ANNUAL REPORT AND
FINANCIAL STATEMENTS 2024
INNOVATE
CREATE
INSPIRE
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Annual Report and Financial Statements 2024
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INSPIRATION HEALTHCARE GROUP PLC
Strategic Report | Governance | Financial Statements
Strategic Report
03 About the Group
04 Our business
06 Chairman’s and Chief Executive
Officer’s report
10
Our business strategy
11
Operational and financial review
14 Principal Risks & Uncertainties
19
Companies Act Section 172
Statement
Governance
22
Statement of Corporate
Governance
29 Audit Committee Report
31
Board of Directors
34 Directors’ Remuneration Report
38 Directors’ Report
Financial Statements
42 Independent Auditors’ Report
to the Members of
Inspiration Healthcare Group plc
49 Consolidated Financial Statements
53 Notes forming part of the
Consolidated Financial Statements
81 Company Financial Statements
83 Notes forming part of the Company
Financial Statements
Shareholder Information
89 Shareholder Information
90 Advisors
Contents
INSPIRATION HEALTHCARE GROUP PLC
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About the Group
Inspiration Healthcare (AIM: IHC) designs, manufactures and markets
pioneering medical technology. Headquartered in the UK, the Company
specialises in neonatal intensive care medical devices, which are addressing
a critical need to help to save the lives and improve the outcomes of patients,
starting with the very first breaths of life.
The Company has a broad portfolio of its own products and complementary
distributed products, for use in neonatal intensive care designed to support
even the most premature babies throughout their hospital stay. Its own branded
products range from highly sophisticated capital equipment such as ventilators
for life support through to single-use disposables.
The Company sells its products directly to hospitals and healthcare providers
in the UK and Ireland, where it also distributes a range of advanced medical
technologies for infusion therapy. In the rest of the world the Company
has an established network of distribution partners giving access to more than
75 countries.
The Company’s commercial strategy is focused on accelerating growth
through maximising in-market sales, geographic and portfolio expansion and
strategic M&A.
The Company operates in the UK from its Manufacturing and Technology Centre
in Croydon, South London, and in the USA from its facility in Melbourne, Florida.
Find out more:
inspirationhealthcaregroup.com
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Infusion Therapies
We manage a range of advanced medical technologies for infusion therapy
for which we are the exclusive distributor in the UK. Total parenteral nutrition
(“TPN”) is currently the Group’s largest market in Infusion therapy and there are
also significant opportunities in chemotherapy and pain management that are
suitable for hospital and homecare settings. Expansion into these areas is a
strategic focus.
As with our Neonatal Intensive Care range, for Infusion, we offer technical support
for our customers through training programmes or directly at our Manufacturing
and Technology Centre in Croydon.
Global Reach
Our global reach means our medical technology is available in more than 75
countries. We sell directly into the UK and Ireland (“Domestic”) and partner with
established independent distributors in the rest of the world. In the USA we support
our distributors with our own sales team. This model provides us with significant
global coverage and opportunity including access to international Key Opinion
Leaders (“KOLs”) with whom we develop relationships to drive our product
development and education offerings.
Our business
Our Markets
The Group operates within a single business segment, providing essential
medical technology. Within this segment, the Group sells products and services
into two main market areas: ‘Neonatal’ and ‘Infusion Therapies’.
Neonatal Intensive Care
Neonatal intensive care is our primary area of concentration where the focus
is on saving the youngest and most vulnerable patients. Worldwide, more than
1 in 10 babies are born prematurely. In 2020 there were an estimated 13.4 million
preterm births globally while in 2019 900,000 deaths were attributed to preterm
birth complications. (Source: World Health Organization 2023).
Premature births are the single biggest cause of death of children under the age
of five and remain a consistent challenge to healthcare professionals. There is
increasing demand for technologies that can deliver the best possible outcomes
and prevent serious complications.
Our products have been developed to improve patient outcomes, starting with
the first breaths of life.
We have a range of products, both capital equipment and consumables, that we
have developed and own outright or through licence arrangements of Intellectual
Property which we can sell globally where regulatory approvals allow. We
supplement our own products with commercial arrangements which allow us to
distribute third party products. This adds value to our customers and distribution
partners as they are able to acquire products they need from a single source.
As well as our broad portfolio of products, we supplement this with technical
support directly in the UK and the USA and through distributors elsewhere for the
capital equipment that we sell. We train our distributors and hospital biomedical
engineers and provide spare parts to those who have been appropriately trained.
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We have considered our employees’ overall well-being. Through our Group’s
People team, we offer a range of benefits:
u
‘Blended Working Policy’ allowing employees to work from home for up to 40% of
their time.
u
Compressed working hours, allowing employees to choose whether they would
like to work a four-day compressed working week and benefit from a three-day
weekend.
u
Improved parental pay for all new parents, including adoptions, and additional
paid time off for those parents who have a premature baby.
u
Mental Health and well-being App providing employees with access to support
if and when needed.
In addition to the above, we actively monitor gender pay and acknowledge the
benefits of a diverse workforce. Diversity fosters varied perspectives and ways of
thinking, which in turn will improve the Group’s performance.
We are also aware of our responsibilities to the local environment where many
of our employees live. We have started an initiative with a local college to give
training to T-Level students, aged between 16-18 years old, who are interested in
pursuing a career in manufacturing and engineering.
We are committed to ethical business practices and ensure all our employees
understand their obligations to make sure that our business is conducted in a
fair and transparent manner. We have codes of conduct for how employees
should expect to be treated and treat others. As a global supplier, we respect
cultures around the world. However, we never compromise on certain areas of
our business, and we have policies around issues such as modern slavery, bribery
and corruption and money laundering to ensure we are adopting best practice
in these areas.
Governance
As a company listed on the Alternative Investment Market (“AIM”) of the London
Stock Exchange and as a member of the Quoted Companies Alliance (“QCA”), the
Board follows their best practice on Governance aiming to ensure everything we
do is with the highest level of governance and transparency.
Our Business
Inspiration Healthcare Group is an ethical Company with high principles in business.
We take our responsibilities towards Environmental, Social and Governance (“ESG”)
seriously and are always looking at ways to improve the way we operate our
business, especially around issues that affect society.
Environmental
We are committed to reducing our impact on the planet wherever possible
and undertake regular reviews of our practices to do so. Our environmental
and sustainability efforts are an important part of our operational strategy. The
environment and sustainability are important to our customers. In our biggest
market, the UK, the government has mandated the NHS to be carbon neutral by
2040, our aim is to use this to drive the Group to be ahead of this date which will
stand us in good stead around the world.
Social
As a medical technology company, we are deeply embedded in society to improve
the outcomes for the patients we serve. We are committed to using technology to
improve outcomes for patients and want to do this in a way that has maximum
benefit for society. Our charitable giving initiative offers us the opportunity to
support charities that align with our core values.
We are an ethical employer and create a positive working environment for our
employees. We aim to have roles that challenge, engage and develop our teams
to their fullest potential, including prioritising internal promotion opportunities
before reviewing external candidates, where appropriate. We are an organisation
committed to the ongoing professional growth of every team member. Regardless
of position, we provide the opportunity to excel and enhance their skills.
Our Business continued
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Chairman and Chief
Executive Officer’s Report
Welcome to my first review as Executive Chairman and Interim CEO of
Inspiration Healthcare Group plc. It is a privilege to take on this role at this time.
Despite the challenges of the past couple of years I believe we have a number of
significant opportunities ahead of us in both the UK and International markets,
including North America, which is a significant strategic market and future
growth opportunity for the Group.
Overall however, the year was disappointing with revenues down 8.7% to £37.6m
(FY2023: £41.2m) which consequently meant that Adjusted EBITDA was reduced
to £2.0m (FY2023: £4.0m). Cash was impacted as was working capital with net
debt (excluding IFRS 16 liabilities)1 increasing to £(6.0)m. Despite recent challenging
market conditions, the Company has invested in the business to expand its
manufacturing capabilities and product portfolio, building the foundations to
deliver long-term sustainable growth.
My initial focus as Chairman has been to examine the key factors impacting the
business and identify a constructive path forward. The last couple of years have
been difficult for the medical device sector, which has added pressure on the
internal resources within the Group.
The Group operates within a single business segment, providing essential medical
technology. Within this segment, the Group sells products and services into two
main market areas: ‘Neonatal’ and ‘Infusion Therapies’.
Neonatal focuses on intensive care equipment for premature and sick babies. We
design, manufacture and sell our equipment around the world to over 75 countries
and we also distribute complementary products in the UK and Ireland.
Infusion Therapies focuses on infusion pumps and associated consumables in
the UK where we are an active distributor of these technologies into various
therapy areas.
1 Cash and cash equivalents plus short-term investments, less revolving credit facility and
invoice financing borrowings
Neonatal
Neonatal revenues were lower than last year at £29.1m (FY2023: £32.1m), this was
impacted by delays in receiving a large Middle Eastern order and a key distributed
product not receiving its CE marking under the new European Medical Device
Regulations (‘MDR’). We also saw increased competition in the neonatal ventilator
market, due to the saturation of the adult ventilator market following increased
purchasing during the Covid-19 pandemic and those manufacturers seeking
new markets for their products. We expect the markets to normalise over the next
12-18 months, particularly with the withdrawal of Medtronic from the adult
ventilator market.
During the year, supply chain issues continued to require attention. The limited
availability of certain components has required the company to devise new
solutions, taking up valuable R&D resources and requiring us to acquire parts at
elevated prices impacting both gross cash and cash equivalents plus short-term
investments, less revolving credit facility and invoice financing borrowings margin
and working capital as we held more stock. Although these solutions are not ideal,
it does give us the security of being able to manufacture our products.
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There is also significant growth potential in our consumables business, and we
are looking to expand our portfolio of disposable products. We have undertaken
a thorough review of our consumables for Neonatal Intensive Care and have
identified a number of overlapping products along with gaps in the portfolio. This
will lead to us improving our product offerings, whilst streamlining the number of
products and working closely with existing suppliers.
Our technical support offering for maintenance programmes and spare parts
represents another opportunity for growth. We have been running a project entitled
‘service as a product’ to challenge the way we approach technical service, which
has identified many areas in which we can grow our technical service revenues,
and with greater consumables and a better focus on technical support, we expect
to drive growth in recurring revenue streams over FY2025 and beyond.
Infusion Therapies
The Infusion Therapies products delivered revenues of £8.5m in the year (FY 2023:
£9.1m), the decline was primarily due to a one-off de-stocking of a major customer
during H1. This de-stocking, which meant sales for the year were below our initial
expectations, was over by the end of the first half when order patterns returned to
traditional levels. Revenues in H2 saw a strong recovery in line with the prior year,
albeit from a lower base at the end of H1.
We have continued to invest in sales, marketing and clinical support in this area
of our business and have introduced new products into the range in new therapy
areas, which are starting to gain traction. This diversification is a key part of our
growth strategy for this business, and we are working to develop the market by
further expanding our product portfolio through distribution agreements and
looking at new therapy areas for the existing portfolio.
We were delighted to be able to launch a key new pump from our partner Micrel.
With the UK NHS increasingly looking to treat patients out of hospital, it is important
that new devices have the capability of being able to be monitored remotely.
The new pump from Micrel will allow for this making it an attractive option for our
existing customer base and allowing for future growth.
The changes to the European regulatory landscape, with the implementation of
the EU Medical Device Regulation has also resulted in the early discontinuation
of some of our products. Our commitment to our customers means that we
have to maintain the supply of spare parts for seven years, which has increased
working capital in some areas. Additionally, we have invested time and resources
to ensure our products remain compliant within both the EU and the UK under
the new legislation despite the EU extending the deadline for compliance to MDR
to 2027.
During the year we also launched several new products:
u
SLE1500 – A compact respiratory support system that provides non-invasive
ventilation (“NIV”) modes, which is considered the gold standard of care for
preterm infants with respiratory distress syndrome (‘RDS’) and is gradually
becoming the first choice for respiratory support. The SLE1500 gives respiratory
support to babies that have a breathing reflex by providing nasal continuous
positive airway pressure (‘CPAP’) and High Flow Oxygen therapy. We have also
included our Oxygenie patented automatic Oxygen control algorithm.
u
SLE6000N – A non-invasive version of our leading specialist neonatal ventilator,
which facilitates precise, controlled ventilation for critically ill infants and can
also feature Oxygenie. This has allowed us to enter slightly different markets.
This also led to a re-branding of other variants of the SLE6000 to differentiate
the entire portfolio and we now have three variants across critical care, high
dependency care and non-invasive respiratory support. The SLE6000N is CE
marked and available where CE marking allows products to be registered.
u
LifeStart – having received feedback from US customers we launched a
new version of LifeStart, our specialist unit that can be used as a stabilisation
platform for babies that have experienced a difficult birth. The new version is
more aligned with US user requirements, allowing US manufactured accessories
to be added to the platform.
China continues to be an important market for us and remains challenging due to
local legislation favouring locally manufactured goods. To address this, we have
instigated a project for assembly of the SLE6000 ventilator range in China. This will
allow us to protect our current market position and opens up a larger part of the
market that we have not been able to enter previously.
Chairman and Chief Executive Officer’s Report continued
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Commercial and Board structure
The Board continues to evaluate the focus of the Group, including the market
and products along with the resources and structure of the Group. This has led to
the appointment of a new Chief Commercial Officer reporting directly to me as
Interim CEO. This new pivotal role will bring together all our commercial activities
and will help drive our business forward.
In June 2024, we announced that we would close our Hailsham facility at the end
of July. Activities undertaken at Hailsham are either being outsourced to a long-
standing supplier or moved to the Group’s Croydon site. This impacts 12 employees
with several expected to transfer to Croydon. This further rationalises the Group’s
operations into a single site and is anticipated to realise annualised savings of
approximately £0.5m.
With the advancement of our North American strategy, a restructure of the
commercial team and the addition of new products, I am confident that we are
taking the right steps to deliver the longer-term growth ambitions of the Company.
The Group also strengthened the Board during the year with the appointments of
Alan Olby as Chief Financial Officer and Marlou Janssen as Non-executive Director.
Both bring significant commercial expertise in the medical device space and
their experience will be instrumental as the Group continues to execute on its
growth strategy.
Post year-end there were two additional changes to the Board, Mark Abrahams
retired as Chairman in March 2024 and Neil Campbell stepped down as CEO in
May 2024 to become a Non-executive Director of the Group. On behalf of the
Company and the shareholders, I would like to thank both Mark and Neil for
their service and commitment to the Company over the past nine years and
look forward to continuing to work with Neil as a Non-executive Director and in
his capacity as a Global Advocate supporting key relationships and business
development opportunities.
North America strategy
North America accounts for approximately 50% of the world market for neonatal
intensive care products and is a significant strategic market and key focus for
our long-term growth. In January 2024, we acquired Airon Corporation (‘Airon’)
in Melbourne, Florida, providing an established platform to support and de-risk
the Company’s US commercial operations. The acquisition was the first step in
advancing our US/North American strategy, which aims to reduce the Group’s
reliance on markets dominated by large tenders. The Company is looking
to expand its product portfolio in the US through the regulatory approval of
existing technologies and is also evaluating complementary acquisition and
licensing opportunities.
Airon is a leading manufacturer of pneumatic ventilators, which can be used in
transport and MRI for babies through to adults. It has established sales channels,
through national distributor(s), and provides a good platform to launch Inspiration
Healthcare’s existing products into the USA. It also allows the export of Airon
products through the Group’s international distribution network. The acquisition is
in line with our long-term strategy to acquire companies with both complementary
technologies and sales reach to expand the Group’s global footprint, add scale
and accelerate growth. It is expected to be earnings accretive in the second full
year of ownership.
We are excited to be working with our new colleagues as we welcome them
into the Group and execute our North America strategy together. Although it is a
small business, it is already showing signs of growth and potential through its
national distributor.
In the summer of 2023, we submitted an initial application to the FDA for clearance
of the SLE6000 ventilator, albeit with some features removed. In light of recently
amended FDA guidelines, particularly pertaining to cyber security, we have opted
to reassess the most effective employment of our resources to comply with these
new regulations. As a result, we are reassessing the application and this is pending
further clarification from a meeting with the FDA, planned for the summer of 2024.
In January 2024, the Company received Medical Device Single Audit Program
(“MDSAP”) certification, confirming its Quality Management System processes
comply with the requirements of the EU, USA, Japan, Australia and Canada.
MDSAP is compulsory for Canada and following certification, we have initiated
the registration process of our product range in Canada, which is expected to be
commercially available during FY2025.
Chairman and Chief Executive Officer’s Report continued
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Outlook
While there have been challenges beyond our control presented by volatility in the
international markets we serve, we continue to be robustly positioned in a stable
global long term growth sector with a best-in-class product portfolio.
We are actively executing our growth strategy to increase our presence in more
stable markets, most notably North America, where our recent acquisition of Airon
provides a suite of complementary products and a ready-made platform to grow.
This strategic move not only aims to mitigate the impact of short-term market
volatility, but also will be a future growth driver for the Group.
While revenues are expected to be second half weighted in FY25, current trading
is in line with management’s expectations. We are grateful to our shareholders for
their continuing support, and we look forward to a successful FY25 and beyond.
I would like to thank our dedicated team around the world for all of their hard
work and our customers for their continued use of our products, we are proud to
support clinicians around the world in the life saving work that they do.
I would like to summarise by re-iterating my excitement for and confidence in
the Group’s ability to capitalise on the opportunities ahead. I believe our Group
has a solid portfolio of best-in-class, life-saving neonatal technologies and
infusion products that are addressing a critical need and is well placed to deliver
significant long-term sustainable growth.
Roy Davis
Executive Chairman and Interim CEO
30 July 2024
Chairman and Chief Executive Officer’s Report continued
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u
Expand product portfolio through investment in R&D to invigorate the
Company’s pipeline of branded products, technology agreements such
as targeted in-licensing or IP acquisitions and the addition of new
distributed products.
u
New variants of ventilators launched in Q2 2023, specifically designed to
meet specialist healthcare of smallest neonates across critical care, high
dependency care in non-invasive respiratory support.
u
Entry into new geographical markets through regulatory approvals, with a
particular focus on North America.
u
Opportunity to expand distribution network and products in Canada now
that we have achieved MDSAP registration for the Group.
u
Reviewing all products to plan FDA approval in the USA starting with our
ventilator range.
u
M&A and IP licensing opportunities to add complementary new products/IP
and capabilities and expand global footprint to add scale and accelerate
company growth.
u
Strategic acquisition of Airon Corporation in January 2024, added scale,
complementary technologies and sales reach to expand the Group’s global
footprint and accelerate growth.
Infusion Therapies
We have been focusing on penetration into new therapy areas with the range of
products we have in our portfolio. This has proved successful and we look forward
to launching a new range of capital products in FY2025.
We continue to look for additional complementary and supplementary products
to add value to our range and give our customers a more complete range to
choose from.
Our business
strategy
We design, manufacture and market medical technology globally. Our
world class design and manufacturing expertise, combined with our deep
understanding of patient needs enables us to provide a broad portfolio of
own branded innovative medical products, supplemented by complementary
distributed products, for use in neonatal intensive care.
The Group has an established global footprint, selling its products directly in the
UK and Ireland and via its network of distribution partners across Europe, MENA and
ASIA-PAC.
Our commercial strategy is focused on accelerating growth through maximising
in-market sales, geographic and portfolio expansion and strategic M&A,
with a long-term ambition to become a world leading provider of innovative
medical devices.
u
Maximise revenue from existing products and markets.
u
Developing new features for existing products, for example we recently
added features to our LifeStart to meet US customer requirements.
u
Increase education and support for end users and distributors, we have
recently launched a new online learning management system for products.
u
Add value through services, including education and technical support, such
as webinars to support education.
u
Focus on increasing recurring revenues from disposable products having
undertaken a fundamental review of our range and working with our current
supply partners.
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Infusion
Revenues for the Infusion products were £8.5m in the year, representing a decline
of 6.6% from the £9.1m reported for FY2023. This followed a challenging first half of
the year during which our leading customer was de-stocking, resulting in a 14% fall
in first half revenue. The second half of the year showed a marked improvement
as this customer returned to normal ordering patterns and revenues were in-
line with the same period in FY2023. With a new pump launched in April 2024,
combined with a focus on growth opportunities outside the homecare sector, we
are optimistic of a return to growth for the Infusion products in FY2025.
Gross profit
Gross profit of £17.9m was 1.1% lower than the prior year (FY2023: £18.1m) and
represents a gross margin of 47.6% for FY2024, increased from the 43.9% achieved
in FY2023. The margin improvement was driven by an improving sales mix of
neonatal products, and increased absorption of manufacturing overheads into
finished goods.
Operational and
Financial Review
Revenue
Group revenue decreased 8.7% to £37.6m (FY2023: £41.2m). This includes £0.2m
revenue from Airon Corporation in the period following completion of the
acquisition on 3 January 2024. Going forwards, Airon revenue will be included
within Neonatal product revenues.
Neonatal
Neonatal products achieved revenues of £29.1m for FY2024, a decline of 9.3% from
the £32.1m in FY2023. There were several factors in this performance:
u
Loss of revenue from a distributed product of £1.0m, resulting from the loss of
regulatory approval for the product.
u
The Group has chosen to discontinue a number of products due to the increasing
cost of parts and costs associated with maintaining CE marking making these
uneconomic to continue with. Revenue from these products declining by £1.3m
in FY24, with a similar decline predicted in FY25.
u
Revenue from the remaining Neonatal products declined by 5.0% in the year
with order and delivery patterns significantly impacting reported revenues. The
Group shipped 247 ventilators in January 2023, boosting FY23 revenues, while
only 47 ventilators were shipped in FY24, partly due to production being diverted
for the anticipated Middle East order. Ignoring the final month of the year, unit
sales of ventilators, which make up 55% of the neonatal product revenues,
increased by 10% in the period from February to December 2023 compared
to the same period in the prior year, and in revenue terms increased by 21%.
This demonstrates that underlying demand for one of the Group’s key products
remains strong, despite the decline in reported revenue for the year.
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The Group recorded a tax charge of £0.4m for the year (FY2023: credit of £0.2m)
which is mainly a deferred tax charge resulting from a write off of previously
recognised deferred tax assets.
Loss Per Share (“LPS”)
Basic and diluted LPS were 8.85p per share for FY2024 as a result of the loss for the
year (FY2023: EPS 0.40p and 0.39p).
Cash flow
The Group generated net cash flow from operations of £1.8m in the year,
significantly better than the operating cash outflow of £3.5m in FY2023. This was a
combination of EBITDA profit and a reduction in working capital.
Cash outflow on investing activities was significantly reduced at £2.7m compared
with £8.3m in FY2023. This included £1.1m outflow relating to the acquisition of
Airon. Capitalised development costs reduced to £1.1m in the year (FY2023: £2.0m)
and capital expenditure reduced significantly to £0.4m (FY2023: £6.2m) following
completion of the new Manufacturing and Technology Centre in 2023.
Net debt (excluding IFRS16 lease liabilities) increased to £6.0m at 31 January 2024,
compared with £3.8m last year, an increase of £2.2m.
In February 2024, the Group renewed and increased its Revolving Credit Facility
(‘RCF’) with a £10m RCF now in place, expiring in February 2027, with an option to
extend for a further year. The Group also continues to have access to its invoice
discounting facility of up to £5.0m. As at 31 January 2024, £5.0m of the RCF and
£1.7m of the invoice discounting facility were utilised.
The Group has received waivers from its bank in relation to the covenant tests due
at 31 January and 30 April 2024 caused as a result of the delay to the anticipated
large Middle East order. Following these waivers, revised covenants have been
put in place for the period until 31 January 2025 and bank consent is required for
further drawings on the RCF.
Operating loss
The Group reported an Operating loss of £4.9m for the year (FY2023: profit of £0.4m).
This included non-recurring items of £4.5m (FY2023: £1.2m) and amortisation
of acquired intangible assets of £0.6m (FY2023: £0.6m) leading to an Adjusted
Operating Loss (before non-recurring items) of £(0.4)m (FY2023: profit of £1.6m).
Administrative expenses (pre non-recurring items) increased year-on-year by
10.9% to £18.3m (FY2023: £16.5m), partly reflecting the high inflationary macro-
economic environment. Employment costs which represent approximately 60%
of administrative expenses increased by 8% in the year because of a 7% pay
increase for the year and a small increase in headcount. Other increases were in
marketing expenses and travel as activity continued to recover from covid related
restrictions in previous years. There were also increases in insurance premiums,
foreign exchange variances and amortisation charges.
