We create a welcoming space for effective
personalised digital mental health care.
Accessible to all.
Kooth Plc
Annual Report 2021
koothplc.com
We create a welcoming space for
effective personalised digital mental
health care. Accessible to all.
Strategic Report
Mental health: A growing, global challenge
Our purpose
CONTENTS PAGE
Chair’s statement
Chief Executive Officer’s statement
Kooth plc business model
Market review
Strategy
Key performance indicators
Chief Financial Officer’s Review
Environmental, Social and Governance (‘ESG’) Report
Section 172 Statement
Corporate Governance
Chairs’ Introduction to Governance
Compliance with the QCA Code
Report of the Audit Committee
Report of the Remuneration Committee
Directors’ report
Statement of Directors’ responsibilities
4
6
8
10
14
21
26
32
34
40
56
62
70
76
80
88
92
Financial Statements
Independent Auditors Report
Consolidated Financial Statements
Notes to the Consolidated Finacial Statements
Company Financial Statements
Notes to the Company Financial Statements
Company Information
94
108
113
143
145
151
Mental health: A growing,
global challenge.
Pre-pandemic, the World Economic Forum and the Harvard
School of Public Health estimated that the cost of mental health
is expected to rise to $6 trillion globally by 2030, up from $2.5
trillion in 2010.
Headline UK Statistics
25%
of adults who experience mental
illness every year.
£12.1 billion
(14.8%) of NHS commissioner budgets
spent on mental health in 2021/22.
10 million
people in the UK will need new / more
help as a direct result of the pandemic.
Fast forward to 2022 and the
psychological impact of the pandemic is
now starting to be laid bare. 1.4 million
UK citizens are waiting for specialised
NHS mental health treatment and it
is predicted by the NHS Confederation
and the Royal College of Psychiatrists
that there are another eight million who
cannot get on the waiting list, but would
benefit from support.
We must not forget that health (both
mental and physical), the economy and
employment are interconnected. More
than 800,000 UK workers suffered
from work-related stress, depression
or anxiety in 2020 / 2021 (HSE). Poor
mental health is estimated to cost UK
employers between £33 billion and £42
billion per year (Gov UK).
As the leading player in digital mental
health care, Kooth brings over 20 years’
experience and innovation to help
address this growing, global challenge.
Our platform provides a clinical and cost
effective ‘digital-first’ model that blends
self-therapy with professional support.
4
5
Strategic Report Our purpose
We create a welcoming space for effective personalised digital mental health
care, accessible to all.
Kooth exists to ensure clinically and cost effective digital mental health support is accessible
to all, on any digital device, tailored to an individual’s specific needs.
To achieve this, we focus on three key principles:
“Welcoming space”: We create a stigma-free environment for people to get the support
they want and need without barriers such as thresholds to meet or waiting lists.
“Effective”: We deliver help that is clinically effective and cost effective. We are
committed to constant innovation in new digital therapies spanning self-therapy, community
and professional support. We are exploring the opportunity to apply artificial intelligence
to the huge volumes of anonymous data within our platform. This will help us to further
improve the effectiveness, efficiency, and experience for our users.
“Accessible to all”: We want to make Kooth accessible to everyone, globally. Our goal is
to embed our business model into health care systems and businesses both in the UK and
internationally.
Who we support
Children &
Young People
Adults
Corporates
International
Public Sector
Private Sector
6
7
Strategic Report We are proud of the support we have provided
to the nation, and our close partnership with the
NHS to reduce the strain on stretched mental
health services by providing a digital-first
approach to reach people in need of support.
Peter Whiting
Non-Executive Chair
Chair’s Statement
Dear Shareholders,
After a year in which our priority was the support of a nation in need,
I would first like to thank our employees who are the most important
foundation for our success.
Our staff have shown their resilience, flexibility, and professionalism in dealing with
the challenges and changes that we have all experienced in the last two years. We
are proud of the support we have provided, and of our close partnership with the
NHS that aims to reduce the strain on stretched mental health services by providing
a digital-first approach to reach people in need of support.
In 2021, we not only saw the continued expansion of Kooth with 1.3 million logins
(18% YoY growth). We also saw an increase in the severity of need from people that
came to Kooth, with more than 60% of people visiting Kooth measuring as ‘severe’
on a scale of acuity. Our teams of practitioners, clinical psychologists, moderators,
and safeguarding experts have adjusted to this emerging ‘new normal’ with
professionalism and compassion.
I am pleased to report that our financial
In terms of outlook, the business has
performance has been in line with market
continued to thrive over the last year as
expectations, with revenue up 28% to
evidenced by our financial and operational
£16.7million, adjusted EBITDA growth
performance, demonstrating that our
from £0.9 million to £2.1 million and an
growth strategy continues to deliver. Our
improved adjusted EBITDA margin to 12.5%
high level of customer retention, and
(2020: 7.2%).
strong recurring revenue visibility position
the Group well. We enter FY22 in a solid
We have seen continued growth and
financial position, with revenue growth,
expansion in our service for children and
a good cash position with no debt and a
young people, with 90% of Commissioners
proven business model. Trading during the
in England choosing Kooth as their digital
new financial year has been broadly in line
mental health platform. This includes all 32
with the Board’s expectations with strong
boroughs in London, plus a clear expansion
levels of existing and new client activity.
into Scotland and Wales. In total 7.1 million
children and young people have access to
Looking further ahead, we continue to
Kooth across the UK today, with 1 in 33 of
see a significant potential opportunity
these having accessed Kooth in 2021.
in supporting businesses to improve the
mental wellbeing of their workforce, and
We continue to see a growing demand
to expand Kooth into international markets
in the public sector for our Kooth Adult
including the USA, where, as previously
service. In 2021 we added 14 new contracts
announced, we have hired a General
to our roster, with 3.8 million adults now
Manager to develop that business during
having free access to Kooth nationwide.
2022. Since our IPO in September 2020,
our focus has been to invest to support
ARR grew by 20% to £16.9 million (2020:
the long-term growth of our technology
£14.1 million) which included an 89%
platform. These newer, nascent growth
increase in Adult ARR to £1.7 million (2020:
initiatives have made encouraging progress
£0.9 million).
in 2021 setting them up for a successful
year ahead.
Over 90% of Kooth’s revenue comes from
recurring annual contracts of 12 months or
longer. Given the nature of our subscription
based business model, this provides
strong forward revenue visibility giving us
confidence to invest in the growth of our
Peter Whiting
Non-Executive Chair
platform and people.
28 March 2022
8
9
Strategic Report As acceptance of digital-first mental health care
grows, the imperative is to continue to innovate
and scale to deliver easy to access, high quality
support, with measurable impact.
Tim Barker
Chief Executive Officer
Chief Executive
Officer’s Statement
Delivering measurable impact at scale
As an organisation with 20 years of experience in digital-first mental health care, we
have seen a surge of interest in how digital can play a role in the long-term future of
health care in the last two years.
For digital truly to embed itself into health care systems, there are three questions
that every healthtech company in the mental health sector, including Kooth, must
answer:
1. Can clinical and economic outcomes be evidenced?
2. Can the approach address the growing, global shortage of practitioners?
3. Can it be delivered efficiently, at scale?
1. Clinical and economic outcomes
Underpinned by a decade of applied research, Kooth is a trailblazer in research, development
and outcome measures to evidence the therapeutic, social, and economic impact of our
platform. This has led to the development of new therapies, many of which are only possible
through a digital delivery model. We’ve made substantial progress in 2021 in continuing to
innovate and evidence our impact:
Responsive (“drop-in”) chat: We have a high proportion of individuals that we
may engage with only once, or on an ad-hoc basis in what we call a ‘responsive
chat’. By developing a new outcome measure, and validating it independently
with CORC (Child Outcomes Research Consortium), we can evidence that 72%
of users achieve their wants and needs. This is an impressive outcome in an
environment where typically 50% is considered a good level of efficacy.
Community support and self-therapy: The London School of Economics
undertook a study to evaluate the clinical impact of Kooth’s community and
self-therapy activities. 75% of individuals find these beneficial to their mental
health. In addition, 50% of people that engage with the community go on to help
someone else.
Economic impact: In 2021 we initiated a project with YHEC (York Health
Economics Consortium) to deliver what will be one of the first ever assessments
of the economic benefit of early intervention support for young people. This will
be published in 2022 and demonstrates our commitment to deliver a clinically
and economically effective service.
Innovating in digital therapies: In 2021 we delivered a ‘collections’
programme, a first step in providing individuals with personalised, guided help
through a challenge or change in their lives. We intend to build on this to
provide self-guided programmes that provide both self-guided and professional
The long term sustainability of every provider in the healthtech ecosystem, and
the growth of the ecosystem itself, depends on satisfactorily answering these three
support.
questions.
10
11
Strategic Report 2. Addressing the growing, global shortage of therapists
3. Efficiency at scale
Globally, there are not enough health care professionals to meet the level of demand.
As Kooth grows, delivering a high quality service, efficiently, at scale, is paramount. Data and
In Europe there are 15 therapists per 100,000 of population. In the USA, 1-in-3 of the
insights play an important role in measuring the quality and predictability of our service.
population lives in a designated health professional shortage area.
Our approach in addressing this is twofold:
In 2021 we established targets in collaboration with practitioners to define what ‘good’
looks like in terms of operational efficiency. In addition, Kooth’s clinical team audits
each practitioner quarterly to help ensure a consistently high quality of support. We also
Innovating in self-therapy and community support
continue to invest in our technology platform to help improve the experience, efficiency, and
Today, only c.40% of people who use Kooth engage with a practitioner to get the support
they need, and/or through messaging and responsive (drop-in) chat. Around 60% get the
help they need through the community, therapeutic content, and self-therapy activities we
effectiveness of Kooth.
As a result, our platform and team of 252 practitioners and clinicians supported over
200,000 people in 2021, delivering a gross margin of 69.5% to reinvest back into the
provide. We are making good progress on delivering an integrated range of support options
business.
to meet the wants and needs of each individual. This has been demonstrated by the progress
that has been made in our outcome measures.
Foundations for long term growth and impact
Hiring and building the careers of our practitioners
By investing in these areas, we not only strengthen our foundations for future growth, but
are able to reach and positively impact the lives of more people in need of help. This is why
Kooth hires practitioners and develops their careers. This has been an increased area of
focus over the last 18 months. We map career development and progression pathways,
providing additional training and development opportunities (e.g. trauma informed therapy,
we are here.
management development programmes). We have expanded our team of Emotional
4. #StandWithUkraine: Impact of the war in Ukraine
Wellbeing Practitioners to bring people with experience from social work, teaching, or other
related professions into Kooth. As a result, over 2021 we grew the size of our practitioner and
Finally, while Kooth does not have any customers or assets in Ukraine or Russia, all of us at
clinical team from 183 to 252.
Kooth are devastated as we watch the war unfold in Ukraine. In the first two weeks of the
war, our data showed an increase in depression, suicidal thoughts, and lack of motivation
from individuals coming to Kooth. To assist, we’ve issued guidance from our expert
psychologists on how to discuss the war with young children, and will continue to identify
ways to support those directly and indirectly impacted by this trauma.
Tim Barker
Chief Executive Officer
28 March 2022
12
13
Strategic Report
Kooth plc business model
Our markets
Kooth’s platform and growth strategy is focused around three key pillars that represent
a £500 million UK addressable market. Our platform and operating model can scale into
international markets to tackle the global mental health challenge.
~£13bn
NHS mental health annual budget
£45bn
cost to UK business
$6tn
cost globally by 2030
Children &
young people
Continued
expansion at
Kooth to support
10-25 year olds.
Adults
Workforce
International
Early
intervention
support for
adults.
Support the
wellbeing of your
workforce.
Expand into US.
Technology
licensing.
Addressable
Market
£85m+
£300m+
£150m+
£1bn+
£500m+
Kooth UK market
Children and young people (10-25 years): Kooth is the UK’s largest digital mental
health platform for children and young people. It is commissioned by 90% of NHS CCGs
(clinical commissioning groups) in England to help deliver early intervention and ongoing
mental health support to their local community.
Adults: Kooth’s service for Adults, known as Qwell, is commissioned across a growing
number of NHS CCGs to provide early intervention support. This helps to reduce demand
on acute care services in the NHS.
Workforce: Kooth Work provides employees with immediate access to free and
confidential mental health support spanning a range of topics, from burnout to imposter
syndrome. Employers are able to benchmark how ‘mentally healthy’ their business is,
and, through anonymous insights, identify strategies to improve employee wellbeing.
International: As a “born digital” mental health platform with significant operating
expertise, we see opportunities to establish Kooth in new international markets (with the
USA being the priority), in addition to licensing our technology to health care operators
in other geographies.
14
15
Strategic Report
Integrated platform for
personalised mental health support
No barriers to access
De-stigmatisation
Choice, not prescription
Safe-space
Therapeutic Content
& Activities
Community
Professional Support
Async messaging
& live-chat
Kooth’s platform is designed to provide a welcoming, safe and confidential space to give
individuals the support they want and need. To achieve this, Kooth’s proprietary technology
platform has been developed with four key design principles:
No barriers to access: Individuals can sign-up without having to be referred by a
professional. There are no thresholds or waiting lists.
De-stigmatisation: Stigma is still a barrier in seeking help. To tackle this, Kooth is
‘anonymous-by-default’. Individuals do not need to provide personal identifiable information
to join Kooth, but may do so as they build their confidence and trust with practitioners.
Choice, not prescription: To make a positive change in a person’s life, it is important
to empower them. Encouraging them to be part of the decision making process helps
to determine what help may be most appropriate. To achieve this we deliver a range of
integrated tools and therapies:
• Therapeutic content and activities: Every week, our community submits over
100 ‘lived experience’ articles to our moderation team for publication. This is
in addition to our clinical content team that publishes therapeutic content and
activities across a range of over 70 subject areas.
• Community: Users can get help from others in the Kooth community, providing
a positive peer support space.
• Professional support: Kooth provides access to emotional wellbeing and
counselling support, delivered by our team of over 200 practitioners. We
provide responsive (drop in) chat, asynchronous messaging support, structured
counselling (typically 6-12 sessions), and ongoing support. This is delivered as a
live text chat through the Kooth platform.
Safe space: As Kooth provides support to vulnerable individuals, safety is our top priority. In
addition to robust safety protocols to support individuals in crisis, or at risk, Kooth ensures
that all content published by individuals on the Kooth platform is moderated by our clinical
team for safety and appropriateness. In 2021, the team moderated over 500,000 posts,
journals, and comments from the Kooth community.
16
17
Strategic Report Business model
Kooth’s integrated platform for mental health care
Kooth is a Business-to-Business-to-Consumer (B2B2C) model. It provides individuals with
free access to mental health support, funded by the health care system, insurers, businesses,
Kooth enables individuals to access a range
approach that we view as fundamental to
or charities. This enables Kooth to support individuals in need regardless of their economic
of tools and therapies to support their
empowering individuals to better mental
circumstances, and provides our commissioners with a digital model that can scale to reach
wants and needs. This integrated approach,
health. Plus, it creates economic benefits
the whole population in their care.
What age range
do you want to
support?
10-25, 25+
How many do
we estimate
would use Kooth
in year 1?
Subscription =
digital platform
+ practitioner
support.
Promote to
community
through local
teams and
digital.
Free support via
Kooth’s NHS
commissioned
service.
Grow contract value as usage grows. Expand into new age groups.
Kooth’s pricing model is built on a ‘seed-
Our team of over 40 Kooth Engagement
and-grow’ approach. This helps to establish
Leaders across the UK will promote Kooth
Kooth’s service within a region, and grow
to local communities, schools/universities,
the contract over time as awareness and
health care and welfare organisations. In
usage grows.
addition, our digital marketing team will
focus on building awareness for Kooth in
By working with NHS commissioners we
the local region through PR and digital
will determine the population they want to
campaigns.
provide support for, for example, 11-18 year
olds.
As individuals sign-up and usage grows, we
build the business case to grow contracts
Given our 15+ year track record and over 25
further to meet increasing demand and
million data points in our platform, we can
usage. We grow our contracts based on the
estimate the likely uptake of service within
growing usage of the platform, or to support
spanning self-therapy and professional
as we continue to build new self-guided
support (including counselling) is a key
therapies that require less intense direct
differentiator for Kooth in the industry. It
support from practitioners.
demonstrates the “one size does not fit all”
Outcomes
adults who experience mental illness
every year.
Professional Support
Ongoing
counselling
37% of users
Structured
counselling
with assigned practitioner
Goal-based outcomes (CoGS)
74% achieve their life
and therapy goals
Session wants and needs
outcome measure (SWAN-OM)
Asynchronous messaging
& responsive (drop-in) chat
72% achieve their wants and needs
Self-guided
Therapy
63%
of users
Community
Content & community
Therapeutic content & activities
75% find beneficial to
their mental health
Self-guided therapy
63% of Kooth platform users engage with self-guided therapy. This enables them to access
the support they want/need from helpful content, self-therapy activities, and by engaging
with the Kooth community for peer-support.
Professional support
the first year. This enables us to provide an
additional age groups such as 19-25 years.
37% of Kooth platform users engage with professional support, through asynchronous
annual subscription that covers the digital
platform and practitioner support that we
will be providing.
messaging with our practitioners, attending a responsive (drop-in) chat session, or getting
more regular support through structured or ongoing counselling sessions. This is all delivered
as a text-based chat, similar to WhatsApp, but within Kooth’s own platform.
18
19
Strategic Report Market review
Undoubtedly, the pandemic has been a catalyst for change in the mental health ecosystem.
It has helped de-stigmatise the topic in mainstream media and businesses and has raised
awareness of the barriers in accessing help. In addition, it has spurred investment by
technology companies to rise to the global challenge of supporting individuals with their
mental health and wellbeing.
A growing number of people unable
to access support
Given that demand for mental health
support outstrips available resources in the
NHS, there is a growing challenge of dealing
with waiting lists. This has been exacerbated
by COVID-19.
In addition to the 1.4m that are on mental
health waiting lists (mental health trusts &
NHS providers) an additional eight million
people are unable to get professional
support based on the threshold levels that
dictate who gets access to treatment.
Kooth’s focus is on supporting this ‘sub-
threshold’ population to help them build
their resilience and recovery.
1.4m people on NHS England mental
health waiting lists for acute care
The imperative for early intervention
8m ‘sub-threshold’ don’t qualify for support
Benefits
Early intervention support to reduce pressures on acute mental health
services: With a focus on early intervention and prevention, Kooth provides a
first port of call to individuals that need support. By tackling issues early before
they escalate, we can reduce the demand for acute mental health care support.
Proven clinical outcomes: Kooth provides a clinically effective service. We
measure this through goal-based outcomes, with 74% of users achieving their life
and therapy goals. For users that solely engage with our therapeutic content and
community, 75% find it beneficial to their mental health.
Mental health trends and Insights: Kooth provides commissioners with
near real-time anonymous trends and insights into the mental health of the
population. This enables health care providers and businesses to identify where
they need to focus additional resources to improve the wellbeing of their
constituents.
20
21
Strategic Report A growing ‘call to action’ to invest in early
intervention support
Given the increased prevalence of mental health problems in the
population, there is a growing recognition and ‘call to action’ for a focus
and investment in early intervention and prevention support.
In England, The Health and Social Care Committee report on ‘Children
and young people’s mental health’ published a set of recommendations
in November 2021, including:
The Department of Health and Social Care—in partnership with
the Department for Education and all other relevant Government
departments—must take radical steps to shift the focus in mental
health provision towards early intervention and prevention.
This must ensure that all children and young people under the age of
25 can receive mental health support as early as possible and no young
person is turned away from mental health support for not being ill
enough. The Department must focus its attention on:
• The faster roll out of Mental Health Support Teams
• A network of community hubs based on the Youth Information
Advice and Counselling service model
• Digital support
Health and Social Care Committee Report
Likewise, in the US, the imperative for early intervention is clear, based on the call to action
published by the US Surgeon General in the ‘Protecting Youth Mental Health’ report:
What Funders and Foundations can do
Create sustained investments in
Scale up evidence-based
equitable prevention, promotion,
interventions, technologies, and
and early intervention. Prioritize
services. Use a structured process
interventions that address social
to assess an intervention’s readiness
and economic factors known
to scale and support high-quality
to affect children’s healthy
implementation at a community
development and mental health,
level. Share information and
such as poverty, discrimination, and
convene stakeholders to provide
inequality, among others.
education and consultation to
spread innovation.
Incentivize coordination across
Invest in innovative approaches
grantees and foster cross-sector
and research on mental health.
partnerships to maximize reach
For example, fund participatory
and bring together a diversity of
research that involves young people
expertise. The scale and complexity
in understanding their online
of mental health issues among
experiences. Develop and test new
young people require collaborative
solutions, including digitally enabled
approaches. Consider leveraging
solutions that can reach young
resources across sectors to advance
people at scale and in underserved
practices, policies, and research
communities. Consider different
that support the mental health of
kinds of funding models, such as
children, youth, and families. And
incubators and accelerators, that
support grantees in developing and
can drive funding toward promising
sharing meaningful mental health
projects at very early stages.
outcome measures.
