacancies and continued organic growth. Graduate recruitment for FY2023 is currently underway with graduates expected to start
in early February 2023.
• Clinician retention rates across the group dropped below 90% for the first time, driven largely by resignations between 1 February
2022 to 31 May 2022. Most resignations were due to lifestyle changes and would have otherwise occurred earlier in the pandemic
if not for lockdowns and border closures. We have attracted and recruited new clinicians at roughly the same run-rate as
resignations, with additional graduates currently being recruited for commencement in early calendar year 2023 to fill remaining
vacancies.
Connect, Support, Inspire
I continue to be extremely proud of how our team members have responded to the COVID-19 pandemic, and how they have remained
engaged and committed to each other, their patients and customers and the communities that they are a part of. I would like to take this
opportunity to personally thank all of Healthia’s dedicated team members and to acknowledge all of their hard work and resilience during
this challenging period.
We will continue to find ways to support our teams better with our latest initiatives and strategies focused on “Connect, Support and Inspire”.
The key focus over the next 12 months is to:
1.
“Connect” better as a Healthia team. The pandemic created a lot of “new norms” and a number of those took away the human
connection we have all enjoyed in the past. The key areas of connection will include:
Each clinic to have a face-to-face visit from at least one Executive team member during FY2023 (+140 clinic visits
achieved to date)
The launch of Workplace, an online collaborative software tool developed by Meta, designed to facilitate online sharing,
messaging etc across all staff
Regional events, ensuring teams are coming together, face-to-face, on a regular basis
Scheduled ongoing education and professional development events, including the group-wide conference, to be held on
the Gold Coast in October 2022
2. As one of the largest allied health professional employers in Australia and New Zealand, we believe it is important that we “Connect”
all team members to individual career journeys. This year we will ensure our team members have engaged in this conversation,
that they feel “Supported” and “Inspired” in their careers with Healthia.
Strategy Reset
We have recently refreshed our strategic communications and messaging to ensure they remain relevant to our teams, patients, customers,
and other stakeholders. Due to the pandemic, and post achieving a key scale milestone of 300+ clinics, we have made a number of subtle
changes. The strategic direction remains largely unchanged, however, some updates have been made to our purpose, vision and key
strategies.
6 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Managing Director’s Letter
30 June 2022
Our 5 key strategies of:
1. Connect
2. Quality
3.
4. Growth
5. Extensive Coverage
Innovation
can be found in more detail within the Review of Operations.
Outlook
While trading conditions in Australia have stabilised, we are still experiencing some lingering impacts from COVID-19. We will continue to
monitor these closely and find new ways to improve staff absenteeism and patient and customer appointment cancellations as the pandemic
eases. Continuing to evolve and meet the ongoing challenges of COVID-19 will ensure we are positioned to maximise productivity, revenue
and EBITDA(u).
We will keep the major focus on our teams and how we engage with them during these unprecedented times. Our aim is to ensure clinician
retention rates return to 90%+ and to engage Best Practice Australia to conduct our third culture survey in May 2023 to assess the
effectiveness of our engagement strategies.
Graduate recruitment is underway to ensure we have the scale of workforce required to deliver products and services to our patients and
customers. Graduate offers are expected to be accepted and finalised by the end of November 2022, with new graduates to commence
their training in early February 2023.
As inflation increases across Australia and New Zealand, we took the opportunity to perform a full review of our products and service fees.
This has been completed and we have increased fees across the group by circa 4%.
The national award that governs health professional wages increased by 4.6% at the start of FY2023. A full review of all wages has been
completed with pay increases being given to those employees on the minimum awards and to others on a case-by-case basis. Furthermore,
as most of our clinicians are paid the higher of their base salary or an agreed percentage of their personal billings, clinician wages are
expected to increase in line with fee increases.
After careful consideration of the above impacts and taking into the consideration the unaudited 4-month trading period from 1 May 2022 to
31 August 2022, I am pleased to be able to confirm that the Consolidated Entity still expects to deliver EBITDA(u) in FY2023 of greater than
$40.0 million (assuming no further negative impacts from COVID-19).
We are also well positioned to continue our network expansion with a large current pipeline of acquisition opportunities, including the recent
announcement noting binding agreements have been entered into to acquire the following businesses:
• Corio Bay Health Group, a physiotherapy business located throughout south-west and south-east Melbourne and Geelong, Victoria
(9 clinics);
• Watsonia Physiotherapy, a physiotherapy business located in Watsonia, Victoria (1 clinic) .
It is expected that a minimum of $20.0m of capital will be deployed in FY2023 utilising current banking facilities, cash from the recent capital
raising, free cash and clinic class shares to fund these acquisitions.
Finally, I would like to reinforce that we are well placed to rebound from the challenges of COVID-19. Through the platform we have created,
we are positioned well to capitalise on the ever-changing economic environment due to the underlying strength, resilience and diversification
created by the scale achieved in FY2022. We will remain focused on executing our team engagement strategies, finding areas to drive
organic and acquisitive growth and use our technology roadmap to enhance, run and evolve our business.
Wesley Coote
Managing Director and Chief Executive Officer
7 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Review of Operations
30 June 2022
Review of Operations
The loss for the Consolidated Entity after providing for income tax and non-controlling interest amounted to $3.33 million (FY21: profit of
$5.16 million). The statutory financial performance of the Consolidated Entity was impacted by staff absenteeism and patient and customer
cancellations due to COVID, isolated flooding in Southeast Queensland and New South Wales, and one-off acquisition, integration and
restructuring costs.
The Consolidated Entity’s underlying net profit after income tax and non-controlling interest but before amortisation from customer lists
amounted to $9.20 million (FY21: profit of $8.86 million). A reconciliation between statutory and underlying financial performance is provided
below at Table 3.
1. Significant changes in the state of affairs
Significant changes in the state of affairs of the Consolidated Entity during and after the financial year include:
1. Acquisitions
The Consolidated Entity deployed $111.26 million (FY21: $62.34 million) of capital on 95 new allied health businesses during the
Financial Year as set out in Note 6: Business Combinations included in this Preliminary Financial Report.
Acquisitions completed during the period included the acquisition of the Back In Motion Group ('BIM'), comprising the businesses
of the 63 Back In Motion physiotherapy clinics and the shares in BIM IP Pty Ltd, which owned the brands, trademarks and other
intellectual property. The Back In Motion clinic acquisitions were settled over the period 5 October 2021 to 23 December 2021.
2. Capital raising
To support the cash consideration and related transaction costs payable for Back in Motion, funds were raised through an
Entitlement Offer. The Entitlement Offer was to existing shareholders for $60.00 million and was undertaken via a non-
renounceable pro-rata entitlement offer at $1.80 per share and completed on 13 October 2021.
3. Performance rights
On 19 November 2021, the Consolidated Entity granted 1,203,500 unlisted performance rights to key management personnel and
other senior managers with a nil grant and exercise price. The performance rights will vest on 18 November 2024 (subject to
satisfaction of the relevant vesting conditions) and expire on 31 December 2024. The vesting conditions include a number of
performance and service conditions.
4. Subsequent event – Capital Raising
On 8 September 2022, the Consolidated Entity announced that it was raising up to $15.0 million via an accelerated non-
renounceable pro-rata entitlement offer. The offer comprised an Institutional Entitlement Offer to raise approximately $10 million
and a Retail Entitlement Offer to raise approximately $5 million.
On 12 September 2022, the Consolidated Entity announced the successful completion of the Institutional Entitlement Offer and
approximately $10 million was receipted by the Consolidated Entity on 16 September 2022.
The Retail Entitlement Offer closes on 30 September 2022 and an amount of up to $5 million is expected to be raised from this
offer. The Retail Entitlement Offer is not underwritten.
This capital raising provided additional cash reserves to fund near term acquisition opportunities and provide additional financial
flexibility. The capital raising provided the Consolidated Entity with a strengthened balance sheet.
Impacts from COVID-19 Pandemic
2.
During the financial year, COVID has had a material impact on the financial performance of the Consolidated Entity, which has in turn,
impacted earnings and cash reserves. Whilst the impacts of COVID have not been formally quantified in this report, the major impacts can
be broken down into the following four categories:
8 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Review of Operations
30 June 2022
1. Lockdowns
As a result of the Consolidated Entity providing several essential health care services to the community, the Directors’ have at all
times made the decision to continue trading from its allied health clinics during restrictive government lockdowns. During the
financial year, it is estimated that lockdowns impacted 6,869 clinic trading days for the Consolidated Entity and minimal changes
were made to the trading hours and rosters of the Consolidated Entity’s clinics. The impacts on revenue varied by division and
the biggest impacts were experienced by the Eyes & Ears division due to the comparatively higher store concentration to NSW
and VIC and the lockdowns experienced in these regions during the first quarter of FY22.
2. Staff absenteeism
The Consolidated Entity experienced materially higher staff absenteeism due to COVID illness and Government imposed close
contact/isolation mandates. The impact from staff absenteeism was significant from December 2021 onwards as close contact
and isolation mandates were imposed, and COVID cases escalated with the reopening of state borders. Improvements in staff
absenteeism were experienced once the government imposed close contact mandates were redefined to include household
members only, followed by further improvements when close contact rules were withdrawn entirely. Chart 1 demonstrates
personal leave hours taken as a percentage of total hours incurred over the same corresponding period, compared to total COVID
cases per month. Personal leave as a percentage of all hours incurred increased from historical levels of 1.6% to 3.3% in the
period 1 January 2022 to 30 June 2022, having an impact on the Consolidated Entity’s productivity and patient and customer
retention.
Chart 1: Analysis of Sick Leave
Sick leave as % of wages1 (bar chart) vs. reported COVID cases2 (line chart)
Spike during second half
although improving trend in
recent months
1
1
2
2
Y
Y
F
F
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A
Note 1. Sick leave as a % of wages is calculated as total sick leave paid for the month divided by total gross wages paid for
the month.
Note 2. COVID case numbers. Source: Australian Government Department of Health & Aged Care:
https://www.health.gov.au/health-alerts/covid-19/case-numbers-and-statistics#new-and-cumulative-cases.
3. Patient and customer appointment cancellations
During the second half of FY22, patient and customer appointment cancellations increased and the rebooking of those cancelled
patients and customers to alternate times also decreased. The Directors consider that the majority of these cancellations can be
attributed to the following:
a. The Consolidated Entity staff member absenteeism due to illness and the resulting reduced availability of clinicians to see
patients or customers in their absence
b. Patients and customer being ill with COVID
c. Change in consumer behaviour post COVID (i.e. health industries as a whole are more prone to the cancellations of
appointments).
4. Clinician retention rates
During the financial year, the Consolidated Entity’s clinician retention rate dropped to 83.8% (FY21: 95%), below the target
retention rate of at least 90.0%. The reasons have been consistent over the last 3 years, however, the Directors consider that
the volume of resignation is higher than normal due to team members not being able to make a number of these decisions. or
life changes more generally, due to lockdowns or borders being closed.
9 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Review of Operations
30 June 2022
3. Financial Overview - Statutory Performance
The Consolidated Entity’s unaudited statutory performance is provided in Table 1 below.
Table 1: Statutory Financial Performance
Revenue
Other Income
Net profit/ (loss) after income tax expense
Non-controlling interest
NPAT attributable to the owners of Healthia Limited
FY22
$m’s
200.3
4.0
0.3
3.7
(3.3)
FY21
$m’s
136.9
9.1
9.2
4.0
5.2
Change
Change
$m’s
63.3
(5.0)
(8.8)
(0.3)
(8.5)
%
46.3%
(55.4%)
(96.3%)
(8.7%)
(164.6%)
Note 1. Net profit after income tax expense, net of Non-Controlling Interest (NCI)
4. Financial Overview – Underlying Performance
To assist users, information about the underlying performance of the Consolidated Entity is presented in Table 2 below which excludes the
impact of acquisition and integration costs of the 95 (FY21: 61) allied health businesses acquired during the period and is adjusted for other
one-off non-recurring income and expenses. The Directors believe that this information is useful for investors and shareholders as it presents
the Consolidated Entity’s financial performance as if these non-recurring transactions or circumstances had not occurred.
The Consolidated Entity’s underlying performance is provided on an unaudited basis in Table 2 and a reconciliation between statutory and
underlying performance is provided further below in Table 3.
Table 2: Underlying Financial Performance
Underlying Revenue1
Underlying EBITDA3,4 (removing impact of AASB16)
Underlying NPATA5
Non-controlling interest (NCI)
Net post-tax P&L impact of AASB16 adoption6
Underlying NPATA attributable to the owners of Healthia Limited
(removing impact of AASB16) 5
Underlying EBITDA margin (removing impact of AASB16) 3,4
Underlying NPATA margin (removing impact of AASB16) 5
Underlying Basic EPS (cents, removing impact of AASB16)7
NCI/ Underlying NPATA8
FY222
$m’s
202.8
24.5
12.0
3.7
0.9
9.2
12.1%
4.5%
7.8cps
28.5%
FY212
$m’s
140.4
21.5
11.3
3.0
0.6
8.9
15.3%
6.3%
11.1cps
25.3%
Change
Change
$m’s
62.4
3.0
0.7
0.7
0.3
0.3
(3.2%)
(1.8%)
(3.3)cps
3.30%
%
44.4%
14.3%
6.2%
22.6%
52.9%
3.80%
(319)bps
(177)bps
(29.9%)
328bps
Note 1. For the purposes of underlying performance, the Consolidated Entity has included $0.6M NSW JobSaver revenue subsidies
received (FY21: $1.99M of JobKeeper included in underlying performance).
Note 2. Underlying profit reflects statutory profit as adjusted to reflect the Directors’ assessment of the result for the ongoing business
activities of the Consolidated Entity, in accordance with AICD/Finsia principles of recording underlying profit. Underlying profit
has not been audited.
Note 3. Underlying EBITDA is a non-IFRS measure and equals earnings before interest, tax, depreciation and amortisation.
Underlying EBITDA has not been audited.
Note 4. Underlying EBITDA has been adjusted for the impacts of AASB16. Lease payments of $17.8M (FY21: $11.5M) have been
included to provide users with a like-for-like comparison with PCP.
Note 5. Underlying NPATA is a non-IFRS measure and equals net profit after income tax expense plus amortisation of customer list
intangibles. Underlying NPATA has not been audited.
Note 6. The net post-tax P&L impact of the new leasing standard, AASB16, has been added back to NPATA to provide users with a
like-for-like comparison with PCP. The pre-tax impact of AASB 16 'Leases' in the current period is comprised of the following:
occupancy costs decreased by $17.8M (FY21: $11.4M), depreciation expense increased by $16.0M (FY21: $10.3M), and
finance costs increased by $3.1M (FY21: $2.0M). The net post-tax P&L impact has not been audited.
Note 7. Underlying EPS or earnings per share is calculated as underlying NPATA attributable to the owners of the Consolidated Entity
Limited divided by the weighted average number of ordinary shares on issue for the period (FY22: 117.9M, FY21: 79.6M).
Underlying EPS has not been audited.
10 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Review of Operations
30 June 2022
Note 8. Non-Controlling Interest divided by Underlying NPATA. NCI/ Underlying NPATA has not been audited.
5. Financial Overview - Reconciliation from Underlying NPATA to Statutory NPAT
A reconciliation of underlying NPATA to statutory NPAT performance is detailed in Table 3 below.
Table 3: Reconciliation of Underlying EBITDA to Statutory NPAT
EBITDA(u) (pre-AASB16)
Less: Finance costs (pre-AASB16)
Less: Tax expense (underlying)
Less: Depreciation (pre-AASB16)
Less: NCI (underlying)
NPATA(u) attributable to the owners of Healthia Limited
(removing impact of AASB16) 1
Less: COVID-19 related expenses2
Less: Acquisition costs3
Less: Integration costs4
Less: Restructuring costs and discontinued operations5
Less: Share-based payments expense and associated costs6
Less: Amortisation7
Less: Net impact of AASB168
Less: NCI attributed to Jobkeeper
Less: Bad debt expense
Add: Fair value movements of contingent consideration9
Add: Net income from Jobkeeper
Net taxation impact
Statutory NPAT attributable to the owners of Healthia
Limited
Note 1. Underlying NPATA Definition
FY22
$m’s
24.5
(2.8)
(5.5)
(3.3)
(3.7)
9.2
(3.4)
(6.9)
(1.5)
(2.2)
(1.4)
(1.7)
(0.9)
-
-
1.6
-
3.9
(3.3)
FY21
$m’s
21.5
(1.7)
(5.1)
(2.9)
(3.0)
8.9
(2.1)
(3.4)
(0.8)
-
(1.1)
(1.0)
(0.6)
(1.0)
(0.1)
-
5.6
0.9
5.2
Underlying NPATA is a non-IFRS measure and equals net profit after income tax expense plus amortisation of customer list
intangibles. Underlying profit reflects statutory profit as adjusted to reflect the Directors’ assessment of the result for the
ongoing business activities of the Consolidated Entity, in accordance with AICD/Finsia principles of recording underlying profit.
Underlying NPATA has not been audited.
Note 2. COVID Related Expenses
The Consolidated Entity incurred $3.38 million (FY21: $2.10 million) of costs directly related to COVID. These costs included
COVID related sick leave and other costs directly attributable to COVID during the period.
Note 3. Acquisition Costs
The Consolidated Entity incurred one-off acquisition costs of $6.86 million (FY21: $3.42 million) in relation to the acquisition
of the 95 allied health businesses acquired. Acquisition costs include but are not limited to external legal, financial and
taxation professional advisory services, stamp duty and other acquisition compliance costs, property lease assignment costs
and directly attributable wage costs.
When calculated as a percentage of capital deployed for the period ($111.26 million), acquisition costs represent
approximately 6.16%, which is in line with prior periods: 5.9% in FY21, 14.8% in FY20 and 13.0% in FY19.
Note 4.
Integration Costs
The Consolidated Entity incurred costs of $1.52 million for the integration of the Back In Motion Group during the period.
Integration of the Back In Motion group was more costly than originally anticipated. Integration costs also included
redundancies of acquired corporate support personnel, the rationalisation of the Back In Motion support office located in
Melbourne and the decommissioning of a number of systems not required moving forward.
Note 5. Restructuring Costs and Discontinued Operations
Restructuring costs of $2.22 million relating to clinics which have been merged, relocated, closed or are in the process of
being closed, and the associated earnings contribution of those clinics during the period.
Note 6. Share-based payments expense and associated costs
Non-cash share-based payments expense relating to the issuance of Performance Rights to key management personnel, key
clinicians and administration staff which remains subject to the achievement of a number of vesting conditions.
Note 7. Amortisation
11 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Review of Operations
30 June 2022
Amortisation of customer lists and software intangibles during the current period.
Note 8. Net impact of AASB16
AASB 16 ‘Leases’ had a significant impact on the current period financial performance. This impact is comprised of the
following changes due the adoption of AASB 16: occupancy costs decreased by $17.8 million, depreciation expense
increased by $16.0 million, and finance costs increased by $3.1 million.
Note 9.
Fair Value movements of Contingent Consideration
Fair value adjustment associated with the reversal of contingent consideration which is no longer expected to be achieved
due to lower than expected trading from COVID restrictions and lockdowns.
6. Financial Overview – Underlying Cash Flow
The Consolidated Entity has consistently delivered strong cash flow conversion. As shown in Table 4 below, the underlying cash flow
conversion was 95.9% for the period (FY21: 84.2%).
Table 4: Underlying Cash Flow
EBITDA(u) (pre-AASB16)1,2
Less: changes in working capital
Underlying operating cash flow (pre-tax, ungeared)3
Cash Conversion %4
Financing costs (pre-AASB16)5
Tax paid
Underlying cash flows (post-tax, geared)6
Dividends paid to non-controlling interests
Capital expenditure
Underlying free cash flow7
FY22
FY21
$m’s
24.5
(1.0)
23.5
$m’s
21.5
(3.4)
18.1
95.9%
84.2%
(3.0)
(3.8)
16.7
(3.4)
(4.1)
9.2
(1.7)
(5.2)
11.2
(4.5)
(2.9)
3.8
Note 1.
Note 2.
Note 3.
Note 4.
Note 5.
Note 6.
EBITDA(u) is underlying earnings before interest tax and amortisation. EBITDA(U) reflects statutory profit as adjusted to
reflect the Directors’ assessment of the result for the ongoing business activities of the Consolidated Entity, in accordance
with AICD/Finsia principles of recording underlying profit. Underlying profit has not been audited.
Underlying EBITDA excludes the impact from the adoption of AASB16 on lease payments of $17.8M (FY21: $11.4M).
Underlying operating cash flows (pre-tax, ungeared) reflects statutory operating cash flows less lease payments of $17.8M
($11.4M) and before finance costs and tax and excludes the impact non-recurring income and costs, such as acquisition costs
($6.86M), integration costs ($1.52M), restructuring costs ($2.22M) and COVID related expenses ($3.38M).
Cash conversion % is calculated as EBITDA(u) (pre-AASB16) dividend by Underlying operating cash flow (pre-tax, ungeared).
Finance costs include the finance and interest charged on the bank debt only and excludes interest associated with the
accounting for AASB16.
Underlying cash flows (post tax, geared) reflects statutory operating cash flows less lease payments of $17.8M ($11.4M) and
is post finance costs and tax and excludes the impact non-recurring income and costs, such as acquisition costs ($6.86M),
integration costs ($1.52M), restructuring costs ($2.22M) and COVID related expenses ($3.38M).
Note 7.
Underlying free cash flow is calculated as Underlying cash flow (post-tax, geared) less capital expenditure for ongoing
maintenance capex and for capital expansion and reflects the underlying cash generated by the Consolidated Entity.
7. Financial position and funding
During FY22, the Consolidated Entity’s financial position was impacted by the following key events:
•
•
•
•
The deployment of $111.26 million of capital on 95 new allied health business acquisitions, resulting in material increases to
intangibles, plant and equipment and working capital balances;
The one-off acquisition costs of $6.86 million and integration costs of $1.52 million associated with the 95 allied health businesses
acquired during the period resulting in retained earnings and cash reversed being reduced;
The one-off restructuring costs of $2.21 million relating to clinics which have been merged, relocated, closed or are in the process
of being closed, and the associated earnings contribution of those clinics during the period.