There were £4.5m of non-recurring items in the year (FY2023: £1.2m), comprising
a £4.1m impairment of capitalised development costs, £0.1m of acquisition costs
relating to the Airon acquisition and £0.3m of restructuring and other professional
fees (see note 4).
Adjusted EBITDA reduced to £2.0m (FY2023: £4.0m) because of the lower gross
profit and the increase in administrative expenses outlined above. A reconciliation
of operating loss to adjusted EBITDA is set out below:
2024
£’000
2023
£’000
Operating (loss)/profit
(4,927)
431
Non-recurring items
4,527
1,158
Adjusted Operating (loss)/profit
(400)
1,589
Depreciation
Amortisation of intangible assets
Share based payment
1,293
1,144
(52)
1,354
931
132
Adjusted EBITDA
1,985
4,006
Finance expenses increased to £0.8m (FY2023: £0.4m) reflecting the increased
level of net debt, combined with the increase in effective interest rates seen
through the year.
Operational and Financial Review continued
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On 26 June 2024, the Company announced a placing, subscription and retail offer
(‘the Fundraising’) to raise gross proceeds of £3.0 million. The net proceeds of the
Fundraising (approximately £2.8 million) are to be used to reduce net debt and
provide additional liquidity headroom to the Group. The Fundraising was approved
by shareholders in a general meeting on 22 July 2024, following which 21,428,570
new ordinary shares in the Company were issued and admitted to trading on AIM
on 23 July 2024. Following the Fundraising, the Company is able to make further
drawdowns of the full undrawn amount of the RCF without HSBC consent, subject
only to ongoing covenant compliance, including monthly minimum liquidity level
of £1.5 million.
Net assets
The value of non-current assets as at 31 January 2024 totalled £26.0m (FY2023:
£30.8m). The net £4.8m year-on-year decrease mostly relates to the amortisation
and impairment of capitalised development costs, net of goodwill arising on the
acquisition of Airon.
Inventory increased by £3.8m in the year to £13.7m (FY2023: £9.9m) through a
combination of weaker revenues and ongoing supply chain disruptions requiring
the Group to secure increased holding of various components to ensure continuity
of supply for customers, the anticipated Middle East order; as well as inventory
of £0.4m acquired as part of the Airon acquisition. Trade and other receivables
decreased by £3.2m to £8.7m (FY2023 £11.9m) largely because of weaker revenues
in the final quarter of the year compared with last year.
Overall net assets at 31 January 2024 were £29.0m (FY2023: £35.5m).
Operational and Financial Review continued
Dividends
The final dividend for the year ended 31 January 2023 of 0.41p per share was paid
on 25 July 2023. An interim dividend of 0.205p per share (FY2023: 0.205p) was paid
on 29 December 2023. As a result of the performance of the business, the Board
is not recommending payment of a final dividend (FY2023: 0.41p) making a total
dividend for the year of 0.205p per share (FY2023: 0.615p). Going forward, the Board
has decided to suspend payments of dividends until further notice and will keep
the dividend policy under review.
Alan Olby
Chief Financial Officer
30 July 2024
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Principal Risks
& Uncertainties
Overview of our principal risks and uncertainties
The Group’s principal risks, our actions to mitigate those risks, a directional indication of whether the risks have increased,
decreased, or remained about the same, together with further commentary are set out in the table on the following pages.
This list comprises the material risks and mitigating actions and is drawn from a more complete list of risks which are reviewed
quarterly by the Board.
Risk Appetite
Risk appetite can be defined as ‘the amount and type of risk’ that the Group is willing to take to meet their strategic objectives. The
Board have applied a differentiated risk appetite to each major category of risk, i.e. Strategic, Operational, Financial & Compliance.
Our approach to Strategic risk is ‘Seeking’, as we aim to be innovative in our specialist areas in pursuit of higher returns.
For Operational risks we adopt a ‘Cautious’ approach, where we are only prepared to accept some limited loss.
For Financial & Compliance risks our appetite is to adopt ‘Minimal’
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Description of Risk
Current Mitigation
1. New Product
Development
New product development carries risk around cost and
timescales for delivery. Due to the nature of the work, there
are usually significant unknowns which may take longer
and cost more to resolve. It could also be that intellectual
property owned by a third party could be breached.
Additionally, competitors could bring out better products
more quickly, meaning the investment justification for the
project is outdated.
Projects are reviewed regularly by the Board. However, throughout the
year, pieces of work are carried out to improve products and add value to
maintain competitive advantage.
Major projects are started with commercial justification and market need,
given a priority based on revenue generation and strategic need. Resources
are allocated and timetables agreed.
They are managed through a staged process with Board approval at
project inception and at post evaluation, final business case phase, at
which point development costs are capitalised. The Executive team are
charged with keeping projects on target and in budget, although with the
changing and challenging regulatory regime (especially in Europe) there
is an accepted risk around bringing new technologies to market on time.
2. Sustainability
Major customers, such as the NHS, are becoming increasingly
vocal and demanding regarding sustainability and ensuring
this drives purchasing decisions. Additionally, employees,
shareholders and other stake holders are increasingly
concerned about the impact companies have on the
environment, this can have a knock-on effect on staff morale,
recruitment / retention and ability to raise capital.
We are aware of the NHS timetable for ‘net zero’ and we are working to
be ahead of it. This is being led by an Executive Director of the Group with
responsibility for Sustainability (Brook Nolson). We are monitoring our Scope
1, 2, and 3 emissions and take action as appropriate to reduce them whilst
growing our business. Recent initiatives such as investment in our new
facility, recycling, reuse, 100% no landfill, electric vehicles, hybrid working and
compressed working week etc have reduced our environmental impact as
we work towards our aim of net zero.
Strategic Risks “Seeking”
Principal Risks & Uncertainties continued
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Description of Risk
Current Mitigation
3 Management of
Acquisitions (pre and
post completion)
The stated strategy of the Group is to grow by a mixture
of organic sales and acquisitions. Actionable acquisition
targets are not guaranteed to be delivered or be found in a
set period of time. There is a need for senior management
time to find acquisitions, do due diligence and run the
business without strong second tier management.
The Executive team have developed a reliable model that can be used
preacquisition and understand the need for synergies to be realistic and
pragmatic with a suitable plan to extract benefits once the acquisition
has completed, which the Board review against any target that is
of significant interest. Management also has to carefully assess the
managerial capability of any target and identify supplementary resource
requirements during due diligence. Every acquisition will bring its own
unique challenges and needs which will mean that the post-acquisition
plan will be individually tailored.
4. Revenue Growth
(International and
Domestic)
We are targeting double-digit revenue growth. Macro-
economic and geo-political conditions could have an
impact on our market at home and overseas i.e. Covid-19,
conflicts, trade wars, Brexit. Recession in the UK could lead to
NHS spending on our products being reduced.
Macro-economic events such as the pandemic, Brexit and major conflicts
have to be managed well, using cross-company skills. It is impossible to
plan for every eventuality, but early visibility and quick action to create a
management group that can manage the situation has been shown to
be an effective way of minimising the risk to the Group. However, being
in a relatively niche market does present risks as well as rewards and the
ability to move into other markets is limited.
Strategic Risks “Seeking” continued
Principal Risks & Uncertainties continued
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Principal Risks & Uncertainties continued
Description of Risk
Current Mitigation
1. Dependence on
Third Party Suppliers
and supply chain
interruption (not
Principals in
this instance)
The Group’s business depends on products and services
provided by third parties. If there is any interruption to
the supply of products/services by third parties or those
products/services, for whatever reason, the Group’s business
will be adversely affected. Reasons include inter alia:
scalable supply, adverse quality, delivery on time, upgrade of
products etc.
The Chief Operating Officer is ultimately responsible for supplier
management and aligns stock levels with sales demand to balance
customer satisfaction with working capital. Supplier management & sales
demand is reviewed regularly (Weekly MRP run, Monthly QA/Supply Chain
concerns and high level at QMS Management Review).
Recent events have highlighted a need to adapt to changes quickly.
Diverting R&D resources & using cash to increase stock holding ensured
continuity of supply whilst components are scarce. Sales forecasting
accuracy will strongly influence the management decisions to ramp or
slow demands.
A disaster recovery plan exists and is tested from time to time. However,
it was never envisaged to cope with a Pandemic and the initial loss of
supply due to lack of shipping and enforced business closure due to the
spread of a disease. Focus on reduction in inventory, robust processes
& supply contracts is key to ensuring continued supply to customers &
facilitating cash flow.
2. IT Systems and
Cyber Security
Our systems may be vulnerable to a cyber attack, theft
of intellectual property, malicious intrusion, data privacy
breaches or other significant disruption. We have a layered
security approach in place to prevent, detect and respond,
to minimise the risk and disruption of any intrusions, and
to monitor our systems on an ongoing basis for current
or potential threats. In-house IT Support is supplemented
by external IT experts, as and when required. Greater
dependency
on
cloud-based
systems
and
therefore
broadband for connectivity could leave the business
vulnerable if connectivity was lost.
The Group uses data encryption, two-factor authentication (2FA) and
cybersecurity services from leading technology suppliers and all software
is updated regularly. The Group currently complies with Cyber Essentials
(a standard for cyber security) and will be applying for Cyber Essentials
Plus and have third party Security Management from a large and
reputable supplier; staff training is also undertaken through a third party)
to provide greater assurance to customers.
We have implemented dual access and backup support systems, using
fibre connections from 2 separate sources and 4G cell technology,
to minimise any impact. We are also able to deploy key areas of the
business to work using mobile technology in unaffected locations.
Operational Risks “Cautious”
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Description of Risk
Current Mitigation
1. Changes in
Legislation and
Regulation
Global
regulatory
bodies
continue
to
increase
their
expectations of manufacturers and distributors of medical
devices to ensure products are safe and effective. All markets
in which the Group operates are highly regulated and
legislation can change from time to time, which may impact
the ability of the Group to sell products in a particular country.
Some amendments to legislations are difficult to get access
to as there are released in foreign languages, such as China
and Japan. Therefore adding more risk to compliance issues.
The Group has stringent procedures and controls in order to comply
with the relevant legal and regulatory conditions in the UK and in its
export markets. The Group also has a Quality Assurance and Regulatory
Affairs (“QARA”) department dedicated to liaising with the regulatory
authorities to monitor any changes in conditions and ensure continuing
compliance with the existing and new conditions. The QARA team are
tasked with horizon scanning for legislation and, coupled with R&D, will
keep documentation up-to-date to ensure compliance.
2. Retention Group’s
Certificates and
other Licences
The medical industry is highly regulated and each territory in
which the Group operates is subject to its own stringent legal
and regulatory regime to ensure the products the Group
places on the market are safe and compliant with that
territory. Regulatory approvals are required to market and
sell medical devices into both the UK and export markets.
The Group has four operating companies (now including the recent
acquisition of Airon Corp) and invested more heavily in staff as it has
transitioned to MDSAP and MDR in Europe. The three UK companies are
operating under one Quality Management System which is audited by
one Notified Body. The audits are thoroughly prepared for, however,
the audits are independent and outcomes are not guaranteed. The
companies have resources to undertake remedial action as appropriate.
Airon Corp (a recent acquisition to the Group and based in the USA), also
is certified to MDSAP although has its own QMS and procedures.
3. Going concern
The Company has incurred significant expenditure in
manufacturing stock for a large export order which has not
yet materialised for reasons beyond our control. This has
provided an additional challenge to cash and liquidity in the
short-term.
On 26 June 2024, the Company announced a placing, subscription and
retail offer (‘the Fundraising’) to raise gross proceeds of £3.0 million. The
net proceeds of the Fundraising (approximately £2.8 million) are to be
used to reduce net debt and provide additional liquidity headroom to
the Group. Following completion of the Fundraise, the Group also has full
access to its £10.0 million RCF. The large export order was received in July
2024 and is expected to be delivered in the second half of the current
financial year which will reduce inventory and further improve liquidity.
The company’s plans and downside sensitivities have been reviewed in
detail by the audit committee and auditors.
4. Increased Cost
of Capital
The Company cost of capital has risen recently with interest
rates going up and stock markets having little confidence.
Increased cost of capital, either debt or equity, will make it harder to justify
acquisitions and large strategic investments which could hamper growth.
Improvements in working capital management will enable the Group to
operate within its existing facilities.
Financial and Compliance Risks “Minimal”
Principal Risks & Uncertainties continued
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Companies Act Section 172 Statement
Our Employees
Our employees are key to the Group’s success, and we rely on a committed workforce to help us achieve our business objectives.
Key decisions in the year
How we engage with our stakeholders
Learning and Development
We have partnered with an external leadership and performance
consultancy, Will It Make The Boat Go Faster?, to provide an 18-month
developmental training programme to our managers to better
equip them with tools and techniques to enhance their own and
their team’s performance.
The programme is being rolled out to a second cohort of employees
in 2024, while we continue to encourage learning and development
opportunities to all of our employees.
We continue to engage with our employees through our engagement platform, on which
weekly newsletters and ad hoc news items and announcements are posted. Our platform
also allows our employees the opportunity to react through the use of emojis or comment
on the posts, further encouraging engagement in the conversation.
Our “Question Time” and other employee events continue to be run, through which we
share news and respond to questions.
We survey employees to gather feedback, and have a tool on our engagement platform
that allows our employees to ‘speak up’ anonymously or otherwise.
Our quarterly performance review process and regular employee one-to-one meetings
also provide an opportunity for messaging and feedback to pass up and down our
organisational structure.
Closing our facilities in Earl Shilton, Leicestershire and Crawley,
West Sussex
The Board made the decision to further consolidate our operations,
which saw the closure of our warehouse and office facility in Earl
Shilton and office facility in Crawley, and its operations relocate to
our premises in Croydon and Hailsham. All affected employees were
offered relocation and/or greater flexible working options.
Employee Wellbeing
We continue to promote wellbeing initiatives to our employees,
predominantly through our wellbeing partner, Everymind at Work.
Through this company, and its focus on wellbeing and mental
health, we deliver monthly communications, quarterly webinars, and.
In 2023, financial wellbeing sessions for interested employees with
FCA authorised financial advisers.
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Our Customers
Successful engagement with our customers is paramount to meeting our strategic objectives and growing our business.
Our Suppliers
Managing our supply chain and engaging effectively with our suppliers is critical to the smooth running of our operations. Through continued engagement with our
suppliers, we have built positive, long-lasting partnerships.
Companies Act Section 172 Statement continued
Key decisions in the year
How we engage with our stakeholders
Increased in-person customer visits to our new facilities
During the year, we have hosted several international customer
visits, as well as NHS Trusts, at our new facilities, which have given us
the opportunity to demonstrate the full suite of our products and
services and helped us to strengthen customer relationships.
Our sales teams and senior management engage with our customers through regular
meetings and through participation in local events and exhibitions. Throughout the year
we held online and in-person conferences and have hosted several visits to our new
Manufacturing and Technology Centre in Croydon.
We also continue to engage with our customers through a variety of channels, including
our websites, social media platforms, virtual sales and training meetings and through email
engagement such as customer feedback surveys.
As part of our continued commitment to our customers and aim to provide best in class
customer experience. Customers have a single point of contact for sales and technical
service support. Driving improved communication and efficiencies for our customers.
Key decisions in the year
How we engage with our stakeholders
Consolidation of Procurement & Materials Team under one Head
of Department
The Materials, Goods In, and Procurement teams have been
consolidated to report to one Head of Department. This will enable
the business to streamline end to end Supply Chain processes from
point of ordering through to pick, pack, and supply to customer.
Additional restructuring has taken place within the Procurement
team, with renewed focus placed on the implementation of robust
processes and vendor commercial agreements.
External Stakeholders
As part of our continued commitment to our supplier relationships, the Group holds monthly
critical supply chain meetings with key suppliers. These meetings are supported by the QA/
RA team, enabling us to develop stronger cross-functional relationships with suppliers whilst
ensuring our procurement processes are operating in the most efficient manner possible.
Internal Stakeholders
Weekly, cross-functional, reviews between Supply Chain, Production, and Customer
Experience have been instated to review advance Customer requirements and collectively
act to mitigate risk to supply.
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Investors
The Group understands the importance of communicating regularly with its investors. Building long-term relationships with all our shareholders is critical to the future
growth of the business.
Companies Act Section 172 Statement continued
Key decisions in the year
How we engage with our stakeholders
Approval of interim dividend
An interim dividend was paid in December 2023.
The Group regularly communicates with its shareholders, through investor presentations,
roadshows, retail shareholder events and Regulatory News Service (“RNS”) announcements.
For further information on how the company engages with its investors, refer to our
Statement of Corporate Governance – QCA Principle 2.
Roy Davis
Executive Chairman and Interim CEO
30 July 2024
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Deliver Growth
1. Establish a strategy and business model which promote long-term value
for shareholders
The Group’s core purpose is to improve neonatal outcomes with the use of its
technology. Our purpose is to pioneer first breaths of life support to children.
Our strategy is set out in Our Business Strategy and our business model is
on our website. These are underpinned by our values, which are: patient
focused, outcome changing, pioneering and research-driven. They reflect our
long-term objective of enhancing patient care and delivering business growth
and profitability.
The Chairman’s Review sets out the measures by which we judge ourselves.
The Principal Risks and Uncertainties report highlights key opportunities
and threats and the detail of the financial performance throughout this
report clearly shows the necessary detail for stakeholders to understand the
Group’s performance.
2. Seek to understand and meet shareholder needs and expectations
The Group’s website, www.inspirationhealthcaregroup.com, provides both
historic and up to date detailed information for all stakeholders. It includes
all Annual Reports and regulatory news service announcements. Regular
meetings between the Group’s shareholders and the Directors (both Executive
and Non-executive) provide assurance that their demands are being listened
to and feedback following these meeting is discussed by the Board.
Presentations by the Group’s Executive Management are regularly made to
institutional investors, analysts and stakeholders and their feedback is reported
to and discussed by the Board. The Group’s Nominated Adviser (NOMAD),
Panmure Liberum Limited, appointed during the year is regularly appraised
of performance and provides timely guidance on shareholder sentiment
and expectations as well as on governance matters and the AIM listing rules.
As part of their appointment, they undertook a compliance audit to ensure the
Group maintains its compliance against the Code and Listing Rules.
Statement of Corporate Governance
I am pleased to present the Group’s Corporate Governance Statement for the period ended 31 January 2024. The Group has adopted the Quoted Companies
Alliance Corporate Governance Code (the “Code”) and this report sets out how we have met the principles of the Code and explains how we have applied the
guidance or where we have diverged from it. The Board considers that the Group complied with the Code in all aspects during the period to which this report
relates. However, since the year end and publication of this report a number of changes have been made, not least in respect of my role. This is a minor derogation
from the principles of the Code and is explained in more detail below.
The Board is committed to its corporate governance programme as it underpins the long-term sustainability and success of the Group. We are committed to open
and transparent communications with all our stakeholders. We believe in the great culture at Inspiration Healthcare and that this shines through whenever we visit
colleagues in our manufacturing and technology centre and offices. Solid governance underpins everything we do as a Board and despite the challenging year, I am
proud to say that good corporate governance remains at the heart of how we ensure we are well positioned to deliver in the long-term.
We have strengthened the Board this year with a number of new appointments (my own included) which maintains the balance, diversity and experience at Board level
and brings new skillsets to the benefit of the Group. The Board has reviewed the newly published Code and will be reviewing the detail to align with the governance
expectations of our stakeholders and ensure we smoothly transition to this new updated Code in line with its requirements for the Financial Year commencing February
2025. We believe our current processes to be well placed to enable the transition smoothly and in good time.
QCA Principles
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Statement of Corporate Governance continued
The Group actively welcomes and encourages all shareholders to attend its
Annual General Meeting (“AGM”). It is an opportunity to meet the Directors
and other shareholders, and to hear updates about the Group. There is an
opportunity to speak with the Directors both individually or as a group.
All resolutions put forward at the AGM are published together with the number
of votes delivered against each one for shareholders to review in advance of
the meeting.
3. Take into account wider stakeholder and social responsibilities and their
implications for long-term success
The Group’s model and strategy are designed to promote long-term success
and this is outlined in the Strategic Report. The Board utilises a number of
different routes to obtain feedback and ensure wide stakeholder engagement.
How these interests have been considered in Board discussions and decision
making can be found in the Section 172 statement.
A. Employees
Our talented colleagues are the bedrock on which our success is founded,
and employee engagement is regularly reviewed. Our Senior Independent
Director, Bob Beveridge, has the responsibility of representing employees’
interests at the Board and hosts regular all Company “question time”
meetings. These are informal and designed to encourage employees to
engage with the Executive Team. These are very much, two-way meetings
and feedback is reviewed by the whole Board. He also visits our sites to talk
to employees at all levels within the Group and garner their feedback. This
enables the Board to understand how employees are engaged and to see
first-hand that their wellbeing is being catered for. Bob is also the Board
level point of contact for the Group’s whistleblowing policy.
The Group is proud of its record on employee engagement and the
wellbeing support it offers employees. We remain a living wage employer
and offer equal opportunities to all. The Group employs highly flexible working
arrangements. These include a blended working policy and a compressed
four-day working week aimed at ensuring it can meet the varying needs of
its diverse workforce.
The Group’s move to its new manufacturing and technology centre has
taken our already excellent health and safety record and improved it.
Our colleagues are our most important consideration and we continue
to introduce training, processes and other measures to keep them safe
while they are at work. This was apparent when the Board toured the facility
in the year.
Employees are regularly invited to meetings or “town hall” style get togethers
to ensure they are up to date with business performance and the latest
initiatives. These meetings enable them the opportunity to feedback as well.
The Board utilises indirect methods of assessing colleague engagement
through feedback and engagement survey reports provided by the Group’s
Head of People, who presents to the Board during the year.
B. Customers
Hospitals are our key market for our acute care products, with neonatal
intensive care being the focus. We work closely with key opinion leaders in
the healthcare system to develop, evaluate and enhance our propositions.
Our reputation is for innovative, outcome-enhancing products which aid the
life chances of babies born prematurely or following surgery. We support
research where appropriate, and attend scientific conferences that both
support ongoing clinical research and also allow for engagement with our
customers at many levels from Professors of medicine to junior nursing staff.
This feedback loop is beneficial to both the Group and its customers alike.
C. Suppliers
The nature of our product range means that our relationship with key
strategic suppliers must be long term and collaborative to ensure continued
product innovation. As a medical technology company, we regularly assess
supplier performance. This enables us to agree objectives to enhance
product capability and performance.
Deliver Growth continued
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Statement of Corporate Governance continued
4. Embed effective risk management, considering both opportunities and
threats, throughout the organisation
The Board regularly reviews the Group’s risks and opportunities as well as the
means by which it assesses these. Detail of this is contained in the Principal
Risks and uncertainties report. The Board is continually evolving the Group’s
risk management framework in order to ensure the appetite is appropriate to
the reward, acknowledging that risk is an inherent and accepted element of
doing business.
The Group’s Risk management framework is integral to its ability facilitate the
identification, assessment and mitigation of risks to an acceptable level whilst
enabling the delivery of its strategic objectives. The risk review process applies
a commonly accepted methodology across the Group for identifying and
assessing risk.
The Board has recently re-focused its approach to risk and further embedding
it withing the Group’s workings. The Group continues to progress the
implementation of Cyber Essential + cyber security assurance which is aimed
at mitigating the impact and likelihood of cyber attacks.
Whilst impossible to reduce all risk, the Board considers that the internal controls
in place to be appropriate for the size, complexity and risk profile of the Group.
The Board is responsible for reviewing and approving overall Group strategy,
approving revenue and capital budgets and plans, and for determining the
financial structure of the Group including treasury, tax and dividend policy.
Monthly results and variances from plans and forecasts are reported to the
Board and discussed in detail at all Board Meetings.
The Audit Committee report sets out how it assists the Board in discharging
its duties regarding the Financial Statements, accounting policies and the
maintenance of proper internal business and operational and financial
controls. This includes liaison with the Group’s external auditors.
Maintaining a Dynamic Management Framework
5. Maintain the Board as a well-functioning, balanced team led by
the Chair
During the year, the Board was made of up three Executive Directors and four
independent Non-executive Directors, including the Chair, Roy Davis. All Non-
executive directors were considered to be independent during the period.