US Surgeon General’s ‘Protecting Youth Mental Health’ Report
22
23
Strategic Report The reorganisation of NHS England into Integrated Care Systems (ICS)
During 2022, NHS England will be reorganised into 42 regional Integrated Care Systems.
ICSs bring together NHS, local authority and third party sector bodies to take on
responsibility for the resources and health of an area or ‘system’. Their aim is to deliver
better, more integrated care for patients.
Currently, Kooth is commissioned by Clinical Commissioning Groups, of which there are 135
across England. We believe the shift to ICSs will simplify the commissioning structure and
approach, by:
• Bringing public health and a focus on preventative support into the remit of ICSs,
whereas before it was the responsibility of local authorities.
• Enabling Kooth to work strategically with ICSs to support their whole population. For
example, today we may be commissioned in one district of a city for 11-18 year olds, but
10-25 year olds for its neighbouring district. By working with an ICS we can ‘level-up’
support for Kooth across a whole region and age-range.
Prioritising wellbeing in your workforce
In addition to partnering with health care providers, Kooth engages with businesses who are
committed to building a mentally healthy and resilient workplace.
There is a growing acceptance in businesses of all sizes, and across all sectors, of the
important role they play in supporting the mental health and wellbeing of employees.
According to Bupa Global’s Executive wellbeing index 2021 almost three in ten business
leaders are making employee mental health their number one priority. As a result, they will
be increasing their investment in employee mental health and wellbeing by 18% in 2022.
24
25
Strategic Report Strategy
Kooth has a pragmatic four
pillar growth strategy to
meet the global demand for
clinically and cost effective
mental health care. This
is powered by Kooth’s
proprietary, integrated
technology platform and
clinical operating model.
NHS CYP
Growth
Continue to scale
Kooth to support
children and young
people
International
Growth
Grow Kooth into
international
markets
Kooth Platform &
Clinical Delivery Model
Safe, Effective,
Personalised.
NHS Adult
Growth
Replicate our success
in the adult public
sector market.
Corporate
Expansion
Bring the benefit
of Kooth to every
workplace.
1. Expanding Kooth to support children and young people across the UK
As of the end of 2021 Kooth is contracted by 90% of England commissioners. As we
progress to near-nationwide coverage, our key priorities are:
Expansion into devolved nations: We see the opportunity to expand further into
Scotland, Wales, and Northern Ireland. In 2021 we won our first 4 contracts in
Scotland, and continue to expand in Wales, where we are contracted by over 60% of
commissioners.
Focus on expansion within existing contracts through over-performance and age-
range expansion: As awareness and usage grows within the regions, we aim to over-
perform on the agreed contract, thereby building the business case for expansion. In
addition, currently 44% of our contracts span the full age range of up to age 25.
Continuous incremental improvement in Quality (experience, effectiveness,
efficiency): As a proven, established service, our focus is on continuous improvement of
experience, effectiveness, and efficiency.
2. Early intervention support for adults via the NHS
The NHS spends over £11 billion a year on adult mental health, the majority of this being
invested in acute care services. Kooth Adult (known as Qwell) provides early intervention
and prevention support for NHS commissioners, taking the strain off other NHS services,
and stemming the demand for acute support. Our strategy is to replicate the success we
have had supporting young people with a focus on three key areas:
Building the business case and momentum for Kooth Adult: Kooth Adult is the
number one priority for our new business team. We are seeing a growing recognition
that more needs to be done to support ‘sub threshold’ individuals who do not qualify for
a referral into NHS services. This growing awareness is reflected in the strong growth in
go-lives in 2021 where we added 14 new commissions including Bolton, Newcastle and
Gateshead, South East London, Humber, Coast and Vale.
Promoting Kooth Adult by working in partnership with stakeholders: Health care
professionals (such as GPs), welfare organisations (such as food banks), and educational
organisations (such as colleges and universities) all have a key role to play in promoting
Kooth’s free service to their population. In addition to working with stakeholders, we are
focused on digital, social, and content marketing to reach individuals seeking support.
Platform and service innovation: We are focused on ensuring that our platform can
meet the needs of a diverse population. In doing so, our research, participation, and
product teams are focused on ensuring that we are developing and delivering a service
that matches the population’s needs.
26
27
Strategic Report
3. Supporting the mental health of employees
5. Kooth technology platform
The market for employee mental wellbeing support is nascent, but growing. Given the
Kooth’s proprietary technology platform underpins everything we do at Kooth. A key reason
spectrum of providers entering the market, from meditation apps to companies building a
for our AIM listing was to enable us to invest in our technology to support the long term
marketplace of business coaches, it is key for Kooth to pick a niche it can compete and win in
growth of Kooth. Our investment strategy in technology is focused on three key areas:
repeatedly and economically.
Predominantly, we are focusing on supporting key/frontline workers in industries such
Kooth to succeed, we must offer a stigma-free, safe space where people feel welcome and
as health care, social care, education, public services, retail and transport. This ‘niche’,
empowered to get support that they want and need. We continue to invest in user-research,
according to ONS figures, represents 33% of the UK workforce and builds on the success we
participation, and experience-design to deliver on this.
Delivering a welcoming and engaging space: Reaching out to ask for help can be hard. For
have had supporting emergency services, retail workforces and school staff.
4. Expanding into the USA
In October 2021 we appointed Kevin Winters as General Manager, America to establish
Kooth in the US market, with a strategic focus on bringing our service for children and young
people to market. The focus for 2022 will be to build the foundations for our go-to-market by
building the team, establishing pilot projects to prove Kooth locally, and identifying potential
partners in Health care and Education markets.
Delivering clinically and cost effective access to mental health support: Kooth is a
trailblazer in research, development and outcome measures to evidence the therapeutic,
social, and economic impact of our platform. This has led to the development of new
therapies, many of which are only possible through a digital delivery model. We see huge
potential to continue to innovate and deliver in new support models spanning self-therapy,
community and peer support, and professional support.
Applying AI to improve the experience, efficiency, and effectiveness: Over Kooth’s
lifetime, we have delivered over 930,000 hours of professional support, all via text and
chat based interactions. Collectively, this represents one of the world’s largest anonymous
mental health data sets. The opportunity now is to safely leverage this data using machine
learning and artificial intelligence for the benefit of practitioners and service users. This is an
exciting, long term strategic imperative, led by Dr Tim Budden, our recently appointed Chief
Technology Officer who brings deep domain experience in AI, machine learning, and natural
language processing.
28
29
Strategic Report 6. Digital clinical delivery model: i-RESPOND
Safety and Clinical Effectiveness
in-house training programmes as well as an
enhanced offering for clinical supervision
Fortunately, the shift that many traditional
and support.
services have had to make to adapt to
the use of technology to support clinical
practice has been less of a challenge for us
at Kooth. We have a wealth of experience in
this area.
However, ensuring that the services we
provide are safe and effective has always
been a number one priority and we are
constantly reviewing and improving our
systems and practices to support this.
Kooth’s i-RESPOND clinical framework
underpins our approach: integrative,
responsive, evidence based, safe,
person centred, outcomes focused, non-
judgemental and data informed.
As part of Kooth’s focus on ensuring
its work is safe and evidence-based, we
introduced a system of improved reporting
and root cause analysis. This helps the team
to identify earlier on any opportunities for
improvement, and learning.
2021 also saw Kooth’s i-RESPOND
framework being fully embedded into our
audit process - offering all practitioners
the opportunity for individual professional
development as well as important learning
for the wider clinical team. Both of these
improvements have led to additions to our
A much discussed topic within the Kooth
Advisory Board and Leadership team is
ensuring that our service and practitioners
are responsive to the changing mental
health needs of the population. In 2021,
working with external experts we have
focused on embedding trauma informed
approaches into our service.
A crucial part of this evidence based
intervention is ensuring that there
continues to be an assessment of suicidal
thoughts. Kooth’s own data supports a
wider consensus that this has increased
significantly over the pandemic period,
hence the need to introduce this approach
alongside careful consideration of our
risk management processes as part of our
specific focus on the SAFE element of our
framework. We will continue to test and
refine this model in the year ahead.
Over the last 12 months, Kooth has
continued in our ambition to be at
the centre of driving evidenced based
approaches within digital mental health
services. This included an invitation to give
evidence at the UK government’s Health
and Social Care Select Committee and being
referenced in the final report as an example
of good practice.
I
Integrative
R
Responsive
D
Data
informed
N
Non-
judgemental
The
i-RESPOND
Model
O
Outcomes
focussed
P
Person
centred
E
Evidence
based
S
Safe
Participation: ensuring Kooth meets the needs of diverse communities
To deliver on our purpose to be ‘accessible to all’, we need to ensure that Kooth meets the
needs of diverse communities, especially those that may be less likely to use established NHS
services such a Black, Asian, non-White, or LGBTQIA+ communities.
In 2021, we made substantial progress in our participation approach, forming partnerships
with a number of groups across the country. These are providing invaluable support in
helping us understand why certain adult cohorts do not typically access mental health
services, and how we can improve this via our digital ‘ecosystem of support’.
Through these reciprocal relationships, we will improve access to evidence-based
interventions for marginalised groups. In addition, it will enable us to play a leading role
in contributing to the evidence base in this area and demonstrate how to deliver safe and
clinically effective care digitally.
30
31
Strategic Report Key performance indicators
Total revenue
£16.7m
2021
£13.0m
2020
£8.7m
2019
As we continue to invest in and grow our business, revenue growth demonstrates the
progress we are making.
Annual Recurring Revenue (ARR)
£16.9m
2021
£14.1m
2020
£10.6m
2019
Annual Recurring Revenue (ARR) is the annualised revenue of customers engaged or
closed at the year end date (31 December) and is an indication of the upcoming annual
value of the recurring revenue. This is used by management to monitor the long term
revenue growth of the business.
Gross margin
69.5%
2021
69.8%
2020
63.6%
2019
Gross Profit as a percentage of revenue. Direct costs are the costs of our practitioners
directly involved in the delivery of our services. Promotional costs were reclassified
to indirect costs during the year and comparative numbers have been reclassified
to enable a like for like comparison. Further details are provided in note 2.3 of the
financial statements.
Adjusted EBITDA
£2.1m
2021
£0.9m
2020
£0.1m
2019
Earnings before interest, tax, depreciation and amortisation in the financial
year, adjusted for share based payments and exceptional costs which are
predominantly IPO related. This metric provides a more comparable indication of
the Group’s core business performance by removing the impact of non-trading
items that are reported separately.
Number of customers
151
2021
132
2020
81
2019
The total number of live contracts with customers. In 2021/22, as the NHS
consolidates from 135 Clinical Commissioning Groups to 42 Integrated Care
Systems, we are seeing a shift to larger contracts spanning the whole population
within an ICS region.
Population coverage
10.9m
2021
7.8m
2020
5.9m
2019
The total number of people who have access to the Kooth service is a clear
indicator of our accessibility.
Service user logins
1.3m
2021
1.1m
2020
0.7m
2019
The number of logins to Kooth from users, demonstrating uptake of our service.
32
33
Strategic Report Kooth delivered a strong financial
performance in 2021, at both a revenue
and gross profit level, setting a solid
foundation for future growth.
Sanjay Jawa
Chief Financial Officer
Chief Financial
Officer’s Review
Significant growth
Gross profit
This is the second set of full year financial
Gross profit grew by 27.5% to £11.6 million
statements issued by Kooth plc following
(2020: £9.1 million) with gross margin
its admission to trading on AIM on 2
remaining flat at 69.5% (2020: 69.8%).
September 2020 and represents the first
Direct costs previously included the cost of
full year of the Group being quoted on AIM.
our practitioners and our engagement team
Revenue
I am pleased to report Group total revenue
grew, in line with market expectations, by
28% to £16.7 million in the year, driven
primarily by fee uplifts from existing public
sector clients and new business in Adult
and CYP as well as the tail of a small
number of one-off COVID-19 related projects
that started in 2020. Adults represented
approximately 10% of revenue in 2021.
Recurring revenue comprises income
invoiced for services that are repeatable and
consumed and delivered on a monthly basis
over the term of a customer contract.
Annual Recurring Revenue (ARR) is the
annualised revenue of customers engaged
or closed at that date (31 December) and
is an indication of the upcoming annual
value of the recurring revenue. This is used
by management to monitor the long term
who are responsible for promoting Kooth
to potential users in a corporate or region.
We have taken the decision to reclassify
those engagement costs as administrative
expenses, given they are closer in nature
to sales and marketing expenditure. The
comparative numbers have also been
reclassified and full details are set out in
note 2.3.
Gross margin was slightly lower, mainly
because a one-off benefit in 2020 relating
to COVID-19 did not repeat in 2021. This
one-off benefit in 2020 was from shorter
go-live periods between closing a contract
and the commencement of services and
revenue as clients looked to accelerate
the implementation of Kooth, particularly
during the national lockdown-enforced
closure of schools.
Statutory loss after tax
revenue growth of the business.
The Group loss after tax for the year was
£0.3million (2020: loss of £1.5 million) with
Highlighting the depth and longevity of
2020 impacted by the costs incurred for the
our customer relationships, net revenue
IPO and the share based payment expense
retention was 109% (2020: 107%). This is
incurred as a result of accounting for the
measured by the total value of ongoing ARR
fair value of shares acquired by employees
at the year end from customers in place at
prior to the IPO.
the start of the year as a percentage of the
opening ARR from those clients.
34
35
Strategic Report Administrative expenses
Adjusted EBITDA
Excluding depreciation, amortisation and
Adjusted EBITDA grew by £1.1 million
share based payments, administrative
(123%) to £2.1 million in the year due to
expenses grew by £0.8 million in the year,
the gross profit increase, offset partially
a 9% increase year on year, which remains
by higher administrative expenses as
in line with our strategic investment plan
outlined above.
and comfortably below revenue growth.
This was primarily driven by increases in
Adjusted results are prepared to provide
staff costs as we strengthened our business
a more comparable indication of the
development and account management
Group’s core business performance by
teams, salary increases as well as an
removing the impact of certain items
upgrade to our finance, people and rota
including exceptional items (material and
associated with being a listed company.
items that are reported separately.
Adjusted results exclude items as set out
in the consolidated statement of profit
and loss and below, with further details
given in Notes 2, 5, 7, 8, 9, 14 & 16 to
the financial statements. In addition,
the Group also measures and presents
Adjusted EBITDA (being EBITDA prior to exceptional costs) is calculated as follows:
£’m
Operating Loss
Add Back:
Depreciation and Amortisation
Share based payment expense
Adjusted EBITDA
Taxation
2021
0.7
2020
1.6
2.4
0.4
-
2.1
1.5
0.5
0.6
0.9
systems and a full year of the costs
non- recurring), and other, non-trading,
IPO and other exceptional items
There has been no corporation tax charge recognised in the year due to accumulated
performance in relation to various other
losses combined with the overall current year position (2020: £nil). The tax credit
non GAAP measures, such as gross
margin, annual recurring revenue and
revenue growth.
Adjusted results are not intended to
replace statutory results. These have
been presented to provide users with
additional information and analysis of
the Group’s performance, consistent with
how the Board monitors results.
for the year ended 31 December 2021 and 2020 relate to Research and Development
expenditure credits in addition to the movement in the deferred tax asset.
Cash
The Group had good cash management in the year with net cash generated from
operating activities of £1.9 million (2020: £0.4 million), broadly in line with adjusted
EBITDA. The net cash at year end was £7.1 million (2020: £7.8 million). The Group
continues to be debt free and maintains a robust financial position following a full year
of the global pandemic and with no recourse to any government support schemes. Trade
receivables have grown by 13% in the year to £1.6 million (2020: £1.4 million), below the
rate of revenue growth. The Group’s cash collection disciplines remain strong with debtor
days at 31 December 2021 of 33 days (2020: 35)
36
37
Strategic Report Capital expenditure
Capital and Reserves
Software and product development
The Group continues to maintain a strong
costs aside, the Group’s ongoing capital
balance sheet with total equity at 31
expenditure requirements remain modest
December 2021 of £11.0 million (2020:
at £0.1million (2020: £0.1million).
£10.9 million).
Capitalised development costs
Dividend policy
The Group continues to invest in product
As outlined at the time of the IPO the
and platform development resulting in
Group’s intention in the short to medium
ongoing improvements in its delivery
term is to invest in order to deliver capital
platform. Costs are a combination of
growth for shareholders. The Board has
internal and external spend. Where
not recommended a dividend in respect
such work is expected to result in future
of the year ended 31 December 2021
revenue, costs incurred that meet the
and does not anticipate recommending a
definition of software development
dividend within the next year but may do
in accordance with IAS38, Intangible
so in future years.
Assets, are capitalised in the statement
of financial position. During the year the
Group capitalised £2.5 million in respect
of software development (2020: £1.5
million) with an amortisation charge of
£2.3 million.
Investment in product and development
Sanjay Jawa
Chief Financial Officer
continues to be significant to the Group
28 March 2022
and we anticipate capitalising software
costs at a higher rate over the next few
years during a period of accelerated
product investment.
38
39
Strategic Report Environmental, Social and
Governance (‘ESG’) Report
1. Social
Nature of Service
Kooth’s accessible digital services provide those aged 10+ (ages vary with each contract) with
a safe and welcoming place to seek confidential and non-judgemental professional help for
mental health concerns, as and when they need it. As a result, Kooth is contributing to Goal
3 of the UN Sustainable Development Goals: Ensure healthy lives and promote wellbeing for
all.
It is only in the last decade that mental health was added to the agenda for the UN
Sustainable Development Goals, when the impact it was having on health care systems was
identified. This gap in health care is where Kooth has our greatest impact.
At Kooth we acknowledge our responsibility to ensure Environmental, Social and Governance
Reducing NHS and CAMHS waiting times is crucial to improving public health - it has been
(ESG) practices and policies are embedded into all aspects of our company. As part of this
reported that those seeking help could experience up to an 18 weeks wait for a therapeutic
commitment, we are working towards the Ten Principles of the United Nations Global
referral. Kooth offers immediate digital support that is available 24 hours a day, seven days a
Compact, specifically those relating to:
week. Once registered, the service can be accessed using any internet connected device such
as a laptop, smartphone or tablet. In 2021, Kooth services were accessible to over 10 million
• Environmental: by reducing Kooth’s environmental impact through the energy we use,
people and 219,000 users accessed our platform.
the movement of our people and the resources we consume.
• Human and labour rights: by ensuring diversity, equity, inclusion and wellbeing are
embedded into working life.
Accessibility
• Anti-corruption: by adhering to secure and transparent governance policies.
Accessibility is at the core of Kooth’s digital mental health services. There are no waiting
Through our business model, which develops safe and confidential digital mental health
services accessible for all ages (10 years+) Kooth is contributing to Goal 3 of the UN
Sustainable Development Goals: Ensure healthy lives and promote wellbeing for all at all
ages.
We will monitor and report on these values and principles in our next annual report. In
addition, we will be formalising our commitment to the principles of the UN Global Compact
over the next year by becoming a signatory. As part of this process we will commit to
reporting our performance against the 10 principles of the UN Global Compact on an ongoing
basis.
40
lists, thresholds to meet, or professional referrals required, meaning that eligible individuals
can sign up immediately.
Kooth is anonymous - when registering for the service individuals do not need to provide
personal identifiable information, but may do so as they build their confidence and trust with
practitioners. This helps Kooth reach individuals and communities who do not want to be
identified. And the digital nature of the service ensures those in rural communities, who may
not have counselling nearby, can seek immediate and accessible support.
41
Strategic Report Kooth’s product team builds our platforms in-house with input from our communities and
We respond to this feedback with action points and timescales, and we measure our success
participation teams. Every new feature is designed to meet the Web Accessibility Guidelines
by evaluating the impact of these changes.
(WCAG) 2.1 level AA.
Kooth’s content and user interface is written in English, but our web pages are built to work
Kooth aims to remove barriers and ensure all individuals - regardless of race, age, gender,
with web browsers’ translation features. All text can be read by a ten-year old (the youngest
disability, sexuality or socio-economic background - have access to effective mental health
user that we engage with) and have been careful not to exclude people with visual or
services. We are aware that mental health affects different communities in different
Diversity and Inclusion
learning impairments.
Personalised Service
ways. Black and non-White communities face barriers to mental health care in the form of
language, fear of stigma and a lack of cultural awareness.
In February 2021, our research team published Kooth’s Theory of Change for Adults, which
This year 19% of our users were from Black and non-White backgrounds. For comparison,
provides extensive information around our person-centric approach. This online report gives
14% of the British population is Black and non-White. As part of our participation work we
an understanding of the similarities and differences between adult users on our Qwell
are continuously improving our understanding of the mental health service needs of these
platform, what they are using us for and what they hope to get out of the service. The aim
communities. We are actively creating more content targeted towards all communities and
is to explore our ‘digital ecosystem’ and detail what exactly adults need from mental health
promoting initiatives to increase usage by people from Black and non-White backgrounds.
care. By publishing this online, we are inviting others to reflect on the value of this type of
personalised service.