The impacts from trading from COVID-19 government lockdowns, staff absenteeism and patient and customer cancellations
resulting in retained earnings and cash reversed being reduced;
12 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Review of Operations
30 June 2022
•
The Entitlement Offer, which was undertaken to fund the acquisition of Back In Motion, in addition to ordinary shares issued as
part consideration increased Issued Capital by $66.6 million (after underwriting fees and the costs of capital raising);
• An increase in net debt, predominantly due to the acquisition of Back In Motion Group, by $29.22 million to $73.40 million (FY21:
$44.19 million); and
• As a result of the 95 new allied health business acquisitions, as well as through the exercise of property lease options, right-of-use
assets and lease liabilities have also increased materially during the period, which has adversely impacted the net working capital
position at 30 June 2022.
Note that subsequent to year end (on 8 September 2022), the Consolidated Entity announced that it was raising up to $15.0 million via an
accelerated non-renounceable pro-rata entitlement offer. On 12 September 2022, the Consolidated Entity announced the successful
completion of the Institutional Entitlement Offer and approximately $10 million was receipted by the Consolidated Entity on 16 September
2022.
The Retail Entitlement Offer closes on 30 September 2022 and an amount of up to $5 million is expected to be raised from this offer. The
Retail Entitlement Offer is not underwritten. This capital raising provided additional cash reserves to fund near term acquisition opportunities
and provide additional financial flexibility. The capital raising provided the Consolidated Entity with a strengthened balance sheet.
8. Risk Management
The Consolidated Entity is committed to identifying and mitigating risks that it faces in relation to its operations, business strategy and
financial prospects to maintain a sustainable business and protect the interests of its shareholders. The Consolidated Entity has an
established Audit and Risk Committee which is responsible for, among other things, identifying and monitoring significant business risk
factors within the Consolidated Entity. More information on how the Consolidated Entity identifies and manages risks can be found in The
Consolidated Entity’s Corporate Governance Statement and under the Corporate Governance section of our website. A non-exhaustive list
of material risks and the mitigation strategies implemented by the Consolidated Entity are set out below in Table 5.
Table 5: Material Business Risks
Risk Area
Pandemic Risk
Acquisition Risk
Potential Impact
The economic consequences of the COVID-19
pandemic could become more severe and may impact
revenue and operations resulting from increased
patient appointment cancellations and staff
absenteeism. Further, some of the Consolidated
Entity’s assets and liabilities comprise financial
instruments that are carried at fair value, with changes
in fair value recognised in the Consolidated Entity’s
income statement. Market declines or weakened
trading conditions could negatively impact the value of
such financial instruments (including the impairment of
goodwill).
The Consolidated Entity may be unable to identify
and/or execute suitable acquisition opportunities and a
failure to do so could have an adverse impact on the
Consolidated Entity. Further, new businesses may not
perform in line with expectations and could be
impacted if sufficient due diligence is not performed
and/or if the acquired businesses are not integrated
effectively.
Staff Retention
The Consolidated Entity relies on clinicians to provide
allied health services to patients and a high turnover or
the inability to retain experienced staff, specifically
clinicians, could impact the quality and/or availability of
clinical services.
Funding Risk
The availability of debt funding or an inability to secure
funding or refinance current debt facilities may
adversely impact the financial position of the
Consolidated Entity. In addition, failure to meet
financial covenants under the Consolidated Entity’s
finance facilities, and the occurrence of other specified
events (including goodwill being impaired by 5% or
more or certain changes in key personnel occurring)
may lead to an event of default or review event under
the finance facility. From time to time the Consolidated
Consolidated Entity’s Response
Comprehensive internal policies and procedures have
been developed to minimise the risk of patient and staff
member illness.
Targeted recall programs in place to re-book patients
that have cancelled appointments due to COVID.
The scale and geographic diversification of operations
provides a level of risk mitigation with respect to
localised outbreaks and/or restrictions.
is undertaken prior
Extensive internal processes and procedures to ensure
sufficient due diligence
to
completion.
Comprehensive integration plans are put in place for all
acquisitions and are managed by an experienced
internal integrations team. The Consolidated Entity will
continue to be disciplined in executing its growth
strategy taking into consideration current trading
conditions.
The Consolidated Group has developed a Clinician
Retention Program which allows clinicians to have an
ownership interest in clinics (via Clinic Class Shares).
A structured learning and education program is also in
place to provide world class learning and education to
position the Consolidated Entity as an employer of
choice.
The yearly graduate clinician intake is expected to
cover any outstanding vacancies.
The Consolidated Entity actively manages its leverage
position and maintains a close and
transparent
relationship with its financiers to ensure ongoing
support.
13 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Review of Operations
30 June 2022
Entity seeks waivers of various aspects of its facility
agreements including financial covenants. There is no
guarantee that waivers sought will be granted by the
banking syndicate in which case there is a risk that the
Consolidated Entity will breach its finance facilities. If
an event of default or a review event applicable to any
given facility occurs, there may be a requirement to
make repayments in advance of the relevant maturity
dates and/or termination of the facility which may
impact on the financial performance and position of the
Consolidated Entity and its ability to operate in the
ordinary course of business.
Interest Rate Risk
Changes in interest rates will impact the costs of the
Consolidated Entity’s debt funding with a majority of its
bank borrowings at variable interest rates.
The Consolidated Entity has a $20.0 million interest
rate swap which expires on 30 September 2022. The
Consolidated Entity may look to enter into further
interest rate swap contracts to hedge against potential
exposure to fluctuations in interest rates.
Cyber Security
Risk of the Consolidated Entity’s IT systems being
accessed which could result in a failure of or
interruption to IT systems and the business or a breach
of patient privacy. Any such failures or breaches could
cause reputational damage, regulatory impositions and
financial loss.
The Consolidated Entity has comprehensive policies
and procedures in place regarding the use and storage
of confidential information as well as controls in place
to minimise technology related business interruption.
Cyber security insurance is also in place to mitigate
potential financial losses.
14 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Review of Operations
30 June 2022
9. Definitions
Term
Definition
Cash Conversion % Calculated as EBITDA (pre-AASB16) divided by operating cash flow before finance, acquisition
and tax costs.
Clinic Class Shares Clinic Class Shares are non-voting shares which entitle the holder to a share of any dividend
declared, calculated on the performance of the clinic in which the Clinic Class Shares are
issued. The Clinic Class Shares are designed to create alignment between the interests of
clinicians and The Consolidated Entity shareholders.
Underlying EBITDA
or EBITDA(u)
Underlying EBITDA reflects statutory EBITDA as adjusted to reflect the Directors’ assessment
of the result for the ongoing business activities of the Consolidated Entity, in accordance with
AICD/Finsia principles of recording underlying profit. EBITDA(u) is presented on a pre-AASB16
basis. Underlying EBITDA has not been audited.
EBITDA(x) Expectations for annualised portfolio run-rate at commencement of FY23. Presented pre-
AASB16 and assuming no impacts from COVID.
Underlying EPS or
EPS(u)
Underlying basic earnings per share as adjusted to reflect the Directors’ assessment of the
result for the ongoing business activities of the Consolidated Entity, in accordance with
AICD/Finsia principles of recording underlying results.
FY21 Full year period ended 30 June 2021.
FY22 Full year period ended 30 June 2022.
H1 Half year period ended 31 December 2021.
H2 Half year period ended 30 June 2022.
Leverage ratio Calculated as (Debt:Adjusted EBITDA) in accordance with bank covenants. Note:
- Adjusted EBITDA adjusts for the earnings contribution of recent acquisitions where the
businesses have not been held for a 12-month period; and
- AASB 16 'Leases' does not apply, and covenants are calculated as they were prior to the
adoption of this accounting standard by the Consolidated Entity.
NPAT - attributed to
shareholders
Underlying NPATA
or NPATA(u)
Net Profit After Tax attributable to shareholders (i.e after non-controlling interests).
Underlying NPATA is a non-IFRS measure and equals net profit after income tax expense plus
amortisation of customer list intangibles. Underlying profit reflects statutory profit as adjusted
to reflect the Directors’ assessment of the result for the ongoing business activities of the
Consolidated Entity, in accordance with AICD/Finsia principles of recording underlying profit.
Underlying NPATA has not been audited.
Underlying Revenue
or Revenue(u)
Underlying Revenue reflects statutory revenue as adjusted to reflect the Directors’ assessment
of the result for the ongoing business activities of the Consolidated Entity, in accordance with
AICD/Finsia principles of recording underlying results and includes adjustments for the impacts
from COVID-19 for the Consolidated Entity. Underlying revenue has not been audited.
Same Clinic Growth Same Clinic Growth represents revenue growth which has been calculated by excluding any
closed businesses and businesses not held during the prior period.
15 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'Consolidated Entity') consisting of Healthia Limited (referred to hereafter as the 'Company' or 'parent entity') and the
entities it controlled at the end of, or during, the year ended 30 June 2022.
Directors
The following persons were Directors of Healthia Limited during the whole of the financial year and up to the date of this
report, unless otherwise stated:
Dr Glen Frank Richards
Paul David Wilson
Lisa Jane Dalton
Wesley James Coote
Darren Lindsey Stewart
Colin Jonathan Kangisser
Lisa Michelle Roach (appointed as an Executive Director 21 April 2022)*
Anthony Peter Ganter (resigned as an Executive Director 22 April 2022)*
*
Employed by the Consolidated Entity since listing and remains employed at the date of this Report.
Principal activities
During the financial year the principal activities of the Consolidated Entity consisted of the following:
●
●
the operation of podiatry and retail footwear businesses throughout Australia through the Feet and Ankles division;
the operation of physiotherapy, occupational therapy, hand therapy, exercise physiology and speech pathology
businesses throughout Australia through the Bodies and Minds division; and
the operation of optometry and audiology businesses throughout Australia through the Eyes and Ears division.
●
Dividends
Dividends paid during the financial year were as follows:
Final dividend for the year ended 30 June 2020 of 2.0 cents per ordinary share
Interim dividend for the year ended 30 June 2021 of 2.0 cents per ordinary share
Final dividend for the year ended 30 June 2021 of 2.5 cents per ordinary share
Interim dividend for the year ended 30 June 2022 of 2.0 cents per ordinary share
Consolidated
2022
$'000
2021
$'000
-
-
2,255
2,537
4,792
1,261
1,783
-
-
3,044
As at the date of signing the financial report, the Directors of Healthia Limited have determined not to declare the payment
of a final dividend for 2022 taking into account the significant one-off costs incurred during the period which have reduced
free cash, in addition to the significant growth opportunities (both organic and inorganic) available to the Consolidated Entity.
The Consolidated Entity plans to resume its stated dividend policy, of distributing between 40% to 60% of underlying NPATA,
during the next financial year. Underlying NPATA is a non-IFRS measure and equals net profit after income tax expense
plus amortisation of customer list intangibles. Underlying profit reflects statutory profit as adjusted to reflect the Directors’
assessment of the result for the ongoing business activities of the Consolidated Entity, in accordance with AICD/Finsia
principles of recording underlying profit.
Review of operations
The loss for the Consolidated Entity after providing for income tax and non-controlling interest amounted to $3,329,000 (30
June 2021: profit of $5,157,000).
Please refer to page 8 for the Director's Report and Review of Operations.
16 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
Significant changes in the state of affairs
Significant changes in the state of affairs of the Consolidated Entity during the financial year include:
●
Acquisitions
The Consolidated Entity deployed $111.26 million (FY21: $62.34 million) of capital on 95 new allied health businesses
during the Financial Year as set out in Note 35: Business Combinations included in this Annual Financial Report.
Acquisitions completed during the period included the acquisition of the Back In Motion Group ('BIM'), comprising the
businesses of the 63 Back In Motion physiotherapy clinics and the shares in BIM IP Pty Ltd, which owned the brands,
trademarks and other intellectual property. The Back In Motion clinic acquisitions were settled over the period 5 October
2021 to 23 December 2021.
●
●
Capital raising
To support the cash consideration and related transaction costs payable for Back in Motion, funds were raised through
an Entitlement Offer. The Entitlement Offer was to existing shareholders for $60.00 million and was undertaken via a
non-renounceable pro-rata entitlement offer at $1.80 per share and completed on 13 October 2021.
Performance rights
On 19 November 2021, the Consolidated Entity granted 1,203,500 unlisted performance rights to key management
personnel and other senior managers with a nil grant and exercise price. The performance rights will vest on 18
November 2024 (subject to satisfaction of the relevant vesting conditions) and expire on 31 December 2024. The vesting
conditions include a number of performance and service conditions.
Matters subsequent to the end of the financial year
Capital Raising
On 8 September 2022, the Consolidated Entity announced that it was raising up to $15.0 million via an accelerated non-
renounceable pro-rata entitlement offer. The offer comprised an Institutional Entitlement Offer to raise approximately $10
million and a Retail Entitlement Offer to raise approximately $5 million.
On 12 September 2022, the Consolidated Entity announced the successful completion of the Institutional Entitlement Offer
and approximately $10 million was receipted by the Consolidated Entity on 16 September 2022.
The Retail Entitlement Offer closes on 30 September 2022 and an amount of up to $5 million is expected to be raised from
this offer. The Retail Entitlement Offer is not underwritten.
This capital raising will provide additional cash reserves to fund near term acquisition opportunities and provide additional
financial flexibility.
Acquisitions
On 8 September 2022, the Consolidated Entity announced that it had entered into binding agreements to acquire the following
businesses (together, the 'Acquisitions'), comprising:
●
●
●
Sunshine Coast Hand Therapy, a hand therapy business located on the Sunshine Coast, Queensland (2 clinics);
Watsonia Physiotherapy, a physiotherapy business located in Watsonia, Victoria (1 clinic); and
Corio Bay Health Group, 9 allied health businesses located throughout south-west and south-east Melbourne and
Geelong, Victoria.
Settlement has been reached for Sunshine Coast Hand Therapy and it is expected that all conditions precedent will be
satisfied and settlement reached for each of Watsonia Physiotherapy and Corio Bay Health Group on or before 30 October
2022.
The Acquisitions are expected to contribute the following annualised earnings(1) to Healthia:
Revenue(u)(1)
EBITDA(u)(2)(3)
$'000
8,880.00
1,870.00
17 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
Total consideration for the Acquisitions (subject to completion adjustments(4)) is as follows:
Upfront cash consideration
Issue of Clinic Class Shares(5)
Total upfront consideration
$'000
6,610.00
1,680.00
8,290.00
In addition to the upfront consideration, contingent consideration(6) may become payable as cash consideration, subject to
the achievement of pre-defined conditions.
(1)
(2)
(3)
(4)
(5)
(6)
Revenue(u) and EBITDA(u) numbers are based on historical 12 months of trading, normalised in accordance with Healthia’s acquisition and accounting policies, removing the impacts
of AASB16.
EBITDA(u) means underlying earnings before interest, tax, depreciation and amortisation, removing the impacts of AASB16. EBITDA(u) reflects EBITDA as adjusted to reflect the
Directors’ assessment of the result for the ongoing business activities, in accordance with AICD/Finsia principles. EBITDA(u) has not been audited.
EBITDA(u) includes the approximate 20% economic interest continued to be owned by Clinic Class Shareholders.
Completion adjustments are agreed on a deal-by-deal basis and can include adjustments for the value of inventory held at completion and the value of employee liabilities transferring
to Healthia as the acquirer.
Clinic Class Shares are non-voting shares issuable by certain subsidiaries of Healthia Limited. These shares enable the holder to participate in dividends declared, calculated on the
performance of the clinic in which the Clinic Class Shares are issued. The Clinic Class Shares are designed to create alignment between the interests of clinicians and shareholders.
Contingent consideration is based on future performance of the business with the maximum amount payable in the future $3.76 million.
No other matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly affect the
Consolidated Entity's operations, the results of those operations, or the Consolidated Entity's state of affairs in future financial
years.
Environmental regulation
The Consolidated Entity is not subject to any significant environmental regulation under Australian Commonwealth or State
law.
Information on Directors
Name:
Title:
Appointed:
Experience and expertise:
Dr Glen Frank Richards
Chairman and Non-Executive Director
10 May 2018
Glen is a veterinary surgeon and the founder and former CEO of Greencross Limited,
Australia’s largest pet care company. Glen has spent over 20 years building a multi-
million-dollar integrated pet care empire, which now operates more than 180 veterinary
hospitals and 230 pet care retail stores in Australia and Animates in New Zealand.
Other current directorships:
Chairman and Non-Executive Director of People Infrastructure Ltd (ASX code: PPE).
Former directorships (last 3 years): Non-Executive Director of Regeneus Ltd (ASX code: RGS) (24 February 2015 to 3
Special responsibilities:
Interests in shares:
Interests in rights:
June 2020)
Non-Executive Director of Greencross Ltd (ASX code: GXL) (26 April 2007 to 27
February 2019)
Member of the Audit and Risk Committee and the Nomination and Remuneration
Committee.
7,966,777 ordinary shares held at 30 September 2022
None
18 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
Name:
Title:
Appointed:
Experience and expertise:
Paul David Wilson
Independent Non-Executive Director
10 May 2018
Paul was a co-founder, director and shareholder of Mammoth Pet Holdings Pty Ltd (Pet
Barn) prior to the merger with Greencross Limited. Prior to founding Mammoth, Paul
was the Chief Operating Officer of ShopFast, Australia’s largest online grocery retailer
(sold to Coles in 2003). Paul has worked in the retail industry for 26 years with roles
including General Manager of Caltex/Boral JV, Vitalgas.
None
Other current directorships:
Former directorships (last 3 years): Non-executive director of Greencross Ltd (ASX code: GXL) (5 February 2014 to 27
Special responsibilities:
Interests in shares:
Interests in rights:
February 2019)
Chairman of the Audit and Risk Committee and a member of the Nomination and
Remuneration Committee.
1,857,727 ordinary shares held at 30 September 2022
None
Name:
Title:
Appointed:
Experience and expertise:
Lisa Jane Dalton
Independent Non-Executive Director
10 May 2018
Lisa is an experienced director, senior executive and company secretary with expertise
in the healthcare, medical, utilities, manufacturing, childcare, energy, mining and
construction sectors.
She has experience in leading teams responsible for strategy, governance, risk
management, human resources, communication, stakeholder relations and program
management. In recent times, Lisa has participated in 4 successful ASX listings. Lisa
has strong practical experience in fit for purpose governance, risk management,
strategic planning and motivating teams to find solutions to complex issues.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Chairman of the Nomination and Remuneration Committee and a member of the Audit
and Risk Committee.
46,728 ordinary shares held at 30 September 2022
None
Interests in shares:
Interests in rights:
Name:
Title:
Appointed:
Experience and expertise:
Wesley Coote
Group Managing Director and Group Chief Executive Officer
29 April 2019
Wesley is the former Chief Financial Officer and Company Secretary of Greencross
Ltd. Prior to Greencross, Wesley worked in Chartered Accounting where he provided
business advice within the health sector, property sector and financial services industry.
Wesley holds a Bachelor of Commerce from the University of Queensland and is a
member of the Institute of Chartered Accountants, as well as a member of the
Governance Institute of Australia. Wesley joined the Group in December 2015 as Chief
Financial Officer and Company Secretary and was appointed Group Managing Director
and Chief Executive Officer on 29 April 2019.
Other current directorships:
None
Former directorships (last 3 years): None
Interests in shares:
Interests in rights:
1,722,326 ordinary shares held at 30 September 2022
552,463 performance rights held at 30 September 2022
19 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
Name:
Title:
Appointed:
Experience and expertise:
Darren Lindsey Stewart
Executive Director
10 May 2018
Darren is a registered podiatrist and in 2004 co-founded the My FootDr Business with
Greg Dower. The two had grown the group to 13 clinics by December 2015. In 2015,
Darren and Greg saw the opportunity to grow their network of clinics through the
acquisition of well-established podiatry clinics. Before merging with Balance Podiatry
Group in December 2016, they had grown the network to 19 clinics. Today, Darren
provides strategic leadership and direction to the Feet & Ankles business division.
Other current directorships:
None
Former directorships (last 3 years): None
Interests in shares:
Interests in rights:
8,021,333 ordinary shares held at 30 September 2022
None
Name:
Title:
Appointed:
Experience and expertise:
Colin Jonathan Kangisser
Executive Director and Chief Executive Officer, Eyes & Ears Division
30 November 2020
Colin is a registered optometrist with over 30 years optical experience. He founded and
grew multiple retail chains including Optic Express and Kays Optical prior to holding
executive leadership positions with the OPSM Group and founding TOC in 2005.
None
Other current directorships:
Former directorships (last 3 years): None
Interests in shares:
Interests in rights:
5,134,628 ordinary shares held at 30 September 2022
45,000 performance rights held at 30 September 2022
Name:
Title:
Appointed:
Experience and expertise:
Lisa Michelle Roach
Executive Director and Chief Operating and People Officer, Bodies & Minds and Feet
& Ankles Division
22 April 2022
Lisa was a founding partner in several of the Allsports Clinics and has over 29 years'
experience in the allied health industry. Lisa was also a qualified and practicing
physiotherapist for 10 years. Lisa has held an executive role and has been heavily
involved and influential within Healthia since its IPO. Her current role is Chief
Operations and People Officer for Healthia's Bodies and Minds, Feet and Ankles
divisions. Lisa holds a Bachelor of Physiotherapy, is a member of the Institute of
Company Directors and has held board positions on Healthia's subsidiary since IPO.
Other current directorships:
None
Former directorships (last 3 years): None
Interests in shares:
Interests in rights:
895,819 ordinary shares held at 30 September 2022
264,840 performance rights held at 30 September 2022
Name:
Title:
Appointed/Resigned:
Experience and expertise:
Anthony (Tony) Peter Ganter
Director and Group Chief Business Development & Strategy Officer
10 May 2018/22 April 2022
Tony has over 25 years’ experience in the management and operation of private
physiotherapy and sports medicine clinics and high performance medical teams in
professional sport. He possesses knowledge of the professional, administrative and
management skills required to operate physiotherapy and sports medicine centres.
Tony remains active as a treating physiotherapist which enables him to keep in touch
with the challenges of both professional health care and clinic ownership. He has a
strong commitment
for
physiotherapists.