Meetings are transparent and constructive, with every director participating
fully. Meetings take place regularly throughout the year or by video conference
when time requires. Formal Board meetings, of which there are six in the year,
are always conducted in person at the Group’s Manufacturing and Technology
Centre. Following the year end a number of changes to the Board were made,
further detail of which is outlined in section 9 of this report.
It is the responsibility of the Chair to lead the Board and ensure its effectiveness.
As Chair I work to ensure the right Board dynamic and that all strategic decisions
receive adequate time and attention at Board meetings to ensure the Non-
executive Directors are fully appraised of decisions being taken. Whilst the
Executive Directors (of which I am currently one) are responsible for the day-
to-day running of the business and developing corporate strategy, the Non-
executive Directors are tasked with constructively challenging the decisions
and ensuring robust processes remain in place. The Non-executive Directors
give informal advice to the Executives between meetings and devote sufficient
time to be effective in this regard. During this interim period when my role as
Chair and CEO has been combined, we take this aspect of governance with an
even higher level of resolve.
Board papers, together with an agenda are circulated prior to all
meetings, allowing time for full consideration and necessary clarifications
in advance. Monthly reports are submitted by the Executive Team when
there is no formal Board meeting. Board dinners are held from time to
time and at least twice in each year to allow broader discussion and
development of effective Board relations in an informal environment.
The Non-executive Directors also meet without the Executives present.
Deliver Growth continued
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Statement of Corporate Governance continued
The Group has effective procedures in place to monitor and deal with conflicts
of interest and has recently reviewed and updated all Directors’ roles and
commitments outside the Group. Any changes to these commitments and
interests are reported to the Company Secretary and, where appropriate,
agreed with the rest of the Board.
A new Chief Financial Officer, Alan Olby, was appointed during the year. The
Board has appointed an outsourced independent Company Secretary. The
Company Secretary is responsible for ensuring that Board procedures are
followed and that the Group complies with all applicable rules, regulations
and obligations governing its operation. If required, the Directors are entitled
to take independent legal advice and, if the Board is informed in advance, the
cost of such advice will be reimbursed by the Group.
6. Ensure that between them the Directors have the necessary up-to-date
experience, skills and capabilities
The Directors bring a broad portfolio of skills and experience to the Group and
this is set out in the Board of Directors section of this report.
The skills and experience required of the Board are discussed at the Nominations
Committee and form part of the Group’s succession planning. The recent
appointment of Marlou Janssen-Counotte has brought increased medical
devices market knowledge as well as significant additional international
experience to the Board. As such, the Board remains satisfied that, it has an
effective and appropriate balance of skills and experience, needed at this
stage of the Group’s development.
The Chair of the Remuneration Committee obtains regular updates on best
practice for executive remuneration packages and initiates periodic reviews,
taking account of changes to the business. During FY2025 the Remuneration
Committee has started a review of Executive remuneration using an
independent external adviser.
Other Directors are regularly kept up-to-date via the latest governance and
business updates from major accountancy or legal firms and via membership
of various professional bodies. The Company Secretary provides regular
briefings to all Directors in respect of their duties and on other pertinent legal
and compliance matters. All Directors stand for re-election by shareholders
each year.
7. Evaluate Board performance based on clear and relevant objectives,
seeking continuous improvement
The Board maintains a calendar of scheduled meetings and principal matters
to be discussed throughout the year. Meetings are scheduled three years in
advance to aid diary planning and attendance by all Directors. All meetings
have an agenda and papers provided in advance. All actions are reviewed at
the beginning of each meeting to ensure they are completed to the satisfaction
of the Board. The Board held 6 scheduled meetings in the year.
The Board, through the Nominations Committee, considers succession
planning for all Directors on an ad-hoc basis. Terms of reference for the Board
and Remuneration Committee have been updated as have reserved powers
for the Board in the year with all available on the Group’s website. The Board
through the Nominations Committee has informally evaluated its performance
in the year. Plans are in place to formalise this process in the forthcoming
financial year.
8. Promote a corporate culture that is based on ethical values
and behaviours
The Group’s culture is based on its core values of being; patient focused,
outcome changing, pioneering and research driven. As Executive Chair, I
believe these values flow into the Group’s culture which lay the foundations of
its strategy and business model. Culture in all businesses is led by its leaders
and particularly the Executive Directors. Their leadership is reviewed through
engagement surveys conducted by the Group, which, as already detailed, are
reviewed by the Board. Regular town hall meetings are conducted enabling
colleagues to ask questions of the leadership team and all the Executive
Directors have their main place of work at the Group’s manufacturing and
technology centre.
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Statement of Corporate Governance continued
All formal Board Meetings take place at the Group’s manufacturing and
technology centre and the Board tours the premises to see the operations in
action first hand. These tours are undertaken by middle management, often
without Executive Directors present, with a view to giving our employees an
opportunity to discuss matters pertinent to their teams direct with the Board.
The Non-executive Directors join colleagues at the Group’s annual awards
events and facilitate sessions in areas where they can bring their extensive
experience to colleagues at all levels throughout the business. These types of
session are designed with two-way communication at heart and are aimed
at promoting a healthy and transparent corporate culture. Senior managers
regularly present to the Board, ensuring there is an opportunity for the Non-
executive Directors to meet the Group’s senior leaders and understand their
risks and opportunities at a more granular level. It enables the Non-executive
Directors to witness senior management first hand and provide assurance
that they have the support required to effect the Group’s strategy.
The move of all the Group’s functions to a single site alongside the leadership
team is considered a positive for maintaining the Group’s already strong sense
of purpose and ensuring all teams integrate as seamlessly as possible to aid
the furthering of the Group’s strategy. In having the majority of employees
based in one location, it is easier to ensure any deviations from the Group‘s
culture can be addressed quickly and effectively and ensure our values remain
at the heart of all we do.
9. Maintain governance structures and processes that are fit for purpose
and support good decision-making by the Board
The Board reviewed the Group’s corporate governance code in line with
its obligations under AIM Rule 26 in the year. This review, also conducted
independently by the Group’s NOMAD, found that it was in compliance with
the principles of the Code during the financial year. Since the end of the
financial year, a number of changes to the make-up of the Board have been
implemented. Neil Campbell has stepped aside as Chief Executive Officer and
has taken up a role of Non-executive Director. His experience in the Group’s
market is second to none, and as such we look forward to retaining this
experience in his new role.
On a temporary basis, I have taken on the joint role of Chief Executive and
Chair whilst the Group conducts a thorough process to find a successor to Neil.
We believe this is the correct approach for a Group of our size and appropriate
to ensure a smooth transition of roles and is in the best interests of the Group
for the benefit of its members. I believe I am ably supported by my Board
colleagues, both executive and non, some of whom have been with the
Group for a number of years, who will provide the necessary support as well
as challenge during this period. We acknowledge that Neil’s and my change
of role mean that the Company derogates slightly from the requirements of
the Code, in that we now technically have fewer independent directors versus
those who are not, and the role of Chief Executive and Chair are combined.
Whilst we believe the Board to be of a size appropriate to the Company
and of suitably independent mind, we will look to address these matters in
due course. Updates to this aspect of the Group’s governance will be provided
as relevant.
Following the changes, I am responsible for both leading the Board, setting
its agenda and monitoring its effectiveness, as well as the day to day
management and implementation of the strategy of the Group. As a relatively
new appointment as Chair, I took the opportunity as part of my induction to
review the governance structures and the performance of the Board. I was
pleased to see that terms of reference for all sub-committees of the Board
have been reviewed and updated where necessary. I believe the updated
terms for the Board clarify matters reserved for the Board (available on the
Group’s website) and I am pleased to see that there is the necessary flexibility
on the part of the Executives and Non-executive Directors to ensure agility
when required (a recent example being the acquisition of Airon Corporation,
as well as the equity raise). The Board calendar is clear and ensures all areas of
the business report into the Board at least on an annual basis. The Group, as it
grows, will continue to develop its reporting in areas such as risk management
and diversity. I look forward to further developing the Board’s strategic role.
The Board has delegated authority to three sub-committees. These committees
meet independently of the Board.
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Statement of Corporate Governance continued
Audit Committee
The role of the Audit Committee is to monitor the integrity of the Group’s
financial statements and ensure that the interests of shareholders are
protected in all financial matters. It is made up of three members, Bob
Beveridge (Chair), Liz Shanahan and Marlou Janssen who are all independent.
The Chief Financial Officer and external auditors attend meetings by invitation.
The Audit Committee monitors and reviews the effectiveness of internal
controls alongside the wider compliance environment within which the Group
operates. It recommends the appointment of the Group’s auditor and reviews
their performance, independence and objectivity as well as their scope of work.
A separate report of the Audit Committee activities is contained in this
report. The terms of reference for the Audit Committee can be found on the
Group’s website.
Remuneration Committee
The Remuneration Committee’s principal responsibilities are to determine and
recommend to the Board the Group’s remuneration policy and monitor its
effectiveness, determine and recommend the remuneration of the executive
directors and determine the headline targets for any performance related
elements of their pay, both short and long-term. It is also responsible for
monitoring, reviewing and approving the levels and principles of other senior
employees within the Group. Further detail in respect of the activities of the
Remuneration Committee is set out in this report. The Remuneration Committee
has three members, Liz Shanahan (Chair), Bob Beveridge and Marlou Janssen
who are all independent. The Company Secretary and other directors attends
by invitation as requested.
Terms of reference, which were reviewed and updated in the year, for the
Remuneration Committee can be found on the Group’s website.
Nominations Committee
The Nominations Committee is responsible for ensuring that the Board
is effective both now and in the future. It leads the process for Board
appointments, ensures effective succession planning is in place and evaluates
the skill, experience and make up of the Board and its sub-committees. During
the year, it had four members, Roy Davis (Chair), Bob Beveridge, Liz Shanahan,
Marlou Janssen and Neil Campbell. It also has the responsibility to oversee the
development of a diverse pipeline for succession. It meets on an ad hoc basis
throughout the year. As part of Neil’s change of role, he no longer sits on the
Nominations Committee.
Terms of reference for the Nominations Committee can be found on the
Group’s website. Whilst they were not changed, they were reviewed along with
all other terms of reference in the year.
The following table sets out the member attendance at Board and Committee
meetings during the year ended 31 January 2024.
Board Members
Number of Meetings Attended
Board
AC
RC
NC
Mark Abrahams
6/6
-
-
1/1
Neil Campbell
6/6
-
-
1/1
Bob Beveridge
6/6
6/6
3/3
1/1
Brook Nolson
6/6
-
-
-
Liz Shanahan
5/6
6/6
3/3
1/1
Marlou Janssen-Counette
3/3*
1/1
3/3
1/1
Alan Olby
3/3**
-
-
-
Roy Davis
1/1***
-
-
-
*Marlou Janssen-Counette appointed to the Board on 22nd June 2023.
**Alan Olby appointed to the Board on 12th June 2023
*** Roy Davis appointed to the Board on 7th December 2023
Non-members are invited to attend committees as appropriate. In addition to
the Board committees, the Group holds Senior Executive Team meetings on a
regular basis.
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Statement of Corporate Governance continued
Build Trust
10. Communicate how the Company is governed and is performing
by maintaining a dialogue with shareholders and other
relevant stakeholders
The Group’s principal means of ensuring dialogue with its stakeholders, including
shareholders, is via its website, its Annual Report, the Annual General Meeting and
investor meetings. These are generally attended by the Chief Executive Officer
and Chief Financial Officer. The Chair is also available as are Chair of the Audit
Committee and the Remuneration Committee if required. The Chief Executive
Officer and Chief Financial Officer make presentations to institutional investors,
shareholders and potential shareholders immediately following the release of
the interim and full-year results and also attend events aimed at promoting the
Group to future investors. The Board receives detailed external and independent
feedback (from the Group’s NOMAD) in respect of any investor meetings. This
vital and often frank feedback is discussed by the Board.
The Group’s website has an extensive and well-resourced back catalogue of
corporate information including historic Annual Reports, Interim Statements
and other circulars and investor presentations.
It was welcomed that here were no significant votes against any of the
resolutions at the previous AGM.
Regular informal meetings between the Executive and Non-executive Directors
are aimed at ensuring strong relations are maintained. All scheduled Board
Meetings have taken place face-to-face and Non-executive Directors continue
to meet with other senior managers informally to give advice and assistance,
sometimes at Groupwide events. There have been two board dinners held
during the year aimed at providing an informal opportunity to discuss Group
performance and strategy.
Roy Davis
Executive Chairman and Interim CEO
30 July 2024
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Financial Reporting
The Committee has recently concluded that the Annual Report and Financial
Statements for the year ended 31 January 2024, taken as whole, are fair, balanced
and understandable and provide the information necessary for shareholders to
assess the Group’s business model, strategy and performance. In respect of this
year’s accounts, the Committee considered in particular the following key matters
of judgement:
u Capitalisation of product development expenditure.
u Valuation of goodwill and intangible assets, and any possible impairment
indicators.
u Revenue recognition and associated policies and procedures.
u Going Concern – The Committee considered financial projections for the next
18months covering several scenarios, including a significant revenue downside
versus the base case budget. These projections demonstrate that the Group
can operate within the revised headroom available following completion of the
placing for the foreseeable future. The Committee is therefore of the opinion
that the Group has adequate facilities to continue as a going concern and that
the going concern basis is appropriate. Please refer to the Directors’ Report for
further detail.
u Restructuring provisions and other significant non-recurring items.
u Accounting in respect of the Airon acquisition, completed in January 2024.
Audit Committee
Report
The Audit Committee comprises three members: Bob Beveridge, who Chairs
the committee, a chartered accountant with recent and relevant financial
experience, Liz Shanahan, a seasoned NED and audit committee member
and Marlou Janssen, an industry expert, who joined the Committee in
December 2023.
The committee met six times during the year. The Chief Financial Officer (or interim)
attended all meetings at the invitation of the Committee Chair and the external
auditors attended four meetings. The Committee also met with the external
auditors without the presence of Executive Directors or management.
Role
The Audit Committee is responsible for ensuring that the financial performance
of the Group is properly reported and reviewed. Its role includes monitoring the
integrity of the Financial Statements (including annual and interim accounts
and results announcements), reviewing internal control and risk management
systems, reviewing any changes to accounting policies, reviewing and monitoring
the extent of the non-audit services undertaken by external auditors and advising
on the appointment of external auditors.
Main Activities
The main items of business carried out by the Committee in the year included:
u Consideration of matters of judgement and other key audit matters.
u Review of interim and full year Financial Statements and Annual Report.
u Consideration of the external auditor’s report.
u Going concern review.
u Review of the risk management process and internal control procedures
u Review of effectiveness of the external auditor, and approve the FY2024 audit
plan and fee.
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u Strong cash management
The Group maintains tight cash management control through, for example,
delegated authorities and dual signatories on all bank accounts.
Deep Dives
The Committee received a presentation on key Cyber and IT risks. The team is
working to achieve Cyber Essentials Plus in the first half of 2024, which will provide
a government recognised, independent verification of key cyber-risk security
controls including firewalls, access controls and malware protection.
The Committee reviewed an analysis of key Foreign Exchange transactions and
approved a proposal to hedge Euro risk on Infusion products.
Policies
The Committee agreed an update to the Policy on non-audit services.
Conclusion
The Committee considers it has acted in accordance with its responsibilities.
The Chair of the Audit Committee will be available at the Annual General Meeting
to answer any questions about the work of the Committee.
Bob Beveridge
Chair, Audit Committee
30 July 2024
External Audit
A review of the prior year’s audit effectiveness took place in June and improvements
agreed including earlier testing; the 2024 audit plan was agreed in December. The
Committee considered a number of factors to assess the auditor’s objectivity
and independence, including their internal procedures, the degree and nature
of challenges and scepticism shown by the partner. The Committee is satisfied
with the independence, objectivity and expertise of BDO (the Group’s external
auditors) and approved the FY2024 audit plan. The fees paid to the auditors, BDO,
were £300,000 (FY2023: £227,000) for FY2024 audit services, and £4,000 (FY2023:
£4,000) for non-audit services. No services were provided pursuant to contingent
fee arrangements.
Risk Management and Internal Controls
The risk register was reviewed in the Board meetings, following a process agreed
by the Audit Committee to identify and report strategic, operational and financial
risks, the procedures in place to mitigate those risks and uncertainties, and the
potential impact on the Group.
An enhanced process was developed and presented to the Board in November
including greater focus on mitigating actions. The Committee reviewed this report
and reported its views to the Board. The principal risks and uncertainties to which
the Group is exposed are set out in the Strategic Report.
During the year the Committee received an update on the internal control
environment. Key control procedures continue as follows:
u Management responsibility and authorisation controls
The Group has an authorisation matrix and delegation of authorities are built
into the ERP system. The new CFO has commenced a detailed review to identify
opportunities to automate and strengthen controls and will report to the
Committee in 2024.
u Corporate planning process
An annual plan and three-year strategic plan is updated each year and
approved by the Board. Following approval of the annual budget by the
Board, financial performance and variances against budget are analysed and
reported monthly and challenged centrally.
Audit Committee Report continued
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Brook Nolson
Chief Operating Officer
Brook has been a key member of the Inspiration Healthcare team since 2013.
In July 2020 he became Chief Operating Officer for the Group, having been a
Non-executive Director since 2015. With considerable experience, domestically
and internationally, in managing manufacturing, implementing strategic
development plans and leading organisational change where the teams can
grow, Brook has designed and developed new facilities, encompassing as
many sustainable features as possible, that enable expansion and efficiency
to work together and with a bias towards maximising output through the use
of technology and systems to ensure that highly regulated environments have
constantly improving visibility. Brook is a member of The Cambridge Institute for
Sustainability Leadership (CISL), having completed his studies in Sustainability
Management for the Corporate Environment with the University of Cambridge.
Previous Group Directorships include: Birse Group plc, Willmott Dixon Group and
Morgan Sindall plc.
Key areas of expertise
Corporate sustainability, strategic growth, restructuring, business transformation,
product development, leadership and management development.
Board of Directors
Roy Davis
Executive Chair and Interim Chief Executive Officer
Roy is the Company’s Executive Chair (having joined the Board in January 2024).
He is also Chairman of LungLifeAi plc, a lung cancer diagnostic company, Foster &
Freeman Ltd, a leading forensic imaging manufacturer, and RAIR Health Ltd, a real-
world data insights start up. He is also a Non-executive Director of Futura Medical
plc, a UK pharmaceutical company focused on the sexual health market. Roy
was previously Chairman of Medica Group plc until its sale to IK Partners in 2023
and Chairman of Edinburgh Molecular Imaging Ltd. Prior to these roles Roy served
as the Chief Executive Officer of Optos plc, a leading ophthalmology medical
device business, from 2008 until June 2016 when he stepped down following the
company’s acquisition by Nikon Corporation. Before joining Optos, he served from
2007 as Chief Executive Officer of Gyrus Group plc, a leading medical device
company, prior to its acquisition by the Olympus Corporation of Japan in 2008,
having previously served as Chief Operating Officer of Gyrus from 2003 and a
Non-executive Director since flotation in 1997. Prior to this, Roy was CEO of NTERA, a
nanotechnology company, and before that spent almost ten years with Arthur D
Little, the global management consulting company, where he was vice president
and global head of its operations management business. His early career included
experience in the connector, oil, and automotive sectors. Roy holds a mechanical
engineering degree from the University of Southampton and an MBA from the
London Business School.
Key areas of expertise
International
medtech
experience,
Business
Strategy
Development
&
Implementation, M&A, Investor Relations, Post Merger Integration, Operations,
Supply Chain & R&D.
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Liz Shanahan
Non-executive Director
Liz Shanahan joined the Board as a Non-executive Director in October 2020. She
is Chair of the Remuneration Committee and a member of the Audit Committee.
Until 2014, she was Global Head of Healthcare & Life Sciences at the NYSE-listed
management consultancy, FTI Consulting Inc., who had, in 2007, acquired the
communications business, Santé Communications, which she had founded in
1995. Liz is Non-executive Chair of Advanced Medical Solutions plc and a Non-
executive Director of Celadon Pharmaceuticals plc as well as being a Director
and Trustee of CWPlus, the charitable arm of Chelsea & Westminster Foundation
Trust Hospital in London, where she was a Non-executive Director for more than
five years. She is also a member of the organisation’s Innovations Advisory Board.
Liz has a degree in Computer Programming and Maths from University College
Cork, where she is Entrepreneur in Residence and she is an alumnus of the
University of Virginia, Darden School of Business.
Key areas of expertise
Pharmaceutical and healthcare industry expertise, financial including M&A, risk
management, public policy, ESG strategy, international markets, communications
and investor relations.
Alan Olby
Chief Financial Officer
Alan Olby joined the Board as Chief Financial Officer in June 2023. Alan is a
chartered accountant with over 20 years’ experience in finance leadership roles
in life science companies. Alan previously spent 16 years at Sinclair Pharma, 12
as Chief Financial Officer, playing a key role in transforming the business into
a fast growth global aesthetics business, initially as an AIM listed group and
subsequently under private ownership following the sale to Huadong Medicine
Co Ltd (China) in 2018. Alan has overseen a number of strategically important
M&A transactions and capital raisings, while also managing the operational
financial challenges of a growing international business.
Key Areas of expertise:
Financial planning & management, working capital management, business
partnering, financing, M&A, risk management, investor relations.
Bob Beveridge
Non-executive Director
Bob Beveridge FCA, Non-executive Director and Senior Independent Director,
joined the Board in August 2015 and is Chair of the Audit Committee. Bob has
wide ranging Non-executive Director and public company experience (he
was until recent retirement a Non-executive Director of Finsbury Food Group
plc as well as chair of their Audit Committee); he is currently Chairman of the
Berkshire Local Enterprise Partnership, a non-executive director of Maintel Plc and
member of the Audit Committee of the Health Foundation. Previously he was Group
Finance Director of McBride plc, Marlborough Stirling plc and Cable and Wireless
Communications plc. In 2021, Bob became the Employee Representative to the Board.
Key areas of expertise
Senior financial skills relating to M&A, investor relations, risk management,
financing, audit committees and corporate governance, digital technology and
financial strategy.
Board of Directors continued
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Neil Campbell
Non-executive Director
In 2024, Neil became Non-executive Director, having been CEO and a founding
partner of Inspiration Healthcare Limited since 2002, leading the company
through the reverse acquisition of Inditherm plc and onto AIM in June 2015. Neil
has spent more than 30 years in the Medical Technology industry for both blue
chips and small companies. Neil has had an extensive commercial career in
medical devices in international sales and marketing in neonatal intensive care
and operating theatre products, as well as having direct sales experience in
the UK and Australia. Neil has previously also been a director of a drug/ device
development company and an advisor to the Infant Centre (the Irish perinatal
research centre) in Cork. Neil has a degree in Engineering Technology and a
Diploma in International Trade.
Key areas of expertise
Medical device market, business development, market development,
international sales and marketing, product development, regulatory affairs,
strategic planning, M&A.
Marlou Janssen-Counotte
Non-executive Director
Marlou Janssen-Counotte is a senior MedTech Executive with 25+ years
of experience as Vice President, President, General Manager, driving
business development and comprehensive marketing & clinical operations
through effective strategy execution, solutions planning and delivery, and
transformational leadership. Accomplished General Manager adept at
overseeing all-round business management in introducing growth-oriented
strategies, successfully executing sales and marketing plans, and directly
managing high-performing cross-functional teams within large- and medium-
sized organizations such as Medtronic, St. Jude Medical, Biotronik, Philips.
Marlou currently holds a non executive board position at Acarix AB/SA, Field
Medical Inc, EBAMed SA and Sonion A/S.
Key areas of expertise
Medical Device and healthcare industry expertise, strategic business planning,
product development and launch, clinical research, commercial strategies and
execution including US Medtech market expertise, communication strategies,
new business development, partnerships & strategic alliances.
Board of Directors continued
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Remuneration policy
The Committee has followed the Quoted Companies Alliance (“QCA”) guidance
and is also appraised of the FRC UK Corporate Governance Code 2018, including
the updated code. The Committee wants to ensure that we have packages that
are fair, attract and appropriately incentivise the right calibre senior executives to
the organisation, and retain those individuals. We also want a remuneration policy
that is challenging, appropriate and reflective of the Company’s culture.
The remuneration agreements, as part of their contract of employment, for this
level of executive are a mix of fixed remuneration and a performance-based
remuneration, designed to incentivise them but not to detract from the goals of
corporate governance.
The Non-executive Directors, including the Chairman, each have a letter of
appointment for a three-year term. Under the terms of the letters, either party can
serve six months’ written notice to terminate the arrangement, their terms are also
subject to reappointment by the members.