User Feedback
In 2021, we developed partnerships with BlackOut UK and Unity FM to research mental
health needs within specific communities. Our Unity FM partnership offered a week-long
broadcasting workshop, free to males from underrepresented communities, to teach new
Our Participation team’s ‘You Say, We Did’ feedback programme is proof of Kooth’s
skills and talk about experiences and identities. Initiatives like this enables Kooth to create
commitment to continuously improving our service by listening to our users. In 2021, we
content for specific audiences, ensuring everyone feels seen and heard and helps to shape our
collected extensive feedback from over 1,000 young people via our online forums and
service to ensure that it meets the needs of the whole population.
surveys. This included suggestions, compliments and complaints, and a clear indication of
how they want to engage with us i.e., simple things such as users wanting to play games
while waiting for a Live Chat with a counsellor.
“I love this website! I think it is a fantastic way to let people open up about their issues.
The fact that it is all anonymous helps as well. I don’t think I’d feel comfortable being on
here if I had to state my name. I love Kooth, it is my safe space.”
“Staff are friendly and you can trust them. They are here to listen to what you have to say.
They are free to talk at any time. You have activities to keep you busy and help take your
mind off things. The website is free to use. It helps you to take good care of yourself. Thank
you team for all your great help, and for everything you do.”
December 2021, Anonymous Service User
January 2021, Anonymous Service User
42
43
Strategic Report 0.4% of the British population identify as non-binary, while 7.2 % of Kooth users identify
Building an Evidence Base
as a non-binary gender (agender or gender-fluid). In order to understand how best we can
Kooth is committed to developing the evidence base for mental health research as a whole.
support our users, we launched our Inform, Support, Change & Celebrate campaign across
We are skilled in developing strong relationships between academia, industry, policy and
our platforms, social media and in print.
commissioners. At the same time, we aim to align user needs and wants with an evidence
base to ensure meaningful research and data.
We recruited five LGBTQIA+ influencers to work with us to talk about what pride means to
them and how they have managed their mental wellbeing. Neil Young, a psychotherapist,
Kooth is one of the UK Government’s largest contributors to mental health data. Our Kooth
who already provides D&I training to our practitioners joined our weekly town-hall to provide
Pulse 2021 Report focused on the impact of COVID-19 on the nation’s mental health - looking
advice and support to our staff; we’ve delivered over 590 hours of training on diversity and
at the clinical impact of the pandemic, as well as how individual users felt about their lives.
inclusivity to employees. Members of the Kooth team produced their own personal content
The usefulness of this anonymised data continues to be far-reaching - and has been accessed
on growing up as LGBTQIA+ and how that impacted their own mental health which was
by the NHS, policymakers and businesses alike.
shared with businesses and more widely.
“Kooth is so supportive of everyone, no matter their sexuality, religion, interests and
gender. Kooth has given me the courage to finally come out to my parents. I just want to
say thank you for everything. :’)”
January 2022, Anonymous Service User
Additionally, we have partnered with research institutions such as the London School of
Economics (LSE) to produce third-party reports such as ‘Findings from the Kooth Evaluation’,
which developed evidence for the cost effectiveness of online peer support. And continued
to provide a clear understanding of how the Community uses our service through reports
including ‘Supporting Parents: a personalised approach to Mental Health’. By using online
survey responses from Kooth users who are parents we were able to collate insight from our
platform, thus publishing information that can help the wider community talk about and
understand mental health topics.
Employee Wellbeing
Kooth is committed to being a leading employer that cares for its employees, by providing an
optimum work environment. After all, the skills and commitment of our employees play a
major role in Kooth’s business success.
Our people team has developed and manages a wide range of policies, procedures and
Kooth recognises that providing accessible and inclusive services starts before registering for
practices designed to support all employees. They are responsible for ensuring that each
the platform. Our promotional materials include graphics which do not represent any specific
employee is aware of them, and that they are upheld.
race or gender, promoting inclusivity to children, young people and adults alike. Additionally,
our promotional materials are tailored to encourage participation by individuals who might
Diversity, Equity and Inclusion
otherwise be underrepresented.
Diversity, equity and inclusion are central to Kooth’s core purpose.
44
45
We established the Kooth Diversity and Inclusion Council in June 2020 and appointed
Steve Gilbert OBE as its Chair. The purpose of the Council is to ensure we continue to do
everything we can to reach Black and non-White communities and to expand our Black and
non-White workforce.
Strategic Report We have also established the Kooth Employee Voices Group. This group has established
weekly ‘Let’s Talk’ sessions. This is an opportunity for employees to discuss any issues/
concerns that they would like to raise and would like Kooth to discuss or address further.
It is our collective responsibility across the company to ensure a strong and diverse pipeline
of talent. Kooth is fully committed to promoting gender and ethnic balance across the
company. We consider our first annual Gender and Ethnicity Pay Gap piece to reflect these
commitments.
Gender Pay Gap
This year marks the first Gender Pay Gap review at Kooth. Our 2021 gender pay gap
(GPG) analysis shows our statutory gender pay gap in response to Government legislation
introduced in April 2017. It also provides insight into how we are addressing our gender
balance.
What is our 2021 hourly gender pay gap?
Our median hourly pay gap has decreased from 18.3% in 2020 to 11.6% in 2021. This is better
than the national median of 15.4% as reported by the Office for National Statistics and more
specifically, we are 7.2% better than the median of the human health services industry
(18.8%). Nevertheless we acknowledge there is further progress to be made, and the work we
are doing is noted below.
The mean captures the effect of a small number of high earners. With a large number of
female practitioners, our mean pay gap has remained broadly in line with 2020. Men and
women are paid equally for doing equivalent jobs across the firm and we continue to monitor
this regularly to ensure that remains the case.
Kooth employs more women than men. This is a mirror of the high percentage of female
employees in the NHS (75%), as well as the overall percentage of female workers in the
public sector (66%).
2020 Workforce by Gender
2021 Workforce by Gender
Male
23.7%
Male
22.4%
Female
76.3%
Female
77.6%
Gender Pay Gap Metrics 2020 vs. 2021
population are female (74%).
The largest employee group at Kooth are practitioners, of which 85% are
female. This reflects that the majority of practitioners in the wider UK
2021
2020
Female proportion of counsellors Kooth vs. General UK Population
Mean hourly pay gap
National Average: 14.6%
32.8%
33.1%
Median hourly pay gap
National Average: 15.4%
11.6%
18.3%
Kooth
National
85%
74%
0%
10%
20%
30%
40%
0%
25%
50%
75%
100%
46
47
Strategic Report The gender pay gap shows the difference in pay between men and women across the
Physical and Mental Health
business, irrespective of job similarities and seniority. It is not necessarily symptomatic of
unequal pay, as a number of complex factors play a role. The distribution of male and female
Health care schemes
employees across the business and the type of roles they fill are both key contributors to the
Kooth is committed to supporting our people with their physical and mental health. We
gender pay gap.
subsidise membership for all employees to a health care scheme once they successfully pass
their probation period.
What are we doing about our gap?
We are committed to reducing our pay gap in the following ways:
Our health care schemes help with budgeting for everyday health needs, give people access
• Offering flexible working policies
to a range of treatment and provide cover for the unexpected. Eligible employees can use
the scheme to access health care services such as osteopathy, chiropody and counselling,
•
Implementing company wide campaigns to ensure employees feel informed and
as well other specialist consultations. Employees can also extend cover to additional family
connected
members. There are no referrals needed to receive treatment and pre-existing conditions are
• Ensuring our pay ranges are determined by skills and experience, and are benchmarked
covered, this gives staff peace of mind.
against industry averages, excluding gender as a factor
• Analysing and assessing gender and ethnicity data, to understand where more focus is
All staff have access to an Employee Assistance Programme. This service is available 24
required
hours a day, 365 days a year to offer practical, impartial support on everyday matters. This
• Ensuring a more inclusive approach to hiring. From partaking in blind recruitment of our
ranges from financial and legal matters (such as debt, buying a house and consumer rights)
practitioners to including panel interviews during the process for wider feedback and
to home and family issues (for example finding childcare, divorce and coping with elderly
decision-making
Ethnicity Pay
Kooth believes in creating and nurturing an
hourly earnings than White employees. Our
inclusive culture where all our people can
feel they belong. Part of this is analysing
and reporting on ethnicity pay, and using
next step is ensuring we have ethnicity data
recorded for most, if not all, of our people so
we can conduct a full, meaningful analysis
this data informs business decisions relating
on pay distribution across different cohorts.
relatives). The Employee Assistance Programme provides mental health support as well,
offering eight counselling sessions for employees that meet a threshold of need.
Staff also benefit from free access to virtual GP services through Doctor@Hand, an online,
private GP that people can access at their convenience and outside of usual working hours.
Wellness days
Kooth recognises that providing support for wellness is a key part of caring for our people.
For every year of service, our front-line staff gain one wellness day (up to a maximum of
five) annually for use when they please. These days are designed to be flexible and support
employees in managing their own wellbeing, energy levels and work-life balance. Wellness
days are exempt from the standard leave request process, which means they can be taken
2021 Median
Hourly Pay Gap
2021 Mean
Hourly Pay Gap
with a minimum of two hours’ notice.
-1.0%
-4.9%
to remuneration.
Of the 117 employees who disclosed their
ethnicity - 82% were White and 18% were
Black and non-White. The National average
of Black and non-White employees in the
Health and Social Sector is 13%.
Our analysis shows that Black and non-
White employees are paid higher average
48
49
Strategic Report Recognition and Feedback
Learning & Development
Kooth continues to invest in the
Annual appraisals
Kooth recognises the importance of
establishing a culture of feedback and
development of our people. We allocate
development, as well as, aligning employees’
a yearly Learning & Development budget
individual objectives to the company vision
to departments to spend on the training
and Objectives and Key Results (OKRs). All
that matters most to them. In addition,
employees have regular review meetings -
our learning management platform hosts
this starts three months after an individual
learning content and assigns training
joins Kooth. Performance appraisals happen
modules to employees. This makes the
annually between December and January
management and delivery of online
with regular monthly/ quarterly reviews and
training courses easy and supports the roll
at least a mid year review completed. Kooth
out of all our training and development
provides training and detailed guidance
needs; from compliance courses to new
for managers and direct reports on how to
modules on safeguarding and recruitment.
approach the appraisal process.
In 2021 one of our key Learning
& Development initiatives was a
Company awards
Recognition within the company is important
Management Development Programme.
for our culture and morale. In our company-
This was custom designed and focused
wide, quarter-end meetings, peer-nominated
on values-based leadership skills and
employees are awarded one of five awards
behaviours to support our people managers
based on our company values. These awards
in developing the key skills they need to
are: Alongside You, Compassionate, Flexible,
guide, develop and motivate their teams.
Committed and Safe.
Employee Engagement and Feedback
Long-Term Incentives
In August 2021 we introduced an online
Kooth operates an annual Long Term
tool from Officevibe that allows us to
Incentive Plan (LTIP), which gives all
capture anonymous feedback from our
employees, with more than three months’
people across the business, on a regular
service, share options of 5-8% of their
basis. Feedback indicates that the majority
earnings. The LTIP scheme allows employees
of employees are aligned with the Kooth
to share in the success of the Company at
vision with 92% of employees saying the
nominal cost to them.
work they do is impactful to deliver on
Kooth’s purpose.
2. Environmental
Energy Usage and Carbon Footprint
We will continue to seek to minimise our
In 2021, the number of employees
environmental impact, reduce our carbon
footprint and ensure we implement best
working from home increased as a result
practices to reduce energy consumption in
of COVID-19, with 83% of our workforce
readiness to report against the requirements
currently working remotely. With the
exception of a small number of face-to-
face contracts, our counsellors work from
in the Taskforce on Climate-related
Financial Disclosures (TCFD).
home and do not travel. When it comes to
Office facilities
office based employees (17%), they are, on
average, present in the office two to three
Kooth encourages remote working, but
days a week. We expect to continue this
ensures the centralisation of environmental
hybrid way of working for all our office
practices through offices in Manchester and
based team.
London. Both offices are easily accessible
by public transport. For those travelling
As a digital mental health service we have
into the office by bike, the office facilities in
a low carbon footprint. Kooth uses cloud
London include showers and storage, both
storage from Amazon Web Services (AWS)
free of charge for employees.
across all aspects of the business. AWS is
working to achieve Amazon’s goal of 100%
The landlord at Kooth’s London office
renewable energy by 2025. Google (a Carbon
is addressing environmental and health
Neutral company since 2007) provides
impacts associated with energy, materials
all hosting services. Our users can access
and products it uses, for example it has
services from wherever they are located and
eliminated single-use plastics from its
are not required to travel.
facilities and has publicly committed to
achieve carbon neutrality by 2023.
50
51
Strategic Report Waste management
Promotional Materials
Travel
Kooth’s waste management
practices encourage and
enable the recycling of
Kooth is investing in
reusable marketing
Kooth is a digital-first
company. Any travel for
materials and reduced the
work purposes - including
paper, cardboard, plastics,
amount of one-use signage.
internationally - is limited.
glass, and empty printer
cartridges and the re-use
In 2022, Kooth plans to
reduce the amount of
of packaging materials. Our
paper used for promotional
Where possible the use
of video conferencing
is either mandatory or
Manchester office uses a
local recycling charitable
organisation called Emerge.
Kooth is a digital service
and the majority of our
activity, focusing instead
recommended.
on digital marketing
initiatives. When print
is needed, Kooth only
works with printers with
ISO 14001 environmental
Our face-to-face counsellors
and engagement staff who
are required to travel for
their work represent less
work is online - therefore,
management accreditation.
than 20% of our workforce
and only travel within the
region they are assigned to
and where possible, use one
location (such as a school)
for multiple appointments.
This year, 85% of our
investors will receive a
digital-only copy of our
Annual Report. We aim to
achieve close to 100% in
future, reducing printing
and shipping.
we do not produce a
significant amount of
waste. Kooth’s platform
requires our counsellors to
make digital case notes.
And all employees are
advised that documents
and emails should not be
printed, instead accessed
via that Google shared
drives. If needed, all
printers are set to double-
sided and black and white,
the aim being to reduce the
use of paper and toner.
3. Governance
The Board believes that governance is
We have established an Audit Committee
central to the effective delivery of Kooth’s
and a Remuneration Committee
mission and strategy. With this in mind,
with formally delegated duties and
the Board is committed to ensuring that
responsibilities and with written terms of
all decision-making and the oversight it
reference. Each of these committees meet
provides promotes Kooth’s success for the
regularly on the frequencies set out below.
long term benefit of its shareholders, while
From time to time, separate committees
being respectful of the interests of other
may be set up by the Board to consider
key stakeholders. This includes Kooth’s
specific issues when the need arises.
service users, customers, colleagues and the
communities in which we operate.
Audit Committee: The Audit Committee
Kooth seeks to conduct all of its operating
has the primary responsibility of monitoring
and business activities in an honest,
the quality of internal controls to ensure
ethical and socially responsible manner.
that the financial performance of Kooth
These values underpin our business
is properly measured and reported. It
model and strategy. We are committed
receives and reviews reports from Kooth’s
to acting professionally, fairly and with
management and external auditors relating
integrity in all of our business dealings and
to the interim and annual accounts and the
relationships, with consideration for the
accounting and internal control systems in
needs of all of our stakeholders, including
use throughout Kooth. The Audit Committee
service users, investors, suppliers and
meets a minimum of three times in each
employees. Kooth endeavours to conduct
financial year and will have unrestricted
its business in accordance with established
access to Kooth’s external auditors. The
best practice, to be a responsible employer
Audit Committee comprises Simon Philips
and to adopt values and standards designed
and Dame Sue Bailey and is chaired by
to help guide staff in their conduct and
Peter Whiting.
business relationships.
Our Governance Framework
Kooth is a growing organisation. The Board
is committed, through its governance
model, to driving purpose-led decision-
making and to delivering accountability to
our stakeholders.
Remuneration Committee: The
Remuneration Committee reviews the
performance of the Executive Directors
and makes recommendations to the Board
on matters relating to their remuneration
and terms of service. The Remuneration
Committee meets as and when necessary,
but a minimum of three times each year.
52
53
Strategic Report
In exercising this role, the Directors have
Kooth’s learning and development platform,
face of a growing number of new digital service providers, our accredited status with the
regard to the recommendations put forward
Litmos, holds mandatory training and
UK’s leading governing body provides reassurance for new and existing users of Kooth
in the QCA Code and, where appropriate,
voluntary guides for all employees to
that we are safe; enhances recognition and credibility with employers and funding bodies;
the Remuneration Committee Guide for
access. We have materials on Safeguarding
helps with the acquisition of new contracts and supports our recruitment and retention
Small and Mid-Size Quoted Companies
for Non-Delivery, Adults and Children,
programmes.
published by the QCA and associated
GDPR policies, and mandatory training
guidance.
on cyber security. Our training platform
Cyber Security
offers content targeted to Kooth employees,
The Remuneration Committee does, where
for example bullying and harassment in
possible, adhere to the Remuneration
the workplace, anti-fraud, bribery and
Kooth has been awarded Cyber Essentials certification. Management carries out diligence
to seek to ensure that third party suppliers are maintaining good standards of security.
Committee policy document which
corruption and diversity and inclusion. We
Kooth continues to ensure that all members of staff receive annual mandatory cyber
includes, inter alia, a requirement for
also offer content aimed at those working
security training. Kooth takes the threat of a cyber incident very seriously and endeavours
executive directors of the Company to
directly with our users, such as recognising
to mitigate the risk wherever possible, although it is recognised by the Board and
hold shares with a value at least equal to
child abuse, sexual exploitation, equality
management that it will never be possible to fully mitigate cyber risk. Kooth maintains a
their annual salary, with a tapering post-
and diversity.
employment shareholding requirement.
The Remuneration Committee comprises
We have specific staff policies in the
Peter Whiting and Dame Sue Bailey and is
following areas: Health & Safety, GDPR
chaired by Simon Philips.
Business ethics
and Environmental. Each policy has an
individual owner and is revised annually.
Every change to a policy is tracked to
ensure transparency and accountability.
The Board promotes an ethical corporate
culture by having a documented Code of
Accreditations
Ethics, with any areas of non-compliance to
be reported. Kooth’s employment policies,
We continue to be a BACP (British
including those applying to equality,
Association for Counselling and
diversity and dignity, anti-fraud and anti-
Psychotherapy) accredited service and
bribery assist in embedding a culture of
indeed are the only nationwide digital
ethical behaviour for all employees. Kooth’s
mental health service to hold this accolade.
commitment to upholding the human rights
This demonstrates that we offer an
of all individuals is clearly documented in
accountable, ethical, professional and
its Modern Slavery Act 2015 statement.
responsive service to all of our stakeholders
as assessed by the BACP through the
Kooth ensures that all business areas work
submission of evidence via annual review.
to the Ten Principles of the United Nations
Specifically, there are a number of benefits
Global Compact in the areas of human
to this accreditation, many of which are
rights, labour, environment and anti-
particularly pertinent to the current post-
corruption.
COVID landscape. For example, in the
business continuity plan and reviews this plan annually.
2022 is an exciting year for Kooth. Our
focus is two fold, further expanding our
provision of free, safe and anonymous
mental health support across the UK and
penetrating internationally.
Kate Newhouse
Chief Operating Officer
54
55
Strategic Report
Section 172 Statement
The Board understands the views of the Kooth’s other key stakeholders and their interests,
and the matters set out in Section 172 of the Company’s Act 2006 have been considered in
board discussions and decision-making.
The Directors must consider the following in meeting the requirements of Section 172 (1) of
the Companies Act 2006:
• The likely consequences of any decision in the long term
• The interests of the company’s employees
• The need to foster the company’s business relationships with suppliers, customers and
others,
• The impact of the company’s operations on the community and the environment,
• The desirability of the company maintaining a reputation for high standards of business
conduct
• The need to act fairly as between members of the company.
We have identified our key stakeholders as follows:
Stakeholder
Engagement
Employees
We understand that our
employees are at the core
of everything we do and
maintain a focus on their
interests and wellbeing.
Customers
Communication with our
customers is fundamental
to understanding how we
can continue to add value
through our digital mental
health services.
Surveys
In August 2021 we introduced an online tool called OfficeVibe
that allows us to capture and report on valuable feedback from
our people across the business, on a regular basis. The results are
reviewed weekly at the senior management level and feedback is
used to inform employee development and policies.
Training
Employee development is actively encouraged through learning
and development budgets which are allocated to all departments,
in addition to our learning management portal which provides
employees with training materials and content.
Diversity
We appointed Steve Gilbert OBE to chair our Diversity and
Inclusion council during 2020, and also established an Employee
Voices Group to better understand and embrace diversity across the
organisation.
Share Scheme
Long term incentive share options are offered to all of our
employees.
COVID-19
We have continued to support employees throughout the COVID-19
pandemic, implementing remote and hybrid-working for our office
based staff when possible.
IPO
Our Admission to AIM has benefited our customers through greater
transparency facilitated by the increased scrutiny that comes with
being a public company. During the year we have
continued to support the NHS by increasing coverage of our
existing Children and Young People contracts to meet increased
demand, whilst also scaling up our other services.