Other current directorships:
Not applicable as no longer a director
Former directorships (last 3 years): Not applicable as no longer a director
Not applicable as no longer a director
Interests in shares:
Not applicable as no longer a director
Interests in rights:
the ongoing creation of varied career
journeys
to
'Other current directorships' quoted above are current directorships for listed entities only and exclude directorships of all
other types of entities, unless otherwise stated.
20 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and exclude
directorships of all other types of entities, unless otherwise stated.
Company secretaries
Christopher Banks - Chris is the Chief Financial Officer and Joint Company Secretary. Chris joined the Healthia Group
(previously My FootDr) in July 2017 as Chief Commercial Officer and was appointed Chief Financial Officer and Company
Secretary on 29 April 2019.
Julia Murfitt - Julia was appointed Joint Company Secretary on 23 February 2022. Julia is a qualified and practicing solicitor
with over 13 years' experience across Australia and New Zealand. Julia joined Healthia as General Counsel in August 2020
and has been instrumental in Healthia's growth since this time.
Meetings of Directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during the
year ended 30 June 2022, and the number of meetings attended by each Director were:
Full Board
Nomination and
Remuneration Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
Dr Glen Frank Richards
Paul David Wilson
Lisa Jane Dalton
Wesley James Coote
Darren Lindsey Stewart
Colin Jonathan Kangisser
Anthony Peter Ganter
Lisa Michelle Roach
14
14
14
14
14
14
9
5
14
14
14
14
14
14
10
5
1
1
1
1
-
-
-
-
1
1
1
1
-
-
-
-
5
5
5
5
-
-
-
-
5
5
5
5
-
-
-
-
Held: represents the number of meetings held during the time the Director held office or was a member of the relevant
committee.
Remuneration report (audited)
The Board of Directors of the Consolidated Entity present the Remuneration Report (the Report) for the reporting period of
1 July 2021 to 30 June 2022. The Report forms part of the Directors' Report and has been prepared and audited in
accordance with the Corporations Act 2001.
The Report details the key management personnel remuneration arrangements for the Consolidated Entity. Key
management personnel (KMP) are those persons having authority and responsibility for planning, directing and controlling
the activities of the Consolidated Entity, directly or indirectly, including all directors.
21 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
The KMP of the Consolidated Entity covered in this report are:
Name
Position held
Non-Executive Directors:
Glen Richards
Paul Wilson
Lisa Dalton
Executive Directors:
Wesley Coote
Darren Stewart
Colin Kangisser
Lisa Roach
Other KMP:
Anthony Ganter
Christopher Banks
Katherine Baker
Chairman and Non-Executive Director
Non-Executive Director
Non-Executive Director
Group Managing Director and Group Chief Executive
Officer
Executive Director
Executive Director and Chief Executive Officer, Eyes &
Ears Division
Executive Director and Chief Operations and People
Officer, Bodies & Minds and Feet & Ankles Divisions
Appointed
10 May 2018
10 May 2018
10 May 2018
10 May 2018
10 May 2018
20 November 2020
21 April 2022 (Executive Director)
11 September 2018 (Executive)
Group Chief Business Development and Strategy Officer 10 May 2018 (Executive Director)
Chief Financial Officer and Company Secretary
Chief Executive Officer, Bodies & Minds and Feet &
Ankles Divisions
11 September 2018 (Executive)
10 May 2018
1 December 2020
The Board has determined that Dean Hartley is no longer a KMP in the current financial period.
Role of the Nomination and Remuneration Committee
The Nomination and Remuneration Committee (the Committee) assists and makes recommendations to the Board in
relation to the remuneration and incentive framework for its directors and KMP. The Committee’s responsibilities include,
among other things:
●
Reviewing and advising the Board on the process for overseeing performance accountability and effective monitoring
of KMP including
setting and evaluating performance against goals and targets;
Reviewing and advising the Board on the Consolidated Entity’s remuneration structure including short term incentive
(STI) and long term incentive (LTI) arrangements and participation;
Reviewing the incentives and behaviours arising from the Consolidated Entity’s remuneration structure;
Reviewing the succession plans for the Board, Group CEO and other senior executives;
Assisting the Board by co-ordinating a Board performance review annually and to ensure that this review includes an
assessment of a Board skills matrix which sets out the skills, knowledge, experience and diversity that the Board
currently has or is looking to achieve;
Assisting the Board in adopting measurable objectives for having diversity throughout the Consolidated Entity and
assessing progress towards achieving those objectives.
●
●
●
●
●
Under its charter, the Nomination and Remuneration Committee must consist of at least three members, a majority of whom,
including the Committee Chair, are independent non-executive directors. A copy of the charter of the Committee is available
on the Consolidated Entity’s website in the Corporate Governance section. During FY2022, the members of the Committee
were:
●
●
●
Lisa Dalton – Independent Non-Executive Director (Chair)
Dr Glen Richards – Non-Executive Director
Paul Wilson – Independent Non-Executive Director
The Nomination and Remuneration Committee may from time to time engage external remuneration consultants or access
benchmarking information to ensure the KMP remuneration framework is market competitive and complementary to the
remuneration strategy of the Consolidated Entity.
22 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
Remuneration overview and strategy
The performance of the Consolidated Entity depends on the quality of its directors and executives. The remuneration
philosophy is to attract, motivate and retain high performance and high-quality personnel.
The objective of the Consolidated Entity's executive remuneration framework is to ensure reward for performance is
competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of
strategic objectives and the creation of value for all stakeholders, and it is considered to conform to the market best practice
for the delivery of reward.
The Board ensures that executive rewards satisfy the following key criteria for good reward governance practices:
●
●
●
●
competitiveness and reasonableness
acceptability to shareholders
performance linkage / alignment of executive compensation
transparency
The reward framework is designed to align executive reward to stakeholder, including shareholders' interests. The Board
have considered that it should seek to enhance shareholders' interests by:
●
●
having economic profit as a core component of plan design
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value
attracting and retaining high calibre executives
●
Additionally, the reward framework should seek to enhance executives' interests by:
●
●
●
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
The Consolidated Entity utilises both short and long term incentives in addition to fixed remuneration to incentivise executives
and reward performance. Fixed remuneration reflects executives’ qualifications, capabilities and experience and is aimed to
attract and retain high performing and high quality experienced executives to ensure shareholder interests are managed in
a responsible and effective manner. The STI’s are to award achievement of specific and challenging targets and key
performance indicators during the financial year.
In accordance with best practice corporate governance, the structure of Non-Executive Director and Executive Director
remuneration is separate.
Consolidated entity performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the Consolidated Entity. A portion of cash bonus
and incentive payments are dependent on defined earnings per share targets being met. The remaining portion of the cash
bonus and incentive payments are linked to job specific key performance indicators and at the discretion of the Nomination
and Remuneration Committee.
The Nomination and Remuneration Committee is of the opinion that the continued financial performance of the Consolidated
Entity can be attributed in part to the adoption of performance based compensation and is satisfied that this will continue to
increase shareholder wealth if maintained over the coming years.
Performance rights plan
On 19 November 2021, following shareholder approval at the 2021 Annual General Meeting (AGM), 268,500 unlisted
performance rights were granted to Executive Directors (187,500 - Wesley Coote, 36,000 - Anthony Ganter and 45,000 -
Colin Kangisser), with a nil grant and exercise price. The performance rights will vest on 18 November 2024 (subject to
satisfaction of the relevant vesting conditions) and expire on 31 December 2024. The vesting conditions include a number
of performance and service conditions.
The fair value of performance rights (equity settled) with the relative TSR condition is calculated at the date of grant using
the Monte-Carlo simulation model, taking into account the impact of the TSR condition and dividends during the vesting
period. The value disclosed is the portion of fair value of the performance rights recognised in each reporting period.
Refer to 'Share-based compensation' section of this remuneration report for the vesting conditions of the performance rights.
23 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
The performance rights do not rank equally with existing ordinary shares quoted. Prior to vesting, the performance rights do
not carry a right to vote or receive dividends.
Where shares are issued upon the vesting and exercise of the performance rights (within the periods detailed below), those
shares will rank equally with existing ordinary shares of Healthia Limited. To participate in a dividend, the ordinary shares
must be issued prior to the record date for the dividend.
Use of remuneration consultants
During the financial year ended 30 June 2022, the Consolidated Entity did not engage a remuneration consultant to review
its existing remuneration policies.
Voting and comments made at the Company's 2021 Annual General Meeting ('AGM')
At the 17 November 2021 AGM, 99.64% of the votes received supported the adoption of the remuneration report for the year
ended 30 June 2021. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration
Details of the remuneration of KMP of the Consolidated Entity are set out in the following tables.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
$
Total
$
100,000
60,000
60,000
345,000
122,370
295,005
213,077
202,740
-
-
-
-
-
-
34,650
-
220,769
232,500
1,851,461
-
43,312
77,962
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
60,000
60,000
27,500
12,153
26,393
19,269
27,860
6,753
730
5,840
4,380
3,979
137,037
-
12,420
56,290
58,696
516,290
135,253
339,658
327,666
293,275
20,077
27,250
160,502
4,882
4,882
31,446
55,075
61,043
300,803
368,987
380,561 2,501,932
2022
Non-Executive Directors:
Glen Richards
Paul Wilson
Lisa Dalton
Executive Directors:
Wesley Coote
Darren Stewart
Colin Kangisser
Lisa Roach
Anthony Ganter
Other KMP:
Christopher Banks
Katherine Baker
Details of incentives (LTIs) are disclosed in the Additional information section within this remuneration report.
Other than as set out in the above table, no other STI's were paid to KMP during FY22 as a result of them not meeting the
target performance criteria.
The Board has determined that Dean Hartley is no longer a KMP in the current financial period.
No LTIs have vested in the year.
24 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long
service
leave
$
Equity-
settled
$
Total
$
100,000
60,000
57,692
306,154
274,497
193,731
172,083
-
-
-
-
-
-
-
148,462
183,076
210,962
101,923
1,808,580
-
-
-
38,188
38,188
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
60,000
57,692
31,103
27,344
25,088
14,583
4,583
1,643
3,422
2,385
58,562
-
36,265
-
400,402
303,484
258,506
189,051
16,954
20,388
22,891
13,926
172,277
3,285
3,285
4,106
2,920
25,629
125,173
29,148
23,534
6,701
293,874
235,897
261,493
163,658
279,383 2,324,057
2021
Non-Executive Directors:
Glen Richards
Paul Wilson
Lisa Dalton
Executive Directors:
Wesley Coote
Darren Stewart
Anthony Ganter
Colin Kangisser*
Other KMP:
Christopher Banks**
Lisa Roach
Dean Hartley
Katherine Baker***
*
**
Remuneration is from the date of appointment as a director to 30 June 2021.
$100,000 of the $125,173 equity-settled remuneration related to the write-off of a loan owing for a loan funded share plan. Of the $200,000 loan owing, $100,000 was repaid and
$100,000 of the balance was written off during the period.
*** Remuneration is from 1 December 2020 to 30 June 2021, being the period Katherine was classified as a KMP (previously employed in another role with the Consolidated Entity). The
$38,188 cash bonus related to a sign-on bonus for the new position accepted during the period.
Other than the sign-on bonus noted, the Directors have resolved not to award short-term bonuses or other short-term
incentives for the prior period.
The proportion of remuneration linked to performance and the fixed proportion was as follows:
Name
Non-Executive Directors:
Glen Richards
Paul Wilson
Lisa Dalton
Executive Directors:
Wesley Coote
Darren Stewart
Colin Kangisser
Lisa Roach
Anthony Ganter
Other KMP:
Chris Banks
Katherine Baker
Fixed remuneration
2021
2022
At risk - STI
At risk - LTI
2022
2021
2022
2021
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
-
-
-
73.5%
100.0%
96.3%
72.2%
80.0%
85.4%
100.0%
100.0%
87.6%
86.0%
-
-
-
10.8%
-
-
-
-
-
-
-
-
-
-
-
-
26.5%
-
3.7%
17.0%
20.0%
-
-
-
14.6%
-
-
12.4%
14.0%
81.7%
71.8%
57.4%
72.4%
-
11.7%
-
23.5%
18.3%
16.5%
42.6%
4.1%
25 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
The proportion of the cash bonus paid/payable or forfeited was as follows:
Name
Executive Directors:
Wesley Coote
Colin Kangisser
Lisa Roach
Anthony Ganter
Other KMP:
Christopher Banks
Katherine Baker
Cash bonus paid/payable
2022
2021
Cash bonus forfeited
2021
2022
-
-
42%
-
-
53%
-
-
-
-
100%
100%
58%
100%
-
50%
100%
47%
100%
100%
100%
100%
100%
50%
Executive remuneration overview
The Consolidated Entity aims to reward executives based on their position and responsibility, with a level and mix of
remuneration which has both fixed and variable components:
●
●
●
●
Base pay and non-monetary benefits
Short-term performance incentives
Share-based payments
Other remuneration such as superannuation and long service leave
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Nomination and Remuneration Committee based on individual and business unit performance, the overall performance of
the Consolidated Entity and comparable market remunerations.
Executives receive their fixed remuneration in the form of cash.
Short-Term Incentives
The short-term incentives ('STI') program is designed to align the targets of the business units with the performance hurdles
of Executives. STI payments are granted to Executives based on specific and challenging annual targets and key
performance indicators ('KPI's') being achieved. KPI's include profit contribution, customer satisfaction, leadership
contribution and product management. Performance hurdles are linked to key performance indicators of the Executive
personnel, key non-financial targets aligned to Healthia’s strategic objectives and Board approval.
Executives are eligible for an annual STIs with an opportunity to earn up to 35% of their annual base fixed remuneration.
Generally, these arrangements are terminable by the Company or the Executives with 6 months’ notice.
Long Term Incentives
The long-term incentives ('LTI') include long service leave and share-based payments (Performance Rights). Performance
Rights are awarded to executives over a period of three years based on long-term incentive measures. These include
increases in Total Shareholders Return and Earnings Per Share of the Consolidated Entity. The Nomination and
Remuneration Committee reviewed the long-term equity-linked performance incentives specifically for Executives during the
year ended 2022.
26 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
Contractual arrangements with executive KMPs
Group Chief Executive Officer
Fixed remuneration
Contract duration
Notice by the individual / company
Termination of employment (with cause) or by the individual STI is not awarded and all unvested LTI will lapse
Termination of employment (without cause)
$445,000 (effective from 1 October 2022)
Ongoing
6 months
Entitlement to pro-rata STI for the year, subject to meeting
specified performance criteria during the relevant period.
All unvested LTI will lapse, unless the Board determines
otherwise in its absolute discretion.
Post-employment restraint for 18 months preventing the
Group CEO from being employed or involved in a competing
business.
Restrictive covenants
Other Senior Executives
Fixed remuneration
Contract duration
Notice by the individual / company
Termination of employment (with cause) or by the individual STI is not awarded and all unvested LTI will lapse
Termination of employment (without cause)
Range between $241,000 and $329,400 (effective from 1
July 2022)
Ongoing contract
6 months
All unvested LTI will lapse, unless the Board determines
otherwise in its absolute discretion.
Post-employment restraints between 12 and 18 months
Restrictive covenants
Non-executive director arrangements
Fees and payments to Non-Executive Directors reflect the demands and responsibilities of their role. Non-Executive
Directors' fees and payments are reviewed annually by the Nomination and Remuneration Committee. The Nomination and
Remuneration Committee may, from time to time, receive advice from independent remuneration consultants to ensure Non-
Executive Directors' fees and payments are appropriate and in line with the market. The Chairperson's fees are determined
independently to the fees of other Non-Executive Directors based on comparative roles in the external market.
The Chairperson is not present at any discussions relating to the determination of his own remuneration. Non-Executive
Directors do not receive share options or other performance based pay or incentives. Directors do not receive additional fees
for participating in or chairing committees.
ASX listing rules require the aggregate Non-Executive Directors' remuneration be determined periodically by a general
meeting. The most recent determination was at the Annual General Meeting held on 4 July 2018, where the shareholders
approved a maximum annual aggregate remuneration of $500,000 per annum.
All non-executive directors enter into a service agreement with the Consolidated Entity in the form of a letter of appointment.
The letter summarises the board policies and terms, including remuneration, relevant to the office of director.
The current base fees, detailed below, were reviewed with effect from 1 September 2022. Directors may also be reimbursed
for all travel and other expenses they incur in connection with the Consolidated Entity.
Non-executive directors
Per annum director fees (from 1 September 2022)
Non-executive directors
Additional allowances:
Chair of Board
Remuneration & Nomination Committee Chair
Audit & Risk Committee Chair
$70,000 (FY22: $50,000)
$60,000 (FY22: $50,000)
$10,000 (FY22: $10,000)
$10,000 (FY22: $10,000)
27 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
Share-based compensation
Unlisted performance rights
On 19 November 2021, following shareholder approval at the 2021 Annual General Meeting, 268,500 unlisted performance
rights were granted to Directors (187,500 - Wesley Coote, 36,000 - Anthony Ganter and 45,000 to Colin Kangisser), with a
nil grant and exercise price. The performance rights will vest on 18 November 2024 (subject to satisfaction of the relevant
vesting conditions) and expire on 31 December 2024. The vesting conditions include a number of performance and service
conditions.
2021 Grant
Grant dates:
Grant price:
Exercise price:
Vesting date:
Expiry date:
Restriction on shares issued on exercise:
19 November 2021
$nil
$nil
17 November 2024
31 December 2024
Can only be traded in accordance with Securities Trading Policy and
insider trading laws
The fair value of performance rights (equity settled) with the relative TSR condition is calculated at the date of grant using
the Monte-Carlo simulation model, taking into account the impact of the TSR condition and dividends during the vesting
period. The value disclosed is the portion of fair value of the rights recognised in each reporting period.
Vesting conditions performance rights granted 19 November 2021 for all Key Management Personnel
Service condition
The performance rights will be exercisable upon satisfaction of the Service condition,
being continuous employment with the Company from Grant Date until the Vesting
Date.
EPS Growth condition
The Company’s compounding annual growth in underlying Earnings Per Share
(underlying EPS) for the period from 1 July 2021 to 30 June 2024 greater than 10%
per annum.
The underlying EPS results to be used will be the Basic EPS recorded in the
Company’s audited financial statements in the relevant years, adjusted for one-off
and non-recurring items and the amortisation of customer lists, as determined by the
Board in its discretion.
50% of the Performance Rights will be exercisable if this condition is achieved.
Total Shareholder Return condition Total Shareholder Return ('TSR') to exceed 150% for the period from 1 July 2021 to
30 June 2024, with TSR calculated as follows:
TSR = (Price End - Price Begin + Dividends)/Price Begin
Where:
Price Begin = share price at 1 July 2021;
Price End = share price at 30 June 2024; and
Dividends = total dividends paid per share during the period from 1 July 2021 to 30
June 2024.
50% of the performance rights will be exercisable if this condition is achieved.
The performance rights do not rank equally with existing ordinary shares quoted. Prior to vesting, the performance rights do
not carry a right to vote or receive dividends.
Where shares are issued upon the vesting and exercise of the performance rights (within the periods detailed above), those
shares will rank equally with existing ordinary shares of Healthia Limited.
To participate in a dividend, the ordinary shares must be issued prior to the record date for the dividend.
28 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of Directors and
other KMP in this financial year or future reporting years are as follows:
Name
Wesley Coote
Anthony Ganter
Colin Kangisser
Lisa Roach
Chris Banks
Katherine Baker
Wesley Coote
Wesley Coote
Anthony Ganter
Anthony Ganter
Chris Banks
Chris Banks
Lisa Roach
Lisa Roach
Katherine Baker
Katherine Baker
Wesley Coote
Wesley Coote
Anthony Ganter
Anthony Ganter
Chris Banks
Chris Banks
Lisa Roach
Lisa Roach
Number of
rights
granted
Grant date
Vesting date and
exercisable date
Expiry date
Fair value
per right
at grant date
187,500 19-Nov-21
36,000 19-Nov-21
45,000 19-Nov-21
66,000 19-Nov-21
76,000 19-Nov-21
182,500 19-Nov-21
96,250 1-Dec-20
96,250 1-Dec-20
45,000 1-Dec-20
45,000 1-Dec-20
45,000 30-Oct-20
45,000 30-Oct-20
45,000 30-Oct-20
45,000 30-Oct-20
27,125 30-Oct-20
27,125 30-Oct-20
86,232 27-Nov-19
86,231 27-Nov-19
64,057 27-Nov-19
64,058 27-Nov-19
43,800 27-Nov-19
43,800 27-Nov-19
54,420 27-Nov-19
54,420 27-Nov-19
18-Nov-24
18-Nov-24
18-Nov-24
18-Nov-24
18-Nov-24
18-Nov-24
31-Aug-23
31-Aug-23
31-Aug-23
31-Aug-23
31-Aug-23
31-Aug-23
31-Aug-23
31-Aug-23
31-Aug-23
31-Aug-23
31-Aug-22
31-Aug-22
31-Aug-22
31-Aug-22
31-Aug-22
31-Aug-22
31-Aug-22
31-Aug-22
31-Dec-24
31-Dec-24
31-Dec-24
31-Dec-24
31-Dec-24
31-Dec-24
31-Oct-23
31-Oct-23
31-Oct-23
31-Oct-23
31-Oct-23
31-Oct-23
31-Oct-23
31-Oct-23
31-Oct-23
31-Oct-23
31-Oct-22
31-Oct-22
31-Oct-22
31-Oct-22
31-Oct-22
31-Oct-22
31-Oct-22
31-Oct-22
$0.420
$0.420
$0.420
$0.420
$0.420
$0.420
$0.270
$1.150
$0.270
$1.150
$0.140
$0.910
$0.140
$0.910
$0.140
$0.910
$0.920
$0.050
$0.920
$0.050
$0.920
$0.050
$0.920
$0.050
Performance rights granted carry no dividend or voting rights.