The Executive Directors’ fixed packages consist of basic salary, pension
contributions of 5% of basic salary on a matched contribution basis, a company
vehicle (which must be electric), private healthcare insurance and a death in
service insurance scheme. Either party can serve six months’ written notice to
terminate their employment.
Directors’
Remuneration Report
I am pleased to be able to present my Directors’ Remuneration Report as Chair
of the Remuneration Committee, on behalf of the Board, for the financial year
ended 31 January 2024 (“FY2024”).
Overview of year
FY2024 has been a year of mixed outcomes. We have had some great successes
on some of our strategic priorities such as securing a foothold in the US, as well as
some welcome Board changes which have strengthened the Board.
Alan Olby was appointed CFO in June 2023, Marlou Janssen-Counotte also joined
the Board in June 2023 and Roy Davies joined the Board in December 2023,
subsequently being appointed Chair in March 2024. Post year end, Roy became
our Interim CEO and Executive Chair, when Neil Campbell stepped down as CEO.
We sadly say goodbye to Mark Abraham’s who has Chaired the business since
2015, providing sage advice and guidance to the Executive and his fellow board
members throughout his term. He will be sorely missed.
Despite our strategic successes, financially, this has been a tough year. Despite
the challenges, our Executive Directors, continue to retain a strong focus on the
success of the business and tackle every challenge head on. However, Group
revenues fell well short of the threshold for bonuses for FY2024.
Membership
The Remuneration Committee welcomed Marlou Janssen-Counotte as a member,
with Bob Beveridge, and myself, Liz Shanahan continuing as members.
The Committee has met formally three times but regularly had informal
discussions during the year. The Committee’s responsibilities include: setting,
reviewing and recommending to the Board the remuneration policy for Executive
Directors, certain aspects of other senior managers’ remuneration and reviewing
and approving the rules of share incentive plans.
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Performance-related Aspects
Bonus
The maximum annual bonus achievable for the Executive Directors is 100% of basic
salary. The underachievement of the financial performance was such that no
bonus was awarded this year.
Directors’ total remuneration for the year ended 31 January 2024:
Salary
Annual Bonus
Pensions
Benefits
Total
Remuneration
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
£’000
Executives
Neil Campbell
Brook Nolson
Jon Ballard1
Alan Olby2
Non-executive Directors
Mark Abrahams3
Bob Beveridge
Liz Shanahan
Gordon (Roy) Davis4
Louise Marie
Janssen-Counotte5
221
177
–
132
45
30
30
1
18
207
165
129
–
45
30
30
–
–
–
–
–
–
–
–
–
–
–
5
67
4
–
–
–
–
–
–
11
9
–
4
–
–
–
–
–
10
8
6
–
–
–
–
–
–
16
13
–
14
–
–
–
–
–
14
13
11
–
–
–
–
–
–
248
199
–
150
45
30
30
1
18
236
253
150
–
45
30
30
–
–
654
606
–
76
24
24
43
38
721
744
1 Jon Ballard resigned from the board on 22 December 2022
2 Alan Olby joined the board on 12 June 2023
3 Mark Abrahams resigned from the board on 20 March 2024
4 Gordon Davis joined the board on 25 January 2024
5 Louise Marie Janssen-Counotte joined the board on 22 June 2023
The performance-related aspects consist of an annual maximum bonus scheme
of 100% of salary based on agreed performance criteria and a long-term incentive
plan (“LTIP”)1. The LTIP award is in the form of a nil cost nominal value share
option over ordinary shares. The market value of the options granted to each
of the Executives, (number of options multiplied by the share price of the date
of grant) equated, in the aggregate, to 30% of base salary respectively. The LTIP
performance measures are based 60% on revenue growth and 40% on a number
of measurable ESG targets.
No Director participates in decisions about their own remuneration package.
Workforce engagement and workforce remuneration
With the acquisition of SLE Ltd in 2020, there were inevitably some misalignments
between the remuneration policies across the Group. As we noted last year, we
aimed to align those policies and harmonise salaries across the Group. This is
now complete. We have a number of well received employee benefits and our
compressed week pilot has now been rolled out across the business and is working
well. Our SAYE scheme, launched in 2020 which was designed to encourage
our workforce to engage in the long-term future of the business and to reward
them for their commitment, remains well subscribed. As of 31st January 2024,
50 employees are participating with 338,261 shares committed.
Executive remuneration for year ending 31 January 2024
Fixed Aspects
The Executive Directors’ salaries increased in line with the rest of the workforce.
The Executive Directors continue to receive pension contributions of 5% of basic
salary or money purchase scheme on a matched contribution basis. Other
benefits, which comprise the provision of a vehicle allowance or company car,
private healthcare insurance and a death in service insurance scheme, remained
unchanged in FY2024. Full details are set out in the table shown.
Directors’ Remuneration Report continued
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Long-term incentive Plan (“LTIP”)
LTIP options were granted in FY2024 to the Executive
Directors for assessment and vesting at FY2026, subject
to the performance measures being achieved. The
performance criteria for the FY2022 LTIP’s which were
due to vest in May 2024 have not been achieved and
thus have lapsed.
Priorities and Executive remuneration for
year ending 31 January 2025
The Committee continually assesses and reviews the
policy. Post year-end, the Committee appointed external
advisors to help us review our strategy and approach.
Due to personnel changes, we will be changing our
performance related arrangement for YE 31 January 2025,
maintaining the same fixed remuneration approach, but
blending our Bonus and LTIP into an integrated incentive.
The eligible amount remains the same, but it merges our
bonus and LTIPs. The maximum achievable remains 130%
of salary, with 100% being eligible as cash (as before) and
30% in deferred shares (as before), based on primary
financial targets.
Salary
The Executives have been awarded a 5% salary increase,
below the company average for YE 31st January 2025.
Number of shares awarded under award
On 01
February
2023
Granted
during the
year
Exercised
during the
year
Lapsed
during the
year
At
31 January
2024
Date of
Award
Performance
Period
Exercising
Date
Expiry
Date
Neil Campbell
65,385
–
–
(65,385)
–
05 Nov 18
01 Feb 18
31 Jan 21
27 Apr 21
26 Apr 23
50,000
–
–
(50,000)
–
07 May 21
01 Feb 21
31 Jan 24
01 May 24
30 Apr 26
–
115,000
–
–
115,000
31 Mar 23
01 Feb 22
31 Jan 25
01 May 25
30 Apr 27
–
155,043
–
–
155,043
08 Jun 23
01 Feb 23
31 Jan 26
01 May 26
30 Apr 28
115,385
270,043
–
(115,385)
270,043
Alan Olby
–
222,222
–
–
222,222
12 Jun 23
05 Jun 23
04 Jun 26
05 Jun 26
04 Jun 28
–
222,222
–
–
222,222
Brook Nolson
40,000
–
–
(40,000)
–
07 May 21
01 Feb 21
31 Jan 24
01 May 24
30 Apr 26
–
92,000
–
–
92,000
31 Mar 23
01 Feb 22
31 Jan 25
01 May 25
30 Apr 27
–
124,034
–
–
124,034
08 Jun 23
01 Feb 23
31 Jan 26
01 May 26
30 Apr 28
40,000
216,034
–
(40,000)
216,034
Integrated Incentive (Previously Annual bonus & LTIP)
For our Executive Directors in FY2025, 80% of the integrated incentive KPI’s are financial and 20% are
now personal.
Directors’ interests in share awards in the Company as at 31 January 2024 are as follows:
The exercise price of the options is £nil.
Directors’ Remuneration Report continued
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The Directors total interests in shares in the Company as at 31 January 2024 and
at the date of this report were as follows:
Directors’ Interests
30 July 2024
31 January 2024
31 January 2023
Mark Abrahams
Neil Campbell
Jon Ballard1
Brook Nolson
Alan Olby2
Liz Shanahan
Roy Davis
n/a
4,416,646
n/a
34,323
43,211
177,857
178,571
256,576
4,416,646
–
34,323
43,211
35,000
–
256,576
4,416,646
15,375
34,323
–
35,000
n/a
1 Jon Ballard resigned from the board on 22 December 2022
2 Alan Olby joined the board on 12 June 2023
Conclusion
The year ended 31 January 2024 has had some notable strategic successes
and some significant financial challenges. Our entire workforce have shown
great resilience, making sure we focused on seamless production and delivery
of products to our customers, helping to save the lives and improve outcomes,
around the globe, for one of society’s most vulnerable groups, premature and
sick babies.
Liz Shanahan
Chair, Remuneration Committee
30 July 2024
1 No option may be granted under the Share Option Scheme if, as a result, the aggregate nominal value of
Ordinary Shares in the capital of the Company issued or issuable pursuant to options granted during the
previous 10 years under the Share Option Scheme, or any other discretionary employees’ share scheme
adopted by the Company, would exceed 5% of the Ordinary Share capital of the Company in issue on
that date. The Remuneration Committee has the discretion to exceed this 5% in certain circumstances.
After an initial three-year qualification period, options are exercisable at any time up to the tenth
anniversary of the date of grant subject to performance criteria (unless otherwise noted). There are also
provisions, which may allow exercise of the Options in the event of a change of control, subject to the
agreement of the Remuneration Committee.
Directors’ Remuneration Report continued
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Directors’ Report
The Directors present their report on the Group and Company, together with
the audited Consolidated Financial Statements of the Group and Company for
the year ended 31 January 2024 (“FY2024”).
Inspiration Healthcare Group plc is incorporated under the laws of England
and Wales as a public limited company and its registered office and principal
place of business is Unit 7/8 Commerce Park, Commerce Way, Croydon, CR0 4YL.
The Company’s Ordinary Shares are admitted to and traded on the Alternative
Investment Market (“AIM”), a market operated by the London Stock Exchange plc.
Results and Dividends
The Group has reported a loss for the year of £6,034,000 (FY2023: profit of £272,000).
An interim dividend of 0.205p per share (FY2023: 0.205p per share) was paid on 29
December 2023. The board is not recommending a final dividend (FY2023: 0.41p
per share) to make a total dividend for the year of 0.205p per share (FY2023: 0.615p
per share).
Business Review and Future Developments
Details of the business activities during the year can be found in the
Strategic Report.
Going Concern
The Group is reliant on borrowing facilities from external lenders to finance its
ongoing operations. The Group has access to a revolving credit facility (“RCF”)
of £10.0million and an invoice finance facility of up to £5.0 million. The RCF facility
contains certain financial covenants relating to the Group.
As a result of ongoing delays in receiving a material export order, the Group
sought and received waivers from its lender in relation to the covenant tests as
at 31 January 2024 and 30 April 2024, and has agreed alternate covenants for the
period to 30 April 2025, with further drawdown of the RCF subject to lender consent.
On 26 June 2024, the Company announced a placing, subscription and retail offer
(“the Fundraising”) to raise £2.8 million, net of expenses, by the issue of
21,428,570 new Ordinary Shares in the Company. The Fundraising completed
on 23 July 2024 following shareholder approval and admission of shares to
trading on AIM. Conditional upon the placing completing as expected, the
Group’s lender has agreed to release any restriction on further drawdown of
the RCF which will provide the Group with additional liquidity of £3.5 million,
subject only to continued compliance with the revised covenants. On 25 July 2024,
the Company announced that it had signed the material export order, valued at
$4.3 million, and expects to deliver the goods in the second half of the current
financial year.
The Directors have considered financial projections for the next 18 months covering
several scenarios, these include a significant (10%) revenue downside versus the
base case budget for the period. These projections demonstrate that the Group
can operate within the revised headroom available following completion of the
placing for the foreseeable future. The Directors, after taking into account the
proceeds of the Fundraising, the material export order, and availability of the RCF,
believe that they have a reasonable basis for concluding that the Group has
adequate facilities to continue as a going concern and have therefore adopted
the going concern basis in the preparation of these financial statements. The
financial statements do not reflect any adjustments that would be required if they
were prepared on a basis other than the going concern basis.
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Directors
The Directors of the Company who served during the year and up to the date of
this report were:
M S Abrahams
Non-executive Chairman (resigned 20 March 2024)
N J Campbell
Chief Executive Officer*
B Nolson
Chief Operating Officer
R J Beveridge
Non-executive Director
L A Shanahan
Non-executive Director
A M Olby
Chief Financial Officer (appointed 12 June 2023)
L M Janssen-Counotte
Non-executive Director (appointed 22 June 2023)
G R Davis
Non-executive Director* (appointed 7 December 2023)
*Neil Campbell stepped down as CEO on 30 May 2024 to become Non-Executive Director
and as a result, Roy Davis has become Executive Chairman and Interim CEO.
Directors’ Interests in Shares and Contracts
Directors’ interests in shares of the Company at 31 January 2024 and 31 January
2023, and any changes to the date of this report, are set out in the Directors’
Remuneration Report. Directors’ interests in contracts of significance to which
the Group was a party during the financial year are disclosed in note 28 of the
Consolidated Financial Statements.
Indemnification of Directors
As permitted by the Articles of Association, the Directors have the benefit of an
indemnity which is a qualifying third-party indemnity provision as defined by
section 234 of the Companies Act 2006. The indemnity was in force throughout the
last financial year and remains in force at the date of these financial statements.
Directors’ Report continued
Financial Instruments and Risk Management
Disclosures regarding financial instruments are provided within the Principal Risks
and Uncertainties and in note 19 to the Consolidated Financial Statements.
Capital Structure
Details of the Company’s share capital, together with details of the movements
therein, are set out in note 22 to the Consolidated Financial Statements. The
Company has one class of Ordinary Shares which carry no right to fixed income.
Research and Development
The Group continues to invest in research and development, in order to extend its
product offerings and improve the effectiveness of its technology. During the year,
the Group incurred costs totalling £3.5m (FY2023: £3.2m) including expenditure
capitalised in accordance with IAS38.
Involvement of Employees
All employees are valued members of the team and our aim is to help every
individual achieve their full potential. For information on how we engage with our
employees, refer to our section 172 statement.
Customers
A key element of the Group’s business model is to work closely with Key Opinion
Leaders in the healthcare system and to develop, evaluate and enhance our
propositions in full co-operation with those partners. The Group plans to continue
investment in R&D to enhance its products, get more regulatory clearances
around the world and bring its innovative product range to more customers and
ultimately, help more babies survive.
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Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and the Financial
Statements in accordance with applicable law and regulation.
Company law requires the Directors to prepare Financial Statements for each
financial year. Under that law the Directors have prepared the Group Financial
Statements in accordance with UK adopted International Accounting Standards
and Company Financial Statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards,
comprising FRS 101 “Reduced Disclosure Framework”, and applicable law).
Under Company law the Directors must not approve the Financial Statements
unless they are satisfied that they give a true and fair view of the state of affairs
of the Group and Company and of the profit or loss of the Group and Company
for that period. In preparing the Financial Statements, the Directors are required to:
u Select suitable accounting policies and then apply them consistently.
u State whether applicable UK-adopted International Accounting Standards
have been followed for the Group Financial Statements and United Kingdom
Accounting Standards, comprising FRS 101, have been followed for the Company
Financial Statements, subject to any material departures disclosed.
u Make judgements and accounting estimates that are reasonable and prudent.
u Prepare the Financial Statements on the going concern basis unless it
is inappropriate to presume that the Group and Company will continue
in business.
The Directors are also responsible for safeguarding the assets of the Group and
Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting records that
are sufficient to show and explain the Group and Company’s transactions and
disclose with reasonable accuracy at any time the financial position of the Group
and Company and enable them to ensure that the Financial Statements comply
with the Companies Act 2006.
The Directors are responsible for ensuring the annual report and the Financial
Statements are made available on a website. Financial Statements are published
on the Company’s website in accordance with legislation in the United Kingdom
governing the preparation and dissemination of the Financial Statements, which
may vary from legislation in other jurisdictions.
Substantial Interests
At close of business on 30 June 2024, the Company had been notified of the following
interests which amounted to 3% or more of the issued capital of the Company:
Shareholder
Number of shares
Percentage holding
BGF Investment Management
11,725,487
17.2%
Berenberg Asset Management
5,884,391
8.6%
Mr N J Campbell
4,424,262
6.5%
Mennen Medical Ltd
4,229,991
6.2%
Liontrust Asset Management
4,198,205
6.2%
Mr S G Motley
4,111,628
6.0%
Octopus Investments
3,800,000
5.6%
Mr T Foster
3,428,350
5.0%
Castlefield Investments
2,320,440
3.4%
Note that the above table does not reflect changes resulting from the placing and
subscription approved by shareholders on 22 July 2024.
Political and Charitable Donations
No charitable donations were made during the year (FY2023: £nil), however,
disbursements were made to the value of £33,000 (FY2023: £85,000) from the
donation made to CAF in FY2022. No political donations were made (FY20223 £nil).
Annual General Meeting
Details of the arrangements for the Annual General Meeting (“AGM”) and the
resolutions to be proposed will be provided in a separate notice of the AGM that
will be sent to shareholders.
Reappointment of Independent Auditors
BDO LLP have expressed their willingness to continue in office and a resolution to
reappoint them is proposed for consideration at the AGM.
Directors’ Report continued
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The maintenance and integrity of the Company’s website is the responsibility of
the Directors. The Directors’ responsibility also extends to the ongoing integrity of
the Financial Statements contained therein.
Subsequent Events
On 26 June 2024, the Company announced a placing, subscription and retail offer
(‘the Fundraising’) to raise gross proceeds of £3.0 million. The net proceeds of the
Fundraising (approximately £2.8 million) are to be used to reduce net debt and
provide additional liquidity headroom to the Group. The Fundraising was approved
by shareholders in a general meeting on 22 July 2024, following which 21,428,570
new ordinary shares in the Company were issued and admitted to trading on AIM
on 23 July 2024. Following the Fundraising, the Company is able to make further
draw downs of the full undrawn amount of the RCF without HSBC consent, subject
only to ongoing covenant compliance, including monthly minimum liquidity level
of £1.5 million.
In June 2024, the Directors made the decision to close the Hailsham site from
the end of July 2024, further rationalising the Group’s operating sites. Certain
activities will be transferred to the Group’s Manufacturing and Technology Centre
in Croydon while others are outsourced to long-term supply partners.
Directors’ Confirmations
In the case of each Director in office at the date the Directors’ Report is approved:
u So far as the Director is aware, there is no relevant audit information of which
the Group and Company’s auditors are unaware.
u They have taken all the steps that they ought to have taken as a Director in order
to make themselves aware of any relevant audit information and to establish
that the Group and Company’s auditors are aware of that information.
Alan Olby
Chief Financial Officer
30 July 2024
Directors’ Report continued
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Opinion on the financial statements
In our opinion:
u The financial statements give a true and fair view of the state of the Group’s
and of the Parent Company’s affairs as at 31 January 2024 and of the Group’s
loss for the year then ended;
u The Group financial statements have been properly prepared in accordance
with UK adopted international accounting standards;
u The Parent Company financial statements have been properly prepared in
accordance with United Kingdom Generally Accepted Accounting Practice; and
u The financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
We have audited the financial statements of Inspiration Healthcare Group Plc (the
‘Parent Company’) and its subsidiaries (the ‘Group’) for the year ended 31 January
2024 which comprise the Consolidated Income Statement, the Consolidation
Statement of Comprehensive Income, the Consolidated Statement of Financial
Position, the Consolidated Cash Flow Statement, the Consolidated Statement of
Changes in Shareholders’ Equity, the Company Statement of Financial Position, the
Company Statement of Changes in Equity and notes to the financial statements,
including material accounting policy information.
The financial reporting framework that has been applied in the preparation of
the Group financial statements is applicable law and UK adopted international
accounting standards. The financial reporting framework that has been applied in
the preparation of the Parent Company financial statements is applicable law and
United Kingdom Accounting Standards, including Financial Reporting Standard 101
Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting
Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards
are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in accordance
with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied to listed
entities, and we have fulfilled our other ethical responsibilities in accordance with
these requirements.
Independent Auditor’s Report
to the members of Inspiration Healthcare Group Plc
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Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use
of the going concern basis of accounting in the preparation of the financial
statements is appropriate. Our evaluation of the Directors’ assessment of the
Group and the Parent Company’s ability to continue to adopt the going concern
basis of accounting included:
u A review of the terms and conditions attaching to the share placing that was
announced on 26 June 2024.
u A review of the correspondence with the Group’s lender in connection with the
release of restrictions on future drawdowns against the RCF.
u A review of the directors’ assessment of going concern and challenge of the
key assumptions used to make their assessment, including revenue forecasts,
research and development expenditure, capital expenditure and debt/equity
financing cashflows. These were assessed through discussions with directors,
review of previously forecast results against actual results and by reference to
our knowledge of the industry and experience to date of relevant cash flows in
respect of the Group’s operations;
u A review of the accuracy of the forecast model through corroboration of the
opening cash position to bank statements and re-performance of calculations;
u We assessed the completeness and accuracy of the matters disclosed in the
going concern note by reference to our work performed over the directors’
assessment of the Group and Parent Company’s ability to continue as a
going concern.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or collectively, may
cast significant doubt on the Group and the Parent Company’s ability to continue
as a going concern for a period of at least twelve months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going
concern are described in the relevant sections of this report.
Independent auditor’s report to the members of Inspiration Healthcare Group Plc continued
Overview
Coverage
99% (2023: 83%) of Group profit before tax
98% (2023: 95%) of Group revenue
91% (2023: 93%) of Group total assets
Key audit matters
2024
2023
Revenue Recognition
Y
Y
Valuation of the consideration and
Y
N
the appropriateness of the discount
rate applied within the Business Combination
Materiality
Group financial statements as a whole
£186,900 (2023: £93,600) based on 0.5% of revenue (2023:
based on 5% of the last three years average Profit before
tax)
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and
its environment, including the Group’s system of internal control, and assessing
the risks of material misstatement in the financial statements. We also addressed
the risk of management override of internal controls, including assessing whether
there was evidence of bias by the Directors that may have represented a risk of
material misstatement.
We have identified two significant components within the group being Inspiration
Healthcare Limited and S.L.E. Limited which were subject to full scope audits. The
non-significant components were subject to analytical reviews. All audit work on
both significant and non-significant components was performed by the group
engagement team.
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Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include
the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall
audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the
Material uncertainty related to going concern section of our report, we have determined the matters below to be the key audit matters to be communicated in our report.
Key audit matter
How the scope of our audit addressed the key audit matter
Revenue
Recognition
(notes 1 and 3)
Inspiration Healthcare Group revenue includes the sale of branded and
distributed products, technology support and freight recognised at a
point in time and the provision of technology support services recognised
over time.
We consider there to be a risk of fraud and error connected with
recognising revenue in the correct period around year end (cut off) as
there is an element of judgement involved in determining when control
passes to the customer.
We also consider there to be a fraud risk in relation to technology support
revenue arising as a result of judgement involved in determining the
period covered by the contract from the inappropriate or incorrect
calculation of the split between revenue and contract liability.
The group has a number of international markets in which it operates,
which may drive complexities with revenue recognition. We therefore
consider there to be a risk of fraud or error over compliance with IFRS 15
Revenue from Contracts with Customers (“IFRS 15”) for revenue contracts
with overseas customers and distributors.
We therefore have determined revenue recognition to be a key audit matter.
We have checked that the Group’s policy for revenue recognition for all trading entities is in line with IFRS 15.
We completed cut off testing by tracing a sample of invoices from January 2024 to February 2024
through to supporting documentation to ensure these items have been accounted for in the correct
period.
We reviewed a sample of post year end credit notes raised to check that any items relating to
the financial year under audit have been appropriately provided for and did not relate to revenue
recognised in the year that was subsequently reversed.
We have selected a sample of technology support transactions in the year, agreed these through to
invoice and recalculated the contract liability as at year end based upon the term outlined within the
invoice or contract as applicable.
For a sample of revenue recognised for overseas distributors, we have obtained copies of the
agreements to check revenue was recognised in accordance with the terms of the contract.
We tested all unusual journal posting combinations involving revenue accounts within the general
ledger and agreed through to supporting documentation.
Key observations:
Based upon the work performed we did not identify any indicators to suggest that revenue has not
been recognised appropriately.
Valuation of the
consideration
and the
appropriateness
of the discount
rate applied
within the
Business
Combination
(notes 1 and
note 27)
Inspiration Healthcare Group Plc completed the acquisition of Airon
Corporation during the year.