Customer Base
90% of Commissioners in England now choose Kooth as their digital
mental health platform, including all 32 boroughs in London, plus a
clear expansion into Scotland and Wales.
Demand for our Adult service has also grown, with the addition of
14 new Adult contracts in the year.
Outcome Measures
Communication with our customers and users facilitates research
and outcome measures to evidence the impact of our platform,
leading to the development of new theories and the ability to
provide users with the support and services they require.
Service Reviews
Regular service reviews with customers are held to ensure we
continue to add value across our customer and user base.
56
57
Strategic Report
Investors
The Board maintains
strong relationships with
investors and supports
open channels of
communication.
Investor Meetings
Regular meetings are held between the Chief Executive Officer,
Chief Financial Officer and institutional investors and analysts
to ensure that the Company’s strategy, financial performance
and business developments are communicated effectively. There
is a dedicated email address (investorrelations@kooth.com) for
shareholder questions and comments.
Investor Website
Kooth’s investor relations website is updated on a regular and
timely basis. More information on the Board’s relationships with
investors is provided in the next section of the report.
Content
We are aware that mental health affects different communities in
different ways and are actively and continuously creating content
targeted towards all communities.
Diversity
Kooth is committed to providing an accessible and diverse service
to all, including working with leading LGBTQ+ and Black and
non-White influencers to provide appropriate content to our
communities.
Communities
Kooth is committed to
providing an accessible
and diverse service to all.
In 2021 we developed partnerships with BlackOut UK and Unity
FM to research mental health needs within specific communities.
This year 19% of our users were from Black and non-White
backgrounds. For comparison, 14% of the British population is Black
and non-White.
Access
There are no barriers to access our services - individuals do not need
a referral to sign up and there are no waiting lists.
Our Service
By nature of being a digital service provider, the Group’s operations
are deemed to have low environmental impact.
Partnerships
The Board is committed to building trusted partnerships with the
Group’s suppliers, which is crucial to ensuring the smooth-running
of our business and its operations.
Key Suppliers
Our key suppliers are predominantly software technology providers,
and given the nature of our service, strong relationships with these
suppliers are fundamental to its successful delivery.
Communication
We encourage an honest dialogue with all suppliers and ensure
regular engagement and communication with all key strategic
partners and suppliers.
Suppliers
The relationship we have
with our suppliers is
crucial to ensuring the
smooth-running
of our business and its
operations.
58
Principal Risks & Uncertainties
Kooth is exposed to a variety of risks and actively manages them through risk
management procedures. While risk cannot be eliminated altogether, actions are taken to
mitigate risk wherever possible.
Details of the Kooth’s financial risk management objectives and policies of Kooth and
exposure to foreign exchange risk, market risk, credit risk and liquidity risk are given in
note 25 to the consolidated financial statements.
The material business and operational risks that the Directors consider Kooth to be
exposed to include, but are not limited to, the following:
System outages
Safeguarding incidents
Kooth requires stable and robust systems
Kooth is not a crisis service; however,
and hosting services to enable the service
the core component of our business is
to function. The access of Kooth’s users
providing counselling services to children
and its customers to its digital platforms
and young people, and to adults, some of
and the ease with which customers can use
whom are vulnerable. Therefore, given the
and navigate these, along with the broad
nature of Kooth’s activities, it is necessary
range of functionality and services that
to have significant procedures in place to
are available, are key features that affect
ensure that our most vulnerable users are
the attractiveness of Kooth’s services.
prioritised and dealt with appropriately,
Any disruption to this could result in
and to mitigate any potential reputational
compromised Service User experience and/
damage in the event of a serious
or reputational damage. To prevent this
safeguarding incident.
Kooth has regular testing on its systems in
addition to active monitoring and a specific
recovery plan.
59
Strategic Report Changes in laws and regulations
Kooth’s business and its counsellors are
subject to regulation and so our business
may be adversely affected by changes
in government legislation, guidelines
and regulations. It is not always possible
to predict future changes to laws and
regulations as they may relate to the
services Kooth offers and any changes
could have a material adverse effect on our
business operation and financial condition.
Any changes to the prominent areas of the
Kooth’s business resulting from changes in
laws, regulations or guidelines may cause
Kooth to incur significant costs in respect of
implementing necessary changes required
and may severely restrict aspects of our
business, leading to an impact on revenue
and its financial condition.
and relevant laws. There is an inherent risk
such data could be processed in a manner
which is in direct breach of the relevant
data protection legislation, the consequence
of which would not only be a potentially
significant fine, but may also result in
damage to Kooth’s reputation further
impacting Kooth’s revenue.
The nature of the service means that the
data that Kooth collects from its users is
anonymised and collected with explicit
consent, no financial information is collected
and all data is encrypted in compliance with
NHS data standards. Nevertheless there is
a risk that any data breach within Kooth
could have significant reputational impact,
given the nature of the services we offer.
The Board considers that Kooth has in place
adequate procedures to ensure compliance
with the GDPR and controls to ensure the
security of the data collected.
Cyber security and data protection
COVID-19:
Kooth must ensure ongoing compliance
with various data protection laws, including
the UK’s Data Protection Act 2018 and the
Privacy and Electronic Communications (EC
Directive) Regulations 2003. Kooth is under
an obligation to protect the private and
personal data that it holds, including that of
its employees.
Kooth is required to take steps to
ensure compliance with the General
Data Protection Regulation (Regulation
(EU) 2016/679) (“GDPR”). Any personal
information that Kooth holds in respect of
its employees would be subject to the GDPR
During 2021 and throughout the pandemic
to date Kooth has provided vital support to
UK citizens and our remote delivery model
has enabled us to scale up to support the
NHS.
As Kooth provides essential mental health
services across the UK, the Directors remain
confident that we will continue to operate
and be successful in the new environment.
2
Corporate
Governance
60
61
Strategic Report Corporate Governance
Chairs’ Introduction to Governance
Dear Shareholder,
I am pleased to present the Corporate Governance Statement as Chair of the Board of
The Board
Directors of Kooth plc. As Chair, it is my responsibility to ensure that Kooth has both sound
corporate governance and an effective Board. Since the Company listed on AIM, it has
chosen to adopt the Quoted Companies Alliance’s Corporate Governance Code for Small and
Mid-Size Quoted Companies (the “QCA Code”).
Board discussions are conducted openly and transparently, which creates an environment
for rigorous and robust debate. During the year, the Board has constructively and proactively
challenged management on Group strategies, proposals, operating performance and key
decisions, as part of its ongoing work to assess and safeguard the position and prospects of
the Group.
The Directors of Kooth recognise the value of good corporate governance in every part
of the business. The Board considers that compliance with the QCA Code enables us to
serve the interests of all our key stakeholders, including our shareholders, and promotes
the maintenance and creation of long-term value in the Company. This report describes
our approach to governance, including information on relevant policies, practices and the
operation of the Board and its Committees.
Following the year end we were pleased to announce the appointment of Kate Newhouse to
the Board. Kate will continue in her role as Chief Operating Officer, having joined Kooth in
May 2020 with a wealth of leadership experience in the digital health space. As at the date
of this report the Board comprises the Independent Non-Executive Chair, two Non-Executive
Directors and three Executive Directors. Short biographical details are set out on page 64.
In carrying out its governance role, the main task of the Board is to drive the performance
of the Group. The Board must also ensure that the Group complies with all its contractual,
statutory and any other obligations, as well as the requirements of any regulatory body.
The Board has the utlimate responsibility for the successful operations of the Group, and
meets approximately monthly to set the overall direction and strategy of the Group.
62
63
Corporate Governance Peter Whiting
Independent Chair
Joined May 2020
Twenty-five years’ experience as an investment analyst
in equity markets, and experience over the past ten
years as a non-executive director on the board of several
public and private companies (currently including FDM
Group plc, Aptitude Software plc and D4t4 Solutions
plc). Peter has experience in a broad range of sectors,
but focused particularly on technology, including
software and engineering.
Sue Bailey
Independent Non-
Executive Director
Joined August 2020
Non-Executive Director at Manchester University NHS
Foundation Trust and thirty years’ experience as a Child
and Adolescent Psychiatrist.
Simon Philips
Non-Executive Director
Joined October 2015
Managing Partner of ScaleUp Capital with experience
of providing growth capital and expertise to businesses
in the technology, digital, business services and
information sectors.
Tim Barker
Executive Director /
Chief Executive Officer
Joined January 2020
Former CEO of DataSift, with over 30 years experience
in technology and SaaS startups and scale-ups,
including successful exits to Meltwater and Salesforce.
Sanjay Jawa
Executive Director /
Chief Financial Officer
Joined March 2020
Former Operating Partner and CFO at ScaleUp Capital,
with over 30 years senior financial experience in
technology and services businesses including Qualitest,
Barclays and FTI Consulting. Chartered Accountant and
previously an audit manager at Price Waterhouse.
Kate Newhouse
Executive Director /
Chief Operating Officer
Former CEO at leading venture builder, Blenheim
Chalcot and Doctor Care Anywhere, taking it from
digital health concept to a global business, serving over
140 corporate clients.
Board meetings
The Board meets on a regular basis throughout the financial year and as required on an
ad-hoc basis. Its mandate is to consider strategy, operational and financial performance and
internal controls. In advance of each meeting, the Chair of the Board sets the agenda, with
the assistance of the Company Secretary. Directors are provided with appropriate and timely
information, including board papers distributed in advance of the meetings. Those papers
include reports from the executive team and other operational heads.
Richard Almond of Almond + Co is the Company Secretary and attends all Board meetings
as well as advising on corporate governance matters. The Company Secretary produces full
minutes of each meeting, including a log of actions to be taken. The Chair of the Board then
follows up on each action at the next meeting, or before if appropriate.
Board and committee attendance
The attendance of the Board and the Committees is as follows:
Director
Position
Max possible
attendance
Meetings
attended
Max possible
attendance
Meetings
attended
Max possible
attendance
Meetings
attended
Board Meeting
Audit Committee
Remuneration Committee
Tim Barker
CEO
Sanjay Jawa
CFO
Peter Whiting
Chairman
Dame Sue
Bailey
Independent
Non-executive
Director
Simon Philips
Non-executive
Director
9
9
9
9
9
9
9
9
8
9
-
-
3
3
3
-
-
3
2
3
-
-
3
3
3
-
-
3
3
3
64
65
Corporate Governance Matters reserved for the board
Matters reserved for the decision of the Board include, but are not limited to:
• Approving Kooth’s strategic aims
• Approving major capital projects
and objectives;
and material contracts or
• Reviewing performance against
arrangements;
Kooth’s strategic aims, objectives
• Approving all circulars,
and business plans;
prospectuses and admission
• Overseeing Kooth’s operations;
documents;
• Approving changes to Kooth’s
• Ensuring a satisfactory dialogue
capital, corporate, management or
with shareholders;
control structures;
• Establishing Board committees and
• Approving results announcements
approving their terms of reference;
and the annual report and financial
• Approving delegated levels of
statements;
authority;
• Approving the dividend policy;
• Approving changes to the Board
• Declaring the interim dividend and
and its committees;
recommending the final dividend
• Determining the remuneration
and any special dividend;
policy for the Directors and other
• Approving any significant changes
senior executives and
in accounting policies;
• Providing a robust review of
• Approving the treasury policy;
Kooth’s corporate governance
• Approving Kooth’s risk appetite
arrangements.
and principal risk statements;
• Reviewing the effectiveness of
Kooth’s risk and control processes;
Audit Committee
Remuneration Committee
The Audit Committee comprises three
The Remuneration Committee comprises
Non-Executive Directors, two of whom
Simon Philips (Chair), Sue Bailey and
are independent, namely; Peter Whiting
Peter Whiting. Only members of the
(Committee Chair), Sue Bailey (INED) and
committee have the right to attend
Simon Philips (NED). At the discretion
meetings, however other individuals
of the Committee Chair, the CFO was
such as the CEO, the Head of Human
invited to attend meetings of the Audit
Resources and external advisors were
Committee during the year.
The Audit Committee is responsible
for the annual and half-yearly
reports to shareholders, other public
announcements of a financial nature,
review of the likelihood of any fraud
risks, review of the effectiveness
of Kooth’s internal control and risk
management system and oversight of the
relationship with the external auditors.
The Audit Committee also reviews the
appointment of the external auditor,
their independence, the audit fee, and
any questions of resignation or dismissal.
invited to attend at different points
during the year at the discretion of the
Chair. No individual was present for any
discussion on their own remuneration.
The role of the Remuneration Committee
includes responsibility for all aspects
of the remuneration of Executive
Directors, including salary, annual
bonus (where appropriate) and share-
based payments and an awareness of
remuneration within the wider workforce
and the administration of all share-
based remuneration plans within the
organisation.
The Remuneration Committee met three
The Audit Committee met three times
times during the year.
during the year.
66
67
Corporate Governance Relationships with stakeholders
The Board is committed to open and ongoing engagement with the Company’s
Shareholders. The Board will communicate with Shareholders through:
• The annual report and accounts;
• The interim and full-year results announcements
• Trading updates (where required or appropriate)
• The annual general meetings
• The Company’s investor relations website (in particular, the “RNS News”
and “AIM Rule 26” pages)
Election and re-election of the Directors
In accordance with the Company’s Articles of Association, each of the directors
will retire and stand for re-election at the forthcoming AGM.
Board Evaluation
The Chairs of the Board and of the
committees are available to meet with
An informal board evaluation process led
shareholders if requested.
Risk management and internal
controls
The Board acknowledges its responsibility
(delegated to the Audit Committee) for
establishing and maintaining Kooth’s
system of internal controls and will
continue to ensure that management keeps
these processes under regular review and
improves them where appropriate.
The Board’s financial risk management
objectives involve safeguarding Kooth’s
assets by identifying, managing, monitoring
and reporting the critical risks across
the business. As part of the admission
to AIM, Kooth has set up a risk register
which identifies, monitors and reports
on the critical risks of the business. The
risk register covers commercial, financial,
operational, competitive, technology and
other risks. A Head of Legal and Risk was
hired during the year to strengthen controls
and the Board via the Audit Committee,
regularly reviews the risks and ensures that
they are being addressed.
by the Chair took place during the year
in which the Chair conducted individual
discussions with each director, followed
by a collective discussion with the board.
The review considers effectiveness in
a number of areas including general
supervision and oversight, business risks
and trends, succession and related matters,
communications, ethics and compliance,
corporate governance and individual
contribution.
We will be considering the use of external
facilitators in future board evaluations.
As the business expands, the executive
directors will be challenged to identify
internal candidates who could potentially
occupy board positions and set out
development plans for these individuals.
The Chief Financial Officer is the primary
contact for Shareholders and there is a
dedicated email address (investorrelations@
kooth.com) for shareholder questions and
comments. Regular meetings are held
between the Chief Executive Officer,
Chief Financial Officer and institutional
investors and analysts to ensure that
the Company’s strategy, financials and
business developments are communicated
effectively. The Board intends to engage
with any shareholders who do not vote
in favour of resolutions at annual general
meetings to understand their motivation.
68
69
Corporate Governance Compliance with the QCA Code
The Chairman’s role is to lead the Board of Directors and to be responsible for ensuring that
the Company adheres to and applies the standards of corporate governance. The Board and
Committees meet regularly as described above. The executive team are directed to the day-
to-day management and are accountable to the rest of the Board. The Directors support a
high standard of corporate governance and have decided to comply with the QCA Corporate
Governance Code 2018 (“QCA Code”). The Directors believe that the QCA Code provides
the Company with the framework to help embed the governance culture that exists within
the organisation as part of building a successful and sustainable business for all of its
stakeholders.
A summary of how the Company currently complies with the QCA Code is set out below and
is updated at least annually in the manner recommended by the QCA Code.
Principle 1: Establish
Kooth’s platform and growth strategy is focused around
a business strategy and
four key pillars that represent a £500 million UK
business model which
addressable market, with a platform and operating model
promotes long-term value
that can scale into international markets to tackle the
for shareholders
global mental health challenge. The four pillars being
Children and Young adults, Adults, Workforce and
International.
Full disclosure of our strategy and business model can be
found in pages 4 to 60 of the Annual Report which will
also be available on the Company’s website.
The Directors intend to subject this strategy to ongoing
review and will provide an update on it from time to time
in the strategic report that will form part of the Annual
Report of the Company.
Principle 2: Seek to
The Board is committed to an open and ongoing
understand and meet
engagement with its shareholders. The main methods
shareholder needs and
of communication with shareholders are the Annual
expectations.
Report and Accounts, the annual and half-year results
announcements, trading updates, the Annual General
Meeting and the Company’s website.
In addition, the Chief Executive Officer and Chief Financial
Officer meet regularly with institutional investors and
analysts to ensure that objectives and any business
developments are clearly communicated, and that they are
available to respond to any enquiries following Company
announcements, together with other Company advisers
and the Non-Executive Directors.
The Annual General Meeting of the Company gives the
Directors the opportunity to meet with shareholders
and the ability to give an update on the Company’s
performance. It also provides the shareholders the
opportunity to ask questions of the Directors, either in the
formal AGM proceedings or informally after the event.
Principle 3: Take
into account wider
The Company takes ESG very seriously and the Board
is conscious of the impact that the Company’s business
stakeholder and social
activities may have in these areas.
responsibilities and their
implications for long-term
The Board recognises that its long-term success will
success
necessitate the maintenance of effective working
relationships across a wide range of stakeholders as well as
its shareholders; being primarily its employees, customers,
and suppliers.
A detailed report on how the Company has taken into
account wider stakeholders can be found in the ESG report
and s172 statement in the Annual Report.
70
71
Corporate Governance Principle 4: Embed
The Board has ultimate responsibility for the Company’s
Principle 6: Ensure
The Board evaluates consistently those skills that are
effective risk
system of internal controls and for reviewing its
that, between them,
required and whether they are adequately provided for
management, considering
effectiveness. Such systems are designed to manage risk of
all Directors have the
across the Board and executive team. In doing so, and
both opportunities and
failure to achieve business objectives.
threats, throughout the
necessary up to date
where relevant, it will consider guidance available on
experience, skills and
appointment and training of Board members.
organisation.
The Board meets frequently during the year during which
capabilities
business and other risks are assessed.
The Directors have identified the risks and uncertainties
which they consider to be the most significant for
investors, which are summarised in page 59.
Principle 5: Maintain
The Board comprises of six directors: the Independent
the Board as a well-
Chairman, two Non-Executive Directors and three
functioning, balanced
Executive Directors.
team led by the Chair.
Further details of the Directors and their experience is
set out in page 64 of the Annual Report and the AIM 26
section of the website.
The Board meets regularly with processes in place to
ensure that each Director is always provided with such
information as is necessary to discharge their duties.
The Board is also supported by the Committees (Audit and
Remuneration) each with specific remits. The detail of the
number of meetings and attendance by Directors is noted
on page 65.
The Company Secretary has the responsibility to make
the Board aware of legal changes and will advise on the
Company’s approach.
Where vacancies arise or gaps are identified that must
be addressed, the Board receives recommendations from
the Chief Executive Officer and appraises the candidates.
Appointments are made on merit against objective criteria
and considering the benefits that will be brought to the
Board and the Company.
The Board has access to external advice, including the
Company’s solicitors where required. The Board receives
ongoing training as part of its annual Board meeting cycle.
Principle 7: Evaluate
Although the Company is not required to undertake a
board performance based
formal independent evaluation, the Board undertook an
on clear and relevant
informal evaluation process led by the Chair which took
objectives, seeking
place during the year. The Chair conducted individual
continuous improvement
discussions with each director, followed by a collective
discussion with the board on its effectiveness and ways to
improve.
External facilitators were not used this year but will be
considered in future board evaluations. Until the formal
process is established, the Chairman is responsible for
ensuring an effective Board.
72
73
Corporate Governance Principle 8: Promote a
The Board places significant importance on the promotion
corporate culture that is
of ethical values and good behaviour within the Company
Principle 9
(Continued)
Board papers are circulated to the Directors in advance of
meetings to enable proper consideration of the content of
based on ethical values
and takes ultimate responsibility for ensuring these are
and behaviours
promoted and maintained throughout the organisation.
the papers.
The Company’s culture and values which are highlighted
on page 6 of the Annual Report reflects the Boards
dedication to promote an ethical culture.
In addition, the Company has documented procedures with
respect to its responsibilities regarding ethical behaviour,
specifically whistleblowing, social media, anti-bribery
and corruption, communication, and general conduct of
employees.
Principle 9: Maintain
The Board held 9 meetings during the year.
governance structures
and processes that are fit
The Company Secretary works closely with the Chairman
for purpose and support
and the Chairs of the Board Committees to ensure that
good decision-making by
Board procedures, including setting agendas and the timely
the Board
distribution of papers, are complied with and that there
are good communication flows between the Board and its
Committees, and between senior management and Non-
Executive Directors.
There is a formal agenda at each Board Meeting which
includes operational updates from the Chief Executive
Officer and financial updates from the Chief Financial
Officer. All reports cover different areas within the
Company and cover new business opportunities.
During the course of the year, other matters considered
by the Board include annual and half-year results
announcements, principal risks and uncertainties, ESG,
AGM resolutions, shareholder communications and
management incentivisation.