Additional disclosures relating to KMP
Shareholding
The number of shares in the Company held during the financial year by each Director and other KMP of the Consolidated
Entity, including their personally related parties, is set out below:
Balance at Received
as part of
the start of
the year
remuneration Additions
Disposals/
other
Balance at
the end of
the year
Ordinary shares
Glen Richards
Paul Wilson
Lisa Dalton
Wesley Coote
Darren Stewart
Colin Kangisser
Lisa Roach
Anthony Ganter
Chris Banks
Katherine Baker
6,306,572
1,363,416
34,335
1,633,587
8,028,011
5,066,600
779,408
971,502
192,270
5,873
24,381,574
-
-
-
-
-
-
-
-
-
-
-
1,150,000
374,666
8,932
47,923
-
-
75,611
4,113
-
6,984
1,668,229
-
-
-
-
(27,087)
-
-
(37,393)
-
-
7,456,572
1,738,082
43,267
1,681,510
8,000,924
5,066,600
855,019
938,222
192,270
12,857
(64,480) 25,985,323
29 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
Performance rights holding
The number of performance rights over ordinary shares in the Company held during the financial year by each Director and
other members of KMP of the Consolidated Entity, including their personally related parties, is set out below:
Balance at
the start of
the year
Granted
Expired/
forfeited/
other
Balance at
the end of
the year
Vested
Performance rights over ordinary shares
Glen Richards
Paul Wilson
Lisa Dalton
Wesley Coote
Darren Stewart
Colin Kangisser
Lisa Roach
Anthony Ganter
Chris Banks
Katherine Baker
-
-
-
364,963
-
-
198,840
218,115
177,600
54,250
1,013,768
-
-
-
187,500
-
45,000
66,000
36,000
76,000
182,500
593,000
-
-
-
-
-
-
-
-
-
-
-
Performance rights over ordinary shares
Wesley Coote
Colin Kangisser
Lisa Roach
Anthony Ganter
Chris Banks
Katherine Baker
-
-
-
-
-
-
-
-
-
-
-
-
-
-
552,463
-
45,000
264,840
254,115
253,600
236,750
1,606,768
Maximum
value yet to
vest* $
154,988
24,474
53,601
44,365
59,040
109,928
446,396
* The maximum value of the deferred shares yet to vest has been determined as the amount of the grant date fair value of
the rights that is yet to be expensed.
Loans to KMP and their related parties
There were no loans to KMP and their related parties at 30 June 2022.
Other transactions with KMP and their related parties
The following transactions occurred with related parties:
Rent and outgoings paid to entities controlled by Darren Stewart
Rent and outgoings paid to entities controlled by Anthony Ganter
Rent and outgoings paid to entities controlled by Lisa Roach
Payment for bookkeeping services to an entity associated with Wesley Coote
Payment for orthotics and prosthetics to an entity associated with Darren Stewart
Deferred cash payment for the acquisition of businesses associated with Colin Kangisser
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
This concludes the remuneration report, which has been audited.
30 (Annual Report - 30 June 2022)
Consolidated
2022
$
311,652
304,127
235,907
380,470
72,556
1,065,044
2,369,756
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
Shares under performance rights
Unissued ordinary shares of Healthia Limited under performance rights at the date of this report are as follows:
Grant date
27 November 2019
30 October 2020
1 December 2020
19 November 2021
Expiry date
31 October 2022
31 October 2023
31 October 2023
31 December 2024
Number
under rights
2,543,358
378,500
282,500
1,203,500
4,407,858
No person entitled to exercise the performance rights had or has any right by virtue of the performance right to participate in
any share issue of the Company or of any other body corporate.
Shares issued on the exercise of performance rights
There were no ordinary shares of Healthia Limited issued on the exercise of performance rights during the year ended 30
June 2022 and up to the date of this report.
Indemnity and insurance of officers
The Company has indemnified the Directors and executives of the Consolidated Entity for costs incurred, in their capacity as
a Director or executive, for which they may be held personally liable, except where there is a lack of good faith.
Post the end of the financial year, the Consolidated Entity paid a premium in respect of a contract to insure the Directors and
executives of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of the liability and the amount of the premium.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility
on behalf of the Company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 31 to the financial statements.
The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The Directors are of the opinion that the services as disclosed in note 31 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants (including Independence Standards) issued by the Accounting Professional and
Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-
making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.
●
Officers of the Consolidated Entity who are former partners of BDO Audit Pty Ltd
There are no officers of the Consolidated Entity who are former partners of BDO Audit Pty Ltd.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
31 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' report
30 June 2022
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this Directors' report.
Auditor
BDO Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
Dr Glen Frank Richards
Director
30 September 2022
32 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Auditor's independence declaration
30 June 2022
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY T R MANN TO THE DIRECTORS OF HEALTHIA LIMITED
As lead auditor of Healthia Limited for the year ended 30 June 2022, I declare that, to the best of my
knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect Healthia Limited and the entities it controlled during the period.
T R Mann
Director
BDO Audit Pty Ltd
Brisbane, 30 September 2022
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
33 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2022
Revenue from contracts with customers
5
200,264
136,946
Other income
Fair value movement of contingent consideration
6
29
2,520
1,550
9,080
-
Note
Consolidated
2022
$'000
2021
$'000
Expenses
Changes in inventories
Raw materials and consumables used
Employee benefits expense
Occupancy costs
Marketing costs
Other expenses
Impairment of receivables
Acquisition costs
Integration and restructuring costs
Share-based payments expense
Depreciation expense
Amortisation expense
Finance costs
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Profit for the year is attributable to:
Non-controlling interest
Owners of Healthia Limited
Total comprehensive income for the year is attributable to:
Non-controlling interest
Owners of Healthia Limited
2,527
(20,785)
(129,189)
(4,758)
(3,218)
(11,335)
(268)
(5,219)
(2,183)
(1,395)
(19,341)
(1,685)
(5,895)
4,279
(18,194)
(82,833)
(3,402)
(1,837)
(7,356)
(271)
(3,415)
(793)
(1,180)
(13,183)
(1,017)
(3,674)
39
7
7
7
1,590
13,150
8
(1,247)
(3,973)
343
9,177
-
-
343
9,177
3,672
(3,329)
4,020
5,157
343
9,177
3,672
(3,329)
4,020
5,157
343
9,177
Basic earnings per share
Diluted earnings per share
Cents
Cents
38
38
(2.82)
(2.82)
6.48
6.23
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
34 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Consolidated statement of financial position
As at 30 June 2022
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax refund due
Other assets
Total current assets
Non-current assets
Investments accounted for using the equity method
Property, plant and equipment
Right-of-use assets
Intangibles
Deferred tax
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Income tax
Employee benefit obligations
Provisions
Other liabilities
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Derivative financial instruments
Employee benefit obligations
Provisions
Other liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained profits/(accumulated losses)
Equity attributable to the owners of Healthia Limited
Non-controlling interest
Total equity
Note
Consolidated
2022
$'000
2021
$'000
9
10
11
8
12
13
14
15
16
8
17
18
19
8
21
22
23
18
19
20
21
22
23
24
25
26
5,666
8,204
10,532
97
3,199
27,698
19
17,075
59,073
246,326
7,845
330,338
5,816
4,779
8,005
-
2,200
20,800
19
12,320
40,345
137,534
4,525
194,743
358,036
215,543
19,089
1,954
17,116
-
11,318
357
2,914
52,748
77,117
46,853
14
904
2,975
4,961
132,824
11,800
1,674
11,212
3,668
6,840
310
1,745
37,249
48,330
32,907
240
660
1,648
1,982
85,767
185,572
123,016
172,464
92,527
146,213
(2,124)
(7,801)
136,288
36,176
79,578
(3,519)
320
76,379
16,148
172,464
92,527
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
35 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Consolidated statement of changes in equity
For the year ended 30 June 2022
Consolidated
Issued
capital
$'000
Reserves
$'000
Retained
profits/
(accumulated
losses)
$'000
Non-
controlling
interest
$'000
Total equity
$'000
Balance at 1 July 2020
49,884
(4,190)
(1,793)
13,955
57,856
Profit after income tax expense for the year
Other comprehensive income for the year,
net of tax
Total comprehensive income for the year
Transactions with owners in their capacity
as owners:
Contribution of equity, net of transaction
cost
Issue of performance rights
Issue of ordinary shares as consideration
for business combinations (note 34)
Issue of ordinary shares as part of Dividend
Reinvestment Plan (note 24)
Issue of ordinary shares as consideration
for acquisition of non-controlling interest
(note 24)
Contributions of clinic class shares
Issue of clinic class shares as consideration
for business combinations (note 35)
Buy-back of clinic class shares
Transactions with non-controlling interests
Distributions paid to non-controlling interest
Dividends paid (note 27)
-
-
-
12,596
-
13,448
3,044
606
-
-
-
-
-
-
-
-
-
5,157
4,020
9,177
-
-
-
5,157
4,020
9,177
-
1,180
-
-
-
-
-
-
(509)
-
-
-
-
-
-
-
-
-
-
-
-
(3,044)
-
-
-
-
-
2,767
1,584
(1,707)
-
(4,471)
-
12,596
1,180
13,448
3,044
606
2,767
1,584
(1,707)
(509)
(4,471)
(3,044)
Balance at 30 June 2021
79,578
(3,519)
320
16,148
92,527
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
36 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Consolidated statement of changes in equity
For the year ended 30 June 2022
Consolidated
Issued
capital
$'000
Reserves
$'000
Retained
profits/
(accumulated
losses)
$'000
Non-
controlling
interest
$'000
Total equity
$'000
Balance at 1 July 2021
79,578
(3,519)
320
16,148
92,527
Profit/(loss) after income tax expense for the
year
Other comprehensive income for the year,
net of tax
Total comprehensive income for the year
Transactions with owners in their capacity
as owners:
Contributions of equity, net of transaction
costs (note 24)
Issue of performance rights
Issue of ordinary shares as consideration
for business combinations (note 34)
Issue of ordinary shares as part of Dividend
Reinvestment Plan (note 24)
Contributions of clinic class shares
Issue of clinic class shares as consideration
for business combinations (note 35)
Buy-back of clinic class shares
Distributions paid to non-controlling interest
Dividends paid (note 27)
-
-
-
58,128
-
5,771
2,736
-
-
-
-
-
-
-
-
(3,329)
3,672
-
-
(3,329)
3,672
343
-
343
-
1,395
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,792)
-
-
-
-
1,154
18,816
(220)
(3,394)
-
58,128
1,395
5,771
2,736
1,154
18,816
(220)
(3,394)
(4,792)
Balance at 30 June 2022
146,213
(2,124)
(7,801)
36,176
172,464
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
37 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Consolidated statement of cash flows
For the year ended 30 June 2022
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers (inclusive of GST)
Interest received
Government grants (Covid-19)
Interest and other finance costs paid
Income taxes paid
Note
Consolidated
2022
$'000
2021
$'000
198,056
(171,818)
139,928
(115,618)
26,238
1
622
(5,895)
(3,770)
24,310
5
10,792
(3,674)
(5,155)
Net cash from operating activities
37
17,196
26,278
Cash flows from investing activities
Payment for purchase of businesses, net of cash acquired
Payments of contingent and deferred business purchases consideration
Payment for acquisition of non-controlling interest
Payments for property, plant and equipment
Payments for intangibles
Proceeds from disposal of property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of ordinary shares
Share issue transaction costs
Proceeds from issue of clinic class shares
Buy-back of clinic class shares
Proceeds from borrowings
Repayment of lease liabilities
Dividends paid to non-controlling interest
Dividends paid
Proceeds from related party loan
Net cash from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
35
14
16
24
37
37
27
(79,456)
(1,554)
-
(3,495)
-
50
(39,737)
(3,719)
(446)
(2,919)
(310)
-
(84,455)
(47,131)
62,570
(2,677)
1,154
(220)
29,065
(14,877)
(3,394)
(4,792)
-
16,271
(631)
2,767
(1,707)
21,595
(10,044)
(4,471)
(3,044)
100
66,829
20,836
(430)
4,142
(17)
4,159
Cash and cash equivalents at the end of the financial year
9
3,712
4,142
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
38 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 1. General information
The financial statements cover Healthia Limited as a consolidated entity consisting of Healthia Limited ('Company', 'Healthia'
or 'parent entity') and the entities it controlled at the end of, or during, the year (referred to in these financial statements as
the 'Consolidated Entity'). The financial statements are presented in Australian dollars, which is Healthia Limited's functional
and presentation currency.
Healthia Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office
and principal place of business is:
Level 4, East Tower
25 Montpelier Road
Bowen Hills QLD 4006
A description of the nature of the Consolidated Entity's operations and its principal activities are included in the Directors'
report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 30 September 2022.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective
notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Consolidated Entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period. The adoption of these
Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the
Consolidated Entity.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Going concern
The financial statements have been prepared on a going concern basis, which contemplates continuity of normal business
activities and the realisation of assets and settlement of liabilities in the normal course of business.
Working capital deficiency and compliance with banking covenants
As presented in the financial statements, the Consolidated Entity generated a profit after tax of $0.34 million and had net
cash inflows from operating activities of $17.19 million for the year ended 30 June 2022. As at that date the entity had net
current liabilities of $25.05 million (FY21: $16.45 million). Within these current liabilities, the Directors further note:
With regards to the working capital deficiency, the Directors note:
●
Trade and other payables increased by $7.29 million to $19.09 million (FY21: $11.80 million). As a percentage of
revenue, trade and other payables increased from 8.6% in FY21 to 9.5% in FY22;
Lease liabilities increased by $5.91m to $17.12m (FY21: $11.21m);
Employee benefit obligations increased by $4.48m to $11.32m (FY21: $6.84m);
The bank facility overdraft, presented as current borrowings, increased by $0.28 million to $1.95 million (FY21: $1.67
million).
●
●
●
The directors also note that prior to 30 June 2022, the Consolidated Entity requested and received waivers from its financiers
in relation to the addbacks when calculating Adjusted EBITDA for the purposes of its bank covenants, in particular for the
Leverage Covenant (Debt:Adjusted EBITDA). Addbacks (namely, adjustments) in relation to acquisition, integration and
restructuring costs for the period exceeded the balance permitted under the Syndicated Facility Agreement and the
Consolidated Entity received waivers from each of its financiers to allow the total quantum of addbacks for the period ended
30 June 2022. Further detail of the applicable loan covenants is included in Note 18.
Notwithstanding these conditions, the Directors believe the following:
39 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
●
●
$17.12 million included in current liabilities relates to property leases (under AASB16) where the associated right-of-
use assets are recognised as non-current assets. Cash flow from customers will be generated from the Consolidated
Entity's business sites/clinics and a portion of these cash flows will be used to pay the respective lease liability
repayments (property rents); and
Other current liabilities of $1.21 million relate to contingent consideration for business acquisitions (earn-outs), which
will only be achieved if cash flow generation remains as forecast.
The directors also believe that the preparation of the financial statements using the going concern basis of accounting is
appropriate based on cash flow forecasts prepared, which show the Consolidated Entity is expected to be able to pay its
debts as and when they fall due for the next 12 months and to realise the value of its assets and discharge its liabilities in
the ordinary course of business. Therefore, the directors believe that the preparation of the financial statements using the
going concern basis of accounting is appropriate.
Key to the forecasts are relevant assumptions regarding the business, and about financing and shareholder support; in
particular:
●
●
●
●
●
Revenue and cash flow targets – the Consolidated Entity has prepared a cash flow forecast based on reasonable
assumptions that the directors believe are achievable;
Future business combinations – the base case cash flow forecasts do not incorporate future business combinations,
which remain uncertain. Any future acquisitions will either be funded through debt, ordinary equity, clinic class shares
or available cash reserves at the time of settlement;
COVID-19 impacts – the cash flow forecasts do not incorporate any possible COVID-19-related impacts, as have been
experienced in financial years 2022 and 2021;
Subsequent event capital raising – subsequent to year end the Consolidated Entity has successfully undertaken a
capital raising providing funds to support working capital and provide flexibility for further acquisitions. Refer below for
further detail;
Bank waivers – in September 2022, the Consolidated Entity has obtained waivers from its financiers in relation to the
addbacks when calculating Adjusted EBITDA as detailed above for the September 2022 and December 2022 quarters.
As a result of obtaining these waivers, the consolidated entity is forecasting to be in compliance with its loan covenants
for 12 months from the date of these financial statements.
Subsequent event – Capital Raising
On 8 September 2022, the Consolidated Entity announced that it was raising up to $15.0 million via an accelerated non-
renounceable pro-rata entitlement offer. The offer comprised an Institutional Entitlement Offer to raise approximately $10
million and a Retail Entitlement Offer to raise approximately $5 million.
On 12 September 2022, the Consolidated Entity announced the successful completion of the Institutional Entitlement Offer
and approximately $10 million was receipted by the Consolidated Entity on 16 September 2022.
The Retail Entitlement Offer closes on 30 September 2022 and an amount of up to $5 million is expected to be raised from
this offer. The Retail Entitlement Offer is not underwritten.
This capital raising provided additional cash reserves to fund near term acquisition opportunities and provide additional
financial flexibility. The capital raising provided the Consolidated Entity with a strengthened balance sheet.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of derivative financial instruments.
40 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Consolidated Entity's accounting policies. The areas
involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Consolidated Entity only.
Supplementary information about the parent entity, Healthia Limited, is disclosed in note 34.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company as at 30 June
2022 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the Consolidated Entity has control. The Consolidated Entity controls an entity
when the Consolidated Entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the Consolidated Entity. They are de-consolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Consolidated Entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Consolidated Entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and
other comprehensive income, statement of financial position and statement of changes in equity of the Consolidated Entity.
Losses incurred by the Consolidated Entity are attributed to the non-controlling interest in full, even if that results in a deficit
balance.
Where the Consolidated Entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and
non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
Consolidated Entity recognises the fair value of the consideration received and the fair value of any investment retained
together with any gain or loss in profit or loss.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
Consolidated Entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within
12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used
to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Consolidated Entity's normal operating cycle;
it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
41 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
Associates
Associates are entities over which the Consolidated Entity has significant influence but not control or joint control.
Investments in associates are accounted for using the equity method. Under the equity method, the share of the profits or
losses of the associate is recognised in profit or loss and the share of the movements in equity is recognised in other
comprehensive income. Investments in associates are carried in the statement of financial position at cost plus post-
acquisition changes in the Consolidated Entity's share of net assets of the associate. Goodwill relating to the associate is
included in the carrying amount of the investment and is neither amortised nor individually tested for impairment. Dividends
received or receivable from associates reduce the carrying amount of the investment.
When the Consolidated Entity's share of losses in an associate equals or exceeds its interest in the associate, including any
unsecured long-term receivables, the Consolidated Entity does not recognise further losses, unless it has incurred obligations
or made payments on behalf of the associate.
The Consolidated Entity discontinues the use of the equity method upon the loss of significant influence over the associate
and recognises any retained investment at its fair value. Any difference between the associate's carrying amount, fair value
of the retained investment and proceeds from disposal is recognised in profit or loss.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at
either amortised cost or fair value depending on their classification. Classification is determined based on both the business
model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an
accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
Consolidated Entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset, its carrying value is written off.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a business
model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial
asset represent contractual cash flows that are solely payments of principal and interest.
Impairment of financial assets
The Consolidated Entity recognises a loss allowance for expected credit losses on financial assets which are either measured
at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon
the Consolidated Entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk
has increased significantly since initial recognition, based on reasonable and supportable information that is available, without
undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit
loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a
default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is
determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-
financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
42 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 2. Significant accounting policies (continued)
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the Consolidated Entity for the annual reporting period ended 30 June 2022. The
Consolidated Entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have,
on the Consolidated Entity based on known information. This consideration extends to the nature of the products and services
offered, customers, supply chain, staffing and geographic regions in which the Consolidated Entity operates. Other than as
addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements
or any significant uncertainties with respect to events or conditions which may impact the Consolidated Entity unfavourably
as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
Allowance for expected credit losses for trade receivables
The allowance for expected credit losses assessment for trade receivables requires a degree of estimation and judgement.
It is based on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an
overall expected credit loss rate for each group. These assumptions include recent sales experience, historical collection
rates, the impact of the Coronavirus (COVID-19) pandemic and forward-looking information that is available. The allowance
for expected credit losses, as disclosed in note 10, is calculated based on the information available at the time of preparation.
The actual credit losses in future years may be higher or lower.
43 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Goodwill and other indefinite life intangible assets
The Consolidated Entity tests annually, or more frequently if events or changes in circumstances indicate impairment,
whether goodwill and other indefinite life intangible assets have suffered any impairment, in accordance with the accounting
policy stated in note 2. The recoverable amounts of cash-generating units have been determined based on value-in-use
calculations. These calculations require the use of assumptions, including estimated discount rates based on the current
cost of capital and growth rates of the estimated future cash flows.
For the purpose of impairment testing, goodwill has been allocated to the Cash-Generating Units (CGUs), or groups of CGUs,
that are expected to benefit from the synergies of the business combination and which represent the level at which
management will monitor and manage the goodwill. The Consolidated Entity has identified three CGUs, being the Bodies &
Minds, Feet & Ankles, Eyes & Ears divisions. Refer to Note 16 for details on impairment testing.
Classification of Clinic Class Shares: Equity vs Financial liability
Clinic Class Shares were issued to (1) the sellers on acquisition of various podiatry and physiotherapy clinics and (2)
clinicians who wish to (i) ‘buy-in’ to existing clinics, or (ii) ‘buy-in’ to a new podiatry or physiotherapy clinic.
The Clinic Class Shares were historically classified as a financial liability based on the fact that My FootDr (Aust) Limited
previously had a contractual obligation to deliver cash in the form of preferential dividends payable to the holders each quarter
by reference to profits derived from the Clinics. The Clinic Class Shares have been reclassified to equity in 2019 Financial
year following amendments to the terms and conditions that result in the instruments having the characteristics of equity.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying
asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be included
in the lease term. In determining the lease term, all facts and circumstances that create an economical incentive to exercise
an extension option, or not to exercise a termination option, are considered at the lease commencement date. Factors
considered may include the importance of the asset to the Consolidated Entity's operations; comparison of terms and
conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold improvements;
and the costs and disruption to replace the asset. The Consolidated Entity reassesses whether it is reasonably certain to
exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in
circumstances.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to discount
future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is
based on what the Consolidated Entity estimates it would have to pay a third party to borrow the funds necessary to obtain
an asset of a similar value to the right-of-use asset, with similar terms, security and economic environment.
Contingent consideration
The contingent consideration liability relates to business combinations and is valued at fair value at the acquisition date as
part of the business combination. At each reporting date, the contingent consideration liability is reassessed against revised
estimates and any increase or decrease in the net present value of the liability will result in a corresponding gain or loss to
profit or loss. The increase in the liability resulting from the passage of time is recognised as a finance cost. Refer to Note
29 for the fair value measurement of contingent consideration.