Under IFRS 3, management are required to calculate the fair value of
the consideration payable as a result of the acquisition, which involves
judgement in the calculation of the contingent consideration, including
an assessment of probability of meeting relevant earn out thresholds
and assessment of the appropriate discount rate for the time value
of money.
Due to the judgement involved, we considered there to be a significant
risk of material misstatement relating to the valuation of the
consideration and the appropriateness of the discount rate applied
within the business combination. Therefore this was also considered to
be a key audit matter.
We have checked management’s calculation of consideration paid to supporting third party
documentation, including the share purchase agreement (SPA).
We obtained management’s calculation of the fair value of contingent consideration, together with
management’s forecasts for the Airon business covering the earn-out period.
We assessed the arithmetic accuracy of the earn-out calculation and challenged Management on
the achievability of the forecasts and whether the SPA defined targets would be met, with reference
to forecasts provided.
We have reviewed the completion balance sheet and obtained supporting explanations and
documentation for variances above a set threshold, identified as a percentage of the group materiality
With the assistance of our internal valuation experts we reviewed management’s valuation expert’s
report and the discount rate used was compared to our valuations experts’ determined discount rate.
We considered the appropriateness of key assumptions in the discount rate applied.
Key observations:
We did not identify any indicators to suggest that managements judgements used to value the
consideration and the appropriateness of the discount rate applied within the business combination
were inappropriate.
Independent auditor’s report to the members of Inspiration Healthcare Group Plc continued
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Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be
the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance
materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as
we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the
financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:
Group financial statements
Parent company financial statements
2024
£
2023
£
2024
£
2023
£
Materiality
186,900
93,600
77,000
88,300
Basis for determining
materiality
0.5% of revenue
5% of the average profit before
tax over the last three years
95% of group materiality
95% of group materiality
Rationale for the benchmark
applied
Rationale for the
benchmark applied
Materiality has been set based
upon revenue as a result of the
change in shareholder base in
the year. The shareholders have
a greater focus on growth in
revenue and adjusted EBITDA as
the groups KPIs.
The volatility in the year is
considered to be unusual and
not necessarily due to the
general market conditions. The
impact of one-off transactions
and of supply chain difficulties
experienced by the business
caused the result for the year
to be significantly lower than
usual. We therefore applied an
average to normalise the impact
of the results for the year.
Parent company materiality was
capped at £177,000 to respond
to aggregation risk
Parent company materiality was
capped at £88,300 to respond to
aggregation risk
Performance materiality
140,100
70,200
132,800
66,200
Basis for determining
performance materiality
75% of group materiality as this is reflective of our perceived risk of
the financial statements containing misstatements, after considering
previous experience of the audit engagement.
75% of parent company materiality as this is reflective of our
perceived risk of the financial statements containing misstatements,
after considering previous experience of the audit engagement.
Independent auditor’s report to the members of Inspiration Healthcare Group Plc continued
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Component materiality
For the purposes of our Group audit opinion, we set materiality for each significant
component of the Group based on a percentage of between 67% and 83% (2023:
66% and 84%) of Group materiality dependent on the size and our assessment
of the risk of material misstatement of that component. Component materiality
ranged from £125,100 to £155,200 (2023: £61,800 to £78,500). In the audit of each
component, we further applied performance materiality levels of 75% (2023:
75%) of the component materiality to our testing to ensure that the risk of errors
exceeding component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual
audit differences in excess of £9,300 (2023:£3,720). We also agreed to report
differences below this threshold that, in our view, warranted reporting on qualitative
grounds.
Other information
The directors are responsible for the other information. The other information
comprises the information included in the annual report other than the financial
statements and our auditor’s report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or
our knowledge obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this gives rise to
a material misstatement in the financial statements themselves. 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.
Independent auditor’s report to the members of Inspiration Healthcare Group Plc continued
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the
course of the audit, we are required by the Companies Act 2006 and ISAs (UK) to
report on certain opinions and matters as described below.
Key audit matter
How the scope of our audit addressed the key audit matter
Strategic report
and Directors’
report
In our opinion, based on the work undertaken in the course of the audit:
u the information given in the Strategic report and the Directors’ report
for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
u the Strategic report and the Directors’ report have been prepared in
accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and Parent
Company and its environment obtained in the course of the audit, we
have not identified material misstatements in the strategic report or the
Directors’ report.
Matters on
which we
are required
to report by
exception
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
u adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been received from
branches not visited by us; or
u the Parent Company financial statements are not in agreement with the
accounting records and returns; or
u certain disclosures of Directors’ remuneration specified by law are not
made; or
u we have not received all the information and explanations we require for
our audit.
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Responsibilities of Directors
As explained more fully in the Statement of Directors’ responsibilities, the Directors
are responsible for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such internal control as the
Directors determine is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing
the Group’s and the Parent Company’s ability 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 the Parent Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are 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 ISAs (UK) 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 these
financial statements.
Extent to which the audit was capable of detecting irregularities, including
fraud
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting irregularities, including
fraud is detailed below:
Non-compliance with laws and regulations
Based on:
u Our understanding of the Group and the industry in which it operates;
u Discussion with management and those charged with governance, including
the Audit Committee; and
u Obtaining and understanding of the Group’s policies and procedures regarding
compliance with laws and regulations.
We considered the significant laws and regulations to be UK-adopted international
accounting standards for the Group and Financial Reporting Standard 101 ‘Reduced
Disclosure Framework’ for the Parent Company, Companies Act 2006, AIM listing
rules and UK tax compliance regulations which is the principal jurisdiction in which
the group operates.
The Group is also subject to laws and regulations where the consequence of non-
compliance could have a material effect on the amount or disclosures in the
financial statements, for example through the imposition of fines or litigations. We
identified such laws and regulations to be the health and safety legislation.
Our procedures in respect of the above included:
u Review of minutes of meeting of those charged with governance for any
instances of non-compliance with laws and regulations;
u Review of correspondence with regulatory and tax authorities for any instances
of non-compliance with laws and regulations; and
u Review of financial statement disclosures and agreeing to supporting
documentation;
u Involvement of tax specialists in the audit.
Independent auditor’s report to the members of Inspiration Healthcare Group Plc continued
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Fraud
We assessed the susceptibility of the financial statements to material misstatement,
including fraud. Our risk assessment procedures included:
u Enquiry with management and those charged with governance, including the
Audit Committee, regarding any known or suspected instances of fraud;
u Obtaining an understanding of the Group’s policies and procedures relating to:
u Detecting and responding to the risks of fraud; and
u Internal controls established to mitigate risks related to fraud.
u Review of minutes of meeting of those charged with governance for any known
or suspected instances of fraud;
u Discussion amongst the engagement team as to how and where fraud might
occur in the financial statements; and
u Performing analytical procedures to identify any unusual or unexpected
relationships that may indicate risks of material misstatement due to fraud.
Based on our risk assessment, we considered the areas most susceptible to
fraud to be revenue recognition and the valuation of the acquisition, for which
our procedures have been set out as Key Audit Matters above, capitalisation of
development costs and management override of controls.
Our procedures in respect of the above included:
u Testing a sample of journal entries throughout the year, which met a defined
risk criteria, by agreeing to supporting documentation;
u Assessing significant estimates made by management for bias, including
through revenue recognition and the accounting for the business combination
as discussed within the Key Audit Matters section;
In order to assess the fraud risk in relation to capitalisation of development
costs, we have selected a sample of costs capitalised to ensure they meet
the criteria of the accounting standards. We have discussed with individuals
outside of finance to understand the status of ongoing projects, considering the
commercial and technical feasibility, to ensure the costs are being appropriately
capitalised. We have also challenged management on their forecasts to check
that no impairment of costs capitalised is necessary.
Independent auditor’s report to the members of Inspiration Healthcare Group Plc continued
We also communicated relevant identified laws and regulations and potential
fraud risks to all engagement team members who were all deemed to have
appropriate competence and capabilities and remained alert to any indications
of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement
in the financial statements, recognising that the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting
from error, as fraud may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent limitations in the
audit procedures performed and the further removed non-compliance with laws
and regulations is from the events and transactions reflected in the financial
statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work
has been undertaken so that we might state to the Parent Company’s members
those matters we are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Parent Company and the Parent
Company’s members as a body, for our audit work, for this report, or for the
opinions we have formed.
Nigel Harker (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Gatwick, UK
30 July 2024
BDO LLP is a limited liability partnership registered in England and Wales (with registered
number OC305127).
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Consolidated Income Statement
for the year ended 31 January 2024
Note
2024
Adjusted
£’000
2024
Non-recurring
items
£’000
2024
Total
£’000
2023
Total
£’000
Revenue
Cost of sales
3
37,630
(19,743)
–
–
37,630
(19,743)
41,233
(23,140)
Gross profit
Administrative expenses
4
17,887
(18,287)
–
(4,527)
17,887
(22,814)
18,093
(17,662)
Operating (loss)/profit
Finance income
Finance expense
6
6
(400)
61
(810)
(4,527)
–
–
(4,927)
61
(810)
431
40
(395)
(Loss)/profit before tax
Income tax
7(a)
(1,149)
(358)
(4,527)
–
(5,676)
(358)
76
196
(Loss)/profit for the year attributable to owners of the parent Company
(1,507)
(4,527)
(6,034)
272
(Loss)/earnings per share
Basic (pence per share)
Diluted (pence per share)
8
8
(8.85p)
n/a
0.40p
0.39p
Consolidated Statement of Comprehensive Income
for the year ended 31 January 2024
2024
Total
£’000
2023
Total
£’000
(Loss)/Profit for the year
Other comprehensive income
Items that may be reclassified to profit or loss
(6,034)
–
272
–
Total other comprehensive income for the year
–
–
Total comprehensive income for the year
(6,034)
272
The accompanying notes form an integral part of these Consolidated Financial Statements.
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Consolidated Statement of Financial Position
as at 31 January 2024 (Registered Number: 03587944)
Note
31 January 2024
£’000
31 January 2023
£’000
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Right of use assets
Deferred tax asset
10
11
12
21
13,278
7,137
5,578
–
17,004
7,497
5,970
324
25,993
30,795
Current assets
Inventories
Trade and other receivables
Short-term investments
Cash and cash equivalents
13
14
15
13,743
8,669
197
412
9,935
11,888
–
2,276
23,021
24,099
Total assets
49,014
54,894
LIABILITIES
Current liabilities
Trade and other payables
Lease liabilities
Financial liabilities
Contract liabilities
17
12
18
20
(6,591)
(697)
(1,654)
(625)
(5,812)
(822)
(2,079)
(531)
(9,567)
(9,244)
Non-current liabilities
Lease liabilities
Financial liabilities
12
18
(5,477)
(5,002)
(6,176)
(4,000)
(10,479)
(10,176)
Total liabilities
(20,046)
(19,420)
Net assets
28,968
35,474
Shareholders’ equity
Called up share capital
Share premium account
Reverse acquisition reserve
Share-based payment reserve
Retained earnings
22
22
22
22
6,823
18,905
(16,164)
280
19,124
6,813
18,842
(16,164)
405
25,578
Total equity
28,968
35,474
The accompanying notes form an integral part of
these Consolidated Financial Statements.
The Consolidated Financial Statements were
approved by the Board of Directors on 30 July 2024
and signed on its behalf by:
Alan Olby
Roy Davis
Director
Director
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Note
Issued
share
capital
£’000
Share
premium
account
£’000
Reverse
acquisition
reserve
£’000
Share
based
payment
reserve
£’000
Retained
earnings
£’000
Total
£’000
At 1 February 2022
Profit for the year
6,812
–
18,838
–
(16,164)
–
278
–
25,725
272
35,489
272
Total comprehensive income for the year
–
–
–
–
272
272
Transactions with owners in their capacity
as owners
Issue of Ordinary Shares, net of transaction
costs and tax
Dividends
Employee share scheme expense
24
1
–
–
4
–
–
–
–
–
(5)
–
132
–
(419)
–
–
(419)
132
Total transactions with owners
1
4
–
127
(419)
(287)
At 31 January 2023
Profit for the year
6,813
–
18,842
–
(16,164)
–
405
–
25,578
(6,034)
35,474
(6,034)
Total comprehensive income for the year
–
–
–
–
(6,034)
(6,034)
Transactions with owners in their capacity
as owners
Issue of Ordinary Shares, net of transaction
costs and tax
Dividends
Employee share scheme credit
24
10
–
–
63
–
–
–
–
–
(73)
–
(52)
–
(420)
–
–
(420)
(52)
Total transactions with owners
10
63
–
(125)
(420)
(472)
At 31 January 2024
6,823
18,905
(16,164)
280
19,124
28,968
The accompanying notes form an integral part of these Consolidated Financial Statements.
Consolidated Statement of Changes in Shareholders’ Equity
for the year ended 31 January 2024
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Consolidated Cash Flow Statement
for the year ended 31 January 2024
Note
2024
£’000
2023
£’000
Cash flows from operating activities
(Loss)/Profit for the year
Adjustments for:
Depreciation and amortisation
Remeasurement of leases
Impairment of right of use assets
Impairment of intangible assets
Employee share scheme (credit)/expense
Loss/(Profit) on disposal of tangible assets
Loss on disposal of intangible assets
Finance income
Finance expense
Income tax
12
10
24
10
6
6
7(a)
(6,034)
2,437
(210)
–
4,120
(52)
108
–
(61)
810
358
272
2,285
(25)
446
–
132
(26)
6
(40)
395
(196)
1,476
3,249
Increase in inventories
Decrease/(increase) in trade and other receivables
Increase/(decrease) in trade and other payables
Increase in contract liabilities
(3,378)
3,000
630
94
(3,486)
(2,501)
(740)
7
Cash flows generated from/(used in) operations
Taxation received
7(b)
1,822
190
(3,471)
–
Net cash generated from/(used in) operating
activities
2,012
(3,471)
Cash flows from investing activities
Bank interest received
Interest received on leases
Acquisition of subsidiary, net of cash acquired
Purchase of property, plant and equipment
Purchase of intangible assets
Capitalised development costs
6
6
27
11
10
10
21
40
(1,114)
(434)
(63)
(1,135)
5
35
–
(6,226)
(140)
(1,976)
Net cash used in investing activities
(2,685)
(8,302)
Note
2024
£’000
2023
£’000
Cash flows from financing activities
Principal elements of lease payments
Principal elements of lease receipts
Interest paid on lease liabilities
Interest paid on loans and borrowings
Dividends paid to the holders of the parent
Proceeds from loans and borrowings
12
14
6
6
9
18
(829)
281
(272)
(528)
(420)
577
(697)
217
(300)
(84)
(419)
6,079
Net cash (used in)/generated from financing
activities
(1,191)
4,796
Net decrease in cash and cash equivalents
(1,864)
(6,977)
Cash and cash equivalents at the beginning
of the year
2,276
9,253
Cash and cash equivalents at the end of the year
15
412
2,276
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Notes forming part of the Consolidated Financial Statements
for the year ended 31 January 2024
1. Accounting policies
Inspiration Healthcare Group plc (“Company”) is a public limited company
incorporated in England and Wales and domiciled in England. The Company’s
registered address is Unit 7/8, Commerce Park, Commerce Way, Croydon, CR0
4YL and the registered company number is 03587944. The Company’s ordinary
shares are traded on the Alternative Investment Market (“AIM”), a market operated
by the London Stock Exchange plc.
The principal activities of Inspiration Healthcare Group plc and its subsidiaries
(together, the “Group”) continue to be the sale, service and support of critical care
equipment to the medical sector including hospitals.
Basis of preparation
The principal accounting policies adopted in the preparation of these Financial
Statements are set out below. These policies have been consistently applied
unless otherwise stated.
The individual Financial Statements of each entity in the Group are presented
in the currency of the primary economic environment in which it operates (the
functional currency). The Group Financial Statements are presented in pounds
sterling, which is the presentation currency of the Group.
Going concern basis
The Group is reliant on borrowing facilities from external lenders to finance its
ongoing operations. The Group has access to a revolving credit facility (‘RCF’)
of £10.0million and an invoice finance facility of up to £5.0million. The RCF facility
contains certain financial covenants relating to the Group.
As a result of ongoing delays in receiving a material export order, the Group
sought and received waivers from its lender in relation to the covenant tests
as at 31 January 2024 and 30 April 2024, and has agreed alternate covenants
for the period to 30 April 2025, with further drawdown of the RCF subject to
lender consent.
On 26 June 2024, the Company announced a placing, subscription and retail
offer (“the Fundraising”) to raise £2.8million, net of expenses, by the issue of
21,428,570 new Ordinary Shares in the Company. The Fundraising completed on
23 July 2024 following shareholder approval and admission of shares to trading
on AIM. Conditional upon the placing completing as expected, the Group’s lender
has agreed to release any restriction on further drawdown of the RCF which will
provide the Group with additional liquidity of £3.5million, subject only to continued
compliance with the revised covenants. On 25 July 2024, the Company announced
that it had signed the material export order, valued at $4.3 million, and expects to
deliver the goods in the second half of the current financial year.
The Directors have considered financial projections for the next 18 months covering
several scenarios, these include a significant (10%) revenue downside versus the
base case budget for the period. These projections demonstrate that the Group
can operate within the revised headroom available following completion of the
placing for the foreseeable future. The Directors, after taking into account the
proceeds of the Fundraising, the material export order, and availability of the RCF,
believe that they have a reasonable basis for concluding that the Group has
adequate facilities to continue as a going concern and have therefore adopted
the going concern basis in the preparation of these financial statements. The
financial statements do not reflect any adjustments that would be required if they
were prepared on a basis other than the going concern basis.
Group
The Consolidated Financial Statements cover the year ended 31 January 2024.
The Consolidated Financial Statements have been prepared and approved by
the Directors in accordance with UK adopted international accounting standards
in conformity with the requirements of the Companies Act 2006. The Consolidated
Financial Statements are prepared under the historical cost convention, as
modified for any financial assets or liabilities which are stated at fair value
through operating profit or loss and for share based payments which are
measured at fair value.
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Basis of consolidation
The Financial Statements of the Group consolidate the financial statements
of Inspiration Healthcare Group plc and its subsidiary undertakings (together
referred to as the “Group”) up to 31 January each year. All subsidiaries have a
reporting date of 31 January.
Subsidiaries are entities controlled by the Group. Control exists when the Group
has the power, directly or indirectly, to govern the financial and operating policies
of an entity so as to obtain benefits from its activities. In assessing control, potential
voting rights that are currently exercisable or convertible are taken into account.
All subsidiaries are 100% owned.
The financial statements of subsidiaries are included in the Consolidated Financial
Statements from the date that control commences until the date that control
ceases, in accordance with IFRS 10. Intra group transactions and balances, and
any unrealised gains or losses arising from intra group transactions, are eliminated
in preparing the Consolidated Financial Statements.
Critical estimates and judgements
The presentation of Financial Statements requires the use of accounting estimates
which, by definition, will seldom equal the actual results. Management also needs
to exercise judgement in applying the Group’s accounting policies.
Judgements
The Group applies judgement in how it applies its accounting policies, which
could materially affect the numbers disclosed in these financial statements.
The key accounting judgements that have been applied in these financial
statements are as follows:
u
Taxation Provision
In arriving at the tax provision required at the balance sheet date, management
make a judgement on the accuracy of preliminary tax computations prior to
their submission and acceptance by the tax authorities. As a significant investor
in research and development (“R&D”) expenditure, this includes judgement on
the accuracy of the calculation of R&D tax credits included within the preliminary
computation. Although all endeavours are made to reflect the correct R&D tax
credits in the preliminary tax computation, the final tax computation submitted
to the relevant tax authorities may differ. See note 7(b) for the impact on the tax
provision as at 31 January 2024 of R&D tax credit claims made for the year.
u
Capitalisation of development costs
In order to capitalise product development costs, there is a requirement for
detailed analysis of the technical feasibility and judgement on the commercial
viability of the project. The Board regularly reviews this judgement in respect
of relevant development projects. Commercial viability is based on the future
prospects for revenue generated through sales of the products that are being
developed and expected costs to complete the development, as well as costs
to make the products. These estimates are based on historical experience
and other factors, including the achievement and timing of regulatory and
registration requirements as well as other expectations of future events that
are believed to be reasonable under the circumstances. Actual results may not
be in line with the estimates made. The value of product development costs
capitalised during the year was £1,135,000 (2023: £1,976,000) which includes
£416,000 (2023: £920,000) of employee time spent on development projects.
See Note 10.
u
Non-recurring items
Non-recurring items are items which, given their nature, management believes
should be disclosed separately for the purposes of presenting the results
of the Group. Management believes that presenting these items separately
enables users of the Financial Statements to obtain a clear and consistent
view of the Group’s underlying operating performance. In identifying the non-
recurring items, management have applied judgement including whether
i) the item is related to underlying trading of the Group; and/or ii) how often the
item is expected to occur. Details of non-recurring items incurred in the year
are set out in Note 4b.
Notes forming part of the Consolidated Financial Statements continued
1. Accounting policies continued
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u
Leases
Termination options are included in a number of property leases across
the Group. This option is used to maximise operational flexibility in terms of
managing contracts. In determining the lease term, management considers
all facts and circumstances that create an economic incentive not to exercise
a termination option. Termination options are only included in the lease term if
the lessee is reasonably certain to exercise the option to terminate before the
end of the lease term. The assessment is reviewed if a significant event or a
significant change in circumstances occurs which affects this assessment and
that it is within the control of the Group.
u Revenue
In accordance with IFRS 15, when the criteria for recognising revenue over time
is not met, revenue is recognised at the point in time when control of the goods
or services are passed to the customer. The Group exercises judgement on the
point at which transfer of control has taken place, which is, dependent upon
individual contract shipment terms, typically assessed to be when risk in the
goods has been assumed by the customer. Control of the goods or services
may pass to the customer at the point of physical delivery of the goods or for
ex-works shipments, at the point of collection by the customer.
Accounting Estimates
The Group is required to make judgements based on estimates and assumptions
concerning the future in order to fully comply with Adopted IFRSs. These
judgements and estimates are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under
the circumstances. Although these estimates are based on management’s best
knowledge of the amount, events or actions, actual results ultimately may differ
from those estimates. Estimates and underlying assumptions are reviewed on an
ongoing basis.
Revisions to accounting estimates are recognised in the year in which the
estimate is revised and in any future periods affected. The following are areas
that are deemed to require the most complex judgements about matters
that have potential material impacts on the amounts recognised in the
Financial Statements.
The key estimates applicable to the Financial Statements, which have a significant
risk of resulting in a material adjustment in future financial years are as follows:
Impairment
u
Carrying value of capitalised development costs
The fair value of capitalised development costs is determined by discounting
estimated future net cash flows generated by the asset where no active market
for the asset exists. A weighted average cost of capital of 12.5% is used. The net book
value of capitalised development costs as at 31 January 2024 is £1,837,000 (2023:
£5,160,000). See note 10 for more information on capitalised development costs.
Additionally, judgement is required on the appropriate amortisation rates applied
to the capitalised product development costs of completed developments, which
are based on estimates of useful lives of between five to 10 years and residual
values of the assets involved. Actual product lives may vary from estimates made.
Amortisation of product development costs during the year was £338,000 (2023:
£157,000). An impairment of £4,120,000 was recognised in the year (2023: £nil).
u
Goodwill
Impairment testing is an area involving management’s judgement, requiring
assessment as to whether the carrying value of the operating segment can
be supported by the net present value of estimated future cash flows derived
from such asset using cash flow projections which have been discounted at an
appropriate rate. In calculating the net present value of the future cash flows,
certain assumptions are required to be made in respect of highly uncertain
matters including management’s expectation of:
u
The selection of discount rates to reflect the risks involved.
u Future revenue and costs.
u
Long-term growth rates.
Changing the assumptions selected by management, in particular the
discount rate and growth rate assumptions used in the cash flow projections,
could significantly affect the Group’s impairment evaluation and hence results.
See Note 10 for further information on the assumptions used in the Group’s
impairment model.