The Chairman maintains regular contact with the Non-
Executive Directors outside of formal Board meetings.
All Directors have access to the support and advice of the
Company Secretary as required.
Principle 10:
The Company places a strong emphasis on the standards
Communicate how the
of good corporate governance and maintaining an effective
Company is governed
engagement with its shareholders and key stakeholders,
and is performing
by maintaining an
open dialogue with
which it considers to be integral to longer-term growth and
success.
Shareholders and other
The Company’s Annual reports and accounts, and its half
relevant stakeholders
year report are key communication channels through
which stakeholders are informed of how the Company
is governed, updates to its strategic targets and how the
Company is progressing in meeting its objectives.
The ‘Investor Hub’ section of Company’s website is also an
avenue which the Company uses to communicate directly
with shareholders. This can be found at https://investors.
kooth.com/
Approved by order of the Board
Richard Almond
Company Secretary
28 March 2022
74
75
Corporate Governance
Report of the Audit Committee
Committee Chair’s introduction
As the Chair of the Audit Committee of Kooth (Committee), I present the Committee Report
for the year ended 31 December 2021, which has been prepared by the Committee and
approved by the Board.
Committee meetings and attendance
The three members of the Committee are Dame Sue Bailey, Simon Philips and me. The Board
considers that I have sufficient, relevant financial experience to chair the Committee given
that I have over 25 years’ experience as an investment analyst and currently hold a number
of other listed company Board and Audit Committee positions. During the year ended 31
December 2021, the Committee met three times with all members attending at least two
meetings. The Committee is required by its Terms of Reference to meet as frequently as the
Committee Chair shall require, and also at regular intervals to deal with routine matters and,
in any event, at least three times in each financial year.
Committee activities
The Committee is responsible for
reviewing and reporting to the Board on
the Company’s financial performance,
monitoring the integrity of the Company’s
financial statements (including Annual
and Interim Accounts and results
announcements), reviewing internal control
and risk management, and reviewing/
monitoring the performance, independence
and effectiveness of the Company’s external
auditors. The Committee’s primary activities
included meeting with the external
auditors, considering the audit approach,
scope and timetable, and reviewing the key
audit matters for the financial year 2021
audit. In addition, the Committee reviewed
the audit provided by Grant Thornton LLP,
Kooth’s external auditors. The Committee
concluded that Grant Thornton LLP is
delivering the necessary audit scrutiny.
Accordingly, the Committee recommended
to the Board that Grant Thornton LLP be re-
appointed for the next financial year.
As part of the year end audit, the
Committee:
• Met with the external auditors to
review and approve the annual audit
plan and receive their findings and
report on the annual audit
• Considered the integrity of the
published financial information and
whether the Annual Report and
Accounts taken as a whole are fair,
balanced and understandable and
provide the information necessary
to assess Kooth’s position and
performance, business model and
strategy
• Considered significant issues and
areas of judgement with the potential
to have a material impact on the
financial statements
• Reviewed and approved the year end
results and accounts
• Considered significant issues and
areas of judgement with the potential
to have a material impact on the
financial statements
76
77
Corporate Governance Committee objectives and responsibilities
The Committee’s main responsibilities can be summarised as follows:
• To report on and review the Company’s financial performance
• To monitor the integrity of the Company’s financial statements and any formal
announcements relating to Kooth’s financial performance
• To review the Company’s internal financial controls and risk management systems
• To review any changes to accounting policies
• To make recommendations to the Board in relation to the appointment of the external
auditors
Auditor Independence
To ensure auditor independence, consideration is given to their integrity and the objective
approach of the audit process. The use of non-audit services is not considered to be
significant and amounts paid in respect of these are disclosed in note 24.
I am satisfied that the Committee has satisfactorily discharged its duties in the year in
• To make recommendations to the Board concerning the approval of the remuneration
accordance with its terms of reference.
and terms of engagement of the external auditors
• To review and monitor the external auditors’ independence and objectivity
• To consider any matter specifically referred to the Committee by the Board
• The Terms of Reference are reviewed annually and are available on the Company’s
website.
Financial reporting
At the request of the Board, the Committee concluded that the Annual Report and Financial
Statements, taken as whole, were fair, balanced and understandable and provided the
information necessary for shareholders to assess the Group’s business model, strategy
and performance. The Committee considered the budget for 2022 and concluded that
the going concern basis is appropriate. The Committee also reviewed the Strategic Report
and concluded that it presented a useful, fair, balanced and understandable review of the
business.
Peter Whiting
Chair of the Audit Committee
28 March 2022
78
79
Corporate Governance Report of the
Remuneration Committee
Committee Chair’s introduction
As the Chair of the Remuneration Committee of the Company (‘the Committee’), I present
the Remuneration Committee Report for the year ended 31 December 2021, which has
been prepared by the Committee and approved by the Board.
Committee meetings and attendance
The three members of the Committee are Dame Sue Bailey, Peter Whiting and me. The
Board considers that I have sufficient relevant experience to chair the Committee, given
the numerous Board level positions currently (including the Remuneration Committee
Chair of another listed company) and previously held.
During the year ended 31 December 2021, the Committee met three times with all
members attending all meetings. The Committee is required by its Terms of Reference to
meet as frequently as the Committee Chair shall require and also at regular intervals to
deal with routine matters and, in any event, at least three times in each financial year.
Remuneration policy for the year ended 31 December 2021
The Remuneration Committee determines the Company’s policy on the structure of
Executive Directors’ and if required, senior management’s remuneration. The objectives of
this policy are to:
• Reward Executive Directors and senior management in a manner that ensures that
they are properly incentivised and motivated to perform in the best interests of
shareholders
• Provide a level of remuneration required to attract and motivate high- calibre
Executive Directors and senior management of appropriate calibre
• Encourage value creation through consistent and transparent alignment of incentive
arrangements with the agreed company strategy over the long term
• Ensure the total remuneration packages awarded to Executive Directors, comprising
both performance-related and non-performance-related remuneration, is designed to
motivate the individual, align interests with shareholders and comply with corporate
governance best practice
Ensure the total remuneration packages awarded to Executive Directors, comprising both
performance-related and non-performance-related remuneration, is designed to motivate
the individual, align interests with shareholders and comply with corporate governance
best practice.
80
81
Corporate Governance Committee objectives and responsibilities
The Committee’s main responsibilities can be summarised as follows:
• To determine the framework or broad policy for the remuneration of the
Chair, the Executive Directors, and such other senior executives as it is
requested by the Board to consider. The remuneration of Non-Executive
Directors shall be a matter for the Chair and the Executive Directors of
the Board. No Director shall be involved in any decisions as to their own
remuneration
• To determine such remuneration policy, taking into account all factors
which it deems necessary (including relevant legal and regulatory
requirements)
• To review the ongoing appropriateness and relevance of the remuneration
policy, including policy comparisons with market competitors
• To design and determine targets for any performance related pay schemes
operated by the Company and approving any annual payments made under
such schemes
• To review the design of, and any changes to, all share incentive plans
• To review the structure, size and composition of the Board, including the
skills, knowledge and experience
• To give consideration to succession planning
• To recommend new Board appointments
• To consider any matter specifically referred to the Committee by the Board
82
83
Corporate Governance Director’s remuneration: salary
Salaries are normally reviewed annually with effect from 1 January
The fair value of the awards was calculated using the Black Scholes model. Non-market
taking into account inflation, salaries paid to directors of comparable
based vesting conditions are included in assumptions about the number of options that are
companies, Group and personal performance. Salaries of Executive
expected to become exercisable or the number of shares that the employee will ultimately
Directors are determined by the Remuneration Committee. The Board
receive. This estimate is revised at each balance sheet date to allow for options that are
as a whole decides the remuneration of the Chair and Non-Executive
not expected to vest and the difference is credited to the Consolidated Statement of
Directors. Salaries and fees for directors effective from 1 January 2022
Comprehensive Income with a corresponding adjustment to reserves.
are as follows:
A breakdown of the Directors’ current interests in the long term incentives awards is set out
below.
Salaries
Name
Dame Sue Bailey
Tim Barker
Sanjay Jawa
Simon Philips
Peter Whiting
Director’s remuneration: long term
incentives (audited)
£’000
The Group adopts a Long Term Incentive
35
265
200
50
80
Plan with all employees of the Group
eligible to receive awards under the share
plans.
In line with the terms of the scheme, the
awards granted to Directors are subject
to performance criteria, with 50% being
linked to ARR growth and 50% linked to
comparative total shareholder return with
both elements being measured over a three
year period. The Remuneration Committee considers that the targets are
appropriate and are aligned with shareholder interests.
The fair value of the employee services received in exchange for these
grants is recognised as an expense on a straight-line basis over the
vesting period. The total amount to be expensed is determined by
reference to the fair value of the options or shares determined at the
date of grant.
Long Term Incentives
Name
No. of Options
Exercise price (p)
Tim Barker
Sanjay Jawa
100,000
75,000
0.05
0.05
Director’s remuneration: interests
According to the register of Directors’
interests maintained under the Companies
Act, the following interests in shares
of Group companies were held by the
Directors in office at the year end:
*Simon Philips is one of the beneficial owners of the
shares held by Root Capital II Fund.
Name
No. of Shares
Dame Sue Bailey
Tim Barker
Sanjay Jawa
-
801,603
320,648
Simon Philips*
12,329,873
Peter Whiting
40,000
84
85
Corporate Governance 2020
Name
Tim Barker
Sanjay Jawa
Total
Base Salary
and Fees
Pension Gain on exercise of
share options
234
159
393
6
3
9
94
38
132
Total
334
200
534
Executive Directors’ Remuneration: current year
Executive Director’s remuneration for the years ended 31 December 2021
and 31 December 2020 was as follows.
Remuneration policy for Non-Executive Directors
Dame Sue Bailey, Peter Whiting and I each receive a fee for our services as Directors, which
is approved by the Board, mindful of the time commitment and responsibilities of our roles
and of current market rates for comparable organisations and appointments. Non-Executive
Director fees for the year commencing 1 January 2022 are noted above.
2021
Name
Tim Barker
Sanjay Jawa
Total
Base Salary
and Fees
Pension
Gain on exercise of
share options
250
175
425
8
5
13
-
-
-
Total
258
180
438
Simon Philips
Chair of the Remuneration Committee
28 March 2022
86
87
Corporate Governance Directors’ report
The Directors present their report and the audited financial statements of Kooth plc for
Directors
Research and Development
The directors who held office during the
During the year the Group invested over
year and up to the date of signing these
£2.5 million in Research and Development.
financial statements were as follows:
More information on this is provided in the
Strategic Report and in the notes to the
the year ended 31 December 2021.
• Sue Bailey, Non-executive director
financial statements.
The principal activity of the Group is the provision of online counselling and support
to children, young people, and adults in need. A description and review of the Group’s
performance during the financial year and indications of future development are set
out within the Strategic Report, and this also incorporates the requirements of the
Companies Act 2006.
Comparatives
Disabled employees
The 2020 comparatives shown cover the
Applications for employment by disabled
year ended 31 December 2020
persons are always fully considered, bearing
Dividends
The Directors do not recommend the
payment of a dividend (2020: £nil).
in mind the abilities of the applicant
concerned. In the event of members of
staff becoming disabled every effort is
made to ensure that their employment with
the Group continues and that appropriate
training is arranged. It is the policy of the
Group and the Company that the training,
career development and promotion of
disabled people should, as far as possible, be
identical to that of other employees.
• Tim Barker, Chief Executive
• Sanjay Jawa, Chief Financial Officer
• Kate Newhouse, Chief Operating
Officer (appointed January 2022)
• Simon Philips, Non-executive director
• Peter Whiting, Chair and
Anti-Bribery
It is our policy to conduct all our business
in an honest and ethical manner. We take
a zero-tolerance approach to bribery and
corruption and are committed to acting
Non-executive director
professionally, fairly and with integrity in
all our business dealings and relationships.
Political Contributions
The Group made no political donations
during the year (2020: nil).
Directors’ insurance
The Group maintains appropriate insurance
cover in respect of any legal action against
its directors including in respect of the
prospectus issued for the initial public
offering.
Going Concern
The Directors have a reasonable expectation
that the Group as a whole has adequate
resources to continue in operational
existence for the foreseeable future. For this
reason, the going concern basis continues to
be adopted in the accounts.
The company’s business activities, together
with the factors likely to affect its future
development, performance and position
are set out in the Strategic report on
pages 4 to 60. In addition, note 25 to the
financial statements include the company’s
objectives, policies and processes for
managing its capital; its financial risk
management objectives; and its exposures
to credit risk and liquidity risk.
88
89
Corporate Governance
During the 2021 financial year the Group
that the company is well placed to manage its
generated a loss of £0.3 million (2020: £1.5
business risks successfully despite the current
million). Adjusted EBITDA is £2.1 million
uncertain economic outlook.
(2020: £0.9 million). The Group is in a net
asset position of £11.0 million (2019: £10.9
The Directors have, at the time of approving
million).
the financial statements, a reasonable
expectation that the Group has adequate
Management has performed a going concern
resources to continue in operational existence
assessment for a period up to 31 March
for the foreseeable future and as such continue
2023, which indicates that the Group will
to adopt the going concern basis of accounting
have sufficient funds to trade and settle its
in preparing the financial statements.
liabilities as they fall due. This assessment
takes into account a number of sensitivities,
Employee Involvement
including a downside scenario and a reverse
stress test, which models the scenarios that
would lead to a default by the Group. Both
the downside scenario and reverse stress test
reflect lower activity levels than both the
Group forecast and 2021 actual results. The
key assumption used in the assessment is
revenue and Management has analysed the
impact of reduced revenue on the Group’s
performance.
Whilst Management has concluded that
the possibility of the downside scenario
occurring is remote, the Group would still
have adequate resources to be able to trade
and settle its liabilities as they fall due in this
scenario. As a result Management also deems
the likelihood of the scenarios in the default
model occurring to be remote.
The Directors have considered the impact of
COVID-19 and do not expect the pandemic
to have a material adverse impact on the
Group. Consequently, the directors believe
The Group continues to attract and retain key
talent and places considerable value on the
involvement of employees. Employees are
regularly consulted regarding matters affecting
them through channels such as company-wide
briefings, employee engagement software and
email announcements, and their interests are
taken into account in making decisions that
are likely to affect their interests.
The Group is committed to providing equality
of opportunity to all existing and prospective
employees without discrimination through
channels such as our Diversity and Inclusion
Council (established in July 2020) and our
Employee Voices Group.
As a result of the IPO in 2020 we were able to
offer our staff long term incentives to reward
their hard work, passion and impressive
results.
Notice of Annual General Meeting
Details of business to be conducted at this
year’s AGM are contained in the Notice of
the Annual General Meeting which will be
communicated to shareholders separately.
It is the opinion of the Directors that the
passing of these resolutions are in the best
interest of the shareholders.
Significant events after year end
There have been no significant events after
year end.
Auditor
Grant Thornton UK LLP was appointed
as auditor in the year. A resolution to re-
appoint Grant Thornton UK LLP as auditor
and to authorise the directors to determine
their remuneration will be proposed at the
forthcoming AGM.
Name
Root Capital Fund II
LP trading as Scale Up
Capital
Cannacord Genuity
Group Inc
LF Gresham House UK
Micro Cap
Stancroft
Trust Limited
% of Issued
Share Capital
37.3%
14.3%
8.7%
6.1%
Premier Miton Investors
4.9%
Sanjay Jawa
Chief Financial Officer
Significant shareholders
28 March 2022
The Group has been notified of the following
interests in 3% or more of the issued ordinary
share capital of the Company. This is the
position as at 31 December 2021.
90
91
Corporate Governance
Directors’ responsibilities
statement
In respect of the Annual Report and the financial statements
The directors confirm that:
The directors are responsible for preparing the Annual Report, the Directors’ Remuneration
Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year.
Under that law the directors have to prepare the financial statements in accordance with
international accounting standards in conformity with the requirements of the Companies
Act 2006. 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 and profit
or loss of the company and group for that period. In preparing these financial statements,
the directors are required to:
• Select suitable accounting policies and then apply them consistently;
• Make judgements and accounting estimates that are reasonable and prudent;
• State whether International Accounting Standards in conformity with the requirements
of the Companies Act 2006 have been followed, subject to any material departures
disclosed and explained in Kooth and Parent Company financial statements
respectively;
• Prepare the financial statements on the going concern basis, unless it is inappropriate
to presume that Kooth and the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to
show and explain the company’s transactions and disclose with reasonable accuracy at any
time the financial position of the company and enable them to ensure that the financial
statements and the Directors’ Remuneration report comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the company and hence for taking
reasonable steps for the prevention and detection of fraud and other irregularities.
• so far as each director is aware, there is no relevant audit information of which the
company’s auditor is unaware; and
•
the directors have taken all the steps that they ought to have taken as directors in order
to make themselves aware of any relevant audit information and to establish that the
company’s auditor is aware of that information.
The directors are responsible for the maintenance and integrity of the corporate and
financial information included on the company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
To the best of our knowledge:
•
the group financial statements, prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006, give a true
and fair view of the assets, liabilities, financial position and profit or loss of the company
and the undertakings included in the consolidation taken as a whole; and
•
the Strategic Report and Directors’ Report include a fair review of the development and
performance of the business and the position of the company and the undertakings
included in the consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face..
Sanjay Jawa
Chief Financial Officer
28 March 2022
92
93
Corporate Governance Independent auditor’s report
Our opinion on the financial statements is unmodified.
We have audited the financial statements of Kooth plc (the ‘Parent company’) and
its subsidiaries (the ‘Group’) for the year ended 31 December 2021 which comprise
the Consolidated Statement of Profit and Loss and Other Comprehensive Loss,
the Consolidated Statement of Financial Position, the Consolidated Statement of
Changes in Equity, the Consolidated Cashflow Statement, the Parent Company
Statement of Financial Position, the Parent Company Statement of Changes in
Equity and notes to the financial statements and to the parent company financial
statements, including a summary of significant accounting policies. 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).
In our opinion:
•
•
•
•
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 December 2021 and of the Group’s loss
for the year then ended;
the Group financial statements have been properly prepared in accordance with
UK-adopted international accounting standards;
the Parent company financial statements have been properly prepared in
accordance with United Kingdom Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Independent auditor’s report to the
members of Kooth plc
28th March 2022
94
95
Corporate Governance Independent auditor’s report
Independent auditor’s report
Independent auditor’s report
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 are 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. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We are responsible for concluding on the appropriateness of the directors’ use of the going
concern basis of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the
Group’s and the Parent company’s ability to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention in our report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify the
auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of
our report. However, future events or conditions may cause the Group or the Parent company
to cease to continue as a going concern.
Our evaluation of the directors’ assessment of the Group’s and the Parent company’s ability
to continue to adopt the going concern basis of accounting included challenging the key
assumptions used within the cash flow scenarios modelled and the available sources of
liquidity. We critically assessed both the outcomes of reverse stress testing and the availability
of controllable mitigating future actions within the going concern assessment. We have also
considered the disclosures contained within the Annual Report in relation to the going concern
basis of accounting and are satisfied they describe adequately the impact of Covid-19 on the
Group as at 31 December 2021.
In our evaluation of the directors’ conclusions, we considered the inherent risks associated
with the Group’s and the Parent company’s business model including effects arising from
macro-economic uncertainties such as Covid-19, we assessed and challenged the reasonableness
of estimates made by the directors and the related disclosures and analysed how those risks
might affect the Group’s and the Parent company’s financial resources or ability to continue
operations over the going concern period.
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’s 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.
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.
The responsibilities of the directors with respect to going concern are described in the
‘Responsibilities of directors for the financial statements’ section of this report.
Our approach to the audit
Overview of our audit approach
Overall materiality:
Group: £246,000, which represents approximately
1.5% of the Group’s revenue.
Parent company: £159,900, which represents 2% of
the Parent company’s total assets, capped at 65% of
group materiality.
Key audit matters were identified as:
•
revenue recognition (same as previous year)
• accounting for capitalised internal development
costs (same as previous year).
Our auditor’s report for the year ended 31 December
2020 included one key audit matter that has not
been reported as a key audit matter in our current
year’s report. This related to the accounting for IPO
transaction and related costs, as this transaction
occurred wholly in the previous period.
We performed audits of the financial statements of
the significant Group components Kooth plc, Kooth
Group Limited and Kooth Digital Health Limited
using component materiality (full scope audit
procedures). We performed analytical procedures
on the financial information of the remaining
component.
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.
These matters included those that 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.
96
97
Corporate Governance
Independent auditor’s report
Independent auditor’s report
Independent auditor’s report
In the graph below, we have presented the key audit matters, significant risks and other risks relevant
to the audit.
Key Audit Matter - Group
How our scope addressed the
matter – Group
Revenue recognition (£16,682k, 2020:
£13,012k)
In responding to the key audit matter, we
performed the following audit procedures:
Revenue forms the basis for some of the
Group’s key performance indicators, both
for reporting to external stakeholders and
for management incentives.