Business combinations
As discussed in note 35, business combinations are initially accounted for on a provisional basis. The fair value of assets
acquired, liabilities and contingent liabilities assumed are initially estimated by the Consolidated Entity taking into
consideration all available information at the reporting date. Fair value adjustments on the finalisation of the business
combination accounting is retrospective, where applicable, to the period the combination occurred and may have an impact
on the assets and liabilities, depreciation and amortisation reported.
The Consolidated Entity has accounted for the acquisition of Back In Motion physiotherapy on an aggregate basis (i.e. as
one acquisition), rather than 63 separate acquisitions. The Consolidated Entity also accounted for the acquisition of the
LensPro optometrists group on an aggregate basis, rather than as 8 separate acquisitions. In determining this position, the
Consolidated Entity has applied the relevant considerations detailed in AASB 3.
44 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 4. Segment Information
Identification of reportable segments
For management purposes, the Consolidated Entity is organised into business units based on its products and services and
has three reportable segments, as follows: : Feet & Ankles, Bodies & Minds and Eyes & Ears.
These reportable segments are based on the internal reports reviewed and used by the Board of Directors (who are identified
as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources.
The 'other' category comprises of corporate functions.
The CODM reviews underlying EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation). Underlying EBITDA
also excludes the impact of acquisition and integration costs, the revenue and expense impacts of 'COVID-19' and other
one-off non-recurring income and expenses. Underlying EBITDA is reported on a pre-AASB16 basis, with property lease
costs recognised as standard occupancy costs.
The Consolidated Entity has included underlying EBITDA. This measure is not defined under IFRS and are, therefore, termed
"non-IFRS" measures and are not audited.
The information is reported to the CODM on a monthly basis.
Types of products and services
The principal products and services of each of these reportable segments are as follows:
Feet and Ankles Division
This division provides podiatry services and podiatry related services including the
manufacturing and sale of orthotics and podiatry related products.
Bodies and Minds Division
This division provides physiotherapy and speciality hand therapy services.
Eyes and Ears Division
This division provides optometry and audiology services.
Presentation of revenue and results
Underlying results exclude the impact of non-recurring income and expenses such as acquisition and integration costs.
Underlying EBITDA is reported on a pre-AASB16 basis, with property lease costs recognised as standard occupancy costs.
Reportable segment information
Consolidated - 2022
Revenue
Sales to external customers
Total revenue
EBITDA
Addback property lease costs (**)
Depreciation and amortisation expense
Share-based payments expense
Finance costs
COVID related expenses (***)
Acquisition costs (***)
Integration and restructuring costs (***)
Fair value movement of contingent
consideration
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Feet
& Ankles
$'000
Bodies
& Minds
$'000
Eyes
& Ears
$'000
Other*
$'000
Total
$'000
53,183
53,183
109,825
109,825
37,256
37,256
-
-
200,264
200,264
8,662
5,129
(6,175)
-
-
-
-
-
-
7,616
18,580
8,837
(10,206)
-
-
-
-
-
-
17,211
9,252
3,829
(4,644)
-
-
-
-
-
-
8,437
(11,956)
-
-
(1,395)
(5,895)
(3,383)
(6,859)
(3,736)
1,550
(31,674)
24,538
17,795
(21,025)
(1,395)
(5,895)
(3,383)
(6,859)
(3,736)
1,550
1,590
(1,247)
343
45 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 4. Segment Information (continued)
*
**
The ‘Other’ category comprises corporate functions and does not represent a segment.
Property lease costs are included in the underlying EBITDA reported to the CODM. This reporting is not consistent with AASB 16, which requires leases to be presented on the
statement of financial position, with the associated expenses to be recognised as depreciation and finance costs. The property leases costs are therefore added back in this reconciliation
between underlying EBITDA and statutory profit/(loss).
*** Varies from Consolidated Statement of Profit and Loss due to attribution of directly attributable Employee Benefits Expenses.
Consolidated - 2021
Revenue
Sales to external customers
Total revenue
EBITDA
Addback property lease costs (**)
Depreciation and amortisation expense
Share-based payments expense
Finance costs
COVID related expenses (***)
Acquisition and integration costs (***)
JobKeeper excluded from Underlying EBITDA
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Feet
& Ankles
$'000
Bodies
& Minds
$'000
Eyes
& Ears
$'000
Other*
$'000
Total
$'000
57,363
57,363
13,141
4,897
(6,285)
-
-
-
-
1,408
13,161
59,258
59,258
10,635
4,440
(4,899)
-
-
-
-
3,262
13,438
20,325
20,325
5,794
2,096
(3,016)
-
-
(2,102)
-
943
3,715
-
-
136,946
136,946
(8,102)
-
-
(1,180)
(3,674)
-
(4,208)
-
(17,164)
21,468
11,433
(14,200)
(1,180)
(3,674)
(2,102)
(4,208)
5,613
13,150
(3,973)
9,177
*
**
The ‘Other’ category comprises corporate functions and does not represent a segment.
Property lease costs are included in the underlying EBITDA reported to the CODM. This reporting is not consistent with AASB 16, which requires leases to be presented on the
statement of financial position, with the associated expenses to be recognised as depreciation and finance costs. The property leases costs are therefore added back in this reconciliation
between underlying EBITDA and statutory profit/(loss).
*** Varies from Consolidated Statement of Profit and Loss due to attribution of directly attributable Employee Benefits Expenses.
Accounting policy for reportable segments
Reportable segments are presented using the 'management approach', where the information presented is on the same
basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the
allocation of resources to segments and assessing their performance.
Note 5. Revenue from contracts with customers
Rendering of services
Sale of goods
Revenue from contracts with customers
Consolidated
2022
$'000
2021
$'000
154,898
45,366
109,698
27,248
200,264
136,946
46 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 5. Revenue from contracts with customers (continued)
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Segment Revenue
Feet & Ankles
Bodies & Minds
Eyes & Ears
Geographical regions
Australia
United States
New Zealand
Timing of revenue recognition
Goods and services transferred at a point in time
Accounting policy for revenue recognition
The Consolidated Entity recognises revenue as follows:
Consolidated
2022
$'000
2021
$'000
53,183
109,825
37,256
57,363
59,258
20,325
200,264
136,946
197,306
1,252
1,706
136,159
787
-
200,264
136,946
200,264
136,946
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Consolidated Entity is expected to be entitled
in exchange for transferring goods or services to a customer. For each contract with a customer, the Consolidated Entity:
identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price
which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to
the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to
be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts the
transfer to the customer of the goods or services promised.
Sale of goods
Revenue from the sale of goods is recognised at a point in time when the customer obtains control of the goods, which is
generally at the time of delivery.
Revenue from the sale of goods from the orthotics laboratory and podiatry wholesale business goods is recognised when
control of the products has transferred, being when the products are delivered to the customer. Delivery occurs when the
goods have been shipped to the specific location, and the risks of obsolescence and loss have been transferred to the
customer.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional.
Rendering of services
Revenue from a contract to provide services is recognised as the services are rendered based on either a fixed price or an
hourly rate.
47 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 6. Other income
Government grants (COVID-19)
Interest
Sub-tenant rent
Dividend income
Other income
Other income
Consolidated
2022
$'000
2021
$'000
622
1
1,284
24
589
7,606
5
989
-
480
2,520
9,080
Government grants (COVID-19)
During the Coronavirus (‘Covid-19’) pandemic, the Consolidated Entity received JobSaver support payments from the NSW
State Government. These are recognised as government grants in the financial statements as other income when there is
reasonable assurance that the grant will be received and all attached conditions will be complied with. It is recognised as
other income on a systematic basis over the periods that the related employee benefits expense, for which it is intended to
compensate, are expensed.
Accounting policy for government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them
with the costs that they are intended to compensate.
Accounting policy for interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Accounting policy for rent
Rent revenue is recognised on a straight-line basis over the lease term. Lease incentives granted are recognised as part of
the rental revenue. Contingent rentals are recognised as income in the period when earned.
48 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 7. Expenses
Profit before income tax includes the following specific expenses:
Cost of sales
Cost of sales
Depreciation
Leasehold improvements
Plant and equipment
Land and buildings - right-of-use assets
Plant and equipment - right-of-use assets
Total depreciation
Amortisation
Customer lists
Software
Total amortisation
Total depreciation and amortisation
Finance costs
Interest expense - bank
Interest expense - lease liabilities
Finance costs expensed
Superannuation expense
Defined contribution superannuation expense
Share-based payments expense
Share-based payments expense
Consolidated
2022
$'000
2021
$'000
18,258
13,915
648
2,695
15,755
243
607
2,267
10,190
119
19,341
13,183
1,578
107
887
130
1,685
1,017
21,026
14,200
2,813
3,082
1,662
2,012
5,895
3,674
10,686
6,857
1,395
1,180
49 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 8. Income tax
Income tax expense
Current tax
Deferred tax - origination and reversal of temporary differences
Adjustment recognised for prior periods
Derecognition of DT balance
Aggregate income tax expense
Deferred tax included in income tax expense comprises:
Increase in deferred tax assets
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Capital costs expensed
Reversal of contingent consideration
Derecognition of DT balance
Other
Under/over
Adjustment recognised for prior periods
Income tax expense
Amounts credited directly to equity
Deferred tax assets
Consolidated
2022
$'000
2021
$'000
4,331
(2,681)
(107)
(296)
5,890
(1,855)
(62)
-
1,247
3,973
(2,681)
(1,855)
1,590
13,150
477
3,945
1,405
(394)
(296)
(51)
213
1,354
(107)
204
-
-
-
(114)
4,035
(62)
1,247
3,973
Consolidated
2022
$'000
2021
$'000
(803)
(239)
50 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 8. Income tax (continued)
Deferred tax asset
Deferred tax asset comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Right-of-use asset
Customer lists
Employee benefits
Leases
Accrued expenses
Blackhole expenses
Other
Losses - Revenue & Capital
Deferred tax asset
Movements:
Opening balance
Credited to profit or loss
Credited to equity
Additions through business combinations (note 35)
Derecognition
Other
Under/over
Closing balance
Income tax refund due
Income tax refund due
Provision for income tax
Provision for income tax
Consolidated
2022
$'000
2021
$'000
(17,722)
(1,772)
5,562
19,191
303
956
68
1,259
(12,099)
(914)
3,353
13,224
116
592
43
210
7,845
4,525
4,525
2,681
803
(301)
(296)
143
290
2,874
1,855
239
129
-
(171)
(401)
7,845
4,525
Consolidated
2022
$'000
2021
$'000
97
-
Consolidated
2022
$'000
2021
$'000
-
3,668
Accounting policy for income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
●
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor
taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
●
51 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 8. Income tax (continued)
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which intend to settle simultaneously.
Note 9. Cash and cash equivalents
Current assets
Cash on hand
Cash at bank
Reconciliation to cash and cash equivalents at the end of the financial year
The above figures are reconciled to cash and cash equivalents at the end of the financial
year as shown in the statement of cash flows as follows:
Balances as above
Bank overdraft (note 18)
Balance as per statement of cash flows
Consolidated
2022
$'000
2021
$'000
225
5,441
132
5,684
5,666
5,816
5,666
(1,954)
5,816
(1,674)
3,712
4,142
Accounting policy for cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash
and cash equivalents also include bank overdrafts, which are shown within borrowings in current liabilities on the Statement
of Financial Position.
Note 10. Trade and other receivables
Current assets
Trade receivables
Less: Allowance for expected credit losses
GST recoverable
52 (Annual Report - 30 June 2022)
Consolidated
2022
$'000
2021
$'000
8,562
(549)
8,013
4,578
(377)
4,201
191
578
8,204
4,779
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 10. Trade and other receivables (continued)
Allowance for expected credit losses
The Consolidated Entity has recognised a loss of $268,000 (30 June 2021: $271,000) in profit or loss in respect of the
expected credit losses for the year ended 30 June 2022.
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Consolidated
Current
0 to 3 months overdue
Over 3 months overdue
Feet & Ankles Reportable
segment
Current
0 to 3 months overdue
Over 3 months overdue
Bodies & Minds Reportable
Segment
Current
0 to 3 months overdue
Over 3 months overdue
Eyes & Ears Reportable
segment
Current
0 to 3 months overdue
Over 3 months overdue
Expected credit loss rate
2022
%
2021
%
Carrying amount
2021
$'000
2022
$'000
-
-
22%
-
-
28%
4,900
1,172
2,490
2,362
876
1,340
8,562
4,578
Expected credit loss rate
2022
2021
Carrying amount
2021
2022
%
%
$'000
$'000
-
-
21%
-
-
13%
746
339
691
537
426
545
1,776
1,508
Expected credit loss rate
2022
2021
Carrying amount
2021
2022
%
%
$'000
$'000
-
-
21%
-
-
28%
2,629
692
1,505
1,000
328
545
4,826
1,873
Expected credit loss rate
2022
2021
Carrying amount
2021
2022
%
%
$'000
$'000
-
-
30%
-
-
63%
766
141
295
826
121
249
1,202
1,196
Allowance for expected
credit losses
2022
$'000
2021
$'000
-
-
549
549
-
-
377
377
Allowance for expected
credit losses
2022
$'000
2021
$'000
-
-
145
145
-
-
70
70
Allowance for expected
credit losses
2022
$'000
2021
$'000
-
-
316
316
-
-
150
150
Allowance for expected
credit losses
2022
$'000
2021
$'000
-
-
88
88
-
-
157
157
The calculation of expected credit losses has been revised as at 30 June 2022 and rates have decreased in the Over 3
months overdue category to 22% (30 June 2021: 28%).
53 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 10. Trade and other receivables (continued)
Accounting policy for trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30
days.
The Consolidated Entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected credit loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days
overdue.
The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors affecting
the ability of the customers to settle the receivables. The Consolidated Entity has identified the following to be the most
relevant factors in determining expected loss rates:
●
●
●
unemployment rate
inflation, and
Reserve Bank of Australia cash rate
Aged debtors greater than 90 days require investigation. Management uses judgment in determining which debtors are
unlikely to be recovered and require write-off
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Note 11. Inventories
Current assets
Consumables at cost
Finished goods at cost
Consolidated
2022
$'000
2021
$'000
951
9,581
1,134
6,871
10,532
8,005
Accounting policy for inventories
Consumables and finished goods are stated at the lower of cost and net realisable value on a 'first in first out' basis. Cost
comprises of direct materials and delivery costs, direct labour, import duties and other taxes. Costs of purchased inventory
are determined after deducting rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Note 12. Other assets
Current assets
Prepayments
Other current assets
Consolidated
2022
$'000
2021
$'000
2,166
1,033
1,128
1,072
3,199
2,200
54 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 13. Investments accounted for using the equity method
Non-current assets
Investment in associate - Fracture Holdco Pty Ltd
Reconciliation
Reconciliation of the carrying amounts at the beginning and end of the current and previous
financial year are set out below:
Opening carrying amount
Closing carrying amount
Consolidated
2022
$'000
2021
$'000
19
19
19
19
19
19
Interests in associates
Interests in associates are accounted for using the equity method of accounting. Information relating to associates that are
material to the Consolidated Entity are set out below:
Name
Principal place of business /
Country of incorporation
Ownership interest
2021
2022
%
%
Fracture Holdco Pty Ltd
Australia
40.00%
45.00%
Note 14. Property, plant and equipment
Non-current assets
Leasehold improvements - at cost
Less: Accumulated depreciation
Plant and equipment - at cost
Less: Accumulated depreciation
Consolidated
2022
$'000
2021
$'000
10,368
(5,032)
5,336
26,266
(14,527)
11,739
8,530
(4,384)
4,146
20,007
(11,833)
8,174
17,075
12,320
55 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 14. Property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2020
Additions
Additions through business combinations (note 35)
Disposals
Depreciation expense
Balance at 30 June 2021
Additions
Additions through business combinations (note 35)
Disposals
Depreciation expense
Leasehold
Plant and
improvements equipment
$'000
$'000
Total
$'000
2,827
1,082
844
-
(607)
4,146
1,341
546
(49)
(648)
4,849
1,837
3,810
(55)
(2,267)
8,174
2,154
4,106
-
(2,695)
7,676
2,919
4,654
(55)
(2,874)
12,320
3,495
4,652
(49)
(3,343)
Balance at 30 June 2022
5,336
11,739
17,075
Accounting policy for property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a reducing balance basis to write off the net cost of each item of property, plant and equipment
over their expected useful lives as follows:
Leasehold improvements
Plant and equipment
3-10 years
3-7 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets,
whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
Consolidated Entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Note 15. Right-of-use assets
Non-current assets
Land and buildings - right-of-use
Less: Accumulated depreciation
Plant and equipment - right-of-use
Less: Accumulated depreciation
Consolidated
2022
$'000
2021
$'000
91,668
(32,595)
59,073
56,942
(16,840)
40,102
622
(622)
-
622
(379)
243
59,073
40,345
56 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 15. Right-of-use assets (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 July 2020
Additions
Additions through business combinations (note 35)
Depreciation expense
Balance at 30 June 2021
Additions
Additions through business combinations (note 35)
Depreciation expense
Balance at 30 June 2022
Land and
buildings -
right-
of-use
$'000
Plant and
equipment -
right-
of-use
$'000
Total
$'000
24,216
9,937
16,501
(10,309)
40,345
15,322
19,404
(15,998)
347
15
-
(119)
243
-
-
(243)
-
59,073
23,869
9,922
16,501
(10,190)
40,102
15,322
19,404
(15,755)
59,073
For other lease disclosures, refer to:
●
●
●
●
note 7 for depreciation on right-of-use assets and interest on lease liabilities;
note 19 for lease liabilities at the reporting date;
note 28 for maturity analysis of lease liabilities; and
consolidated statement of cash flows for repayment of lease liabilities.
Accounting policy for right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred and except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is shorter. Where the Consolidated Entity expects to obtain ownership of the leased asset at the
end of the lease term, the depreciation is over its estimated useful life. Right-of-use assets are subject to impairment or
adjusted for any remeasurement of lease liabilities.
The Consolidated Entity has elected not to recognise a right-of-use asset and corresponding lease liability for short-term
leases with terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to
profit or loss as incurred.
57 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 16. Intangibles
Non-current assets
Goodwill - at cost
Trademarks and brands
Customer lists
Less: Accumulated amortisation
Software - at cost
Less: Accumulated amortisation
Consolidated
2022
$'000
2021
$'000
235,242
133,650
4,855
255
9,646
(3,711)
5,935
699
(405)
294
5,361
(2,133)
3,228
699
(298)
401
246,326
137,534
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Goodwill
$'000
Trademarks Customer
and brands
$'000
lists
$'000
Software
$'000
Total
$'000
Balance at 1 July 2020
Additions
Additions through business combinations (note
35)
Amortisation expense
Balance at 30 June 2021
Additions through business combinations (note
35)
Amortisation expense
77,173
-
56,477
-
133,650
101,592
-
20
1
234
-
255
1,860
-
2,255
(887)
3,228
222
309
-
(130)
79,275
310
58,966
(1,017)
401
137,534
4,600
-
4,285
(1,578)
-
(107)
110,477
(1,685)
Balance at 30 June 2022
235,242
4,855
5,935
294
246,326
A Cash-Generating Unit ('CGU') level summary of the goodwill allocation is presented below:
Feet & Ankles
Bodies & Minds
Eyes & Ears
Total goodwill
Consolidated
2022
$'000
2021
$'000
43,323
142,571
49,348
43,305
47,071
43,274
235,242
133,650
58 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 16. Intangibles (continued)
Impairment testing
The Consolidated Entity has tested goodwill, trademarks and brands for impairment, in accordance with the accounting policy
stated in note 2. The recoverable amount has been determined based on value-in-use calculations using cash flow
projections based on Board approved financial budgets and cover a five-year period. Cash flows beyond the 5-year period
to the end of the assets useful life are estimated by extrapolating the management projections using a steady growth rate
based on long term industry expectations.
For the purpose of impairment testing, goodwill, trademarks and brands have been allocated to the CGU, or groups of CGUs,
that are expected to benefit from the synergies of the business combination and which represent the level at which
management will monitor and manage the goodwill, trademarks and brands. The Consolidated Entity has identified three
CGUs, being the Bodies and Minds, Feet and Ankles and Eyes and Ears divisions.
Key assumptions used for the value-in-use calculations are those to which the recoverable amount of an asset or CGUs is
most sensitive.
The following key assumptions were used in the discounted cash flow model for both the Bodies & Minds, Feet & Ankles and
Eyes & Ears divisions:
●
The Consolidated Entity tests for impairment of goodwill, trademarks and brands on an annual basis. The recoverable
amount of a CGU is determined based on a value-in-use calculation which require the use of assumptions.
The calculations use cash flow projections over a five-year period, the first being 2023, based on the financial budget
approved by the Board. Cash flow projections for periods beyond the 2023 period are extrapolated using the estimated
growth rates below.
Goodwill, trademarks and brands have been allocated to the three groupings of CGUs representing Bodies & Minds
('B&M'), Feet & Ankles ('F&A') and Eyes & Ears ('E&E').
Corporate overheads have been apportioned to the CGUs based on the following percentages:
B&M Division: 56%
F&A Division: 26%
E&E Division: 18%
Sensitivity analyses on growth and discount rates has been performed to assess the impact on the outcome of the
model.
●
●
●
●
Significant assumptions for the purposes of the value-in-use calculation include:
●
●
●
●
●
●
Period of cash flows: 5 years
3.0% (2021: 3.0%) per annum projected revenue growth
3.0% (2021: 3.0%) per annum increase in operating costs and overheads
Maintenance capital expenditures of 1% (2021: 1.0%) of revenue per annum
13.0% (2021: 13.0%) pre-tax discount rate
3.0% (2021: 3.0%) terminal value growth rate
It is inherently difficult to predict the impact of any future COVID-19 developments. Whilst temporary measures, such as self-
isolation, may have a short-term impact on staff absenteeism and patient and customer cancellations, it is expected to be
immaterial to the longer term and aggregate cashflows of the Consolidated Entity.
The Consolidated Entity believes that the assumptions adopted in the value-in-use calculations are appropriate.