1. Accounting policies continued
Notes forming part of the Consolidated Financial Statements continued
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Deferred Taxation
Judgement is required on whether future profitability is likely in making the decision
whether or not to recognise a deferred tax asset. Tax losses of £8,569,430 (2023:
£7,834,659) arose in SLE Limited prior to the acquisition by Inspiration Healthcare
Group plc on 7 July 2020 and £7,223,477 (2023: £7,342,903) arose in Inditherm plc
prior to the reverse acquisition by Inspiration Healthcare Limited and change of
name to Inspiration Healthcare Group plc in 2015. Following a hive-down exercise
undertaken with effect from 31 January 2017 the losses which arose in Inditherm
plc have been transferred to Inspiration Healthcare Ltd. There is no time limit on
utilising the brought forward losses, but they can only be set-off against profits
generated from the same trading activities they were generated from. Assessment
of future taxable profit of relevant trading activities is based on estimates of
future revenue streams, costs, investment in research and development together
with related assumptions on tax credits receivable on such expenditure, amongst
other things. Actual taxable profit and the timing of utilising the brought forward
losses may vary from the estimates made. The analysis and assessment of the
likelihood of utilising the losses is reviewed on an annual basis. Should all losses
be able to be utilised in the future, the amount of unrecognised deferred tax as at
31 January 2024 is £2,987,000 (2023: £1,505,000). See also note 21 on Deferred Tax.
Property, plant and equipment
Items of property, plant and equipment are measured at historical cost less
accumulated depreciation and any impairment. Costs include expenditure
that is directly attributable to the acquisition of the asset. Depreciation is
provided to write off the cost, less estimated residual value of property, plant
and equipment by equal instalments over their estimated useful economic lives.
The assets’ residual values and useful economic lives are reviewed, and adjusted
as appropriate, at each year-end date. When parts of an item of property, plant
and equipment have different useful lives, they are accounted for as separate
items (major components) of property, plant and equipment.
The following rates are applied:
Leasehold improvements
Over the term of the lease
Fixtures and fittings
10% - 25% per annum
Motor vehicles
20% per annum
Plant, machinery and office equipment
15% - 33% per annum
Repairs and maintenance are charged to the Consolidated Income Statement
during the financial year in which they incurred.
Leases
The Group assesses whether a contract is or contains a lease at inception of a
contract. The Group recognises a right of use asset and a corresponding lease
liability with respect to all lease agreements in which it is the lessee, except for
short-term leases (defined as leases with a lease term of 12 months or less) and
leases of low value assets.
The lease liability is initially measured at the net present value of the lease payments
that are not paid at the commencement date, discounted using the rate implicit in
the lease. If this rate cannot be readily determined, the Group uses its incremental
borrowing rate, being the rate the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right of use asset in a similar
economic environment with similar terms, security and conditions. Lease payments
are allocated between principle and finance cost. The finance cost is charged to
the Income Statement over the lease period so as to produce a consistent periodic
rate of interest on the remaining balance of the liability for each period.
The right of use assets are measured at cost comprising the amount of the initial
measurement of the lease liability. Right of use assets are depreciated over
the shorter period of the lease term and useful life of the underlying asset on
a straight-line basis and are reviewed for impairment when objective evidence
suggests that events or circumstances have had a negative effect on the
estimated future cash flows of that asset. If any such indication exists, the asset’s
recoverable amount is estimated and an impairment loss is recognised in the
Consolidated Income Statement.
1. Accounting policies continued
Notes forming part of the Consolidated Financial Statements continued
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During the year, the Group continued to lease its patient warming products,
acting as the lessor in these arrangements. These contracts contain both lease
and non-lease components. The lease component is accounted for as a finance
lease in accordance with IFRS 16 ‘Leases’. On commencement of the lease, the
lease component is initially recognised as a receivable at an amount equal to
the net investment in the lease, with an equal amount recognised as revenue.
The net investment comprises the present value of the lease payments due to
the lessor. The Group uses the interest rate implicit in the lease to measure the
net investment in the lease. At commencement of the lease, the lease payments
included in the measurement of the net investment in the lease comprise the
fixed payments for the lease. Finance income is allocated over the lease period
so as to produce a consistent periodic rate of interest on the remaining balance
of the asset for each period. The Group applies the lease payments relating to the
period against the gross investment in the lease to reduce both the principal and
the unearned finance income.
The Group also continues to sub-let several of its former Croydon properties.
These sub-leases have been accounted for as finance leases in accordance with
IFRS 16. On commencement of the sub-lease, the Group derecognised the right
of use asset relating to the head lease and recognised a net investment in the
sub-lease. Any differences between the carrying amount of the right of use asset
and the net investment in the sub-lease is taken to the Consolidated Income
Statement. The Group continues to recognise the lease liability relating to the
head lease, which represents the lease payments owed to the head landlord.
During the term of the sub-lease, the Group recognises both interest income on
the sub-lease and interest expense on the head lease.
Intangible Assets
Intangible assets are recognised if it is possible to demonstrate that there will be
future economic benefits attributable to the asset, the cost of the asset can be
measured reliably, the asset is separately identifiable and there is control over
the use of the asset. All intangible assets recognised are considered to have finite
lives (unless otherwise stated) and are amortised on a straight-line basis over the
period over which the Group expects to benefit from these assets. Amortisation is
recognised in operating expenses. A provision is made for any impairment in the
carrying amount of the intangible asset if applicable.
Intellectual property
Purchased intellectual property rights are capitalised and amortised
over management’s estimate of their useful economic life or term of the
relevant contract up to a maximum of 10 years.
Capitalised development costs
Where the criteria for capitalisation in IAS 38 ‘Intangible assets’ are met, costs
incurred are capitalised and amortised over their useful economic lives from the
point the products are launched to market. The capitalised values are reviewed
against the discounted future economic value, and adjusted as appropriate, at
each year-end date.
Development expenditure on an individual project is recognised as an intangible
asset when the Group can demonstrate:
u
The technical and commercial feasibility of completing the intangible asset so
that the asset will be available for use or sale.
u Its intention to complete and its ability to use or sell the developed asset.
u Its future economic benefits are probable.
u
The availability of adequate technical, financial and other resources to
complete the asset.
u
The ability to measure reliably the expenditure attributable to the asset
during development.
Following initial recognition of the development expenditure as an asset, the asset is
carried at cost less any accumulated amortisation and accumulated impairment
losses. Amortisation of the asset begins when development is complete and the
asset is available for use. It is amortised over the period of expected future benefit
from the asset which varies between five and 10 years. Amortisation is recorded
in operating expenses. During the period of development, the asset is tested for
impairment annually.
Research costs
Research expenditure is written off to the Consolidated Statement of
Comprehensive Income in the year in which it is incurred.
1. Accounting policies continued
Notes forming part of the Consolidated Financial Statements continued
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Software costs
Where the criteria for capitalisation in IAS 38 ‘Intangible assets’ are met, software
costs incurred are capitalised and amortised over their useful economic lives
from the point that the software is brought into service. The estimated useful life
is three years.
Impairment
Intangible assets and goodwill are considered to be impaired if objective
evidence suggests that one or more events have had a negative effect on the
estimated future cash flows of that asset. If any such indication exists, the asset’s
recoverable amount is estimated. For goodwill and intangible assets that have
an indefinite useful life, the recoverable amount is estimated at each year-
end date. Impairment losses are recognised in the Consolidated Statement of
Comprehensive Income.
Calculation of recoverable amount
Assets that are subject to amortisation or depreciation are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss would be recognised whenever the
carrying amount of an intangible asset or its cash generating unit exceeds its
recoverable amount.
The recoverable amount is the greater of the asset’s fair value less costs to sell
and its value in use. In assessing an asset’s value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks
specific to the asset.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises
direct material and, where applicable, direct labour costs and those overheads
that have been incurred in bringing inventories to their present location and
condition on a first in, first out basis.
Net realisable value is based on estimated selling price less additional costs
to completion or disposal. Allowance is made for obsolete, defective and slow
moving items based on estimated future usage.
Recognition and valuation of financial assets and liabilities
Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand.
Trade and other receivables
Trade and other receivables are initially measured at the transaction price.
The Group applies the IFRS 9 simplified approach to measuring expected credit
losses which uses a lifetime expected loss allowance for all trade receivables.
The expected loss rates are based on the payment profile of historic sales and
corresponding historical credit losses in addition to considering current and
forward macro-economic factors potentially affecting the customers’ ability to
settle the amount outstanding.
In measuring the expected credit losses, the trade receivables have been
assessed on a collective basis and have been grouped based on days past due.
Trade and other payables
Trade payables are obligations to pay for goods and services. The value of
trade payables is the value that would be payable to settle the liability at the
year-end date.
Provisions
Provisions for liabilities are made where the timing or amount of settlement
is uncertain. A provision is recognised when: the Group has a present legal or
constructive obligation as a result of past events; it is probable that an outflow
of resources will be required to settle the obligation; and the amount can be
reliably estimated. Provisions are not discounted on the grounds of materiality as
permitted under IAS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’.
1. Accounting policies continued
Notes forming part of the Consolidated Financial Statements continued
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Share capital
Ordinary Shares are classified as equity. Incremental costs directly attributable
to the issue of new shares are shown in equity as a deduction, net of tax, from
the proceeds.
Foreign currency transactions and balances
Transactions in foreign currencies are translated to sterling at the foreign
exchange rate ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies at the year-end date are retranslated to
sterling at the foreign exchange rate ruling at that date. Any exchange differences
arising on the settlement of monetary items or on translating monetary items
at rates different from those at which they were initially recorded are recognised
in the Consolidated Statement of Comprehensive Income in the year in which
they arise.
Employee benefits
Defined contribution pension plans
The costs of contributing to defined contribution stakeholder pension schemes
and employees’ personal pension schemes are charged to the Consolidated
Statement of Comprehensive Income in the year in which they relate. The Group
has no further legal or constructive obligations once the contributions have
been paid.
Share-based incentives
The Group operates an equity settled share scheme for certain employees.
The cost of equity settled share-based payments is measured at fair value at
the date of grant, excluding the effect of non-market based vesting conditions.
The cost is recognised in the Consolidated Income Statement on a straight-line
basis over the vesting period with the corresponding amount credited to equity,
based on an estimate of the number of shares that will eventually vest. The fair
values are measured using the Black-Scholes model. Please refer to note 24 for
more information.
Revenue recognition
The Group either recognises revenue from contracts with customers at a point in
time or over time as outlined below.
Under IFRS 15 any one of the 3 criteria below must be met in order for revenue to
be categorised as “over time”. If none are met then the transaction is deemed
to be at a “point in time”.
u
Customer receives benefits as performed/another would need to re-perform.
u
Create/enhance an asset a customer controls.
u
Does not create an asset with alternative use and a right to payment for
work to date.
The Group recognises revenue at a point in time where there is a distinct
obligation to transfer goods to the customer, none of the above criteria are
met and the transfer to the customer of control of the goods has taken place.
The Group exercises judgement on the point at which transfer of control has taken
place, which is, dependent upon individual contract shipment terms, typically
assessed to be when risk in the goods has been assumed by the customer, which is
either when delivered or when collected under ex-works arrangements. The goods
supplied are primarily medical devices or parts used in medical devices.
The Group recognises revenue over time where there is an obligation to transfer a
service to the customer. This applies to the provision of technical support of products
which are owned by the customer, under a service contract running for a contract
period, which provides for service visits as well as attendance for non-routine faults
during the term of the contract. The Group recognises the revenue evenly over the
duration of the contract as the timing of the visits and provision of the service is not
predetermined and this, in the judgement of the Directors, is the most appropriate
reflection of the service being provided. The recognition of revenue over time results
in contact liabilities being recognised on the Balance Sheet.
The transaction price applied to recognise revenue is the price reflected in the
sales invoice submitted to the customer, both for at the point of sale and over
time which are invoiced separately.
Revenue is shown net of value added tax, returns, rebates and discounts.
1. Accounting policies continued
Notes forming part of the Consolidated Financial Statements continued
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Provisions for costs are charged to the Consolidated Statement of Comprehensive
Income when incurred. No provision is made for future costs on service and
maintenance contracts. Provision is made in full for any losses as soon as they can
be foreseen. Any provisions for foreseeable losses in excess of contract balances
are included in current liabilities.
The performance of products is warranted for 12 months against clearly defined
performance specifications established by reference to the technical and
development testing carried out at the manufacturing facility. The estimated
cost of the work to be performed under warranty on items sold by the Group
would be provided for if management were aware of any field issues that
needed rectification.
The Group also recognises revenue from the rental of its patient warming
equipment. These rental contracts contain both lease and non-lease (service)
components. The Group applies IFRS 15 to allocate the consideration relating
to the service component of the contracts, over the contract term. The lease
component is accounted for as a finance lease in accordance with IFRS 16.
On commencement of the lease, the lease component is initially recognised as a
receivable at an amount equal to the net investment in the lease, with an equal
amount recognised as revenue.
Dividends
Dividends proposed by the Board are recognised in the Financial Statements
when they have been approved by shareholders at the AGM. Interim dividends
are recognised when they are paid.
Segment reporting
An operating segment is a component of the Group that engages in business
activities from which it may earn revenues and incur expenses, including
revenue and expenses that relate to transactions with any of the Group’s other
components. The Board of Directors consider that it is appropriate to report results
as one single business segment. This is consistent with management accounting
information reported regularly to the Board. The Group’s Chief Operating Decision
Maker is considered to be the Board.
Taxation
Tax on the profit or loss for the year comprises the current and deferred tax.
Tax is recognised in the Consolidated Statement of Comprehensive Income
except to the extent that it relates to items directly recognised in equity, in which
case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted at the year-end date and any
adjustment in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for
taxation purposes. The following temporary differences are not provided for:
u
The initial recognition of goodwill.
u
The initial recognition of assets and liabilities that affect neither accounting nor
taxable profit other than in a business combination.
u
The differences relating to investments in subsidiaries to the extent that they
will probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected amount of
realisation or settlement of the carrying amount of assets and liabilities using
tax rates enacted or substantively enacted at the year-end date. A deferred tax
asset is recognised only to the extent that it is probable that future taxable profits
will be available, against which the temporary differences can be utilised within a
reasonable future timescale.
1. Accounting policies continued
Notes forming part of the Consolidated Financial Statements continued
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Business Combinations
The acquisition method of accounting is applied to all business combinations
made by the Group. The cost of an acquisition is measured as the aggregate
of the fair value of the assets given, equity instruments issued and liabilities
incurred or assumed at the date of exchange, at the rate of exchange (where
applicable) on the date of acquisition. Acquisition costs are expensed as incurred
and recognised within exceptional items.
Identifiable assets acquired and liabilities and contingent liabilities assumed, in
a business combination are measured initially at their fair values on the date
of acquisition, based on the rate of exchange (where applicable) on the date
of acquisition. The excess of the consideration over the fair value of the Group’s
share of identifiable net assets, including intangible assets acquired, is recorded
as goodwill.
New standards, amendments and interpretations
The following amendments were effective during the year. These amendments
do not have a material impact on the Financial Statements:
u
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice
Statement 2).
u
Definition of Accounting Estimates (Amendments to IAS 8).
u
Deferred Tax Related to Assets and Liabilities arising from a Single Transaction
(Amendments to IAS 12).
New standards and interpretations not yet effective
There are a number of standards, amendments to standards and interpretations
which have been issued by the IASB that are effective in future accounting periods
that the Group has decided not to adopt early.
The following amendments are effective for the period beginning 1 February 2024:
u
IFRS 16 Leases (Amendment - Liability in a Sale and Leaseback).
u
IAS 1 Presentation of Financial Statements (Amendment - Classification of
Liabilities as Current or Non-current).
u
IAS 1 Presentation of Financial Statements (Amendment - Non-current Liabilities
with Covenants).
The following amendments are effective for the period beginning 1 February 2025:
u
IAS 21 The Effects of Changes in Foreign Exchange Rates (Amendment - Lack of
Exchangeability).
The Group has assessed the impact of these new and forthcoming standards and
interpretations and does not believe that these standards and interpretations will
have a material impact on the Financial Statements.
Alternative financial measures
In the reporting of its financial performance, the Group uses certain measures
that are not defined under IFRS, the Generally Accepted Accounting Principles
(GAAP) under which the Group reports. The Directors believe that these non-GAAP
measures assist with the understanding of the performance of the business. These
non-GAAP measures are not a substitute for, or superior to, any IFRS measures of
performance but they have been included as the Directors consider them to be
an important means of comparing performance year-on-year and they include
key measures used within the business for assessing performance.
The Group refers to the following alternative financial measures, please refer to
the Operating and Financial review in this Annual Report for further information.
u
Adjusted EBITDA.
u
Adjusted Operating Profit.
u
Net Debt excluding IFRS 16 lease liabilities.
1. Accounting policies continued
Notes forming part of the Consolidated Financial Statements continued
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2. Segmental analysis
Inspiration Healthcare Group operates in a single business segment, providing
essential medical equipment. Within this segment the Group’s sales activities are
split into two market sectors: Neonatal and Infusion Therapy and these sectors are
defined and reported in Our business strategy and the Operating and financial
review sections of the strategic report.
3. Revenue
The Group derives revenue from the transfer of goods and services over time and
at a point in time in the following product and geographical split:
Products:
2024
£’000
2023
£’000
– Neonatal products
– Infusion products
29,097
8,533
32,105
9,128
Total
37,630
41,233
Geography:
2024
£’000
2023
£’000
Domestic
– UK
– Ireland
International
– Europe
– Asia Pacific
– Middle East & Africa
– Americas
17,680
1,001
4,354
8,436
4,206
1,953
19,340
547
5,315
9,458
5,386
1,187
Total
37,630
41,233
In the current year, no single customer accounted for more than 10% (2023: 10%)
of revenue.
All revenue reported by the Group is from contracts with customers.
The relationship between the timing of the satisfaction of the Group’s performance
obligations and the typical timing of payments from contracts with customers is
as follows:
u
Revenue for sale of goods and rental contracts is recognised at the point in
time when the goods are delivered or collected under ex-works arrangements,
which completes our performance obligation. At this point in time the
consideration is unconditional because only the passage of time is required
before payment is due. Payment is typically due between 30 and 60 days
following delivery of the goods.
u
For revenue recognised over time, payment is typically received annually in
advance of the service contract commencing. The performance obligations
are met over the duration of the contract. A Contract Liability is recognised
and adjusted at each reporting period to reflect unsatisfied performance
obligations based on a straight-lined apportioned basis over the term of the
customer contract. Included in revenue for the year is £531,000 which had been
included in Contract Liabilities at 1 February 2023 (1 February 2022: £524,000).
See note 20 on Contract Liabilities.
The Group does not currently have any material value of contracts where the
period between the transfer of the goods or services to the customer and
payment by the customer exceeds one year. As a consequence, the Group does
not adjust any of the transaction prices for the time value of money.
The contracts from customers do not include any variable consideration.
There are no obligations for returns or refunds other than any required by law in
the United Kingdom.
Costs associated with the fulfilment of the contracts from customers are either, in
the case of revenue recognised at a point in time, recognised at the same time
as the revenue is recognised, or, in the case of revenue recognised over time, as
incurred. No costs of obtaining contracts are capitalised.
Notes forming part of the Consolidated Financial Statements continued
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4(a). Expenses by nature
Note
2024
£’000
2023
£’000
Cost of Sales
Employee benefit expense 1
Depreciation
– property, plant and equipment
– right of use assets
Amortisation
– intangible fixed assets
– acquisition related intangible assets
Trade receivables loss allowance
Loss/(profit) on disposal of intangible and
tangible assets
Foreign exchange losses/(gains)
R&D expenditure
Non-recurring costs
Other expenses
5
11
12
10
10
4(b)
19,743
11,042
685
607
539
605
232
109
110
118
4,527
4,240
23,140
10,326
523
831
326
605
4
(20)
(79)
116
1,158
3,872
Total cost of sales and operating expenses
42,557
40,802
1 Wages and salaries of R&D employees have been included in Employee benefit expense above
The numbers above include:
2024
£’000
2023
£’000
Auditors’ remuneration
Audit fees payable to the Group’s auditor - Group
Audit fees payable to the Group’s auditor - Company
Additional costs in relations to prior year audit
260
40
–
182
30
15
Total audit fees payable to the Group’s auditor
300
227
Non-audit services provided by the Group’s auditor
4
4
Total non-audit services provided by the Group’s auditor
4
4
4(b). Non-recurring items
During the year, the Group recognised the following non-recurring items:
2024
£’000
2023
£’000
Impairment of capitalised development costs
Impairment (credit)/charge on leased properties
Acquisition costs
Restructuring
Other
4,120
(86)
69
142
282
–
446
467
–
245
Total non-recurring items
4,527
1,158
An impairment charge of £4,120,000 has been recognised in relation to capitalised
development costs, following the decision to cease work on a number of projects
and to focus resources on a smaller number of strategic projects.
An impairment credit of £86,000 has been recognised in the year following the
sub-lease of vacant properties that were impaired in the prior year. In 2023,
following the move to our new Manufacturing and Technology Centre, the Group
took the decision to consolidate its property portfolio and, as a result, there was
an impairment of our right of use assets and leases of £446,000, relating to our
Leicester, Crawley and former Croydon properties.
Acquisition costs in the year of £69,000 were incurred including legal and professional
fees in relation to the acquisition of Airon Corporation. In the prior year, acquisition
costs of £467,000 covered professional fees relating to an aborted acquisition.
Restructuring costs of £142,000 relate to redundancy and severance costs incurred
as a result of the consolidation of the Group’s property portfolio and moving all roles
to the Group’s new premises in Croydon.
Other non-recurring charges include £133,000 which relate to project consultancy
costs incurred in the year. £149,000 were legal and professional fees relating to a
contract dispute.
Notes forming part of the Consolidated Financial Statements continued
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5. Employees
2024
£’000
2023
£’000
Aggregate employee costs are as follows:
Wages and salaries
Social security costs
Defined contribution pension scheme cost
Share-based payment (credit)/expense
9,535
1,079
480
(52)
8,645
1,069
480
132
Total
11,042
10,326
Employee costs include the costs of the Executive and Non-executive Directors
along with severance payments of £20,000 (2023: £30,000).
Key management
Key management control 7% (2023: 7%) of the voting shares of the Company.
Key management comprises the Group’s Executive and Non-executive Directors,
as well as the Group’s Interim Chief Financial Officer, who was employed by the
Group until August 2023.
The aggregate compensation for key management personnel is as follows:
2024
£’000
2023
£’000
Salaries and benefits
Contributions to defined contribution pension scheme
951
34
755
24
Total
985
779
The total remuneration of the highest paid director in the year was £248,000
(2023: £253,000).
Monthly average number of persons employed (including Executive and
Non-executive Directors and excluding agency staff) analysed by category:
2024
2023
Management and Administration
Sales
Development and Quality
Production
80
33
59
52
74
40
61
35
Total
224
210
Notes forming part of the Consolidated Financial Statements continued
The number of Directors for whom retirement benefits are accruing under defined
contribution pension schemes during the year were 3 (2023: 3).
No directors exercised share options during the year (2023: none).
Directors’ remuneration for the year is as follows:
2024
£’000
2023
£’000
Salaries and benefits
Contributions to defined contribution pension scheme
697
24
720
24
Total
721
744
Please refer to the Directors’ Remuneration Report for further detail.
6. Finance income and expense
2024
£’000
2023
£’000
Finance income
Interest receivable – Leases
Bank interest receivable
40
21
35
5
Total finance income
61
40
Finance expense
Bank interest payable
Interest payable – Leases
Other interest payable
(528)
(272)
(10)
(84)
(300)
(11)
Total finance expense
(810)
(395)
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7. Income tax
7(a). Analysis of tax for the year
Note
2024
£’000
2023
£’000
Domestic current year tax*
UK corporation tax
Current year
Prior Year Adjustment
–
37
14
28
Total current tax
37
42
Deferred tax
Origination and reversal of temporary timing
differences
Prior year adjustment
21
321
–
(668)
430
Total deferred tax
321
(238)
Tax charge/(credit) on (loss)/profit on ordinary activities
358
(196)
*All tax in both FY2024 and FY2023 arose in the UK
Notes forming part of the Consolidated Financial Statements continued
7(b). Factors affecting tax for the year
The tax assessed for the year is higher (2023: lower) than the standard rate of
corporation tax in the UK 24.0% (2023: 19.0%) as explained below:
Effective Tax Rate
2024
£’000
2023
£’000
2024
%
2023
%
(Loss)/Profit on ordinary activities
before taxation
(5,676)
76
Tax using the effective UK corporation tax
rate of 24.0% (2023: 19.00%)
Effects of:
Non-deductible expenses
Additional deduction for research
and development
Fixed asset differences
Adjustment in respect of prior periods
Unrecognised temporary differences
(1,362)
251
–
112
37
1,320
14
188
(314)
44
(137)
9
24.0
(4.4)
0.0
(2.0)
(0.7)
(23.3)
19.0
246.9
(413.1)
58.2
(180.7)
11.8
Total tax expense
358
(196)
Effective tax rate
(6.3)
(257.9)
Budget 2021 announced that the UK corporation tax rate was to increase from 19%
to 25% with effect from 1 April 2023. This provision was substantively enacted on 24
May 2021 and the deferred tax balances have been calculated at 25%.