The nature of the Group’s services and their
recognition over time, combined with the
fact that some contracts have terms where
invoicing is ahead of the service delivery,
means that there is a risk of inappropriate
timing of revenue recognition, specifically
as regards the completeness of deferred
revenue.
Furthermore, the invoicing and revenue
deferral process is manual in nature which
gives rise to the risk of errors being made in
the processing of both.
We therefore identified revenue recognition
as one of the most significant assessed risks
of material misstatement due to fraud or
error.
• Evaluating management’s determination
of whether the nature of the Group’s
services results in the provision of a
service at a point in time or over a
contractual term, by assessing a sample
of customer contracts against the
requirements of International Financial
Reporting Standard (‘IFRS’) 15 ‘Revenue
from Contracts with Customers’. This
included the assessment of new or one-off
transactions, by comparing the accounting
treatment adopted by management to the
Group accounting policy and IFRS 15.
• Evaluating the design effectiveness of
controls in respect of revenue recognition,
including those employed to ensure
revenue is recognised correctly in line
with IFRS 15.
• Utilising data analytics techniques to
identify revenue postings to unusual
account codes and investigating those
transactions.
• Testing a sample of transactions to
determine that the amount of revenue
recognised in the year and the amount
deferred at the balance sheet date were
accurately calculated based on progress of
the underlying contract.
Key Audit Matter - Group
How our scope addressed the
matter - Group
Relevant disclosures in the Annual Report
Our results
The Group’s accounting policy for revenue
recognition is shown in note 2.3 to the
consolidated financial statements and related
disclosures are included in note 4.
Based on procedures performed, we did not
identify any material misstatements in the
revenue recognised during the year.
Accounting for capitalised internal
development costs (£3,112K, 2020:
£2,615k)
We identified accounting for capitalised
internal development costs as one of the
most significant assessed risks of material
misstatement due to error.
The Group capitalises costs associated
with development of their online platform,
which is being developed internally. The
costs associated with the time spent on this
development are capitalised in the Statement
of Financial Position at the year end.
Costs must be capitalised when they meet
the requirements of International Accounting
(‘IAS’) 38 ‘Intangible Assets’. This includes
management judgement in determining
the distinction between research and
development costs.
In responding to the key audit matter, we
performed the following audit procedures:
• Assessing the accounting policy and
disclosure for compliance with IAS 38.
• Evaluating the design effectiveness of
controls in respect of accounting for these
transactions, including those performed to
ensure the correct costs are capitalised.
• Obtaining and assessing management’s
judgement on the level of employee costs
to be capitalised across the year.
• Performing a test of details on a sample
of these costs, agreeing amounts to
underlying payroll information or external
invoices.
• For a sample of capitalised costs,
making enquiries with employees
in the development team to gain an
understanding of the nature of the
work they had performed which had
been capitalised. This included assessing
whether the nature of the costs
capitalised met the criteria as set out in
IAS 38.
Relevant disclosures in the Annual Report
Our results
The Group’s accounting policy for accounting
for capitalised internal development costs
and the associated significant accounting
judgement are shown in notes 2.3 and 3,
to the consolidated financial statements,
respectively and related disclosures are
included in note 12.
Our testing did not identify any material
misstatements in the accounting for
capitalised internal development costs.
98
99
Corporate Governance
Independent auditor’s report
Independent auditor’s report
Independent auditor’s report
Our application of materiality
We apply the concept of materiality both in planning and performing the audit, and
in evaluating the effect of identified misstatements on the audit and of uncorrected
misstatements, if any, on the financial statements and in forming the opinion in the auditor’s
report.
Materiality was determined as follows:
Materiality measure
Group
Parent company
Materiality measure
Group
Parent company
Materiality
for financial
statements as a
whole
We define materiality as the magnitude of misstatement in the financial
statements that, individually or in the aggregate, could reasonably
be expected to influence the economic decisions of the users of these
financial statements. We use materiality in determining the nature,
timing and extent of our audit work.
Materiality
threshold
£246,000 which is approximately 1.5%
of revenue.
Significant
judgements made
by auditor in
determining the
materiality
In arriving at this judgement, we
considered the financial measures
which we believed to be most relevant
to the shareholders in assessing the
performance of the Group. Profit before
tax is a generally accepted benchmark
for a profit-orientated business. We
concluded that, in isolation, this metric
did not appropriately reflect the scale
of the Group’s ongoing operations or its
underlying performance. As a result,
revenue was considered the most
appropriate metric.
1.5% of revenues has been selected as
it is in the middle of our acceptable
range. There have been no significant
changes to the business model year on
year and the senior management team
has remained consistent, however,
we reduced the percentage to reflect
the higher risk arising from the entity
being listed.
Materiality for the current year
is higher than the level that we
determined for the year ended 31
December 2020 to reflect the growth
in revenue during the year.
£159,900, which represents
2% of the Parent company’s
total assets, capped at 65%
of group materiality.
Total assets was considered
the most appropriate
benchmark because the
Parent company does not
trade and holds material
investments in subsidiary
companies.
2% of total assets is at the
upper end of our acceptable
range and has been selected
to reflect that there have
been fewer complex
transactions in the Parent
company in the current year,
this was capped at 65% of
group materiality.
Materiality for the current
year is higher than the level
that we determined for the
year ended 31 December
2020 to reflect the increase
in Group materiality against
which this amount has been
capped.
Continued overleaf
Performance materiality
used to drive the extent
of our testing
We set performance materiality at an amount less than
materiality for the financial statements as a whole to reduce to
an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds materiality for
the financial statements as a whole.
Performance materiality
threshold
£172,200 which is 70% of financial
statement materiality.
£111,930 which is 70%
of financial statement
materiality.
Significant judgements
made by auditor in
determining the
performance materiality
In determining performance materiality, we made the following
significant judgements:
• Whether there were changes to the business in their
operations and in their business strategy
• Whether there were changes to our risk assessment, including
our assessment of the Group and Parent company’s overall
control environment
• Consideration of the number and individual magnitude of
audit adjustments observed in the previous period
We concluded that an amount at the upper end of our normal
range was appropriate on the basis of the above considerations.
Communication of
misstatements to the
audit committee
We determine a threshold for reporting unadjusted differences to
the audit committee.
Threshold for
communication
£12,300 and misstatements below that
threshold that, in our view, warrant
reporting on qualitative grounds.
£7,995 and
misstatements
below that threshold
that, in our view,
warrant reporting on
qualitative grounds.
100
101
Corporate Governance Independent auditor’s report
Independent auditor’s report
Independent auditor’s report
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.
In connection with our audit of the financial statements, 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 audit or otherwise appears
to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material misstatement in
the financial statements or a material misstatement of the other information. 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.
Our opinion on other matters prescribed by the Companies Act 2006 is unmodified
In our opinion, based on the work undertaken in the course of the audit:
•
•
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
the strategic report and the directors’ report have been prepared in accordance
with applicable legal requirements.
Matter on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the Group and the 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:
• 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
the Parent company financial statements are not in agreement with the accounting records
and returns; or
•
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
An overview of the scope of our audit
Our audit approach was a risk-based approach founded on a thorough understanding of the
Group’s business, its environment and risk profile and in particular included:
Understanding the group and its environment, including group-wide controls
Our group audit was scoped by obtaining an understanding of the Group and its environment,
including group-wide controls, and assessing the risks of material misstatement at the Group
level.
Type of work to be performed
Evaluation by the Group audit team of identified components to assess the significance of that
component and to determine the planned audit response based on a measure of materiality,
considering the relative size of each component as a percentage of total Group revenue, net
assets, and loss before tax. Kooth plc, Kooth Group Limited and Kooth Digital Health Limited
were significant components for which we performed full scope audit procedures using the
respective component materiality.
For significant components requiring a full scope approach, we evaluated the design and
implementation of controls over the financial reporting systems identified as part of our risk
assessment and addressed critical accounting matters such as those related to the key audit
matters as identified above. With respect to revenue recognition, we evaluated the design
effectiveness of controls and performed data analytics and substantive procedures. A fully
substantive approach was used for all other areas.
For the smallest component of the Group, Xenzone Alliance CIC, we performed analytical
procedures.
Performance of our audit
Audit approach
No. of
components revenue
%coverage %coverage %coverage
LBT
total assets
Full-scope audit
Analytical procedures
3
1
100%
-%
>99%
<1%
>99%
<1%
102
103
Corporate Governance
Independent auditor’s report
Independent auditor’s report
Independent auditor’s report
Responsibilities of directors for the financial statements
As explained more fully in the Directors’ responsibilities statement, 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.
A further description of our responsibilities for the audit of the financial statements is located
on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Explanation as to what extent the audit was considered 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. Owing to the inherent limitations of
an audit, there is an unavoidable risk that material misstatements in the financial statements
may not be detected, even though the audit is properly planned and performed in accordance
with the ISAs (UK).
The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below:
• We obtained an understanding of the legal and regulatory frameworks applicable to the
Parent company, the Group and industry in which they operate. We determined that the
following laws and regulations were most significant: UK-adopted international accounting
standards, United Kingdom Generally Accepted Accounting Practice, the Companies Act
2006, the Quoted Companies Alliance’s Corporate Governance Code for Small and Mid-
Size Quoted Companies and tax compliance regulations in the UK, which is the principal
jurisdiction in which the Group operates.
• We understood how the Parent company and the Group is complying with applicable laws
and regulations, through discussions with the Audit Committee and we corroborated our
understanding through our review of board minutes, and papers provided to the Audit
Committee;
•
In assessing the potential risks of material misstatement, we obtained an understanding
of the Parent company’s and the Group’s operations, including the nature of its revenue
sources, products and services and of its objectives and strategies to understand the classes
of transactions, account balances, expected financial statement disclosures and business
risks that may result in risks of material misstatement
• We assessed the susceptibility of the Parent company’s and Group’s financial statements
to material misstatement, including how fraud might occur. Audit procedures performed by
the Group engagement team included:
–
considering performance targets and their potential influence on revenue
recognition;
–
identifying and assessing the design effectiveness of controls management has in
place to prevent and detect fraud;
–
assessing whether assumptions and judgements in making its significant accounting
estimates are indicative of potential management bias;
–
identifying and testing journal entries, in particular any journal entries posted with
unusual account combinations; and
–
assessing the extent of compliance with the relevant laws and regulations as part of
our procedures on the related financial statement item.
• These audit procedures were designed to provide reasonable assurance that the financial
statements were free from fraud or error. The risk of not detecting a material misstatement
due to fraud is higher than the risk of not detecting one resulting from error and detecting
irregularities that result from fraud is inherently more difficult than detecting those
that result from error, as fraud may involve collusion, deliberate concealment, forgery or
intentional misrepresentations. Also, the further removed non-compliance with laws and
regulations is from events and transactions reflected in the financial statements, the less
likely we would become aware of it.
• The assessment of the appropriateness of the collective competence and capabilities of the
engagement team included consideration of the engagement team’s:
– understanding of, and practical experience with, audit engagements of a similar
nature and complexity through appropriate training and participation; and
– knowledge of the industry in which the client operates.
104
105
Corporate Governance Independent auditor’s report
Independent auditor’s report
Use of our report
This report is made solely to the 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 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 company and the company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
Anthony Thomas FCA
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London, UK
28th March 2022
106
107
Financial Statements
Kooth Plc Annual Report 2021
Corporate Governance
Consolidated statement of profit and loss and other comprehensive loss
For the year ended 31 December 2021
Consolidated statement of financial position
As at 31 December 2021
Continuing operations
Revenue
Cost of sales
Gross profit
Administrative expenses
Other operating income
Operating Loss
Analysed as:
Adjusted EBITDA
Depreciation & amortisation
Exceptional items
Share based payment expense
Gain on disposal of subsidiary
Operating loss
Interest expense
Interest income
Loss before tax
Tax
Loss after tax from continuing operations
Profit/(Loss) after tax from discontinued operations
Total comprehensive loss for the year
Loss per share - basic (£)
On continuing operations
On discontinued operations
Loss per share - diluted (£)
On continuing operations
On discontinued operations
Note
4
5
6
14, 15, 16
7
8
9
10
10
11
9
12
2021
£'000
16,682
(5,097)
2020
£'000
13,012
(3,924)
11,585
9,088
(12,318)
-
(11,216)
497
(733)
(1,631)
2,082
(2,384)
-
(431)
-
934
(1,498)
(580)
(507)
20
(733)
(1,631)
-
13
(314)
-
(720)
(1,945)
410
(310)
-
467
(1,478)
1
(310)
(1,477)
(0.01)
(0.01)
-
(0.01)
(0.01)
-
(0.06)
(0.06)
0.00
(0.06)
(0.06)
0.00
108
108
Assets
Non-current assets
Goodwill
Development costs
Right of use asset
Property, plant and equipment
Deferred tax
Total non-current assets
Current assets
Trade & other receivables
Contract assets
Cash & cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade payables
Contract liabilities
Lease liability
Accruals and other creditors
Deferred tax
Tax liabilities
Total current liabilities
Net current assets
Net Assets / (Liabilities)
Equity
Share capital
Share premium account
P&L reserve
Share-based payment reserve
Capital redemption reserve
Merger reserve
Total equity
Note
31 December 2021
£'000
31 December 2020
£'000
13
14
15
16
17
18
19
20
21
22
15
21
17
21
23
23
23
23
23
23
511
2,867
-
116
435
3,929
2,370
406
7,079
9,855
13,784
(417)
(797)
-
(649)
-
(948)
(2,811)
7,043
511
2,615
14
157
133
3,430
2,097
107
7,823
10,027
13,457
(275)
(619)
(17)
(866)
-
(827)
(2,604)
7,423
10,973
10,853
1,653
14,229
(1,879)
959
115
(4,104)
10,973
1,653
14,229
(1,569)
529
115
(4,104)
10,853
109
109
The financial statements of Kooth plc (Company registration number 12526594) were approved by
the Board of Directors and authorised for issue on 28 March 2022. They were signed on its behalf by:
Sanjay Jawa
Chief Financial Officer
28 March 2022
The notes on pages 113 to 142 form part of the financial statements.
Consolidated statement of changes in equity
For the year ended 31 December 2021
Share
capital
Share
premium
Share
based
payment
reserve
P&L
reserve
Capital
redemption
reserve
Merger
reserve
Total
equity
-
2
400
14,227
3,989
(2,736)
-
-
-
-
-
-
-
-
-
-
-
-
529
-
(2,838)
-
-
2,736
-
10
-
-
- (2,836)
14,627
115
-
-
-
(4,104)
-
-
-
-
-
529
10
-
(1,477)
-
-
(1,477)
1,653
14,229
529
(1,569)
115 (4,104) 10,853
1,653
14,229
529
(1,569)
115 (4,104) 10,853
-
-
-
-
-
-
-
430
-
-
-
(310)
-
-
-
-
-
-
-
430
(310)
1,653
14,229
959
(1,879)
115 (4,104) 10,973
Balance at 1 January
2020
Issue of share capital
Share for share
exchange
Capital reduction
Share based payments
Deferred tax
Total comprehensive
income for the year
As at 31 December
2020
Balance at 1 January
2021
Issue of share capital
Share based payments
Total comprehensive
income for the year
As at 31 December
2021
The notes on pages 113 to 142 form part of the financial statements.
110
110
111
111
Consolidated Cashflow Statement
For the year ended 31 December 2021
Note
Cash flows from operating activities
Loss for the year from continuing operations
Profit/(Loss) for the year from discontinued operations
Adjustments:
Depreciation & amortisation
Income tax received
9
14, 15, 16
8
10
9
18
21
16
14
Share based payment expense
Interest expense
Tax income recognised
Gain on disposal
Movements in working capital:
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Net cashflow from operating activity
Cash flows from investing activities
Purchase of property, plant and equipment
Additions to intangible assets
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of capital
Cost incurred on issue of capital
Receipt/(Repayment) of borrowings
Interest paid
Lease payments
Net cash from financing activities
2021
£'000
(310)
-
2,384
-
520
-
(410)
-
(574)
244
1,854
(63)
(2,535)
(2,598)
-
-
-
-
-
-
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
20
20
(744)
7,823
7,079
The notes on pages 113 to 142 form part of the financial statements.
2020
£'000
(1,478)
1
1,498
268
507
314
(466)
(20)
132
(396)
360
(107)
(1,505)
(1,612)
16,000
(1,378)
(4,249)
(1,444)
(81)
8,848
7,596
227
7,823
Notes to the Financial Statements
1. Corporate Information
Kooth plc is a company incorporated in England and Wales. The address of the registered office is 5
Merchant Square, London, England, W2 1AY.
2. Significant Accounting Policies
2.1) Basis of Preparation
The consolidated financial statements of Kooth plc and its subsidiaries (collectively, the Group) for
the year ended 31 December 2021 have been prepared and approved by the directors in accordance
with International Accounting Standards in conformity with the requirements of the Companies Act
2006.
Measurement Convention
The financial statements are prepared on the historical cost basis with the exception of certain items
which are measured at fair value as disclosed in the accounting policies set out below. These policies
have been consistently applied to all years presented unless otherwise stated. All values are
presented in Sterling and rounded to the nearest thousand pounds (£’000) except when otherwise
indicated.
Going Concern
The Directors have a reasonable expectation that the Group as a whole has adequate resources to
continue in operational existence for the foreseeable future. For this reason, the going concern basis
continues to be adopted in the accounts.
The company’s business activities, together with the factors likely to affect its future development,
performance and position are set out in the Strategic report on pages 4 to 60. In addition, note 25 to
the financial statements include the company’s objectives, policies and processes for managing its
capital; its financial risk management objectives; and its exposures to credit risk and liquidity risk.
During the 2021 financial year the Group generated a loss of £0.3 million (2020: £1.5 million).
Adjusted EBITDA is £2.1 million (2020: £0.9 million). The Group is in a net asset position of £11.0
million (2019: £10.9 million).
Management has performed a going concern assessment for a period up to 31 March 2023, which
indicates that the Group will have sufficient funds to trade and settle its liabilities as they fall due.
This assessment takes into account a number of sensitivities, including a downside scenario and a
reverse stress test, which models the scenarios that would lead to a default by the Group. Both the
downside scenario and reverse stress test reflect lower activity levels than both the Group forecast
and 2021 actual results. The key assumption used in the assessment is revenue and Management has
analysed the impact of reduced revenue on the Group’s performance.
112
112
113
113
Whilst Management has concluded that the possibility of the downside scenario occurring is remote,
the Group would still have adequate resources to be able to trade and settle its liabilities as they fall
due in this scenario. As a result Management also deems the likelihood of the scenarios in the
default model occurring to be remote.
The Directors have considered the impact of COVID-19 and do not expect the pandemic to have a
material adverse impact on the Group. Consequently, the directors believe that the company is well
placed to manage its business risks successfully despite the current uncertain economic outlook.
The Directors have, at the time of approving the financial statements, a reasonable expectation that
the Group has adequate resources to continue in operational existence for the foreseeable future
and as such continue to adopt the going concern basis of accounting in preparing the financial
statements.
2.2) Basis of Consolidation
The consolidated financial statements comprise the financial statements of the Company and its
subsidiaries as at 31 December 2021, with the comparatives presented for the previous 12 months
being the Group’s combined activities for the 12 months ended 31 December 2020.
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if, and only if, the Group has:
● Power over the investee (i.e., existing rights that give it the current ability to direct the
relevant activities of the investee)
● Exposure, or rights, to variable returns from its involvement with the investee
● The ability to use its power over the investee to affect its returns Generally, there is a
presumption that a majority of voting rights results in control. To support this presumption
and when the Group has less than a majority of the voting or similar rights of an investee, the
Group considers all relevant facts and circumstances in assessing whether it has power over
an investee, including:
● The contractual arrangement(s) with the other vote holders of the investee
● Rights arising from other contractual arrangements
● The Group’s voting rights and potential voting rights
accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows
relating to transactions between members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an
equity transaction. If the Group loses control over a subsidiary, it derecognises the related assets
(including goodwill), liabilities, non-controlling interest and other components of equity, while any
resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair
value.
Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been identified as the executive
directors that make strategic decisions. As Kooth plc’s operations are all in one location within the
United Kingdom, the Directors are of the opinion that the Group has only one reportable operating
segment, this is in line with internal reporting provided to the executive directors.
2.3)
Summary of Significant Accounting Policies
The following are the significant accounting policies applied by the Group in preparing its
consolidated financial statements:
Revenue from Contracts with Customers
Revenue arises from the provision of counselling services and mental health support services under
fixed price contracts. Contracts are typically for a 12 month period and are fixed price based on an
expected number of hours of counselling provided.
To determine whether to recognise revenue, the Group follows the five step process as set out within
IFRS 15.
1) Identifying the contract with a customer
2) Identifying the performance obligations
3) Determining the transaction price
4) Allocating the transaction price to the performance obligations
5) Recognising revenue when/as performance obligation(s) are satisfied.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control. Consolidation of a subsidiary
begins when the Group obtains control over the subsidiary and ceases when the Group loses control
of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of
during the year are included in the consolidated financial statements from the date the Group gains
control until the date the Group ceases to control the subsidiary.