Management has determined the projected growth rates for revenue, operating costs and overheads over the five-year
forecast period based on past performance and management's expectation of market development.
The maintenance capital expenditure rate has been determined based on the historical experience of management, and the
planned capital expenditure.
The discount rate of 13.0% pre-tax reflects management’s estimate of the time value of money and the Consolidated Entity’s
weighted average cost of capital, the long-term risk-free rate and the volatility of the share price relative to market movements.
The terminal value growth rate is consistent with forecasts included within industry reports.
Based on the above assumptions, the recoverable amount of the Bodies & Minds CGU exceeds the carrying amount by
$84,454,000.
59 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 16. Intangibles (continued)
Based on the above assumptions, the recoverable amount of the Feet & Ankles CGU exceeds the carrying amount by
$68,906,000.
Based on the above assumptions, the recoverable amount of the Eyes & Ears CGU exceeds the carrying amount by
$44,633,000.
Sensitivity
As disclosed in note 3, the Directors have made judgements and estimates in respect of impairment testing of goodwill.
Should these judgements and estimates not occur the resulting goodwill carrying amount may decrease.
Bodies & Minds division analysis:
●
Growth rates for revenue, costs and terminal value would need to decrease by more than 360 basis points before
goodwill would need to be impaired with all other assumptions remaining constant.
The pre-tax discount rate would be required to increase by 501 basis points before goodwill would need to be impaired,
with all other assumptions remain constant.
FY23 EBITDA would need to decrease by more than 26.3% before goodwill would need to be impaired with all other
assumptions remaining constant.
Feet & Ankles division analysis:
●
Growth rates for revenue, costs and terminal value would need to decrease by more than 830 basis points before
goodwill would need to be impaired with all other assumptions remaining constant.
The pre-tax discount rate would be required to increase by 1,151 basis points before goodwill would need to be impaired,
with all other assumptions remain constant.
FY23 EBITDA would need to decrease by more than 44.3% before goodwill would need to be impaired with all other
assumptions remaining constant.
Eyes & Ears division analysis:
●
Growth rates for revenue, costs and terminal value would need to decrease by more than 510 basis points before
goodwill would need to be impaired with all other assumptions remaining constant.
The pre-tax discount rate would be required to increase by 712 basis points before goodwill would need to be impaired,
with all other assumptions remain constant.
FY23 EBITDA would need to decrease by more than 37.4% before goodwill would need to be impaired with all other
assumptions remaining constant.
●
●
●
●
●
●
As a result of the value-in-use calculation, it was determined no impairment was identified.
Accounting policy for intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at
the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible
assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising
from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying
amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in
the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or
period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment,
or more frequently if events or changes in circumstances indicate that it might be impaired and is carried at cost less
accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Goodwill acquired is allocated to each of the cash-generating units expected to benefit from the combination's synergies.
Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates.
Impairment losses on goodwill cannot be reversed.
Trademarks and Brands
Trademarks and brands are tested annually for impairment.
60 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 16. Intangibles (continued)
Customer list
Customer lists acquired in a business combination are amortised on a straight-line basis over the period of their expected
benefit, being their estimated useful life of 5 years.
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period of their expected
benefit, being their finite life of 5 years.
Note 17. Trade and other payables
Current liabilities
Trade payables
Accruals
PAYG tax payable
Superannuation payable
Other payables
Consolidated
2022
$'000
2021
$'000
4,340
3,267
8,092
2,957
433
4,000
2,413
3,443
1,718
226
19,089
11,800
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the Consolidated Entity prior to the end of the financial
year and which are unpaid. They are measured at amortised cost. The amounts are unsecured and are usually paid within
30 days of recognition.
Note 18. Borrowings
Current liabilities
Bank overdraft
Non-current liabilities
Bank loans
Consolidated
2022
$'000
2021
$'000
1,954
1,674
77,117
48,330
79,071
50,004
Refer to note 28 for further information on financial instruments.
Assets pledged as security
The bank overdraft and loan are secured by a General Security Agreement over the Consolidated Entity.
61 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 18. Borrowings (continued)
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities
Bank overdraft
Bank loans
Used at the reporting date
Bank overdraft
Bank loans
Unused at the reporting date
Bank overdraft
Bank loans
Consolidated
2022
$'000
2021
$'000
2,000
100,000
102,000
1,954
77,117
79,071
46
22,883
22,929
2,000
70,000
72,000
1,674
48,330
50,004
326
21,670
21,996
During FY22, the Consolidated Entity increased its total finance facility from $70.00 million to $100.00 million with its
financiers, namely ANZ, NAB and BOQ. At period end, the Consolidated Entity has undrawn facilities of approximately $22.88
million available with a tenor (remaining maturity) of 2.25 years.
The key financial covenants of the finance facility remain unchanged. They are as follows:
●
●
●
Leverage Ratio: (Debt/Adjusted EBITDA) must remain below or equal to 2.50 times;
Fixed Charge Cover Ratio: (Adjusted EBITDA + rent expense) / (interest + rent expense) must remain above or equal
to 1.75 times; and
Debt to Capitalisation Ratio: Debt / (Debt + Book Value of Equity) must remain below or equal to 50%.
Note that for the purposes of bank covenant calculations:
●
●
●
●
Actual EBITDA is provided on a trailing 12-month basis;
EBITDA is adjusted for the earnings contribution of recent acquisitions where the businesses have not been held for a
12 month period;
EBITDA is adjusted for agreed one-off costs (e.g. acquisitions costs) incurred during the testing period; and
AASB 16 'Leases' does not apply and covenants are calculated as they were prior to the adoption of this accounting
standard by the Consolidated Entity.
Accounting policy for borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
62 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 19. Lease liabilities
Current liabilities
Lease liability
Non-current liabilities
Lease liability
Consolidated
2022
$'000
2021
$'000
17,116
11,212
46,853
32,907
63,969
44,119
Refer to note 28 for further information on financial instruments.
The Consolidated Entity's leasing activities
The Consolidated Entity leases various clinics, retail stores, offices and warehouses. Rental contracts are typically made for
a fixed period of 3 to 5 years but may have extension options.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessors.
Lease assets may not be used as security for borrowing purposes.
Extension and termination options
Extension and termination options are included in a number of property and equipment leases across the Consolidated
Entity. These are used to maximise operational flexibility in terms of managing the assets used in the group's operations.
The majority of extension and termination options held are exercisable only by the Consolidated Entity and not by the
respective lessor.
In determining the lease term, management considers all facts and circumstances that create an economic incentive to
exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options)
are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
Most extension options in clinics, retail stores, offices and warehouses have not been included in the lease liability because
the Consolidated Entity replaces the assets without significant cost or business disruption.
Accounting policy for lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or
if that rate cannot be readily determined, the Consolidated Entity's incremental borrowing rate. Lease payments comprise of
fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is
reasonably certain to occur, and any anticipated termination penalties. Lease payments to be made under reasonably certain
extension options are also included in the measurement of the liability. The variable lease payments that do not depend on
an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of-use asset, or to profit or loss if the carrying amount of the right-of-use asset
is fully written down.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease
period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
63 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 20. Derivative financial instruments
Non-current liabilities
Interest rate swap derivative liabilities
Refer to note 28 for further information on financial instruments.
Refer to note 29 for further information on fair value measurement.
Consolidated
2022
$'000
2021
$'000
14
240
Accounting policy for derivative financial instruments
The Consolidated Entity uses derivative financial instruments, such as interest rate swaps, to hedge its interest rate risks.
Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered
into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive
and as financial liabilities when the fair value is negative.
Note 21. Employee benefit obligations
Current liabilities
Annual leave
Long service leave
Non-current liabilities
Long service leave
Consolidated
2022
$'000
2021
$'000
8,151
3,167
4,941
1,899
11,318
6,840
904
660
12,222
7,500
Accounting policy for employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured at the present value of expected future payments to be made in respect of services provided by employees up to
the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of service. Expected future payments are discounted using market yields at
the reporting date on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the
estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
64 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 22. Provisions
Current liabilities
Lease make good provision
Non-current liabilities
Lease make good provision
Consolidated
2022
$'000
2021
$'000
357
310
2,975
1,648
3,332
1,958
Lease make good
The provision represents the present value of the estimated costs to make good the premises leased by the Consolidated
Entity at the end of the respective lease terms.
Accounting policy for provisions
Provisions are recognised when the Consolidated Entity has a present (legal or constructive) obligation as a result of a past
event, it is probable the Consolidated Entity will be required to settle the obligation, and a reliable estimate can be made of
the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to
settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The
increase in the provision resulting from the passage of time is recognised as a finance cost.
Note 23. Other liabilities
Current liabilities
Contingent consideration
Deferred consideration
Non-current liabilities
Contingent consideration
Consolidated
2022
$'000
2021
$'000
1,214
1,700
680
1,065
2,914
1,745
4,961
1,982
7,875
3,727
Accounting policy for contingent consideration
The contingent consideration liability relates to business combinations and is valued at fair value at the acquisition date as
part of the business combination. When the contingent consideration meets the definition of a financial liability, it is
subsequently re-measured to fair value at each reporting date. Any reassessment of the liability during the earlier of the
finalisation of the provisional accounting or 12 months from acquisition-date is adjusted retrospectively as part of the
provisional accounting rules in accordance with AASB 3 'Business Combinations'. Thereafter, at each reporting date,
the contingent consideration liability is reassessed against revised estimates and any increase or decrease in the net present
value of the liability will result in a corresponding gain or loss to profit or loss. The increase in the liability resulting from the
passage of time is recognised as a finance cost.
65 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 24. Issued capital
Consolidated
2022
Shares
'000
2021
Shares
'000
2022
$'000
2021
$'000
Ordinary shares - fully paid
128,316
90,205
146,213
79,578
Movements in ordinary share capital
Details
Date
Shares
'000
Issue price
$'000
1 July 2020
24 September 2020
28 September 2020
3 November 2020
Balance
Issue of ordinary shares - Dividend Reinvestment Plan
Issue of ordinary shares - Dividend Reinvestment Plan
Issue of ordinary shares - Retail Entitlement Offer
Issue of ordinary shares - Institutional Entitlement Offer 17 November 2020
Issue of ordinary shares - acquisition of The Optical
Company (refer to note 35)
Issue of ordinary shares - acquisition of the non-
controlling interest
Issue of ordinary shares - acquisition of Natural Fit
Footwear (refer to note 35)
Issue of ordinary shares - Dividend Reinvestment Plan
Share issue transaction costs (net of tax)
17 December 2020
23 March 2021
30 November 2020
1 December 2020
30 June 2021
Balance
Issue of ordinary shares - Institutional Entitlement Offer 28 September 2021
Issue of ordinary shares - acquisition of businesses
Issue of ordinary shares - acquisition of businesses
Issue of ordinary shares - acquisition of businesses
Issue of ordinary shares - Retail Entitlement Offer
Issue of ordinary shares - Dividend Reinvestment Plan
Issue of ordinary shares - acquisition of businesses
Issue of ordinary shares - Dividend Reinvestment Plan
Share issue transaction costs (net of tax)
5 October 2021
12 October 2021
12 October 2021
13 October 2021
28 October 2021
30 November 2021
24 March 2022
63,035
1,156
115
9,984
3,939
$0.99
$0.99
$0.95
$0.95
49,884
1,147
114
9,485
3,742
9,400
$1.29
12,126
469
$1.29
606
1,066
1,041
$1.24
$1.71
90,205
24,717
3,069
65
55
8,634
106
16
1,449
$1.80
$1.80
$1.78
$1.78
$1.80
$1.87
$2.15
$1.75
1,322
1,783
(631)
79,578
44,491
5,525
116
97
15,542
199
33
2,537
(1,905)
Balance
30 June 2022
128,316
146,213
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company
does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Capital risk management
The Consolidated Entity's objectives when managing capital is to safeguard its ability to continue as a going concern, so that
it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to
reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Consolidated Entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
66 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 24. Issued capital (continued)
The Consolidated Entity would look to raise capital when an opportunity to invest in a business or company was seen as
value adding relative to the current Company's share price at the time of the investment.
The Consolidated Entity is subject to certain financing arrangements covenants and meeting these is given priority in all
capital risk management decisions. There have been no events of default on the financing arrangements during the financial
year.
The capital risk management policy remains unchanged from the 30 June 2021 Annual Report.
Accounting policy for issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Note 25. Reserves
Share-based payments reserve
Transactions with non-controlling interest reserve
Pre-IPO distributions reserve
Consolidated
2022
$'000
2021
$'000
3,230
(2,860)
(2,494)
1,835
(2,860)
(2,494)
(2,124)
(3,519)
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their
remuneration, and other parties as part of their compensation for services.
Transactions with non-controlling interest reserve
The transactions with non-controlling interest reserve are used to record differences which may arise as a result of increases
or decreases in non-controlling interests that do not result in a loss of control.
Pre-IPO distribution reserve
The reserve records any differences between the acquired net assets and the consideration under continuation accounting.
The transaction relevant to the understanding of this reserve account is detailed below:
Healthia Limited was incorporated on 10 May 2018 as a holding company to acquire the podiatry and physiotherapy service
business as part of the Initial Public Offer of Healthia Limited. In this respect, Healthia Limited acquired all of the ordinary
shares in My FootDr (Aust) Ltd (the MFDA Group) on 30 July 2018. In accordance with AASB3 Business Combinations, the
acquisition of MFDA Group by Healthia Limited did not meet the definition of a business combination. Therefore, Healthia
Limited's first issued financial statements applied the continuation method of accounting for the combination of the MFDA
Group.
Under continuation accounting, the Consolidated Entity effectively adopted book value accounting whereby the assets and
liabilities of the legal acquiree (MFDA Group) were recognised at their previous carrying amounts. No adjustments were
made to reflect fair values and no new assets (including goodwill) and liabilities of the legal acquiree were recognised at the
date of the business combination. Any difference between the acquired net assets and the consideration were recognised
through the pre-IPO distribution reserve account in equity.
67 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 25. Reserves (continued)
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Transactions
with non-
controlling
interest
$'000
Share-based
payments
$'000
Pre-IPO
distributions
$'000
Total
$'000
Balance at 1 July 2020
Issue of performance rights
Acquisition of non-controlling interest of Mount Gambier
Optical Pty Ltd
655
1,180
(2,351)
-
(2,494)
-
(4,190)
1,180
-
(509)
-
(509)
Balance at 30 June 2021
Issue of performance rights
Balance at 30 June 2022
Note 26. Non-controlling interest
Issued equity - Clinic Class shares
Retained profits
1,835
1,395
(2,860)
-
(2,494)
-
(3,519)
1,395
3,230
(2,860)
(2,494)
(2,124)
Consolidated
2022
$'000
2021
$'000
35,079
1,097
15,329
819
36,176
16,148
Classification of Clinic Class Shares: Equity
Clinic Class Shares were issued to (1) the sellers on acquisition of various podiatry clinics and (2) clinicians who wish to (i)
‘buy-in’ to existing clinics, or (ii) ‘buy-in’ to a new podiatry, physiotherapy, and optical clinic. In accordance with the substance
of the contractual arrangements and the definition of an equity instrument, the Clinic Class Shares are classified as equity
instruments.
Refer to note 3 for details of the key judgements regarding the accounting treatment.
Note 27. Dividends
Dividends
Dividends paid during the financial year were as follows:
Interim dividend for the year ended 30 June 2022 of 2.0 cents per ordinary share
Final dividend for the year ended 30 June 2021 of 2.5 cents per ordinary share
Interim dividend for the year ended 30 June 2021 of 2.0 cents per ordinary share
Final dividend for the year ended 30 June 2020 of 2.0 cents per ordinary share
Consolidated
2022
$'000
2021
$'000
2,537
2,255
-
-
-
-
1,783
1,261
4,792
3,044
As at the date of signing the financial report, the Directors of Healthia Limited have determined not to declare the payment
of a final dividend for 2022 taking into account the significant one-off costs incurred during the period which have reduced
free cash, in addition to the significant growth opportunities (both organic and inorganic) available to the Consolidated Entity.
68 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 27. Dividends (continued)
The Consolidated Entity plans to resume its stated dividend policy, of distributing between 40% to 60% of underlying NPATA,
during the next financial year. Underlying NPATA is a non-IFRS measure and equals net profit after income tax expense
plus amortisation of customer list intangibles. Underlying profit reflects statutory profit as adjusted to reflect the Directors’
assessment of the result for the ongoing business activities of the Consolidated Entity, in accordance with AICD/Finsia
principles of recording underlying profit.
Franking credits
Consolidated
2022
$'000
2021
$'000
Franking credits available for subsequent financial years based on a tax rate of 30%
10,388
10,479
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
●
●
●
franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date
Accounting policy for dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the Company.
Note 28. Financial instruments
Financial risk management objectives
The Consolidated Entity's activities expose it to a variety of financial risks: market risk (interest rate risk), credit risk and
liquidity risk. The Consolidated Entity's overall risk management program focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the financial performance of the Consolidated Entity. The Consolidated
Entity uses derivative financial instruments such as interest rate swaps to hedge certain risk exposures. Derivatives are
exclusively used for hedging purposes, i.e. not as trading or other speculative instruments. The Consolidated Entity uses
different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the
case of interest rate and other price risks.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors
('the Board'). These policies include identification and analysis of the risk exposure of the Consolidated Entity and appropriate
procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the Consolidated Entity's
operating units. Finance reports to the Board on a monthly basis.
Market risk
Interest rate risk
The Consolidated Entity's main interest rate risk arises from long-term borrowings and interest rate swap contracts.
Borrowings obtained at variable rates expose the Consolidated Entity to interest rate risk. Borrowings obtained at fixed rates
expose the Consolidated Entity to fair value interest rate risk.
At the reporting date, the Consolidated Entity had the following variable rate borrowings and interest rate swap contracts
outstanding:
Bank loans
Interest rate swaps (notional principal amount)
Net exposure to cash flow interest rate risk
69 (Annual Report - 30 June 2022)
Consolidated
2022
$'000
2021
$'000
77,117
(20,000)
48,330
(20,000)
57,117
28,330
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 28. Financial instruments (continued)
An analysis by remaining contractual maturities is shown in 'liquidity and interest rate risk management' below.
For the Consolidated Entity the bank loans outstanding, totalling $77,117,000 (30 June 2021: $48,330,000), are interest only
loans. At the reporting date, $20,000,000 (30 June 2021: $20,000,000) of debt was hedged by floating to fixed interest rate
swaps.
An official increase in interest rates of 100 (30 June 2021: 100) basis points would have an adverse effect on profit before
tax of $571,170 (30 June 2021: $283,300) per annum. The percentage change is based on the expected volatility of interest
rates using market data and analysts' forecasts.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Consolidated Entity. The Consolidated Entity has a strict code of credit, including obtaining agency credit information,
confirming references and setting appropriate credit limits. The Consolidated Entity obtains guarantees where appropriate to
mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying
amount, net of any provisions for impairment of those assets, as disclosed in the Statement of Financial Position and notes
to the financial statements. The Consolidated Entity does not hold any collateral.
Liquidity risk
Vigilant liquidity risk management requires the Consolidated Entity to maintain sufficient liquid assets (mainly cash and cash
equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The Consolidated Entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Financing arrangements
Unused borrowing facilities at the reporting date:
Bank overdraft
Bank loans
Consolidated
2022
$'000
2021
$'000
46
22,883
22,929
326
21,670
21,996
The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the
continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time and have an average maturity of
2.25 years (30 June 2021: 2.50 years).
70 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 28. Financial instruments (continued)
Remaining contractual maturities
The following tables detail the Consolidated Entity's remaining contractual maturity for its financial liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial
liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual
maturities and therefore these totals may differ from their carrying amount in the Statement of Financial Position.
Consolidated - 2022
Non-derivatives
Non-interest bearing
Trade and other payables
Other liabilities
Interest-bearing - variable
Bank overdraft
Bank loans
Interest-bearing - fixed rate
Lease liability
Total non-derivatives
Derivatives
Interest rate swaps inflow
Interest rate swaps outflow
Total derivatives
Consolidated - 2021
Non-derivatives
Non-interest bearing
Trade and other payables
Other liabilities
Interest-bearing - variable
Bank overdraft
Bank loans
Interest-bearing - fixed rate
Lease liability
Total non-derivatives
Derivatives
Interest rate swaps inflow
Interest rate swaps outflow
Total derivatives
Weighted
average
interest rate
%
1 year or
less
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years
$'000
Over 5
years
$'000
Non-interest
bearing
$'000
Remaining
contractual
maturities
$'000
-
-
-
-
-
-
7.00%
5.00%
1,954
3,856
-
3,856
-
80,971
-
-
-
-
19,089
7,875
19,089
7,875
-
-
1,954
88,683
5.00%
17,826
23,636
18,310
22,166
30,964
111,935
4,309
4,309
-
26,964
71,409
189,010
1.19%
1.26%
(60)
63
3
-
-
-
-
-
-
Weighted
average
interest rate
%
1 year or
less
$'000
Between 1
and 2 years
$'000
Between 2
and 5 years
$'000
Over 5
years
$'000
-
-
-
-
-
-
7.00%
4.90%
1,674
2,368
-
2,368
-
49,711
-
-
-
-
-
-
-
-
-
-
(60)
63
3
Non-interest
bearing
$'000
Remaining
contractual
maturities
$'000
11,800
3,727
11,800
3,727
-
-
1,674
54,447
5.00%
13,331
17,373
11,790
14,158
22,111
71,822
4,306
4,306
-
15,527
51,538
123,186
0.06%
1.26%
(12)
252
240
(3)
63
60
-
-
-
-
-
-
-
-
-
(15)
315
300
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
71 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 29. Fair value measurement
Fair value hierarchy
The following tables detail the Consolidated Entity's assets and liabilities measured or disclosed at fair value using a three
level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly
Level 3: Unobservable inputs for the asset or liability
Consolidated - 2022
Liabilities
Interest rate swap
Contingent consideration
Total liabilities
Consolidated - 2021
Liabilities
Interest rate swap
Contingent consideration
Total liabilities
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
Level 1
$'000
-
-
-
-
-
-
14
-
14
-
6,175
6,175
14
6,175
6,189
Level 2
$'000
Level 3
$'000
Total
$'000
240
-
240
-
2,662
2,662
240
2,662
2,902
There were no transfers between levels during the financial year.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short-term nature.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market
interest rate that is available for similar financial liabilities.