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Notes forming part of the Consolidated Financial Statements continued
8. Loss per Ordinary Share
Basic (loss)/earnings per share for the year is calculated by dividing the profit
attributable to Ordinary shareholders for the year after tax by the weighted
average number of shares in issue.
Diluted (loss)/earnings per share is calculated by adjusting the weighted average
number of Ordinary Shares in issue to assume conversion of all potential dilutive
Ordinary Shares. No diluted loss per share is presented for the year ended 31
January 2024 as the exercise of share options would have the effect of reducing
loss per share and is therefore not dilutive.
2024
2023
(Loss)/Profit attributable to equity holders of the
Company £’000
Weighted average number of ordinary shares in
issue during the year
Dilutive effect of potential ordinary shares:
(6,034)
68,216,532
n/a
272
68,127,218
691,392
Diluted weighted average number of shares in issue
during the year
n/a
68,818,610
The basic and diluted earnings per share for the year are as follows:
Basic
2024
pence
Diluted
2024
pence
Basic
2023
pence
Diluted
2023
pence
(Loss)/Earnings per share (pence)
(8.85)
n/a
0.40
0.39
9. Dividends
The final dividend for the year ended 31 January 2023 of 0.41p per share was paid
on 25 July 2023. The interim dividend for the year ended 31 January 2024 of 0.205p
per share (2023: 0.205p per share) was paid on 29 December 2023. The Board are
not proposing to pay a final dividend for the year (2023: 0.41p per share).
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10. Intangible assets
Goodwill
£’000
Intangible
assets
£’000
Development
costs
£’000
Intellectual
property
£’000
Software
costs
£’000
Total
£’000
Cost
At 1 February 2022
Capitalised in the year
Disposals
7,610
–
–
5,528
–
–
4,127
1,976
(6)
276
–
–
756
140
–
18,297
2,116
(6)
At 1 February 2023
7,610
5,528
6,097
276
896
20,407
Capitalised in the year
Additions arising on
business combinations
–
328
12
–
1,135
–
–
–
63
–
1,210
328
At 31 January 2024
7,938
5,540
7,232
276
959
21,945
Accumulated Amortisation
At 1 February 2022
Charge in the year
–
–
1,028
605
780
157
276
–
388
169
2,472
931
At 1 February 2023
–
1,633
937
276
557
3,403
Charge in the year
Impairments
–
–
605
–
338
4,120
–
–
201
–
1,144
4,120
At 31 January 2024
–
2,238
5,395
276
758
8,667
Net book value
At 31 January 2024
7,938
3,302
1,837
–
201
13,278
At 31 January 2023
7,610
3,895
5,160
–
339
17,004
Notes forming part of the Consolidated Financial Statements continued
The Group tests goodwill for impairment on an annual basis, or more
frequently if there are indications that the goodwill may be impaired.
The recoverable amounts of the cash-generating unit are determined
from value in use calculations. The key assumptions for the value in
use calculations are the discount and growth rates used for future
cash flows and the anticipated future changes in revenue and costs.
The assumptions used reflect the past experience of management and
future expectations.
The forecasts covering a five-year period are based on the detailed
budget for the year ended 31 January 2025 approved by the Board. The
cashflows beyond the budget period are extrapolated for a further four-
years based on future expectations. This forecast is then extrapolated to
perpetuity using a 2.0% (2023: 2.0%) growth rate.
Annual growth rates for revenues for the five-year forecast period have
been included between 5% and 7.5% year-on-year and costs between
3% and 5% year-on-year. A post-tax discount rate of 12.5% (2023: 13.0%)
has been used in these calculations. The discount rate uses weighted
average cost of capital which is reflective of a medical device Company
operating both domestically and internationally. A discount rate of 13.3%
(2023: 19%) would need to be applied for there to be zero headroom.
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11. Property, plant and equipment
Leasehold
improvements
£’000
Fixtures
and
fittings
£’000
Plant,
machinery,
office
equipment
£’000
Motor
vehicles
£’000
Total
£’000
Cost
At 1 February 2022
Additions in the year
Disposals in the year
1,146
5,894
–
106
6
–
1,887
326
(6)
58
–
–
3,197
6,226
(6)
At 1 February 2023
7,040
112
2,207
58
9,417
Additions in the year
Disposals in the year
168
(289)
11
(45)
225
(23)
–
(8)
434
(365)
At 31 January 2024
6,919
78
2,409
50
9,486
Accumulated Depreciation
At 1 February 2022
Charge in the year
Disposals in the year
129
241
–
68
8
–
1,178
257
(2)
24
17
–
1,399
523
(2)
At 1 February 2023
370
76
1,433
41
1,920
Charge in the year
Disposals in the year
375
(192)
7
(41)
290
(19)
13
(4)
685
(256)
At 31 January 2024
553
42
1,704
50
2,349
Net book value
At 31 January 2024
6,366
36
735
–
7,137
At 31 January 2023
6,670
36
774
17
7,497
Depreciation charged for the financial year is split between cost of sales £81,000 (2023:
£60,000) and administrative expense £604,000 (2023: £463,000) in the Consolidated
Income Statement.
Notes forming part of the Consolidated Financial Statements continued
12. Leases
The Group has annual commitments under non-cancellable leases relating
primarily to land and buildings, motor vehicles and office equipment. Land
and buildings have been considered separately for lease classification. Land
and buildings amounts relate to the leasehold property at Croydon.
Right of use assets
Land and
buildings
£’000
Plant,
machinery
and motor
vehicles
£’000
Total
£’000
At 1 February 2022
Additions in the year
Amortisation
Lease remeasurement
Derecognition 1
Impairment
7,047
51
(649)
12
(312)
(446)
336
113
(182)
–
–
–
7,383
164
(831)
12
(312)
(446)
At 1 February 2023
5,703
267
5,970
Additions in the year
Amortisation
Disposal
50
(420)
–
170
(187)
(5)
220
(607)
(5)
At 31 January 2024
5,333
245
5,578
1During the prior year, the Group entered into several sub-leases of its former Croydon properties.
On commencement of the sub-leases, the right of use asset relating to the head lease was derecognised
and a net investment asset was recognised. The net investment has been presented in Trade and Other
Receivables, Note 14.
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Lease liability
Land and
buildings
£’000
Plant,
machinery
and motor
vehicles
£’000
Total
£’000
At 1 February 2022
Additions in the year
Interest expense
Lease payments
Lease remeasurement
7,220
52
289
(820)
(13)
323
113
11
(177)
–
7,543
165
300
(997)
(13)
At 1 February 2023
6,728
270
6,998
Additions in the year
Interest expense
Lease disposals
Lease payments
Lease remeasurement
50
262
(183)
(904)
(33)
170
10
–
(197)
1
220
272
(183)
(1,101)
(32)
At 31 January 2024
5,920
254
6,174
2024
£’000
2023
£’000
Current
Non-current
697
5,477
822
6,176
Total
6,174
6,998
The total cash outflow for leases during the year was £1,101,000 (2023: £997,000).
Notes forming part of the Consolidated Financial Statements continued
12. Leases continued
At 31 January 2024 and 31 January 2023, the Group’s cash commitments relating
to leases are as follows:
Total
£’000
1 year
or less
£’000
1 to 2
years
£’000
2 to 5
years
£’000
Over
5 years
£’000
At 31 January 2024
8,327
893
653
1,376
5,405
At 31 January 2023
9,462
1,094
937
1,588
5,843
13. Inventories
2024
£’000
2023
£’000
Raw materials
Work in progress
Finished goods
7,623
1,897
4,223
7,749
563
1,623
Total
13,743
9,935
Inventories are presented net of provisions of £225,000 (2023: £337,000) to write
down the values to management’s estimate of net realisable value.
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The loss allowance as at 31 January 2024 and 31 January 2023 was determined as follows for trade receivables:
31 January 2024 – £000’s
Current
More than
30 days
past due
More than
60 days
past due
More than
120 days
past due
Additional
Total
Expected loss rate
Gross carrying amount – Trade receivable
0.62%
4,065
1.31%
1,538
2.21%
845
3.52%
1,233
390
8,071
Loss allowance
26
20
19
43
390
498
31 January 2023 - £000’s
Current
More than
30 days
past due
More than
60 days
past due
More than
120 days
past due
Additional
Total
Expected loss rate
Gross carrying amount – Trade receivable
0.14%
6,887
0.43%
1,545
0.82%
1,001
0.00%
718
242
10,393
Loss allowance
9
7
8
–
242
266
Additional loss allowance represents provisions against specific trade receivables.
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable
shown above. The Group does not insure receivables or hold any collateral as security.
The carrying amounts of the Group’s receivables are denominated in the following currencies:
2024
£’000
2023
£’000
Pounds Sterling
Euro
US Dollars
Swiss Franc
7,815
158
692
4
8,991
1,870
1,024
3
Total
8,669
11,888
During the year, the Group held net investments in leases relating to the leasing of the Group’s patient
warming equipment and the sub-lease of two of its properties. The net investment recognised in respect
of these leases has been included in trade and other receivables.
Notes forming part of the Consolidated Financial Statements continued
14. Trade and other receivables
2024
£’000
2023
£’000
Trade receivables
Loss allowance
8,071
(498)
10,393
(266)
Net trade receivables
UK corporation tax receivable
Other taxes and social security
Net investment in leases
Other receivables
Prepayments and accrued
income
7,573
–
–
489
245
362
10,127
143
304
616
183
515
Total
8,669
11,888
Trade receivables are amounts due from customers
for goods sold or services performed in the ordinary
course of business and are generally due for settlement
within 30-60 days. Other receivables are generally due
for settlement within three to twelve months. Trade and
other receivables are therefore all classified as current.
Trade and other receivables are non-interest bearing
and receivable under normal commercial terms. The
Directors consider that the carrying value of trade and
other receivables approximates their fair value. Specific
provisions are made against doubtful debts arising from
contracts with customers taking the value based on the
most likely outcome.
At 31 January 2024, the Group uses a customer invoice
discounting facility with recourse, under which the Group
can borrow against certain notifiable trade receivables.
The Group is committed to underwrite any of the debts
transferred and therefore continues to recognise the
trade receivables until the debtors repay or default. Since
the trade receivables continue to be recognised, the
business model of the Group is not affected.
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Net Investment from patient warming rentals
£’000
At 1 February 2022
230
Additions in the year
Interest Income
Lease receipts
261
29
(181)
At 1 February 2023
339
Additions in the year
Interest Income
Lease receipts
154
31
(198)
At 31 January 2024
326
Net Investment from sub-lease of properties
£’000
At 1 February 2022
–
Additions in the year
Interest Income
Lease receipts
342
6
(71)
At 31 January 2023
277
Additions in the year
Interest Income
Lease receipts
–
9
(123)
At 31 January 2024
163
15. Cash and cash equivalents
Cash and cash equivalents comprise solely of cash at bank available on demand.
The Group currently uses four banks; Royal Bank of Scotland plc, HSBC Bank plc,
Bank of Scotland plc and National Westminster Bank plc. Moody’s give long-term
ratings of A1 for all four banks as at 31 January 2024.
Notes forming part of the Consolidated Financial Statements continued
14. Trade and other receivables continued
16. Current tax
The following are the major current tax assets/(liabilities) recognised by the Group.
Note
2024
£’000
2023
£’000
UK corporation tax asset
14
–
143
UK corporation tax liability
17
(82)
–
At the year-end date the Group has not recognised a separate receivable in
respect of potential research and development tax claims (2023: £nil).
17. Trade and other payables
2024
£’000
2023
£’000
Current
Trade payables
UK corporation tax
Other taxes and social security
Other payables
Accrued expenses
4,359
82
583
606
961
4,081
–
257
434
1,040
Total
6,591
5,812
The fair value of trade and other payables approximates to book value at 31 January
2024. Trade payables are non-interest bearing and the average credit period
taken for trade purchases is 70 days (2023: 48 days). Accruals are normally settled
monthly throughout the financial year.
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18. Financial liabilities
2024
£’000
2023
£’000
Current liabilities
Invoice Financing Facility
Non-current liabilities
Revolving Credit Facility (“RCF”)
1,654
5,002
2,079
4,000
6,656
6,079
Revolving Credit Facility
On 22 February 2024, the Group renewed and extended its £5.0m RCF facility. The
new facility is for a committed amount of £10.0m and will expire in February 2027
with the option to extend for a further year and attracts a 2.5% margin above
SONIA. During the year, the Group utilised £5m of the RCF facility. Covenants of
EBITDA/finance charges and net debt/EBITDA are in place and are tested quarterly.
The Company received a waiver from its bank in respect of the 31 January 2024
and 30 April 2024 covenant tests because of the delay to a material Middle East
order that was anticipated to be received before the year end.
The Company has agreed revised covenants for the period until 31 January 2025
including monthly minimum liquidity target of £1.5m and a quarterly EBITDA target.
The movement in the RCF during the year was as follows:
2024
£’000
2023
£’000
At 1 February
Proceeds from drawdown of loans
4,000
1,002
–
4,000
At 31 January
5,002
4,000
Notes forming part of the Consolidated Financial Statements continued
Invoice Financing Facility
The Group continues to benefit from an invoice financing facility to borrow
against notifiable trade receivables. The arrangement with the bank is such that
the customers remit cash directly with the bank and invoices are settled against
the facility directly. The Group continues to bear the credit risk relating to any
defaulting customers and therefore the related trade receivables continue to
be recognised on the Group’s Statement of Financial Position. Availability under
the facility is capped at £5.0m and borrowings bear interest at 2.05% over SONIA.
There are no covenants relating to this facility.
19. Financial risk management and financial instruments
The Group’s principal financial instruments comprise trade and other receivables,
cash and cash equivalents and trade and other payables. The main purpose of
these financial instruments is to finance the Group’s operations.
The policies to address the risks associated with the Group’s financial instruments
are reviewed and approved by the Board. The main risks arising from the Group’s
financial instruments are liquidity risk and credit risk. A summary of the risks is set
out below and also referred to in the Principal Risks and Uncertainties report of
this Annual Report.
The Group holds the following financial instruments:
Note
2024
£’000
2023
£’000
Financial assets
Financial assets at amortised cost
Trade receivables
Other receivables
Cash and cash equivalents
14
14
15
7,573
245
412
10,127
183
2,276
Financial Liabilities
Liabilities at amortised cost
Trade payables
Other payables
Accrued expenses
17
17
17
4,359
606
961
4,081
434
1,040
The Group has not disclosed the fair values for financial instruments such as
short-term trade receivables and payables, because their carrying amounts are
a reasonable approximation of fair values.
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Notes forming part of the Consolidated Financial Statements continued
19(a). Derivatives
The Group uses forward currency contracts to hedge its financial risks of changes
in foreign exchange rates, in relation to Euro inventory purchases during the year.
Derivatives are only used for economic hedging purposes and not as speculative
investments.
The Group did not have any forward currency contracts in FY2024 and FY2023.
Forward foreign exchange contracts are fair value adjusted through other
comprehensive income within reserves using the rate which would have been
achieved should the contracts have been instructed at the year-end. All contracts
are Level 2 financial instruments, not traded in an active market and determined
using valuation techniques which maximise the use of observable market data.
Hedge effectiveness is determined at the inception of the hedge relationship
to ensure that an economic relationship exists between the hedged item and
hedging instrument.
19(b). Credit risk
Credit risk principally arises on cash deposits and trade receivables.
The Group monitors defaults of customers and other counterparties and
incorporates this information into credit risk controls. Ongoing credit evaluation is
performed on the financial condition of accounts receivable taking into account
independent ratings (where available), its financial position, past experience and
other factors.
Management considers that all the above financial assets are of good credit
quality, including those that are past due.
The carrying value of financial assets recorded in the Financial Statements,
represents the Group’s maximum exposure to credit risk as no collateral or other
credit enhancements are held.
The credit risk for liquid funds and other short-term financial assets relates to
the banking institutions holding such funds and assets on behalf of the Group
and may therefore be higher in conditions of general banking uncertainty. The
counterparties are considered to be reputable banks with high quality external
risk ratings. Please see note 15.
19(c). Liquidity risk
In the normal course of business the Group is exposed to liquidity risk. The Group’s
objective is to ensure that sufficient resources are available to fund short-term
working capital and longer-term strategic requirements.
The Group manages its liquidity needs by monitoring cash outflows due in day-to-
day business. Liquidity needs are monitored in various time bands, on a day-to-
day and week-to-week basis. Long-term liquidity needs are monitored monthly.
At 31 January 2024 and 31 January 2023, the Group’s liabilities had contractual
maturities which are summarised as follows:
Carrying
amount
£’000
Total
£’000
1 year
or less
£’000
1 to 2
years
£’000
2 to 5
years
£’000
Over
5 years
£’000
2024
Trade payables
Lease liabilities
(4,359)
(6,174)
(4,359)
(6,174)
(4,359)
(697)
–
(435)
–
(802)
–
(4,240)
2023
Trade payables
Lease liabilities
(4,081)
(6,998)
(4,081)
(6,998)
(4,081)
(822)
–
(698)
–
(983)
–
(4,495)
19(d). Interest rate risk
Although the Group’s financing activities in the year expose it to the financial risks
of interest rates, the Directors do not believe that the Group’s financial stability is
threatened because of this risk as interest expense is not considered signficant to
the Group. The Board keeps this risk under regular review. and will, as appropriate,
enter into derivative financial instruments in order to manage any significant risks.
Interest rate sensitivity
If the Bank of England SONIA interest rate increased by 1% and all other variables
remained constant, the Group’s profit after tax for the year and reserves would
have decreased by £71,000. (2023: £50,000).
19. Financial risk management and financial instruments continued
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19(e) Foreign currency risk
Although the Group has some exposure to foreign currency risk from trading
transactions in currencies other than GBP, the Directors do not believe that the
Group’s financial stability is threatened because of an exposure to this risk as
there is a natural hedge due to the balance of imports and exports. The Board
keeps this risk under regular review, and will, as appropriate, enter into derivative
financial instruments in order to manage any significant risks.
19(f) Capital risk
The Group establishes credit limits for all financial instruments taking into account
independent ratings, past experience and other factors. The capital risk of cash
deposits is further reduced by spreading investment across more than one bank.
19(g) Capital management
The Directors’ objectives when managing capital are to safeguard the Group’s
ability to continue as a going concern in order to provide returns for shareholders
and benefits for other stakeholders and to maintain an optimal capital structure
to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may issue new
shares, adjust the amount of dividends paid to shareholders, return capital to
shareholders or sell assets to reduce debt.
20. Contract liabilities
Contract Liabilities arise from unsatisfied performance obligations on rental,
managed service, service or maintenance contracts where revenue is recognised
over time. The revenue recognition accounting policy is explained in note 1.
Notes forming part of the Consolidated Financial Statements continued
The profile of when this income will be recognised in the Consolidated Statement
of Comprehensive Income is as follows:
Within 1
year
£’000
1 to 2
years
£’000
2 to 3
years
£’000
3 to 4
years
£’000
4 to 5
years
£’000
Total
£’000
31 January 2024
31 January 2023
625
531
–
–
–
–
–
–
–
–
625
531
21. Deferred tax
The following are the major deferred tax liabilities and assets recognised by the
Group and movements thereon during the current and prior reporting year.
Note that the effective future tax rate is 25% (2023: 25%).
2024
£’000
2023
£’000
Asset at beginning of year
(Charge)/Credit to the Income Statement for the year
2,363
(1,059)
2,012
351
Asset at end of year
1,304
2,363
2024
£’000
2023
£’000
Liability at beginning of year
Credit/(Charge) to the Income Statement for the year
Included on business combinations
(2,039)
737
(2)
(1,925)
(114)
–
Liability at end of year
(1,304)
(2,039)
19. Financial risk management and financial instruments continued
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The elements of deferred taxation provided for are as follows:
2024
£’000
2023
£’000
Unused tax losses relating to SLE
Unused tax losses relating to Inditherm
Short-term timing differences
1,082
–
222
1,959
331
73
Deferred tax asset
1,304
2,363
2024
£’000
2023
£’000
Accelerated capital allowances
Intangible assets
Intangibles arising on business combinations
(222)
(259)
(823)
(186)
(879)
(974)
Deferred tax liability
(1,304)
(2,039)
The Deferred tax assets and deferred tax liabilities have been presented on a net
basis in the Consolidated Statements of Financial Position, as follows:
2024
£’000
2023
£’000
Deferred tax asset
Deferred tax liability
1,304
(1,304)
2,363
(2,039)
Net deferred tax asset
–
324
Notes forming part of the Consolidated Financial Statements continued
21. Deferred tax continued
At the year end date the Group had gross tax losses of £17,490,342 (2023:
£15,248,186) potentially available to offset against future profits, which largely relate
to the unused losses arising in SLE Limited prior to the acquisition by Inspiration
Healthcare Group plc on 7 July 2020 (2024: £8,569,430, 2023: £7,834,659) and
brought forward losses transferred to the Group due to the reverse acquisition of
Inditherm plc (2024:£7,223,477 and 2023: £7,342,903). These losses can be carried
forward and utilised against any future taxable profits of the same business from
which they were generated.
Following a review of the future taxable profits of the above business streams, the
Group has concluded that no deferred tax asset should be recognised in the year
in respect of these losses as a result of the losses incurred in the year and the
expected future benefits of R&D tax credits.
Budget 2021 announced that the UK corporation tax rate was to increase from 19%
to 25% with effect from 1 April 2023. A small profits rate of 19% applies for taxable
profits of £50,000 or less and a tapered rate will apply to companies with taxable
profits between £50,001 and £249,999. This provision was substantively enacted on
24 May 2021 and the deferred tax balances have been calculated at 25%.
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22. Shareholders’ equity
22(a). Called up share capital
Share Capital
Number of shares
(Allotted & Issued)
Share capital
£’000
At 1 February 2023
Issue of share options
68,130,606
104,196
6,813
10
At 31 January 2024
68,234,802
6,823
The Group issued 104,196 (2023: 9,159) shares on the exercise of share options
relating to the employee share option scheme.
The holders of Ordinary Shares are entitled to receive dividends as declared from
time to time and are entitled to one vote per share at meetings of the Company.
Ordinary shares have the same rights.
For the purpose of preparing the Consolidated Financial Statements of the Group,
the Share Capital represents the nominal value of the issued share capital of 10p
per share.
22(b). Share premium
Share Premium
£’000
At 1 February 2023
Issue of share options
18,842
63
At 31 January 2024
18,905
22(c). Reverse acquisition reserve
The reverse acquisition reserve of £(16,164,000) (2023: £(16,164,000)) arose on the
reverse acquisition of Inditherm plc in 2015.
22(d). Share-based payment reserve
The share based payment reserve of £280,000 (2023: £405,000), represents the
cumulative expense recognised in the Consolidated Income Statement in relation
to the Group’s share awards. See note 24.
23. Commitments
23(a). Capital commitments
At 31 January 2024, the Company had capital expenditure commitments totalling
£nil (2023: £nil).
23(b). Lease commitments
The total amount included within administrative expenses in relation to short-
term leases during the year was £7,000 (2023: £2,000). All balances are due within
12 months.
Notes forming part of the Consolidated Financial Statements continued
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24. Share-based payments
Share Incentive Plan
The Group operates an employee share option scheme which is available to
a number of employees and Directors and is designed to provide long-term
incentives for senior managers and above to deliver long-term shareholder
returns. Under the plan, participants are granted options which only vest if
certain performance standards are met. Participation in the plan is at the Board’s
discretion and no individual has a contractual right to participate in the plan or
receive any guaranteed benefits.
The amount of options that will vest depends on performance measures based
on EBITDA margin, Revenue growth and new product release over a performance
period of three years or other measures determined by the Remuneration
Committee. Once vested, the options remain exercisable for a period of two years.
When exercisable, each option is convertible into one ordinary share of 10p each.
The Black Scholes model is used to determine fair value.