Contracts with customers take the form of signed agreements from customers. There is one distinct
performance obligation, being the provision of counselling services, to which all the transaction price
is allocated. Revenue from counselling services is recognised in the accounting period in which the
services are rendered. The contracts are satisfied monthly over the contract term for an agreed level
of support hours. Revenue is recognised over-time, on a systematic basis over the period of the
contract, as this best represents the stage of completion.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity
holders of the parent of the Group and to the non-controlling interests, even if this results in the
non-controlling interests having a deficit balance. When necessary, adjustments are made to the
financial statements of subsidiaries to bring their accounting policies in line with the Group’s
In certain circumstances the number of hours of counselling provided may surpass the expected
number of hours within the contract. In this circumstance, Management does not recognise
additional revenue during the period, as contractually the Group has no right to demand payment for
additional hours. In some instances, the Group has recovered additional fees post year end for the
114
114
115
115
additional hours incurred; this additional revenue is recognised at a point in time when the Group has
agreed an additional fee and has a right to invoice. At each reporting date there was no significant
overprovision of hours noted.
In instances where the number of counselling hours provided is less than the contracted number of
hours, the full fixed fee is still payable by the customer.
The Group typically receives cash from customers 29 days after invoicing a customer.
Contract Assets
Contract assets are recognised for revenue earned not yet invoiced, for customers who are invoiced
on a quarterly basis. Upon invoicing, the amount recognised as a contract asset is reclassified to
trade receivables. The Group have reviewed the expected credit losses for the year and note no
material expected credit losses.
Contract liabilities
A contract liability is recognised if a payment is received or a payment is due (whichever is earlier)
from a customer before the Group transfers the related services. Contract liabilities are recognised as
revenue when the Group performs under the contract (i.e., transfers control of the related services to
the customer).
Other operating income - government grants
Government grants are recognised in profit or loss on a systematic basis over the periods in which the
entity recognises as expenses the related costs for which grants are intended to compensate. Grants
are classified as relating either to revenue or to assets. Grants relating to revenue are recognised in
income over the period in which the related costs are recognised. Grants relating to assets are
recognised over the expected useful life of the asset. Where part of a grant relating to an asset is
deferred, it is recognised as deferred income.
Tax
Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax laws used to compute the amount are those that
are enacted or substantively enacted at the reporting date in the countries where the Group operates
and generates taxable income.
Current tax relating to items recognised directly in equity is recognised in equity and not in the
statement of profit or loss. Management periodically evaluates positions taken in the tax returns
with respect to situations in which applicable tax regulations are subject to interpretation and
establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes at the reporting
date. Deferred tax liabilities are recognised for all taxable temporary differences, except:
116
116
● When the deferred tax liability arises from the initial recognition of goodwill or an asset or
●
liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss
In respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint arrangements, when the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences will
not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences, the carry forward of unused
tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is
probable that taxable profit will be available against which the deductible temporary differences, and
the carry forward of unused tax credits and unused tax losses can be utilised, except:
● When the deferred tax asset relating to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is not a business combination
and, at the time of the transaction, affects neither the accounting profit nor taxable profit or
loss
In respect of deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint arrangements, deferred tax assets are recognised only to the
extent that it is probable that the temporary differences will reverse in the foreseeable future
and taxable profit will be available, against which the temporary differences can be utilised
●
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part
of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each
reporting date and are recognised to the extent that it has become probable that future taxable
profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised
outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in
correlation to the underlying transaction either in OCI or directly in equity.
Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate
recognition at that date, are recognised subsequently if new information about facts and
circumstances change. The adjustment is either treated as a reduction in goodwill (as long as it does
not exceed goodwill) if it was incurred during the measurement period or recognised in profit or loss.
The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally
enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets
and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the
same taxable entity or different taxable entities which intend either to settle current tax liabilities
and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each
future period in which significant amounts of deferred tax liabilities or assets are expected to be
settled or recovered.
117
117
Sales tax
Expenses and assets are recognised net of the amount of sales tax, except:
● When the sales tax incurred on a purchase of assets or services is not recoverable from the
taxation authority, in which case, the sales tax is recognised as part of the cost of acquisition
of the asset or as part of the expense item, as applicable
● When receivables and payables are stated with the amount of sales tax included
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as
part of receivables or payables in the statement of financial position.
Research and Development tax claims
Where Kooth plc has made Research and Development tax claims under the Small and Medium
Enterprise scheme and tax losses have been surrendered for a repayable tax credit, a current tax
credit is reflected in the income statement.
Property, Plant and Equipment
Property, plant and equipment is stated in the statement of financial position at cost, less any
subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of property, plant and equipment includes directly attributable incremental costs incurred
in its acquisition and installation.
Depreciation is charged so as to write off the cost of assets over their estimated useful lives, as
follows:
Leasehold improvements
Fixtures, fittings and equipment
33.33% straight line
33.33% – 50% straight line
Goodwill and Intangibles
Goodwill
Goodwill is initially measured at cost (being the excess of the aggregate of the consideration
transferred and the amount recognised for non-controlling interests and any previous interest held
over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets
acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has
correctly identified all of the assets acquired and all of the liabilities assumed and reviews the
procedures used to measure the amounts to be recognised at the acquisition date. If the
reassessment still results in an excess of the fair value of net assets acquired over the aggregate
consideration transferred, then the gain is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For
the purpose of impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit
from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned
to those units.
Where goodwill has been allocated to a cash-generating unit (CGU) and part of the operation within
that unit is disposed of, the goodwill associated with the disposed operation is included in the
carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in
118
118
these circumstances is measured based on the relative values of the disposed operation and the
portion of the cash-generating unit retained.
Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of
intangible assets acquired in a business combination is their fair value at the date of acquisition.
Following initial recognition, intangible assets are carried at cost less any accumulated amortisation
and accumulated impairment losses. Internally generated intangibles, excluding capitalised
development costs, are not capitalised and the related expenditure is reflected in profit or loss in the
period in which the expenditure is incurred.
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for
impairment whenever there is an indication that the intangible asset may be impaired. The
amortisation period and the amortisation method for an intangible asset with a finite useful life are
reviewed at least at the end of each reporting period. Changes in the expected useful life or the
expected pattern of consumption of future economic benefits embodied in the asset are considered
to modify the amortisation period or method, as appropriate, and are treated as changes in
accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in
the statement of profit or loss.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment
annually, either individually or at the cash-generating unit level. The assessment of indefinite life is
reviewed annually to determine whether the indefinite life continues to be supportable. If not, the
change in useful life from indefinite to finite is made on a prospective basis.
An intangible asset is derecognised upon disposal (i.e., at the date the recipient obtains control) or
when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon
derecognition of the asset (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in the statement of profit or loss.
Expenditure on internally developed software products and substantial enhancements to existing
software product is recognised as intangible assets only when the following criteria are met:
● The technical feasibility of completing the intangible asset so that the asset will be available
for use or sale
Its intention to complete and its ability and intention to use or sell the asset
●
● How the asset will generate future economic benefits
● The availability of resources to complete the asset
● The ability to measure reliably the expenditure 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. Amortisation is recorded in the Statement of Profit and Loss.
During the period of development, the asset is assessed for impairment annually.
119
119
Amortisation is charged on a straight line basis over the estimated useful life of 3 years.
Expenditure on research activities as defined in IFRS is recognised in the income statement as an
expense is incurred.
Impairment testing of intangible assets and property, plant and equipment
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately independent cash inflows (CGU). Those intangible assets including goodwill and those
under development are tested for impairment at least annually. All other individual assets or CGUs
are tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable.
An impairment charge is recognised for the amount by which the asset or CGUs carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting
market conditions less costs to sell, and value in use. All assets, with the exception of goodwill, are
subsequently reassessed for indications that an impairment loss previously recognised may no longer
exist.
Financial instruments
The Group classifies financial instruments, or their component parts, on initial recognition as a
financial asset, a financial liability or an equity instrument in accordance with the substance of the
underlying contractual arrangement. Financial instruments are recognised on the date when the
Group becomes a party to the contractual provisions of the instrument. Financial instruments are
initially recognised at fair value except for trade receivables which are initially accounted for at the
transaction price. Financial instruments cease to be recognised at the date when the Group ceases to
be party to the contractual provisions of the instrument.
Financial assets are included on the balance sheet as trade and other receivables or cash and cash
equivalents.
Trade receivables
Trade receivables are amounts due from customers for services performed in the ordinary course of
business. They are generally due for settlement within 30 days and are therefore all classified as
current. Trade receivables are recognised initially at the transaction price. The Group holds the trade
receivables with the objective of collecting the contractual cash flows and therefore measures them
subsequently at amortised cost using the effective interest method.
The Group assess each receivable on a customer by customer basis for the expected lifetime credit
loss, which is based on an unbiased weighted average probability of default both at initial recognition
and subsequent reporting dates. Where an expected credit loss is identified a provision is made
against the receivable. Significant financial difficulties of the customer, probability that the customer
will enter bankruptcy or financial reorganisation default or delinquency in payments, and the
unavailability of credit insurance at commercial rates are considered indicators that the receivable
may be impaired. When these factors are confirmed for a trade receivable it is considered
uncollectible and a default event is triggered. At this point it is written off against the credit loss
provision account. Subsequent recoveries of amounts previously written off are credited against
administrative expenses in the income statement.
120
120
Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary
course of business from suppliers. Accounts payable are classified as current liabilities if the company
does not have an unconditional right, at the end of the reporting period, to defer settlement of the
creditor for at least twelve months after the reporting date. If there is an unconditional right to defer
settlement for at least twelve months after the reporting date, they are presented as non-current
liabilities. Trade payables are recognised initially at fair value and all are repayable within one year
and hence are included at the undiscounted amount of cash expected to be paid.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly
liquid investments that have a maturity date of 3 months or less, are readily convertible to a known
amount of cash and are subject to an insignificant risk of change in value.
Leases
Short term leases or leases of low value are recognised as an expense on a straight-line basis over
the term of the lease.
The Group recognises right-of-use assets under lease agreements in which it is the lessee. The
underlying assets mainly include property and office equipment and are used in the normal course of
business. The right-of-use assets comprise the initial measurement of the corresponding lease
liability payments made at or before the commencement day as well as any initial direct costs and an
estimate of costs to be incurred in dismantling the asset. Lease incentives are deducted from the
cost of the right-of-use asset. The corresponding lease liability is included in the consolidated
statement of financial position as a lease liability.
The right-of-use asset is depreciated over the lease-term and if necessary impaired in accordance
with applicable standards. The lease liability shall initially be measured at the present value of the
lease payments that are not paid at that date, discounted using the rate implicit in the lease. The
lease liability is subsequently measured by increasing the carrying amount to reflect interest on the
lease liability (application of the effective interest method) and by reducing the carrying amount to
reflect the lease payments made. No lease modification or reassessment changes have been made
during the reporting period from changes in any lease terms or rent charges.
Employee Benefit plans
Defined Contribution Plans
The Group operates a defined contribution pension plan. Payments to defined contribution pension
plans are recognised as an expense when employees have rendered services entitling them to the
contributions.
Share-based payment
Benefits to employees are provided in the form of share-based payment transactions, whereby
employees render services in exchange for shares or rights over shares (‘equity settled transactions’).
The fair value of the employee services rendered is measured by reference to the fair value of the
shares awarded or rights granted, which takes into account market conditions and non-vesting
121
121
conditions. This cost is charged to the income statement over the vesting period, with a
corresponding increase in the share based payment reserve.
The cumulative expense recognised at each reporting date until the vesting date reflects the extent
to which the vesting period has expired and the company’s best estimate of the number of shares
that will ultimately vest. The charge or credit to the income statement for a period represents the
movement in the cumulative expense recognised at the beginning and end of that period and is
recognised in share based payment expense.
Assets and liabilities classified as held for sale and discontinued operations
Assets classified as held for sale are presented separately and measured at the lower of their carrying
amounts immediately prior to their classification as held for sale and their fair value less costs to
sell. However, some held for sale assets such as financial assets or deferred tax assets, continue to be
measured in accordance with the Group’s relevant accounting policy for those assets. Once classified
as held for sale, the assets are not subject to depreciation or amortisation. Financial liabilities
continue to be measured in accordance with the Group’s relevant accounting policy for those items.
Any profit or loss arising from the sale or remeasurement of discontinued operations is presented as
part of a single line item. Assets and liabilities of disposal groups are presented separately in the
statement of financial position.
Discontinued operations
A disposal group qualifies as discontinued operation if it is a component of an entity that either has
been disposed of, or is classified as held for sale, and:
● Represents a separate major line of business or geographical area of operations
●
Is part of a single co-ordinated plan to dispose of a separate major line of business or
geographical area of operations
Is a subsidiary acquired exclusively with a view to resale
●
Discontinued operations are excluded from the results of continuing operations and are presented as
a single amount as profit or loss after tax from discontinued operations in the statement of profit or
loss. Additional disclosures are provided in Note 9. All other notes to the financial statements include
amounts for continuing operations, unless indicated otherwise.
Alternative Performance Measures
Adjusted results are prepared to provide a more comparable indication of the Group’s core business
performance by removing the impact of certain items including exceptional items, and other, non-
trading, items that are reported separately.
The Group believes that EBITDA before separately disclosed items (“adjusted EBITDA”) is the most
significant indicator of operating performance and allows a better understanding of the underlying
profitability of the Group. The Group defines adjusted EBITDA as operating profit/loss before interest,
tax, depreciation, amortisation, exceptional items and share based payments.
The Group also measures and presents performance in relation to various other non-GAAP measures,
such as gross margin, annual recurring revenue and revenue growth.
122
122
Adjusted results are not intended to replace statutory results. These have been presented to provide
Adjusted results are not intended to replace statutory results. These have been presented to provide
Adjusted results are not intended to replace statutory results. These have been presented to provide
users with additional information and analysis of the Group’s performance, consistent with how the
users with additional information and analysis of the Group’s performance, consistent with how the
users with additional information and analysis of the Group’s performance, consistent with how the
Board monitors results.
Board monitors results.
Board monitors results.
Reclassification of Promotional Costs
Reclassification of Promotional Costs
Reclassification of Promotional Costs
During the year ended 31 December 2021 the Group made the decision to reclassify its promotional
During the year ended 31 December 2021 the Group made the decision to reclassify its promotional
During the year ended 31 December 2021 the Group made the decision to reclassify its promotional
costs from cost of sales to administrative expenses. This gives a more appropriate view of the
costs from cost of sales to administrative expenses. This gives a more appropriate view of the
costs from cost of sales to administrative expenses. This gives a more appropriate view of the
financial statements, with regard to the criteria for the selection and application of the Group’s
financial statements, with regard to the criteria for the selection and application of the Group’s
financial statements, with regard to the criteria for the selection and application of the Group’s
accounting policies. As a result the comparative period has also been reclassified so that
accounting policies. As a result the comparative period has also been reclassified so that
accounting policies. As a result the comparative period has also been reclassified so that
comparability is not impaired.
comparability is not impaired.
comparability is not impaired.
The impact to the 2020 accounts as a result of the classification is demonstrated below. The amount
relating to promotion spend included in the 2021 administrative expenses line is £0.95 million.
The impact to the 2020 accounts as a result of the classification is demonstrated below. The amount
The impact to the 2020 accounts as a result of the classification is demonstrated below. The amount
relating to promotion spend included in the 2021 administrative expenses line is £0.95 million.
relating to promotion spend included in the 2021 administrative expenses line is £0.95 million.
Revenue
Revenue
Revenue
Direct Costs
Direct Costs
Direct Costs
Gross Profit (before reclassification)
Gross Profit (before reclassification)
Gross Profit (before reclassification)
Gross Margin
Gross Margin
Gross Margin
Promotion Costs
Promotion Costs
Promotion Costs
Staff Costs
Staff Costs
Staff Costs
Travel
Travel
Travel
Gross Profit (after reclassification)
Gross Profit (after reclassification)
Gross Profit (after reclassification)
Gross Margin
Gross Margin
Gross Margin
2020
2020
2020
£'000
£'000
£'000
13,012
13,012
13,012
(5,091)
(5,091)
(5,091)
7,921
7,921
7,921
60.9%
60.9%
60.9%
1,146
1,146
1,146
22
22
22
1,168
1,168
1,168
9,089
9,089
9,089
69.8%
69.8%
69.8%
123
123
123
123
Exceptional Items
Exceptional items are analysed as costs that are not in the ordinary operating costs of the Group.
The Company was incorporated as Hamsard 3564 Limited on 19 March 2020 as a private limited
company. The Group developed an appropriate accounting policy to restructure in line with IAS 8 as
Group Restructure
follows.
On 6 August 2020, the Company acquired all of the issued share capital of Kooth Group Limited
(formerly Xenzone Group Limited), by way of a share for share exchange with the shareholders of
Kooth Group Limited. On 24 August 2020, by a special resolution of the Company, the Company was
re-registered as a public company limited by shares and the name of the Company was changed to
Kooth plc. This was undertaken in anticipation of the IPO to establish Kooth plc as the parent
company of the Group. The structure of the Group by nature remains the same as prior to the
restructure and as such the transaction falls out of the scope of IFRS 3.
3. Significant Accounting Judgements, Estimates and Assumptions
In the application of the Group’s accounting policies, management is required to make judgements,
estimates and assumptions about the carrying value of assets and liabilities that are not readily
apparent from other sources.
Estimates and Assumptions
periods.
statements are as follows:
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of revision and future periods if the revision affects both current and future
The estimates which have the most significant impact on the amounts recognised in the financial
Useful economic lives of development costs and property, plant and equipment
Property, plant and equipment is depreciated over the economic useful lives of the assets. Useful
lives are based on management’s estimates of the period that the assets will generate revenue,
which are reviewed annually for continued appropriateness. The useful economic lives applied are set
out in the accounting policies. Development costs are amortised on a straight-line basis over the
useful life of the related asset which management estimate to be three years, which is industry
standard.
Share-based payments
Estimating fair value for share-based payment transactions requires determination of the most
124
appropriate valuation model, which depends on the terms and conditions of the grant. This estimate
also requires determination of the most appropriate inputs to the valuation model including the
expected life of the share option or appreciation right, volatility and dividend yield and making
assumptions about them. The basis for these key inputs and assumptions are described in note 8.
Judgements
The areas of judgement which have the most significant impact on the amounts recognised in the
financial statements are as follows:
Impairment of intangible assets (including goodwill) and property, plant and equipment
The Group tests goodwill at least annually for impairment, and whenever there is an indication that
the asset may be impaired. All other intangible assets and property, plant and equipment are tested
for impairment when indicators of impairment exist.
An impairment charge is recognised for the amount by which the asset or CGUs carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of fair value, reflecting
market conditions less costs to sell, and value in use. All assets, with the exception of goodwill, are
subsequently reassessed for indications that an impairment loss previously recognised may no longer
exist.
Deferred tax
The extent to which deferred tax assets can be recognised is based on an assessment of the
probability that future taxable income will be available against which the deductible temporary
differences and tax loss carry-forwards can be utilised. In addition, significant judgement is required
in assessing the impact of any legal or economic limits or uncertainties.
Capitalisation of Development Costs
Distinguishing the research and development phases of a new customised project and determining
whether the recognition requirements for the capitalisation of development costs are met requires
judgement. After capitalisation, management monitors whether the recognition requirements
continue to be met and whether there are any indicators that capitalised costs may be impaired.
Capitalised development expenditure is analysed further in note 14.
Development costs largely relate to amounts paid to external developers, consultancy costs and the
direct payroll costs of the internal development teams. Any internal time capitalised is the result of
careful judgement of the proportion of time spent on developing the platform.
Capitalised development expenditure is reviewed at the end of each accounting period for indicators
of impairment.
125
125
Exceptional Items
Exceptional items are analysed as costs that are not in the ordinary operating costs of the Group.
Exceptional Items
Exceptional items are analysed as costs that are not in the ordinary operating costs of the Group.
Group Restructure
The Company was incorporated as Hamsard 3564 Limited on 19 March 2020 as a private limited
company. The Group developed an appropriate accounting policy to restructure in line with IAS 8 as
Group Restructure
follows.
The Company was incorporated as Hamsard 3564 Limited on 19 March 2020 as a private limited
company. The Group developed an appropriate accounting policy to restructure in line with IAS 8 as
On 6 August 2020, the Company acquired all of the issued share capital of Kooth Group Limited
follows.
(formerly Xenzone Group Limited), by way of a share for share exchange with the shareholders of
Kooth Group Limited. On 24 August 2020, by a special resolution of the Company, the Company was
On 6 August 2020, the Company acquired all of the issued share capital of Kooth Group Limited
re-registered as a public company limited by shares and the name of the Company was changed to
(formerly Xenzone Group Limited), by way of a share for share exchange with the shareholders of
Kooth plc. This was undertaken in anticipation of the IPO to establish Kooth plc as the parent
Kooth Group Limited. On 24 August 2020, by a special resolution of the Company, the Company was
company of the Group. The structure of the Group by nature remains the same as prior to the
re-registered as a public company limited by shares and the name of the Company was changed to
restructure and as such the transaction falls out of the scope of IFRS 3.