Valuation techniques for fair value measurements categorised within level 2 and level 3
Derivative financial instruments have been valued using quoted market rates. This valuation technique maximises the use
of observable market data where it is available and relies as little as possible on entity specific estimates.
Contingent consideration has been valued based on expected EBITDA of the clinics, based on the knowledge of the business
and how the current economic environment is likely to impact it. Contingent consideration of between $0 and $17,497,000
may become payable subject to the EBITDA achieved by the various acquired businesses..
72 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 29. Fair value measurement (continued)
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2020
Additions - new business combinations
Settlement of contingent consideration
Amounts reversed in year
Balance at 30 June 2021
Additions - new business combinations
Settlement of contingent consideration
Fair value movements - through profit or loss
Balance at 30 June 2022
Contingent
consideration
$'000
2,845
2,386
(2,324)
(245)
2,662
5,552
(489)
(1,550)
6,175
The level 3 assets and liabilities unobservable inputs and sensitivity are as follows:
Description
Unobservable inputs
Range
(weighted average)
Sensitivity
Contingent
consideration
Expected EBITDA (pre-
AASB 16) of acquired
clinics
$22,641 - $373,269
Contingent consideration of between $0 and
$17,497,000 may become payable subject to the
EBITDA achieved by the various acquired
businesses.
Accounting policy for fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair
value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the principal
market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and
best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers
between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value
measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where
applicable, with external sources of data.
73 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 30. Key management personnel disclosures
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Consolidated
Entity is set out below:
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
Note 31. Remuneration of auditors
Consolidated
2022
$
2021
$
1,929,423
160,502
31,446
380,561
1,846,768
172,277
25,629
279,383
2,501,932
2,324,057
During the financial year the following fees were paid or payable for services provided by BDO, the auditor of the Company:
Audit and other assurance services - BDO Audit Pty Ltd
Audit and review of the Group financial statements
Non-audit services - BDO Services Pty Ltd
Taxation and business advisory services
Total remuneration of BDO
Note 32. Contingent liabilities
Consolidated
2022
$
2021
$
378,249
221,447
532,562
232,447
910,812
453,894
The Consolidated Entity has given bank guarantees as at 30 June 2022 of $4,857,945 (30 June 2021: $3,032,151) to various
landlords.
Note 33. Related party transactions
Parent entity
Healthia Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 36.
Associates
Interests in associates are set out in note 13.
Key management personnel
Disclosures relating to key management personnel are set out in note 30 and the remuneration report included in the
Directors' report.
74 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 33. Related party transactions (continued)
Transactions with related parties
The following transactions occurred with related parties:
Consideration relating to the acquisition of businesses at the time of acquisition of The
Optical Company:
Ordinary shares issued for the acquisition of businesses associated with director Colin
Kangisser
Cash payment for the acquisition of businesses associated with director Colin Kangisser
Deferred cash payment for the acquisition of businesses associated with director Colin
Kangisser
Consolidated
2022
$
2021
$
12,126,000
-
- 32,028,000
1,065,044
1,537,085
Other transactions:
Rent and outgoings paid to entities controlled by director Darren Stewart
Rent and outgoings paid to entities controlled by former director Anthony Ganter
Rent and outgoings paid to entities controlled by director and key management personnel
Lisa Roach
Payment for bookkeeping services to an entity associated with Wesley Coote
Payment for orthotics and prosthetics to an entity associated with Darren Stewart
Rent and outgoings paid to entities controlled by key management personnel Dean Hartley*
311,652
304,127
320,144
238,338
235,907
380,470
72,556
-
219,496
263,930
336,378
139,556
*
Dean Hartley was classified as Key Management Personnel in 2021 only.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 34. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Profit after income tax
Total comprehensive income
Parent
2022
$'000
2021
$'000
4,333
1,812
4,333
1,812
75 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 34. Parent entity information (continued)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Retained profits/(accumulated losses)
Total equity
Parent
2022
$'000
2021
$'000
38
60
210,181
109,811
1,492
1,413
78,622
50,614
101,302
3,115
(27,143)
34,667
1,720
22,810
131,559
59,197
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2022 and 30 June 2021.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2022 and 30 June 2021.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2022 and 30 June 2021.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Consolidated Entity, as disclosed in note 2 and
within the different notes to the financial statement, except for the following:
●
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
Note 35. Business combinations
2022
Acquisition of The Back in Motion Group (Bodies & Minds Division)
On 20 September 2021, it was announced that the Consolidated Entity had entered binding agreements to acquire the Back
In Motion Health Group (BIM), comprising the businesses of the 63 Back In Motion physiotherapy clinics and the shares in
BIM IP Pty Ltd, which owned the brands, trademarks and other intellectual property.
The Back In Motion clinic acquisitions were settled over the period to 5 October 2021 through 23 December 2021 as landlord
consents and other conditions precedent were satisfied.
The goodwill is attributable mainly to the skills, technical talent and established clinics chain of BIM's work force and the
synergies expected to be achieved from integrating the company into the Group's existing Health Industry business. None
of the goodwill recognised is expected to be deductible for tax purposes.
Initial consideration paid for the acquisitions was $87.65 million including $64.52 million in cash consideration, $15.66 million
in Clinic Class Share consideration, $5.77 million in ordinary Healthia Limited share consideration and $1.70 million payable
in deferred consideration. In addition, a fair value of $4.01 million payable in contingent consideration may become payable
between 12 and 36 months after the completion date.
76 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 35. Business combinations (continued)
HLA shares were issued to the Vendors and are subject to voluntary escrow for 24 months.
For the 12 month period ended 30 June 2022, BIM contributed revenue of $38.95 million and EBITDA of $5.93 million (less
lease payments or pre-AASB 16 change) to the Group. If these acquisitions had been held for a full 12 months period (by
extrapolating the actual performance), the acquired businesses would have contributed revenue of $57.16 million and
EBITDA (less lease payments or pre-AASB 16 change) of $8.37 million to the Consolidated Entity.
Acquisition of PhysioWorks Group (Bodies and Minds Division)
The Consolidated Entity acquired the business named PhysioWorks, a group of five physiotherapy businesses located in
South East Queensland. Initial consideration paid for the acquisition was $2.21 million including $1.81 million in cash
consideration and $0.41 million in Clinic Class Shares consideration.
For the 12 month period ended 30 June 2022, the acquired businesses contributed revenue of $1.35 million and EBITDA
(less lease payments or pre-AASB 16 change) of $0.07 million to the Consolidated Entity. If these acquisitions had been held
for a full 12 month period (by extrapolating the actual performance), the acquired businesses would have contributed revenue
of $2.28 million and EBITDA (less lease payments or pre-AASB 16 change) of $0.12 million to the Consolidated Entity.
Acquisition of Other Bodies and Minds Clinics
The Consolidated Entity acquired an additional 11 physiotherapy and hand therapy clinics during the current period. Initial
consideration paid for acquisitions was $8.77 million including $6.06 million in cash consideration, $2.71 million in Clinic
Class Shares, with up to an additional $1.06 million in contingent consideration.
For the 12 month period ended 30 June 2022, the acquired businesses contributed revenue of $7.78 million and EBITDA
(less lease payments or pre-AASB 16 change) of $1.47 million to the Consolidated Entity. If these acquisitions had been held
for a full 12 month period (by extrapolating the actual performance), the acquired businesses would have contributed revenue
of $11.82 million and EBITDA (less lease payments or pre-AASB 16 change) of $2.21 million to the Consolidated Entity.
Acquisition of LensPro Group (Eyes and Ears Division)
During the current period, the Consolidated Entity acquired the LensPro Optometrists Group comprising 8 optical stores.
Initial consideration paid for acquisition was $6.49 million in cash consideration, with up to an additional $0.33 million in
contingent consideration.
For the 12 month period ended 30 June 2022, the LensPro Group contributed revenue of $1.89 million and EBITDA of $0.30
million (less lease payments or pre-AASB 16 change) to the Consolidated Entity. If these acquisitions had been held for a
full 12 month period (by extrapolating the actual performance), the acquired businesses would have contributed revenue of
$5.65 and EBITDA of $0.89 million to the Consolidated Entity.
Acquisition of Other Eyes and Ears stores
The Consolidated Entity acquired additional 4 optical stores during the current period. Initial consideration paid for acquisition
was $0.60 million including $0.56 million in cash consideration and $0.04 million in Clinic Class Shares, with up to an
additional $0.13 million in contingent consideration.
For the 12 month period ended 30 June 2022, the acquired businesses contributed revenue of $1.37 million and EBITDA
(less lease payments or pre-AASB 16 change) of $0.25 million to the Consolidated Entity. If these acquisitions had been held
for a full 12 month period (by extrapolating the actual performance), the acquired businesses would have contributed revenue
of $1.82 million and EBITDA (less lease payments or pre-AASB 16 change) of $0.40 million to the Consolidated Entity.
Acquisition of Other Feet and Ankles Clinics
The Consolidated Entity acquired an additional 1 podiatry clinic during the current period. Total consideration paid for the
acquisition was $0.016 million in cash consideration. The acquired clinic was merged into surrounding clinics owned by the
Consolidated Entity and as such, no stand alone earnings are able to be reported for the period.
Acquisition rationale
All acquisitions made during the period were consistent with the Consolidated Entity's stated strategic objective of acquiring
and integrating allied health clinics. Given the fragmented nature of the targeted allied health industries, acquisitions will
continue to be a central pillar of the Consolidated Entity's growth strategy.
77 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 35. Business combinations (continued)
Details of the acquisitions are as follows:
Feet &
Ankles
Division
Others
Bodies and Minds Division
Eyes & Ears Division
PhysioWork
s
BIM
Others
LensPro
Others
Fair value Fair value Fair value Fair value Fair value Fair value
$'000
$'000
$'000
$'000
$'000
$'000
Total
$'000
Trade receivables
Inventories
Other assets
Plant and equipment
Right-of-use assets
Brands
Customer lists
Deferred tax asset
Deferred tax liability
Employee benefits
Lease liability
Lease liability - non-current
Other liabilities
Net assets/(liabilities) acquired
Goodwill
Acquisition-date fair value of
the total consideration
transferred
Representing:
Cash paid or payable to vendor
Healthia Limited shares issued
to vendor
Contingent consideration
Deferred consideration
Clinic Class Shares issued to
vendor(s)
Cash used to acquire
business, net of cash acquired:
Acquisition-date fair value of
the total consideration
transferred
Less: contingent consideration
Less: deferred consideration
Less: shares issued by
Company as part of
consideration
Less: Clinic Class Shares
issued to vendor(s)
-
1
-
8
18
-
-
5
(5)
-
(18)
-
(11)
(2)
18
-
49
6
123
432
-
109
154
(162)
(82)
(215)
(217)
(56)
821
764
407
2,811
13,146
4,600
3,400
5,008
(4,680)
(3,525)
(3,354)
(9,792)
(2,109)
141
2,073
7,497
84,160
-
146
61
508
2,813
-
396
952
(963)
(362)
(541)
(2,272)
(175)
563
9,264
-
291
22
947
2,529
-
300
843
(849)
(282)
(756)
(1,773)
(107)
1,165
5,656
-
103
-
255
466
-
80
162
(164)
(74)
(114)
(352)
(53)
821
1,354
496
4,652
19,404
4,600
4,285
7,124
(6,823)
(4,325)
(4,998)
(14,406)
(2,511)
309
421
9,673
101,592
16
2,214
91,657
9,827
6,821
730
111,265
16
1,807
64,515
6,062
6,492
564
79,456
-
-
-
-
-
-
-
5,771
4,010
1,700
-
1,055
-
-
329
-
-
128
-
5,771
5,522
1,700
407
15,661
2,710
-
38
18,816
16
2,214
91,657
9,827
6,821
730
111,265
16
-
-
-
-
2,214
-
-
91,657
(4,010)
(1,700)
9,827
(1,055)
-
6,821
(329)
-
730
(128)
-
111,265
(5,522)
(1,700)
-
(5,771)
-
(407)
(15,661)
(2,710)
-
-
-
(5,771)
(38)
(18,816)
Net cash used
16
1,807
64,515
6,062
6,492
564
79,456
78 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 35. Business combinations (continued)
Goodwill arising from business combinations is attributed to the reputation of the business in their local market, the benefit
of marginal profit and synergies expected to be received by integrating into the Consolidated Entity's systems, expected
revenue growth, future market development, the assembled workforce and knowledge of the local markets. These benefits
are not able to be individually identified or recognised separately from goodwill.
2021
Acquisition of the Optical Company (Eyes and Ears Division)
Healthia successfully completed the acquisition of The Optical Company ('TOC') on 30 November 2020, representing 41
optical stores and eyewear frame distributor, AED (note: the Consolidated Entity’s results for the period ending 30 June
2021, include 7 months of TOC trading).
The goodwill is attributable mainly to the skills, technical talent and established clinics chain of TOC's work force and the
synergies expected to be achieved from integrating the company into the Group's existing business. None of the goodwill
recognised is expected to be deductible for tax purposes.
Initial consideration paid for the acquisitions was $44.16 million including $32.03 million in cash consideration, $12.13 million
in ordinary Healthia Limited share consideration, with up to an additional $2.60 million payable in deferred consideration
which is due in 12 months after the completion date.
The increase in acquisition-date fair value of consideration from the contract price of $43.00 million is due to an increase in
the share price from $0.95 per share at time of signing Share Sale Documentation (and pre capital raising/public
announcement of the deal) and the share price of $1.29 at the date of settlement. This share price increase resulted in a
$3.36 million increase in acquisition-date fair value of consideration. The remaining difference in purchase consideration is
due to cash and working capital delivered in the acquired entities at settlement.
Healthia shares were issued to the Vendors and were subject to voluntary escrow for between 6 months and 24 months.
Acquisition of CQ Physio (Bodies and Minds Division)
The Consolidated Entity acquired the business named CQ Physiotherapy, on 16 October 2020, comprising 3 physiotherapy
clinics during the current period. Initial consideration paid for the acquisition was $4.66 million including $3.67 million in cash
consideration and $0.99 million in Clinic Class Share consideration.
Acquisition of Other Bodies and Minds Clinics
The Consolidated Entity acquired an additional 7 physiotherapy clinics during the current period. Initial consideration paid for
the acquisition was $3.97 million including $3.38 million in cash consideration, $0.59 million in Clinic Class Share
consideration, with up to an additional $0.92 million payable in contingent consideration.
Acquisition of Natural Fit (Feet and Ankles Division)
The Consolidated Entity acquired the business named Natural Fit on 17 December 2020, comprising 6 retail footwear stores
during the current period. Initial consideration paid for the acquisition was $4.21 million including $2.89 million in cash
consideration, $1.32 million in ordinary Healthia Limited share consideration, with up to an additional $1.35 million payable
in contingent consideration.
The increase in acquisition-date fair value of consideration from the contract price is due to an increase in the share price
from $0.95 per share at time of signing Share Sale Documentation and the share price of $1.24 at the date of settlement.
This share price increase resulted in a $0.31 million increase in acquisition-date fair value of consideration. The remaining
difference in purchase consideration is due to settlement adjustments, including the value of inventory delivered at settlement
of $1.14 million.
Acquisition of Other Feet and Ankles Clinics
The Consolidated Entity acquired an additional podiatry clinic during the current period. Total consideration paid for the
acquisition was $0.10 million in cash consideration.
Acquisition of Other Eyes and Ears Clinics
The Consolidated Entity acquired an additional optometry clinic during the current period. Consideration paid for the
acquisition was $0.26 million in cash consideration, with up to an additional $0.11 million payable in contingent consideration.
79 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 35. Business combinations (continued)
Acquisition Rationale
All acquisitions made during the period were consistent with the Consolidated Entity's stated strategic objective of acquiring
and integrating allied health clinics. Given the fragmented nature of the targeted allied health industries, acquisitions will
continue to be a central pillar of the Consolidated Entity's growth strategy.
80 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 35. Business combinations (continued)
Details of the acquisitions are as follows:
Eyes & Ears Division
Others
TOC
Bodies and Minds
Division
Feet & Ankles Division
CQ Physio Others
Natural Fit Others
Fair value Fair value Fair value Fair value Fair value Fair value
$'000
$'000
$'000
$'000
$'000
$'000
Total
$'000
Cash and cash equivalents
Trade receivables
Inventories
Other current assets
Plant and equipment
Right-of-use assets
Patents and trademarks
Customer lists
Deferred tax asset
Trade payables
Other payables
Provision for income tax
Deferred tax liability
Employee benefits
Lease liability
Other liabilities
Less: non-controlling interest
Net assets acquired
Goodwill
Acquisition-date fair value of
the total consideration
transferred
Representing:
Cash paid or payable to vendor
Healthia Limited shares issued
to vendor
Contingent consideration
Deferred consideration
Clinic Class Shares issued to
vendor
Cash used to acquire
business, net of cash acquired:
Acquisition-date fair value of
the total consideration
transferred
Less: cash and cash
equivalents
Less: deferred / contingent
consideration
Less: Healthia Limited shares
issued to vendor
Less: Clinic Class Shares
issued to vendor
2,577
886
2,316
48
3,807
10,175
234
1,350
3,864
(2,287)
(414)
(719)
(3,698)
(1,825)
(10,171)
(1,878)
(536)
3,729
43,027
-
-
46
-
53
234
-
30
68
-
-
-
(77)
(2)
(225)
(9)
-
118
247
-
-
30
12
138
971
-
258
397
-
-
-
(369)
(350)
(971)
(33)
-
83
4,576
-
-
43
37
497
2,242
-
225
793
-
(34)
-
(740)
(401)
(2,243)
(54)
-
365
4,530
2
-
1,139
119
103
2,768
-
384
839
-
-
-
(946)
(30)
(2,768)
(98)
-
1,512
4,049
-
-
-
2
56
111
-
8
34
-
-
-
(36)
(2)
(111)
(10)
-
2,579
886
3,574
218
4,654
16,501
234
2,255
5,995
(2,287)
(448)
(719)
(5,866)
(2,610)
(16,489)
(2,082)
(536)
52
48
5,859
56,477
46,756
365
4,659
4,895
5,561
100
62,336
32,028
254
3,669
3,376
2,889
100
42,316
12,126
-
2,602
-
111
-
-
-
-
-
-
990
-
925
-
594
1,322
1,350
-
-
-
-
-
-
13,448
2,386
2,602
1,584
46,756
365
4,659
4,895
5,561
100
62,336
46,756
365
4,659
4,895
5,561
100
62,336
(2,577)
-
(2,602)
(111)
(12,126)
-
-
-
-
-
-
-
(2)
(925)
(1,350)
-
(1,322)
(990)
(594)
-
-
-
-
-
(2,579)
(4,988)
(13,448)
(1,584)
Net cash used
29,451
254
3,669
3,376
2,887
100
39,737
81 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 35. Business combinations (continued)
Goodwill arising from business combinations is attributed to the reputation of the business in their local market, the benefit
of marginal profit and synergies expected to be received by integrating into the Consolidated Entity's systems, expected
revenue growth, future market development, the assembled workforce and knowledge of the local markets. These benefits
are not able to be individually identified or recognised separately from goodwill.
Valuation techniques
The valuation techniques used for measuring the fair value of material assets acquired were as follows.
Asset acquired
Valuation technique
Property, plant and
equipment
Market comparison technique and cost technique:
The valuation model considers market prices for similar items when they are available, and
depreciated replacement cost when appropriate. Depreciated replacement cost reflects
adjustments for physical deterioration as well as functional and economic obsolescence.
Intangible assets
The fair value of an intangible asset will reflect market participants' expectations at the acquisition
date about the probability that the expected future economic benefits embodied in the asset will
flow to the entity. There are three approaches to valuing intangible assets that correspond to the
valuation approaches:
- Market approaches;
- Income approaches; and
- Cost approaches.
Inventories
Market comparison technique:
The fair value is determined based on the estimated selling price in the ordinary course of
business less the estimated costs of completion and sale, and a reasonable profit margin based
on the effort required to complete and sell the inventories.
The trade receivables comprise gross contractual amounts due of $821,419 (30 June 2021: $886,000), which are expected
to be collectable.
Acquisition and integration related costs of $7,402,000 (30 June 2021: $4,208,000) are included in the consolidated
statement of profit or loss and other comprehensive income.
Accounting policy for business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments
or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit
or loss.
On the acquisition of a business, the Consolidated Entity assesses the financial assets acquired and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic conditions, the Consolidated
Entity's operating or accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the Consolidated Entity remeasures its previously held equity interest
in the acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount
is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
82 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 35. Business combinations (continued)
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest
in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the
acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value
of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly
in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement
of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's
previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends
on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information
possible to determine fair value.
Note 36. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned subsidiaries
in accordance with the accounting policy described in note 2:
Name
Principal place
of business /
Country of
incorporation
Ownership interest
2021
2022
%
%
My FootDr (Aust) Limited
Allsports (Aust) Limited
Extend Rehab Pty Ltd
iOrthotics Pty Ltd
D.B.S. AUSTRALIA PTY. LTD.