Details of the share options outstanding at 31 January 2024 and movements
during the year by exercise price is shown below:
2024
2023
Average
exercise
price per
share option
Number of
options
Average
exercise
price per
share option
Number of
options
Outstanding as at 1 February
Granted during the year
Exercised during the year
Forfeited during the year
Lapsed during the year
£nil
£nil
£nil
£nil
£nil
397,282
1,255,273
(104,196)
–
(52,500)
£nil
£nil
£nil
£nil
£nil
477,538
–
(6,250)
(67,756)
(6,250)
Outstanding as at 31 January
£nil
1,495,859
£nil
397,282
Exercisable as at 31 January
£nil
88,637
£nil
192,833
Notes forming part of the Consolidated Financial Statements continued
Share options outstanding at the end of the year have the following expiry dates
and exercise prices:
Grant date
Expiry date
Exercise
price
Share
options
31 January
2024
Share
options
31 January
2023
7 November 2018
7 May 2021
31 January 2023
8 June 2023
12 June 2023
26 April 2023
30 April 2026
30 April 2027
30 April 2028
30 April 2029
£nil
£nil
£nil
£nil
£nil
88,637
151,949
459,512
573,539
222,222
192,833
204,449
–
–
–
Total
1,495,859
397,282
Weighted average remaining contractual life of options
outstanding at the end of the year
3.6 years
1.8 years
The assessed fair value at grant date of options granted during the year ended
31 January 2024 was £0.48 and £0.43 (2023: £0.53). Fair value is determined by the
Black-Scholes pricing model.
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Sharesave Plan
The Group operates an employee Sharesave scheme which is available to all
employees subject to qualifying conditions. The scheme encourages wider
employee share ownership of the Company.
The options are exercisable after three years from date of grant. When exercisable,
each option is convertible into one ordinary share of 10p each.
Details of the share options outstanding at 31 January 2024 and movements
during the year by exercise price is shown below:
2024
2023
Average
exercise
price per
share option
Number of
options
Average
exercise
price per
share option
Number of
options
Outstanding as at 1 February
Granted during the year
Exercised during the year
Forfeited during the year
£0.75
£0.40
£0.55
£0.65
326,159
232,105
(2,545)
(197,534)
£0.87
£0.82
£0.55
£0.73
310,524
115,126
(2,909)
(96,582)
As at 31 January
£0.58
358,185
£0.75
326,159
Share options outstanding at the end of the year have the following expiry dates
and exercise prices:
Grant date
Expiry date
Exercise
price
Share
options
31 January
2024
Share
options
31 January
2023
20 March 2020
26 March 2021
31 March 2022
06 April 2023
19 March 2023
25 March 2024
30 March 2025
05 April 2026
£0.55
£0.87
£0.82
£0.40
–
79,500
64,400
214,285
108,969
119,708
97,482
–
Total
358,185
326,159
Notes forming part of the Consolidated Financial Statements continued
A credit of £52,000 (2023: charge of £132,000) has been recognised within
administrative expenses in the Consolidated Income Statement in respect of the
above share options, as a result of share awards that have lapsed in the year and
non-market performance conditions that are not expected to be met.
There were no cash settled share-based payment transactions.
25. Contingent liabilities
During the normal course of business, the Group offers warranties on its products
against clearly defined performance specifications.
As at 31 January 2024 management are not aware of any material field issues that
would require provision to be made for products supplied for distribution outside
of manufacturers warranties (2023: No material field issues noted).
26. Pension schemes
The Group made contributions in respect of defined contribution pension
arrangements of £480,000 (2023: £480,000). At the year end the amount of
contributions payable to the schemes were £153,000 (2023: £25,000).
24. Share-based payments continued
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27. Business combinations
On 3 January 2024, the Group purchased 100% of the share capital in Airon
Corporation, a specialist respiratory device company based in Florida, USA.
Airon Corporation is recognised as a leading manufacturer of specialist pneumatic
oxygen-powered life support ventilators. These devices have diverse applications,
including use in Magnetic Resonance Imaging (MRI) machines and transportation
for neonates to adults. The company also offers a range of continuous positive
airway pressure (CPAP) devices, crucial in emergency medicine for supporting
children and adult patients.
In the period from acquisition to 31 January 2024, Airon contributed £181,000 of net
revenue to the Group and £28,000 of operating profit.
Consideration transferred on acquisition
USD $’000
£’000
Cash
1,500
1,178
Total
1,500
1,178
Net cash flow on acquisition
USD $’000
£’000
Cash
Cash acquired
1,500
(82)
1,178
(64)
Total
1,418
1,114
Acquisition-related fees amount to £69,000 have been excluded from the
consideration transferred and have been recognised as an expense in the Income
Statement in the current period.
Notes forming part of the Consolidated Financial Statements continued
Assets acquired and liabilities recognised at the date of acquisition
Opening balance sheet value
Fair Value
USD $’000
£’000
USD $’000
£’000
Assets
Non-current assets
Intangible assets
Right of use assets
–
63
–
50
15
63
12
50
63
50
78
62
Current assets
Inventories
Trade and other receivables
Short-term investments
Cash and cash equivalents
548
276
250
82
430
217
197
64
548
276
250
82
430
217
197
64
1,156
908
1,156
908
Total assets
1,219
958
1,234
970
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
(86)
(63)
(68)
(50)
(86)
(63)
(68)
(50)
(149)
(118)
(149)
(118)
Non-current liabilities
Deferred tax liability
–
–
(3)
(2)
–
–
(3)
(2)
Total liabilities
(149)
(118)
(152)
(120)
Net assets
1,070
840
1,082
850
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28. Related party transactions
There is no ultimate controlling party.
Lease of Leicestershire Facility
The Leicestershire facility at Earl Shilton was rented on an arms length basis for
£22,000 per annum (2023: £22,000) from a self-invested pension plan controlled
by Neil Campbell and others, prior to the lease termination in October 2023.
Employment of Related Parties
Several close family members of the Directors are employed by the Group, and
they are remunerated at a fair market rate which is commensurate with their role.
29. Subsequent events
On 26 June 2024, the Company announced a placing, subscription and retail offer
(‘the Fundraising’) to raise gross proceeds of £3.0 million. The net proceeds of the
Fundraising (approximately £2.8 million) are to be used to reduce net debt and
provide additional liquidity headroom to the Group. The Fundraising was approved
by shareholders in a general meeting on 22 July 2024, following which 21,428,570
new ordinary shares in the Company were issued and admitted to trading on AIM
on 23 July 2024. Following the Fundraising, the Company is able to make further
draw downs of the full undrawn amount of the RCF without HSBC consent, subject
only to ongoing covenant compliance, including monthly minimum liquidity level
of £1.5 million.
In June 2024, the Directors made the decision to close the Hailsham site from
the end of July 2024, further rationalising the Group’s operating sites. Certain
activities will be transferred to the Group’s Manufacturing and Technology Centre
in Croydon while others are outsourced to long-term supply partners.
Goodwill arising on acquisition
Goodwill arose in the acquisition because the consideration paid for the
combination effectively included amounts in relation to the benefit of expected
synergies, revenue growth and future market development. These benefits are not
recognised separately from goodwill because they do not meet the recognition
criteria for identifiable intangible assets
None of the goodwill is expected to be deductible for tax purposes.
USD $’000
£’000
Consideration transferred
Less fair value of identifiable net assets acquired
1,500
(1,082)
1,178
(850)
Goodwill recognised in the period
418
328
Contingent consideration
Contingent consideration is due to the shareholders of Airon, based on revenue
targets for the 12month period ending on 30 April 2025. The maximum amount
payable is $1,000,000 if the highest revenue target is achieved. Any contingent
consideration due is payable in June 2025. None of the contingent consideration
has been provided for, either at the acquisition date or at 31 January 2024 as
management forecasts prepared at that date indicated that the minimum
threshold for the earn-out would not be met.
Airon revenues in the initial months post-acquisition have shown growth due
to a number of factors that have arisen since the year end, that if maintained
for the whole of the earn out period, would result in the maximum contingent
consideration being paid.
27. Business combinations continued
Notes forming part of the Consolidated Financial Statements continued
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Company Statement of Financial Position
as at 31 January 2024
(Registered Number: 03587944)
Note
2024
£’000
2023
£’000
Assets
Non-current assets
Investments
Right of use assets
Deferred tax asset
4
5
9
25,742
53
–
32,881
–
43
25,795
32,924
Current assets
Trade and other receivables
Cash and cash equivalents
6
7
6,826
50
7,996
199
6,876
8,195
Total assets
32,671
41,119
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
8
5
(10,966)
(16)
(8,594)
–
(10,982)
(8,594)
Non-current liabilities
Lease liabilities
Borrowings
5
10
(34)
(5,002)
–
(4,000)
(5,036)
(4,000)
Total liabilities
(16,018)
(12,594)
Net assets
16,653
28,525
Shareholders’ equity
Called up share capital
Share premium account
Share-based payment reserve
Retained earnings
11
11
11
6,823
18,905
435
(9,510)
6,813
18,842
560
2,310
Total equity
16,653
28,525
The Company has elected to take the exemption under section 408 of the
Companies Act 2006 from presenting the Company profit and loss account.
The Company’s loss for the year ended 31 January 2024 is £11,400,000 (£2,802,000,
excluding non-recurring items) (2023: profit of £2,098,000 (£2,643,000 excluding
non-recurring items)).
The accompanying notes form an integral part of these Financial Statements.
The Company Financial Statements were approved by the Board of Directors on
on 30 July 2024 and signed on its behalf by:
Alan Olby
Roy Davis
Director
Director
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Issued
share
capital
£’000
Share
premium
account
£’000
Share
based
payment
reserve
£’000
Other
reserves
£’000
Retained
earnings
£’000
Total
£’000
At 1 February 2022
Profit for the year
Cash flow hedges:
Income recognised on hedging instruments
6,812
–
–
18,838
–
–
433
–
–
–
–
–
631
2,098
–
26,714
2,098
–
Total comprehensive income for the year
–
–
–
–
2,098
2,098
Transactions with owners in their capacity as owners
Issue of ordinary shares, net of transaction costs and tax
Dividends
Employee share scheme expense
1
–
–
4
–
–
(5)
–
132
–
–
–
–
(419)
–
–
(419)
132
Total transactions with owners
1
4
127
–
(419)
(287)
At 31 January 2023
Loss for the year
6,813
–
18,842
–
560
–
–
–
2,310
(11,400)
28,525
(11,400)
Total comprehensive income for the year
–
–
–
–
(11,400)
(11,400)
Transactions with owners in their capacity as owners
Issue of Ordinary Shares, net of transaction costs and tax
Dividends
Employee share scheme credit
10
–
–
63
–
–
(73)
–
(52)
–
–
–
–
(420)
–
–
(420)
(52)
Total transactions with owners
10
63
(125)
–
(420)
(472)
At 31 January 2024
6,823
18,905
435
–
(9,510)
16,653
The accompanying notes form an integral part of these Financial Statements.
Company Statement of Changes in Equity
for the year ended 31 January 2024
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1. Accounting policies
Basis of preparation
The Company Financial Statements cover the year ended 31 January 2024.
The Financial Statements have been prepared in accordance with Financial
Reporting Standard 101, ‘Reduced Disclosure Framework’ (“FRS 101”). The Financial
Statements have been prepared under the historical cost convention and in
accordance with the Companies Act 2006 as applicable to companies using
FRS 101.
The preparation of Financial Statements in conformity with FRS 101 requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Company’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 elsewhere in this note.
The following exemptions from the requirements of IFRS have been applied in the
preparation of the Company Financial Statements, in accordance with FRS 101:
u
Paragraphs 45(b) and 46 to 52 of IFRS 2, ‘Share-based payment’ (details of the
number and weighted-average exercise prices of share options, and how the
fair value of goods or services received was determined).
u
IFRS 7, ‘Financial Instruments: Disclosures’
u
Paragraphs 91 to 99 of IFRS 13, ‘Fair value measurement’ (disclosure of valuation
techniques and inputs used for fair value measurement of assets and liabilities).
u
Paragraph 38 of IAS 1, ‘Presentation of Financial Statements’ comparative
information requirements in respect of:
– paragraph 79(a)(iv) of IAS 1
– paragraph 73(e) of IAS 16 Property, plant and equipment.
u
The following paragraphs of IAS 1, ‘Presentation of Financial Statements’:
– 10(d) (statement of cash flows)
– 10(f) (a statement of financial position as at the beginning of the preceding
period when an entity applies an accounting policy retrospectively or makes
a retrospective restatement of items in its financial statements, or when it
reclassifies items in its financial statements)
– 16 (statement of compliance with all IFRS)
– 38A (requirement for minimum of two primary statements, including cash
flow statements)
– 38B-D (additional comparative information)
– 40A-D (requirements for a third statement of financial position)
– 111 (cash flow statement information)
– 134-136 (capital management disclosures).
u
IAS 7, ‘Statement of cash flows’.
u
Paragraph 30 and 31 of IAS 8 ‘Accounting policies, changes in accounting
estimates and errors’ (requirement for the disclosure of information when an
entity has not applied a new IFRS that has been issued but is not yet effective).
u
Paragraph 17 of IAS 24, ‘Related party disclosures’ (key management
compensation).
u
The requirements in IAS 24, ‘Related party disclosures’ to disclose related party
transactions entered into between two or more wholly owned members of a
group.
Significant accounting policies
The significant accounting policies adopted by the Company are the same
as those disclosed in Note 1 to the Consolidated Financial Statements. The
relevant accounting policies for the Company that are disclosed in Note 1 to the
Consolidated financial starements are as follows:
u
Cash and cash equivalents.
u
Trade and other receivables.
u
Trade and other payables.
u
Share capital.
u
Taxation.
Notes forming part of the Company Financial Statements
for the year ended 31 January 2024
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The accounting policies relevant only to the Company are as follows:
Investments
Investments held are stated at cost less provision for any impairment in value and
are classified as financial asset at fair value through profit or loss.
This classification depends on the Company’s business model for managing
financial assets.
Critical estimate and judgements
Impairment of investments in subsidiaries
The carrying value of investments in subsidiaries is disclosed in Note 4 of the
Company Financial Statements. Determining whether an investment is impaired
involves management’s judgement, requiring assessment of the recoverable
amount, by comparing to market capitalisation at differing points during the year.
2. Employees
2024
£’000
2023
£’000
Aggregate employee costs are as follows:
Wages and salaries
Social security costs
Defined contribution pension scheme cost
Share based payment expense
1,341
153
61
235
1,203
162
79
132
Total
1,790
1,576
Company employment costs are recharged from its subsidiary company,
Inspiration Healthcare Limited, and include the costs of the Directors of the Group
and senior management working in Group roles.
No employees are directly employed by the Company.
No emoluments were directly paid by the Company.
3. Auditor’s remuneration
The auditor’s remuneration relating to audit services to the Company has been
disclosed in Note 4 to the Consolidated Financial Statements.
4. Investments
Note
£’000
Cost
At 31 January 2023
Additions in the year
At 31 January 2024
32,881
1,248
34,129
Accumulated amortisation and impairment
At 31 January 2023
Impairment
At 31 January 2024
–
8,387
8,387
Net book value
At 31 January 2024
25,742
At 31 January 2023
32,881
The additions in the year relate to the acquisition of Airon Corporation on 3 January
2024, see note 27.
An impairment of £8,387,000 was recognised during the year to reflect the current
carrying value of the underlying investments.
Notes forming part of the Company Financial Statements continued
1. Accounting policies continued
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Notes forming part of the Company Financial Statements continued
The Company has the following interests in subsidiary undertakings registered and operating in England and Wales:
Name
Nature of business
Direct/indirect
ownership
% of total issued
share capital
Class of
share
Inspiration Healthcare Limited
Inspiration Homecare Limited *
Inditherm Limited *
Inditherm (Medical) Limited *
Inditherm (UK) Limited *
Inditherm Construction Limited *
Vio Holdings Limited
Viomedex Limited
Sale of medical goods
Dormant
Dormant
Holding Company for intellectual property rights
Dormant
Dormant
Holding Company
Sale and manufacture of medical goods
Direct
Indirect
Indirect
Direct
Direct
Direct
Direct
Indirect
100
100
100
100
100
100
100
100
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
The registered office of the above companies is:
Unit 7/8 Commerce Park, Commerce Way, Croydon, CR0 4YL
SLE Limited
Sale and manufacture of medical goods
Direct
100
Ordinary
The registered office of the above Company is:
Unit 7/8 Commerce Park, Commerce Way, Croydon, CR0 4YL
Anaesthetic Services Systems Limited*
Dormant
Indirect
100
Ordinary
The registered office of the above Company is:
C10 Strangford Park Ards Business Centre, Jubilee Road, Newtownards, Co Down, BT23 4YH
Inspiration Healthcare Ireland Limited*
Dormant
Indirect
100
Ordinary
The registered office of the above Company is:
The Black Church, St. Mary’s Place, Dublin, D07 P4AX
Airon Corporation
Sale and manufacture of medical goods
Direct
100
Ordinary
The registered office of the above Company is:
751 North Dr STE 6, Melbourne, FL 32934, United States
* Entities exempt from the requirement to have a statutory audit
4. Investments continued
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5. Leases
The Company has annual commitments under non-cancellable leases relating
motor vehicles.
Right of use assets
Plant,
machinery
and motor
vehicles
£’000
Total
£’000
At 31 January 2022 and 31 January 2023
–
–
Additions in the year
Amortisation
56
(3)
56
(3)
At 31 January 2024
53
53
Lease liability
Plant,
machinery
and motor
vehicles
£’000
Total
£’000
At 31 January 2022 and 31 January 2023
–
–
Additions in the year
Interest expense
Lease payments
56
1
(7)
56
1
(7)
At 31 January 2024
50
50
Notes forming part of the Company Financial Statements continued
2024
£’000
2023
£’000
Current
Non-current
16
34
–
–
Total
50
–
The total cash outflow for leases during the year was £7,000 (2023: £nil).
At 31 January 2024 and 31 January 2023, the Company’s cash commitments
relating to leases are as follows:
Total
£’000
1 year
or less
£’000
1 to 2
years
£’000
2 to 5
years
£’000
Over
5 years
£’000
At 31 January 2024
At 31 January 2023
56
–
20
–
20
–
16
–
–
–
6. Trade and other receivables
2024
£’000
2023
£’000
Amounts receivable from subsidiary undertakings
Other taxes and social security
Other receivables
Prepayments and accrued income
6,719
43
10
54
7,688
187
18
103
Total
6,826
7,996
Trade and other receivables are non-interest bearing and receivable under
normal commercial terms. The Directors consider that the carrying value of trade
and other receivables approximates their fair value.
The carrying amounts of the Group’s receivables are denominated in Pound
Sterling.
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Notes forming part of the Company Financial Statements continued
7. Cash and cash equivalents
Cash and cash equivalents comprise solely of cash at bank and cash held by
the Company.
The Company currently banks with HSBC Bank plc, which has a Moody’s long-term
rating of A1 as at 31 January 2024.
8. Trade and other payables
2024
£’000
2023
£’000
Current
Trade payables
Amounts payable to subsidiary undertakings
Other payables
Accrued expenses
99
10,520
3
344
204
8,141
3
246
Total
10,966
8,594
The fair value of trade and other payables approximates to book value at 31 January
2024. Amounts due to Group undertakings are non-interest bearing, unsecured
and repayable on demand.
9. Deferred tax
The following are the major deferred tax assets recognised by the Company and
movements thereon during the current and prior reporting year.
Note that the effective future tax rate is 25% (2022: 25%).
2024
£’000
2023
£’000
Asset at beginning of year
Charge to the Income Statement for the year
43
(43)
63
(20)
Asset at end of year
–
43
The elements of deferred taxation provided for are as follows:
2024
£’000
2023
£’000
Short-term timing differences
–
43
Deferred tax asset
–
43
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11. Shareholders’ equity
11(a). Called up share capital and share premium
The Share Capital and Share Premium amounts have been disclosed in Note 22
to the Consolidated Financial Statements.
11(b). Share-based payment reserve
The share based payment reserve of £435,000 (2023: £560,000), represents the
cumulative expense recognised in the Company level Income Statement in
relation to the Company’s share awards.
12. Subsequent events
On 26 June 2024, the Company announced a placing, subscription and retail offer
(‘the Fundraising’) to raise gross proceeds of £3.0 million. The net proceeds of the
Fundraising (approximately £2.8 million) are to be used to reduce net debt and
provide additional liquidity headroom to the Group. The Fundraising was approved
by shareholders in a general meeting on 22 July 2024, following which 21,428,570
new ordinary shares in the Company were issued and admitted to trading on AIM
on 23 July 2024. Following the Fundraising, the Company is able to make further
draw downs of the full undrawn amount of the RCF without HSBC consent, subject
only to ongoing covenant compliance, including monthly minimum liquidity level
of £1.5 million.
10. Borrowings
2024
£’000
2023
£’000
Revolving Credit Facility ("RCF")
5,002
4,000
Total
5,002
4,000
£5m (2023: £4m) has been presented as a non-current liability in the Statement of
Financial Position as at 31 January 2024.
On 22 February 2024, the Company renewed and extended its £5.0m RCF facility.
The new facility is for a committed amount of £10.0m and will expire in February
2027 with the option to extend for a further year and attracts a 2.5% margin above
SONIA. During the year, the Company utilised £5m of the RCF facility. Covenants of
EBITDA/finance charges and net debt/EBITDA are in place and are tested quarterly.
The Company received a waiver from its bank in respect of the 31 January 2024
and 30 April 2024 covenant tests because of the delay to a material Middle East
order that was anticipated to be received before the year end.
The Company has agreed revised covenants for the period until 31 January 2025
including monthly minimum liquidity target of £1.5m and a quarterly EBITDA target.
The movement in the RCF during the year was as follows:
2024
£’000
2023
£’000
At 1 February
Proceeds from drawdown of loans
4,000
1,002
–
4,000
At 31 January
5,002
4,000
Notes forming part of the Company Financial Statements continued
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Shareholder
Information
Registrars
The Company’s registrars, Link Group, provide a number of services that, as a
shareholder, might be useful to you:
Registrar’s online service
By logging onto www.signalshares.com and following the prompts, shareholders
can view and amend various details on their account. You will need to register
to use this service and you will require your unique investor code, which can be
found on your share certificate, for this purpose.
Share dealing services
You can buy and sell shares through any authorised stockbroker or bank that
offers a share dealing service in the UK, or in your country of residence if outside
the UK.
Link Group also provides a share dealing service to private shareholders in the UK,
the Channel Islands or the Isle of Man.
For further information on the share dealing service provided by Link Group, or to
buy and sell shares, visit www.linksharedeal.com or call 0371 664 0445. Calls are
charged at the standard geographic rate and will vary by provider. Calls outside
the United Kingdom will be charged at the applicable international rate. Lines
are open between 08:00 – 16:30, Monday to Friday (excluding public holidays in
England and Wales).
This is not a recommendation to buy and sell shares and this service may not be
suitable for all shareholders. The price of shares can go down as well as up and
you are not guaranteed to get back the amount you originally invested. Terms,
conditions and risks apply.
Link Group is a trading name of Link Market Services Trustees Limited (registered
in England and Wales No. 2729260), which is authorised and regulated by the
Financial Conduct Authority. This service is only available to private shareholders
resident in the United Kingdom, the Channel Islands or the Isle of Man.
The registered office for Link Group is Central Square, 29 Wellington Street, Leeds
LS1 4DL.
Duplicate share register accounts
If you are receiving more than one copy of our report, it could be that your
shares are registered in two or more accounts on our register of members. If that
was not your intention, please contact Link Group who will be pleased to merge
your accounts.
For general shareholder enquiries, please contact:
Link Group, Central Square, 29 Wellington Street, Leeds LS1 4DL
Tel: 0371 664 0300
Calls are charged at the standard geographic rate and will vary by provider. Calls
outside the United Kingdom will be charged at the applicable international rate.
We are open between 09:00 - 17:30, Monday to Friday (excluding public holidays
in England and Wales).
Email: shareholderenquiries@linkgroup.co.uk
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Advisors
Company Secretary
Charlie Strickland
Registered Office
Unit 7/8 Commerce Park, Commerce Way, Croydon, CR0 4YL
Company number
03587944
Independent Auditors
BDO LLP, 2 City Place, Beehive Ring Road, Gatwick, West Sussex RH6 0PA
Bankers
HSBC Bank plc, 1st Floor, First Point, Buckingham Gate, London Gatwick
Airport, West Sussex RH6 0NT
Nominated advisor and broker Panmure Liberum Limited, Ropemaker Place, 25 Ropemaker Street, London,
EC27 9LY
Registrars
Link Group, Central Square, 29 Wellington Street, Leeds LS1 4DL