Allsports Physiotherapy Forest Lake Pty Ltd
Allsports Pilates Sherwood Pty Ltd
Southside Manipulative Physiotherapy Centre Pty Ltd
Allsports Physiotherapy The Gap Pty Ltd
Allsports Physiotherapy Toowong Pty Ltd
My FootDr (Brookwater) Pty Ltd
My FootDr (Camp Hill) Pty Ltd
My FootDr Granda Pty Ltd
My FootDr (Fortitude Valley) Pty Ltd
My FootDr (Indooroopilly) Pty Ltd
BIM Physiotherapy Group Holding Ltd (formerly My FootDr (Mackay) Pty
Ltd)
My FootDr (Newmarket) Pty Ltd
My FootDr (Oxenford) Pty Ltd
My FootDr (Redcliffe) Pty Ltd
My FootDr (Shailer Park) Pty Ltd
MyFootDr Administration Pty Ltd
Orthema Australasia Pty Ltd
Footwear Enterprises Pty Ltd
PinPointe FootLaser Australia Pty Ltd
MFD IP Pty Ltd
Mackay Foot Centre Pty Ltd as trustee for the Mackay Foot Centre Unit
Trust
Balpod Holdings Pty Ltd
My FootDr (Cleveland) Pty Ltd
Foot Care Solutions Australia Pty Ltd
Trepar Pty Ltd
Brisbane Podiatry & Footwear Pty Ltd as trustee for Brisbane Podiatry &
Footwear Unit Trust
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
83 (Annual Report - 30 June 2022)
100%
100%
100%
100%
75%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
75%
100%
100%
100%
100%
100%
75%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
75%
100%
100%
100%
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 36. Interests in subsidiaries (continued)
Name
Foot Focus (Aust) Pty Ltd
Foot Focus (NSW) Pty Ltd
Foot Focus 4 Kids Pty Ltd
Foot Focus Narellan Pty Ltd
Healthia USA INC
iOrthotics USA LLC
Australian Eyewear Distributors Pty Ltd
TOC Hearing Pty Ltd
Blink Optical Gordon Pty Ltd
Blink Optical Pty Ltd
Blink Optical Robina Pty Ltd
Blink Optical St Ives Pty Ltd
Easer Pref Pty Ltd
Eyewear Australia (S.E. Regional) Pty Ltd
Glasses Galore Pty Ltd
Kpfe - Malop St Pty Ltd
Kpfe - Packington Street Pty Ltd
Leopold Optical Pty Ltd
Level 28 Pty Ltd
Mount Gambier Optical Pty Ltd
Point Cook Optical Pty Limited
Stacey & Stacey Pty Ltd
The Optical Company (International) Pty Ltd
The Optical Company (NSW) Pty Ltd
The Optical Company (Pacific) Pty Ltd
The Optical Company Pty Ltd
The Optical Company (Aust) Pty Ltd
Motion Health Group Holding Ltd
BIM IP Pty Ltd
Principal place
of business /
Country of
incorporation
Ownership interest
2021
2022
%
%
Australia
Australia
Australia
Australia
United States
United States
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
100%
100%
100%
100%
100%
58%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
58%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries with non-
controlling interests in accordance with the accounting policy described in note 2:
Name
Parent
Principal place
of business /
Country of
incorporation
Ownership
interest
2022
%
Ownership
interest
2021
%
Non-controlling interest
Ownership
interest
2021
%
Ownership
interest
2022
%
D.B.S, Australia Pty Ltd
Foot Care Solutions Australia Pty Ltd
iOrthotics USA LLC
Australia
Australia
United States
75%
75%
58%
75%
75%
58%
25%
25%
42%
25%
25%
42%
84 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 37. Cash flow information
Reconciliation of profit after income tax to net cash from operating activities
Profit after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Share-based payments
Fair value movements in interest rate swap instrument
Fair value movement of contingent consideration
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Increase in inventories
Increase in deferred tax assets
Increase in prepayments
Decrease/(increase) in other operating assets
Increase in trade and other payables
Increase in provision for income tax
Increase/(decrease) in employee benefits
(Decrease)/Increase in other liabilities and provisions
Consolidated
2022
$'000
2021
$'000
343
9,177
21,026
1,395
-
(1,550)
14,200
1,180
16
-
(2,604)
(1,173)
(3,019)
(1,038)
535
3,097
3,765
(507)
(3,074)
2,405
(695)
(1,651)
(508)
(542)
1,081
141
588
886
Net cash from operating activities
17,196
26,278
Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2020
Net cash from/(used in) financing activities
Acquisition of leases
Changes through business combinations (note 35)
Balance at 30 June 2021
Net cash from/(used in) financing activities
Acquisition of leases
Changes through business combinations (note 35)
Other changes
Balance at 30 June 2022
Note 38. Earnings per share
Profit after income tax
Non-controlling interest
Bank
loans
$'000
Lease
liabilities
$'000
Total
$'000
26,735
21,595
-
-
48,330
29,065
-
-
(278)
27,752
(10,044)
9,922
16,489
44,119
(14,877)
15,322
19,404
1
54,487
11,551
9,922
16,489
92,449
14,188
15,322
19,404
(277)
77,117
63,969
141,086
Consolidated
2022
$'000
2021
$'000
343
(3,672)
9,177
(4,020)
Profit/(loss) after income tax attributable to the owners of Healthia Limited
(3,329)
5,157
85 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 38. Earnings per share (continued)
Weighted average number of ordinary shares used in calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
Performance rights*
Number
Number
'000
'000
117,892
79,627
-
3,204
Weighted average number of ordinary shares used in calculating diluted earnings per share
117,892
82,831
Basic earnings per share
Diluted earnings per share
Cents
Cents
(2.82)
(2.82)
6.48
6.23
*
3,943,000 performance rights have been excluded from the above calculation of diluted earnings per share for the current year as the Consolidated Entity has incurred losses meaning
their inclusion would be anti-dilutive.
Accounting policy for earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Healthia Limited, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during
the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Subsequent event - Capital Raising
On 8 September 2022, the Consolidated Entity announced that it was raising up to $15.0 million via an accelerated non-
renounceable pro-rata entitlement offer. The offer comprised an Institutional Entitlement Offer to raise approximately $10
million and a Retail Entitlement Offer to raise approximately $5 million.
On 12 September 2022, the Consolidated Entity announced the successful completion of the Institutional Entitlement Offer
and 6,718,785 new ordinary shares were issued at $1.47 per share, raising a total of approximately $10 million.
The Retail Entitlement Offer closes on 30 September 2022 and an amount of up to $5 million is expected to be raised from
this offer. The Retail Entitlement Offer is not underwritten.
Note 39. Share-based payments
Performance rights
On 19 November 2021, following shareholder approval at the 2022 Annual General Meeting, 268,500 unlisted performance
rights were granted to Directors (187,500 - Wesley Coote, 36,000 - Anthony Ganter and 45,000 - Colin Kangisser), with a nil
grant and exercise price. The performance rights will vest on 18 November 2024 (subject to satisfaction of the relevant
vesting conditions) and expire on 31 December 2024. The vesting conditions include a number of performance and service
conditions.
86 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 39. Share-based payments (continued)
Details of the performance rights are as follows:
2021 Grant
Grant date:
Grant price:
Exercise price:
Vesting date:
Expiry date:
Restriction on shares issued on exercise: Can only be traded in accordance with Securities Trading Policy and insider
19 November 2021
$nil
$nil
18 November 2024
31 December 2024
trading laws
The fair value of performance rights (equity settled) with the relative TSR condition is calculated at the date of grant using
the Monte-Carlo simulation model, taking into account the impact of the TSR condition and dividends during the vesting
period. The value disclosed is the portion of fair value of the rights recognised in each reporting period.
Vesting conditions performance rights granted 19 November 2021
Executive and Senior Manager Tranche - 923,500 of the 2021 Performance Rights (Tranche 1 Performance Rights) which
will vest in accordance with the Performance Rights Plan Rules is dependent on, and subject to, satisfaction of the following
conditions:
Service condition
The performance rights will be exercisable upon satisfaction of the Service condition,
being continuous employment with the Company from Grant Date until the Vesting
Date.
The Company’s compounding annual growth in underlying Earnings Per Share
(underlying EPS) for the period from 1 July 2021 to 30 June 2024 greater than 10%
per annum.
EPS Growth condition
The underlying EPS results to be used will be the Basic EPS recorded in the
Company’s audited financial statements in the relevant years, adjusted for one-off
and non-recurring items and the amortisation of customer lists, as determined by the
Board in its discretion.
Total Shareholder Return condition Total Shareholder Return (TSR) to exceed 150% for the period from 1 July 2021 to 30
50% of the Performance Rights will be exercisable if this condition is achieved.
June 2024, with TSR calculated as follows:
TSR = (Price End - Price Begin + Dividends)/Price Begin
Where:
Price Begin = share price at 1 July 2021;
Price End = share price at 30 June 2024; and
Dividends = total dividends paid per share during the period from 1 July 2021 to 30
June 2024.
50% of the performance rights will be exercisable if this condition is achieved.
87 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 39. Share-based payments (continued)
Other Key Personnel - 280,000 of the 2021 Performance Rights (Tranche 2 Performance Rights) which will vest in
accordance with the Performance Rights Plan Rules is dependent on, and subject to, satisfaction of the following
conditions:
Service condition
The performance rights will be exercisable upon satisfaction of the Service condition,
being continuous employment with the Company from Grant Date until the Vesting
Date.
EBITDA Growth Condition
50% of the Performance Rights will be exercisable if this condition is achieved.
The Company's compounding annual growth in underlying earnings before interest
tax depreciation and amortisation of Healthia's Eyes & Ears Division (underlying
EBITDA) for the period 1 July 2021 to 30 June 2024 greater than 10% per annum.
The underlying EBITDA results to be used will be the EBITDA recorded in the
Company's audited financial statements in the relevant years, adjusted for one-off
and non-recurring items and the amortisation of customer lists, as determined by the
Board in its discretion.
50% of the performance rights will be exercisable if this condition is achieved.
The performance rights do not rank equally with existing ordinary shares quoted. Prior to vesting, the performance rights do
not carry a right to vote or receive dividends.
Where shares are issued upon the vesting and exercise of the performance rights (within the periods detailed above), those
shares will rank equally with existing ordinary shares of Healthia Limited.
To participate in a dividend, the ordinary shares must be issued prior to the record date for the dividend.
Set out below are summaries of performance rights granted under the plan:
2022
Grant date
Expiry date
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
27/11/2019
30/10/2020
01/12/2020
19/11/2021
2021
31/10/2022
31/10/2023
31/10/2023
31/12/2024
2,543,358
378,500
282,500
-
3,204,358
-
-
-
1,203,500
1,203,500
Grant date
Expiry date
27/11/2019
30/10/2020
01/12/2020
31/10/2022
31/10/2023
31/10/2023
Balance at
the start of
the year
Granted
Exercised
2,678,358
-
-
2,678,358
-
378,500
282,500
661,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,543,358
378,500
282,500
1,203,500
4,407,858
Expired/
forfeited/
other*
Balance at
the end of
the year
(135,000)
-
-
(135,000)
2,543,358
378,500
282,500
3,204,358
*
Performance rights of 135,000 have been cancelled due to the Service condition not being met.
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was 1.08
years (30 June 2021: 1.54 years).
88 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 39. Share-based payments (continued)
Set out below are equity settled payments made during the year:
Equity settled payments
Equity settled payments other
Consolidated
2022
$
2021
$
1,395,000
1,180,000
Accounting policy for share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares that are provided to employees in exchange for the
rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash
is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option,
the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend
yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine
whether the Consolidated Entity receives the services that entitle the employees to receive payment. No account is taken of
any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the
Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was
granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
●
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the
expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the
reporting date.
●
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to
settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value
of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Consolidated Entity or employee, the failure to satisfy the condition is
treated as a cancellation. If the condition is not within the control of the Consolidated Entity or employee and is not satisfied
during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the
award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award
is treated as if they were a modification.
89 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Notes to the consolidated financial statements
30 June 2022
Note 40. Events after the reporting period
Capital Raising
On 8 September 2022, the Consolidated Entity announced that it was raising up to $15.0 million via an accelerated non-
renounceable pro-rata entitlement offer. The offer comprised an Institutional Entitlement Offer to raise approximately $10
million and a Retail Entitlement Offer to raise approximately $5 million.
On 12 September 2022, the Consolidated Entity announced the successful completion of the Institutional Entitlement Offer
and approximately $10 million was receipted by the Consolidated Entity on 16 September 2022.
The Retail Entitlement Offer closes on 30 September 2022 and an amount of up to $5 million is expected to be raised from
this offer. The Retail Entitlement Offer is not underwritten.
This capital raising will provide additional cash reserves to fund near term acquisition opportunities and provide additional
financial flexibility.
Acquisitions
On 8 September 2022, the Consolidated Entity announced that it had entered into binding agreements to acquire the following
businesses (together, the 'Acquisitions'), comprising:
●
●
●
Sunshine Coast Hand Therapy, a hand therapy business located on the Sunshine Coast, Queensland (2 clinics);
Watsonia Physiotherapy, a physiotherapy business located in Watsonia, Victoria (1 clinic); and
Corio Bay Health Group, 9 allied health businesses located throughout south-west and south-east Melbourne and
Geelong, Victoria.
Settlement has been reached for Sunshine Coast Hand Therapy and it is expected that all conditions precedent will be
satisfied and settlement reached for each of Watsonia Physiotherapy and Corio Bay Health Group on or before 30 October
2022.
The Acquisitions are expected to contribute the following annualised earnings(1) to Healthia:
Revenue(u)(1)
EBITDA(u)(2)(3)
Total consideration for the Acquisitions (subject to completion adjustments(4)) is as follows:
Upfront cash consideration
Issue of Clinic Class Shares(5)
Total upfront consideration
$'000
8,880.00
1,870.00
$'000
6,610.00
1,680.00
8,290.00
In addition to the upfront consideration, contingent consideration(6) may become payable as cash consideration, subject to
the achievement of pre-defined conditions.
(1)
(2)
(3)
(4)
(5)
(6)
Revenue(u) and EBITDA(u) numbers are based on historical 12 months of trading, normalised in accordance with Healthia’s acquisition and accounting policies, removing the impacts
of AASB16.
EBITDA(u) means underlying earnings before interest, tax, depreciation and amortisation, removing the impacts of AASB16. EBITDA(u) reflects EBITDA as adjusted to reflect the
Directors’ assessment of the result for the ongoing business activities, in accordance with AICD/Finsia principles. EBITDA(u) has not been audited.
EBITDA(u) includes the approximate 20% economic interest continued to be owned by Clinic Class Shareholders.
Completion adjustments are agreed on a deal-by-deal basis and can include adjustments for the value of inventory held at completion and the value of employee liabilities transferring
to Healthia as the acquirer.
Clinic Class Shares are non-voting shares issuable by certain subsidiaries of Healthia Limited. These shares enable the holder to participate in dividends declared, calculated on the
performance of the clinic in which the Clinic Class Shares are issued. The Clinic Class Shares are designed to create alignment between the interests of clinicians and shareholders.
Contingent consideration it based on future performance of the business with the maximum amount payable in the future $3.76 million.
No other matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly affect the
Consolidated Entity's operations, the results of those operations, or the Consolidated Entity's state of affairs in future financial
years.
90 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Directors' declaration
30 June 2022
In the Directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the Consolidated Entity's financial position as
at 30 June 2022 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
Dr Glen Frank Richards
Director
30 September 2022
91 (Annual Report - 30 June 2022)
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Healthia Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Healthia Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
92 (Annual Report - 30 June 2022)
Impairment assessment of Goodwill and Other Intangible Assets and determination of Cash
Generating Units (“CGU’s”)
Key audit matter
How the matter was addressed in our audit
The Group’s disclosures in respect to intangible
assets, including the impairment assessments of
goodwill and other intangible assets are included
in Note 16.
The carrying value of intangible assets represent
a significant asset of the Group.
The Group is required to annually test the
amount of goodwill and indefinite useful life
intangible assets for impairment and assess other
intangible assets for impairment indicators.
This annual impairment test was significant to our
audit because the goodwill and intangible assets
balance is material to the financial statements
and because management’s assessment process,
including the determination of CGU’s, is complex,
highly judgmental and includes estimates and
assumptions relating to expected future market
or economic conditions.
Our procedures included, amongst others:
•
•
•
•
•
•
Evaluating management’s determination of
the Group’s Cash Generating Units ("CGU's")
to ensure they are appropriate, including
being at a level no higher than the operating
segments of the entity
Evaluating management’s process regarding
the valuation of the Group’s goodwill and
other intangible assets
Assessing the Group’s assumptions and
estimates relating to forecast revenue, costs,
capital expenditure and discount rates used
to determine the recoverable amount of its
assets
Assessing the historical accuracy of
forecasting of the Group by comparing the
current year actual results with FY22 figures
included in prior year forecasts to consider
whether any forecasts included assumptions,
that with hindsight, had been optimistic
Involving our internal specialists to assess the
discount rates and terminal growth rates
against comparable market information
Challenging key assumptions by performing
sensitivity analysis on the growth rates and
discount rate assumptions used.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
93 (Annual Report - 30 June 2022)
Business combination accounting including determination of goodwill
Key audit matter
How the matter was addressed in our audit
During the year, the group acquired the Back in
Motion Group (‘BIM’), comprising the businesses
of 63 physiotherapy clinics and the shares in BIM
IP Pty Ltd, which owns the brands, trademarks
and other intellectual property. The group also
acquired a number of other physiotherapy clinics,
hand therapy clinics, optical stores and a podiatry
clinic.
As disclosed in Note 35, as part of these business
combination transactions, the Group recognised
the following additional intangible assets:
• Goodwill
•
•
Customer lists
Brands
Business combinations is a key audit matter due
to the significant audit effort to test the group’s
acquisitions during the year and the level of
judgement applied in evaluating management’s
assessment of goodwill allocated in the purchase.
Our procedures included, amongst others:
• Obtaining an understanding of the
transactions including an assessment of the
accounting acquirer and whether the
transactions constituted business or asset
acquisitions
•
•
•
•
•
•
Reviewing purchase documentation including
contracts and business sale agreements and
obtaining a detailed understanding of the
acquired businesses
Assessing the appropriateness of the valuation
methodology of the assets acquired
Reviewing management’s assessment of the
fair value of the consideration paid and the
recognition of any contingent and deferred
consideration upon the acquisition date
Evaluating management’s assessment of the
identifiable assets and liabilities acquired
including reviewing independent intangible
asset valuation for the acquisition of BIM
obtained by management
Engaging with internal experts on the
appropriateness of the calculation of
identifiable intangible assets
Assessing the adequacy of the Group's
disclosures of the acquisitions.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
94 (Annual Report - 30 June 2022)
Going Concern basis of preparation of financial statements
Key audit matter
How the matter was addressed in our audit
The Group’s disclosures around the basis of
preparation and the going concern assumption
are included in Note 2, which details the working
capital deficiency position.
As detailed in Note 2 the financial statements
have been prepared by the Group on a going
concern basis.
Going concern was considered a key audit matter
due to this matter requiring significant auditor
effort related to the working capital deficiency as
at 30 June 2022, the assessment of compliance
with loan covenants and associated waivers
obtained by the Group and the assessment of the
Group’s forecast cash flows (for a period of at
least 12 months from the audit report date).
Our procedures included, amongst others:
•
•
•
•
•
•
•
Obtaining and evaluating management’s
assessment of the Group’s ability to
continue as a going concern for at least 12
months from the date of our auditor’s
report
Evaluating management’s cash-flow
forecasts and challenging management’s
assumptions applied around future cash
flows
Assessing the impact of the capital raising
completed subsequent to balance date
Obtaining and reading the terms associated
with the Group’s financing arrangements,
including covenant waivers obtained by the
Group and assessing the amount of facilities
available for drawdown over the forecast
period
Assessing the ability of the Group to comply
with financial covenants for at least the
next 12 months, including reviewing
covenant waivers received in advance
Assessing management’s assumptions in the
cash flow forecasts to assess whether
current cash levels along with expected
cash inflows and expenditure can sustain
the operations of the Group for a period of
at least 12 months from the date of this
audit report
Assessing the appropriateness of the
Group’s going concern basis of preparation
disclosures in the financial statements for
consistency with Australian accounting
Standards.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
95 (Annual Report - 30 June 2022)
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2022, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
96 (Annual Report - 30 June 2022)
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 21 to 30 of the directors’ report for the
year ended 30 June 2022.
In our opinion, the Remuneration Report of Healthia Limited, for the year ended 30 June 2022,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
T R Mann
Director
Brisbane, 30 September 2022
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
97 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Shareholder information
30 June 2022
The shareholder information set out below is current as at 28 September 2022.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Ordinary shares
% of total
Number
of holders
shares
issued
661
927
349
484
105
26.00
37.00
14.00
19.00
4.00
2,526
100.00
-
-
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
issued
Number held
21,511,708
14,488,035
8,748,439
6,963,607
5,066,600
4,413,094
3,980,657
3,466,721
3,445,465
3,069,444
2,873,228
2,373,267
2,098,796
1,815,670
1,522,941
1,177,808
967,317
962,317
910,000
866,679
16.03
10.80
6.52
5.19
3.77
3.29
2.96
2.58
2.56
2.28
2.14
1.79
1.56
1.35
1.13
0.87
0.72
0.71
0.67
0.64
90,721,793
67.56
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BELAROO PTY LTD
BRIDELL PTY LIMITED
MAXIMUM (NQ) PTY LTD
NATIONAL NOMINEES LIMITED
CHESTER-LGL PTY LTD
DLH TRADING PTY LTD
SMITH-ECHEV MANAGEMENT SERVICES PTY LTD
BNP PARIBAS NOMS PTY LTD
ROM GROUP PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
MAXIMUM (NQ) PTY LTD
WILLEESE PTY LIMITED
GF & LH RICHARDS SUPER PTY LTD
DPC INVESTMENTS PTY LTD
LEGGS PTY LTD
HGT INVESTMENTS PTY LTD
SARWILL PTY LTD
Unquoted equity securities
There are no unquoted equity securities.
98 (Annual Report - 30 June 2022)
Healthia Limited and its Controlled Entities
Shareholder information
30 June 2022
Substantial holders
Substantial holders in the Company are set out below:
Wilson Asset Management Group
MA FINANCIAL GROUP LIMITED
Mr Darren L Stewart
Glen Frank Richards
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
% of total
shares
issued
Number held
10,670,424
9,165,154
8,021,333
7,966,777
7.96
6.83
5.98
5.56
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Performance rights
The performance rights do not rank equally with existing ordinary shares quoted. Prior to vesting, the performance rights do
not carry a right to vote or receive dividends.
There are no other classes of equity securities.
Securities subject to voluntary escrow
Class
Ordinary shares
Ordinary shares
Ordinary shares
Expiry date
17 October 2022
30 November 2022
1 December 2022
Number
of shares
1,065,790
5,066,600
117,369
6,249,759
Share Registry
Securityholders who have any questions regarding their holding should contact the company's registrar:
Link Market Services Limited
P: 1300 554 474 (in Australia) or +61 1300 554 474 (from overseas)
F: +61 2 9287 0303
E: registrars@linkmarketservices.com.au
www.investorcentre.linkmarketservices.com.au
99 (Annual Report - 30 June 2022)