Kooth plc. This was undertaken in anticipation of the IPO to establish Kooth plc as the parent
company of the Group. The structure of the Group by nature remains the same as prior to the
restructure and as such the transaction falls out of the scope of IFRS 3.
3. Significant Accounting Judgements, Estimates and Assumptions
In the application of the Group’s accounting policies, management is required to make judgements,
3. Significant Accounting Judgements, Estimates and Assumptions
estimates and assumptions about the carrying value of assets and liabilities that are not readily
apparent from other sources.
In the application of the Group’s accounting policies, management is required to make judgements,
estimates and assumptions about the carrying value of assets and liabilities that are not readily
Estimates and Assumptions
apparent from other sources.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
Estimates and Assumptions
period, or in the period of revision and future periods if the revision affects both current and future
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
periods.
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of revision and future periods if the revision affects both current and future
The estimates which have the most significant impact on the amounts recognised in the financial
periods.
statements are as follows:
The estimates which have the most significant impact on the amounts recognised in the financial
Useful economic lives of development costs and property, plant and equipment
statements are as follows:
Property, plant and equipment is depreciated over the economic useful lives of the assets. Useful
lives are based on management’s estimates of the period that the assets will generate revenue,
Useful economic lives of development costs and property, plant and equipment
which are reviewed annually for continued appropriateness. The useful economic lives applied are set
Property, plant and equipment is depreciated over the economic useful lives of the assets. Useful
out in the accounting policies. Development costs are amortised on a straight-line basis over the
lives are based on management’s estimates of the period that the assets will generate revenue,
useful life of the related asset which management estimate to be three years, which is industry
which are reviewed annually for continued appropriateness. The useful economic lives applied are set
standard.
out in the accounting policies. Development costs are amortised on a straight-line basis over the
useful life of the related asset which management estimate to be three years, which is industry
Share-based payments
standard.
Share-based payments
124
124
124
4. Revenue
7. Exceptional items
The total turnover of Kooth plc has been derived from its principal activity wholly undertaken in the
United Kingdom.
IPO fees
Other exceptional items
8. Employee remuneration
Salaries
Pensions
Social security & other staff benefits
Share based payment expense
Government grant
Total
Employee numbers
Direct
Indirect
Developers
Provision of online counselling
5. Administrative expenses
Employee costs
Rent and rates
IT hosting and software
Professional fees
Marketing
Depreciation & amortisation
Exceptional items
Share based payment expense
Other overheads
Total administrative expenses
6. Other operating income
At 1 January
Received during the year
Released to the statement of profit and loss
At 31 December
2021
£'000
16,682
2020
£'000
13,012
2021
£'000
6,876
212
882
680
494
2,384
-
431
359
12,318
2021
£'000
-
-
-
-
2020
£'000
5,958
347
756
498
611
1,498
580
507
461
11,216
2020
£'000
257
240
(497)
-
2021
£'000
-
-
-
2021
£'000
11,543
286
1,203
520
-
13,552
2021
204
126
32
362
2020
£'000
391
189
580
2020
£'000
9,217
255
911
507
148
11,038
2020
171
89
20
280
2020
£'000
191
316
507
Employee numbers disclosed represents the average number of employees for the year.
Share based payment
Long term incentive awards
Growth shares
2021
£'000
520
-
520
Government grants have been received from the Small Business Research Initiative for a project to
add functionality to the Kooth platform to explore how users could benefit from peer-to-peer
support. There are no fulfilled conditions or contingencies attached to these grants.
Long Term Incentive Awards
Long term incentive awards have been issued to all staff. The fair value of the awards has been
calculated using the Black Scholes model, based on the market price of the underlying shares on the
date of grant. Performance conditions are attached to the incentive awards of Executives, with 50%
linked to ARR growth and 50% linked to comparative total shareholder return. Vesting conditions
126
126
127
127
require that all staff remain employed by the business for 3 years. The shares vest over a 3 year
period with a maximum term of 10 years.
9. Disposal groups classified as discontinued operations
Outstanding at the beginning of
the year
Granted
Forfeited
Exercised
Outstanding at the end of the
year
Number of
Options
2021
999,681
367,173
(286,788)
-
Exercise
price per
share
2021
Number of
Options
2020
Exercise
price per
share
2020
-
1,012,770
(13,089)
-
£0.05
£0.05
£0.05
-
£0.05
£0.05
£0.05
1,080,066
999,681
Growth Shares
Growth shares were issued to Executive team members during 2019 and 2020. The fair value of
growth shares was calculated using the Black Scholes Model at the grant date. The key assumptions
used in the calculation were:
Risk free rate 1%
Annualised volatility 60%
All shares were realised and equity-settled upon Admission during the year ended 31 December 2020.
The weighted average share prices of options exercised in the year was £2.
Outstanding at the beginning of
the year
Granted
Forfeited
Exercised
Outstanding at the end of the year
Number of
Options
2021
Exercise
price per
share
2021
Number of
Options
2020
Exercise
price per
share
2020
-
-
-
-
-
£0.01
£0.01
£0.01
65,604
203,153
-
(268,757)
-
£0.01
£0.01
£0.01
In December 2017, the directors announced that the Group intended to dispose of Beam ABA
Services Limited. The disposal was expected to be completed within 12 months, but no proceedable
offers were received until April 2019.
Beam ABA Services Limited represents a separate line of business and there was a single co-
ordinated plan to dispose of this area. It was therefore treated as held for sale from December 2017
until the point at which it was sold. Revenue and expenses, gains and losses relating to the
discontinuation of this subgroup have been eliminated from profit or loss from the Group’s
continuing operations and are shown as a single line item in the statement of profit or loss.
On the 3rd of April 2020, Beam ABA Services Limited was sold to Root Capital LLP for £1.
Revenue
Expenses
Profit/(Loss) after tax from discontinued operations
The discontinued operations results contributed the
following to the cash flow:
Net cash inflows /(outflows) from operating activities
Net cash inflows/(outflows) from investing activities
Net cash inflows/(outflows) from financing activities
Net cash inflows/(outflows) arising on disposal
Reconciliation of disposal
Cash consideration received
Carrying amount of net assets sold
Gain on disposal
2021
£'000
-
-
-
2021
£'000
-
-
-
-
-
-
-
2020
£'000
273
(272)
1
2020
£'000
27
-
-
27
-
(20)
20
128
128
129
129
10. Interest
12. Earnings per share
Interest on loans
Interest on lease liability
Interest income on cash deposits
2021
£'000
-
-
14
14
2020
£'000
(312)
(2)
-
(314)
Interest on loans relates to the loan with Root Capital that was repaid in full during the year ended
31 December 2020.
Earnings used in calculation of earnings per share:
On total losses attributable to equity holders of the parent
On continuing operations
On discontinued operations
2021
£'000
(310)
(310)
-
Weighted average no. of shares (Basic)
Weighted average no. of shares (Diluted)
Shares in issue
B shares in issue
Ordinary shares in issue
Share options
2021
33,055,776
34,082,252
-
33,055,776
1,080,066
Loss per share (basic, £)
On total profits attributable to equity holders of the parent
On continuing operations
On discontinued operations
Loss per share (diluted, £)
On total profits attributable to equity holders of the parent
On continuing operations
On discontinued operations
(0.01)
(0.01)
0.00
(0.01)
(0.01)
0.00
11. Taxation
Current tax
UK corporation tax
Total current tax charge/(credit)
Deferred tax (P&L)
Origination and reversal of timing differences
Effect of tax rate change on opening balance
Total deferred tax charge / (credit) (P&L)
Tax charge / (credit) on profit on ordinary
activities
Reconciliation of tax charge
Profit /(loss) on ordinary activities before tax
Expected tax charge on profit on ordinary
activities at standard CT rate
Effects of:
Expenses not deductible for tax purposes
Effect of tax rate changing on opening balance
Income not taxable
R&D additional deduction
Difference between UK CT & DT rates
Surrender of tax losses for R&D tax credit refund
R&D expenditure credits
Prior year adjustment
130
2021
£'000
(252)
(252)
(158)
-
(158)
2020
£'000
(315)
(315)
(156)
4
(152)
(410)
(467)
(720)
(1,945)
(137)
-
(93)
-
(430)
(33)
80
-
203
(410)
(370)
632
3
(487)
(348)
-
98
5
-
(467)
130
2020
£'000
(1,477)
(1,478)
1
2020
24,351,925
24,685,152
-
33,055,776
999,681
(0.06)
(0.06)
0.00
(0.06)
(0.06)
0.00
131
131
13. Goodwill
Goodwill as at 1 January and 31 December
2021
£'000
511
2020
£'000
511
Management has established counselling services as the one CGU during the relevant periods. All
goodwill is attributable to this CGU.
The Group tests annually for impairment or more frequently if there are indications that it might be
impaired. There were no indicators of impairment noted during the periods presented.
The Group tests goodwill for impairment by reviewing the carrying amount against the recoverable
amount of the investment. Management has calculated the value in use using the following
assumptions:
Discount rate 8%
Growth rate 2%
Using alternative discount and growth rates as sensitised assumptions does not result in any
impairment.
The Group prepares forecasts based on the most recent financial budgets approved by the Board.
The forecasts have been used in the value in use calculation along with the assumptions stated
above. The forecasts used are consistent with those used in the going concern review and discussed
in note 2. There were no impairments in the years ended 31 December 2021 and 31 December 2020.
14. Development costs
Cost
Balance as at 1 January
Additions
Balance as at 31 December
Amortisation
Balance as at 1 January
Amortisation
Balance as at 31 December
Carrying amount 31 December
132
2021
£'000
4,828
2,535
7,363
(2,213)
(2,283)
(4,496)
2,867
2020
£'000
3,297
1,531
4,828
(895)
(1,318)
(2,213)
2,615
132
The 2021 amortisation charge includes £0.2m in respect of accelerated amortisation on a project
where the useful economic life was reduced from its initial three years.
15. Leases
During the year ended 31 December 2021, the value of all leases recognised under IFRS 16 were
reduced to nil. All remaining leases are either short-term leases or leases of low value underlying
assets.
Right of use asset
As at 1 January
Additions
Depreciation
Disposal
As at 31 December
Lease liability
As at 1 January
Additions
Interest charge
Cash payment
Disposal
As at 31 December
2021
£'000
2020
£'000
14
-
(3)
(11)
(14)
-
17
-
-
-
(17)
-
98
-
(84)
14
95
-
2
(80)
17
The consolidated statement of cash flows includes the following amounts relating to leases within
scope of IFRS 16:
Cash outflows
2021
£'000
-
2020
£'000
81
133
133
16. Property, plant and equipment
18. Trade and other receivables
Cost
Balance as at 1 January
Additions
Balance as at 31 December
Depreciation
Balance as at 1 January
Depreciation
Balance as at 31 December
Carrying amount 31 December
2021
£'000
388
63
451
(231)
(104)
(335)
116
2020
£'000
281
107
388
(135)
(96)
(231)
157
Trade receivables
Prepayments and other receivables
Total trade and other receivables
2021
£'000
1,609
761
2,370
2020
£'000
1,430
667
2,097
All amounts shown above are short term. The net carrying value of trade receivables is considered a
reasonable approximation of fair value.
19. Contract assets
Property, plant and equipment refers to computer and office equipment.
Accrued income
17. Deferred tax assets and liabilities
20. Cash and cash equivalents
At 1 January 2020 - asset/(liability)
Movement - (charge)/credit
At 1 January 2021 - asset/(liability)
Movement - (charge)/credit
Fixed asset
temporary
differences
Other
temporary
differences
Tax
losses
Total
(388)
(93)
(481)
23
193
(114)
164
371
(31)
164
79
244
535
35
133
302
At 31 December 2021 - asset/(liability)
(458)
323
570
435
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be
available against which the deductible temporary differences can be utilised.
Cash and cash equivalents
21. Trade and other payables
Trade payables
Accruals and other creditors
Tax liabilities
Total
22. Contract liabilities
Contract liabilities - current
2021
£'000
406
2021
£'000
7,079
2021
£'000
417
649
948
2,014
2,014
2021
£'000
797
2020
£'000
107
2020
£'000
7,823
2020
£'000
275
866
827
1,967
2020
£'000
619
134
134
135
135
23. Equity
Share Capital
Ordinary A shares
On 2 September 2020, Kooth plc issued 8 million new ordinary A shares of 200p each via an Initial
Public Offering and admission to AIM. This brought the total shares in issue to 33,055,776.
Upon Admission, the B shares converted into Ordinary A shares.
2021
£'000
1,653
2020
£'000
1,653
Share Premium
2021
£'000
14,229
2020
£'000
14,229
The share capital of Kooth plc consists of fully paid ordinary shares with a nominal value of £0.05 per
share.
The A ordinary shares have attached to them full voting, dividend and capital distribution rights
(including on winding up). They do not confer any right of redemption. B ordinary shares have
attached to them no voting, dividend or capital distribution rights (including on winding up). They do
not confer any rights of redemption.
Share premium represents the funds received in exchange for shares over and above the nominal
value.
Share based payment reserve
2021
£'000
959
2020
£'000
529
Number of Shares
Number of Shares
Ordinary A shares
2021
33,055,776
2020
33,055,776
The share based payment reserve represents amounts accruing for equity settled share options
granted plus the fair value of growth shares realised upon IPO.
During the year ended 31 December 2020, 203,152 £0.0001 B shares in Kooth Group Limited
(formerly Xenzone Group Limited) were issued to Executive team members bringing the total number
of B shares to 367,928. These shares were accounted for as a share based payment transaction under
IFRS 2, with the nominal value of these shares held in share capital and the fair value expense
recognised in the share based payment reserve. See note 6.
Upon incorporation of Kooth plc in September 2020, the Company entered into a share for share
exchange agreement whereby 1,000,000 A ordinary and 367,928 B ordinary £3 shares were issued in
the capital of Kooth plc.
The Company then undertook a reduction of capital whereby the total aggregate nominal amount of
share capital was reduced from £4,104,000 to £1,368,000 by reducing the nominal value of each
share from £3 to £1.
Subsequent to this, and prior to the listing on AIM, the Company undertook a reorganisation whereby
1,000,000 A ordinary shares and 367,928 B ordinary shares £1 shares were sub-divided into
20,000,000 A ordinary shares and 7,358,560 B ordinary shares of £0.05. These shares were
reclassified into 25,055,776 ordinary shares and 2,302,784 deferred shares of £0.05. The deferred
shares were subsequently bought back and cancelled by the Company.
Merger reserve
2021
£'000
(4,104)
2020
£'000
(4,104)
The merger reserve was created as a result of the share for share exchange during the year ended 31
December 2020.
Capital redemption reserve
2021
£'000
115
2020
£'000
115
The capital redemption reserve was established as a result of the deferred share buyback during the
year ended 31 December 2020.
136
136
137
137
24. Auditors remuneration
Fees payable to the auditor for the audit of the Company and
Consolidated financial statements
Fees payable to the auditor and its associates for other services:
Other audit related services
25. Financial assets and liabilities
Financial assets
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Trade and other payables
2021
£'000
75
5
2021
£'000
2,370
7,079
2020
£'000
50
139
2020
£'000
1,782
7,823
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices. Market risk comprises three types of risk: interest rate risk,
currency risk and other price risk, such as equity price risk and commodity risk.
Market risk is deemed to be immaterial to the Group given that:
●
●
the Group has no debt facilities in place at the year ended 31 December 2021 (£2020: £nil)
that would cause interest rate risk, and
the Group’s activities are solely domestic therefore eliminating foreign currency risk.
Credit risk
The Group’s principal financial assets are cash and trade receivables. The credit risk associated with
cash is limited, as the counterparties have high credit ratings assigned by international credit-rating
agencies. The credit risk associated with trade receivables is also limited as customers are primarily
government backed organisations such as the NHS or local councils. Credit losses historically
incurred have been negligible.
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet
foreseeable needs by closely managing its cash balance.
2,015
1,985
As at the year ended 31 December 2021 the Group is solely funded by equity and as a result liquidity
risk is deemed to be immaterial. The Group monitors its risk of a shortage of funds through both
review and forecasting procedures.
Management has assessed that the fair values of cash, trade receivables, trade payables, and other
current liabilities approximate their carrying amounts largely due to the short-term maturities of
these instruments.
26. Related party transactions
25.1) Financial instruments risk management objectives and policies
The Group’s principal financial liabilities comprise trade and other payables. The Group has no debt
facility as at 31 December 2021 (2020: £nil). The main purpose of these financial liabilities is to
finance the Group’s operations. The Group’s principal financial assets include trade receivables and
cash that derive directly from its operations.
The Group is exposed to market risk, credit risk and liquidity risk. The Group’s senior management
oversees the management of these risks. The Group’s senior management is supported by the Board
of Directors who advise on financial risks and the appropriate financial risk governance framework for
the Group. The Board provides assurance to the Group’s senior management that the Group’s
financial risk activities are governed by appropriate policies and procedures and that financial risks
are identified, measured and managed in accordance with the Group’s policies and risk objectives.
Note 28 provides information about the Group’s structure, including details of the subsidiaries and
the holding company. The Group has taken advantage of the exemption available under IAS 24
Related Party Disclosures not to disclose transactions between Group undertakings which are
eliminated on consolidation.
The following table provides the total amount of transactions that have been entered into with
related parties for the relevant financial year.
Monitoring fees - ScaleUp Capital Limited
2021
£'000
50
50
2020
£'000
91
91
The Board of Directors reviews and agrees policies for managing each of these risks, which are
summarised below.
Key management personnel are the executive members of the Board of Directors of the Group and
their remuneration is disclosed below and in the Remuneration Committee report.
138
138
139
139
Base salary and fees
Pension
Gain on exercise of share options
Total
2021
£'000
430
8
-
438
2020
£'000
393
9
132
534
27. Capital management policies and procedures
The Group’s capital management objectives are:
●
●
to ensure the Group’s ability to continue as a going concern
to provide an adequate return to shareholders by pricing products and services in a way that
reflects the level of risk involved in providing those goods and services.
The Group monitors capital on the basis of the carrying amount of equity, less cash and cash
equivalents as presented in the statement of financial position.
The Group has no debt facilities in place as at 31 December 2021 (2020: £nil).
Management assesses the Group’s capital requirements in order to maintain an efficient overall
financing structure while avoiding excessive leverage. The Group manages the capital structure and
makes adjustments to it in the light of changes in economic conditions and the risk characteristics of
the underlying assets.
The amounts managed as capital by the Group for the reporting periods under review are
summarised as follows:
Total equity
Cash and cash equivalents
Capital
Total equity
Lease liability
Financing
140
2021
£'000
10,973
7,079
18,052
10,973
-
10,973
2020
£'000
10,853
7,823
18,676
10,853
17
10,870
140
28. Subsidiaries and associated companies
Name
Country of
Incorporation
Kooth Group Limited
UK
Proportion
Activity
Registered Address
Held
100%
Platform
development
5 Merchant Square, London,
England, W2 1AY
Kooth Digital Health
Limited
UK
100%
5 Merchant Square, London,
England, W2 1AY
Provision of online
counselling and
support to
children, young
people and adults
in need
Xenzone Alliance CIC
UK
100%
Dormant
5 Merchant Square, London,
England, W2 1AY
29. Standards issued but not yet effective
At the date of authorisation of these consolidated financial statements, several new, but not yet
effective, Standards and amendments to existing Standards, and Interpretations have been published
by the IASB. None of these Standards or amendments to existing Standards have been adopted early
by the Group.
Management anticipates that all relevant pronouncements will be adopted for the first period
beginning on or after the effective date of the pronouncement. New Standards, amendments and
Interpretations not adopted in the current year have not been disclosed as they are not expected to
have a material impact on the Group’s consolidated financial statements.
30. Ultimate Controlling Party
No shareholder owns a majority of shares. The directors do not consider that there is one ultimate
controlling party.
31. Events after the reporting date
There have been no material events.
141
141
32. Capital commitments
The Group’s capital commitments at 31 December 2021 are £nil (FY20: £nil).
33. Parent Company Statement of Financial Position
Note
31 December 2021
£'000
31 December 2020
£'000
Assets
Non-current assets
Investments
Current assets
Trade & other receivables
Deferred tax
Intercompany receivables
Cash & cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade payables
Intercompany payables
Total current liabilities
Net current assets
Non-current liabilities
Net assets
Equity
Share capital
Share premium account
P&L reserve
Share-based payment reserve
Capital redemption reserve
Merger reserve
Total equity
34
38
39
35
36
40
35
41
41
41
41
41
41
4,414
50
52
6,707
6,533
13,342
17,756
(64)
(2,616)
(2,680)
10,662
-
15,076
1,653
14,222
2,231
959
115
(4,104)
15,076
4,414
114
15
6,734
6,674
13,537
17,951
(23)
(2,891)
(2,914)
10,623
-
15,037
1,653
14,222
2,622
529
115
(4,104)
15,037
142
142
143
143
As permitted by section 408 of the Companies Act 2006, the income statement of the parent
company is not presented as part of the financial statements. The parent company’s loss for the
financial period was £391k (2020: £115k).
The financial statements of Kooth plc (Company registration number 12526594) were approved by
the Board of Directors and authorised for issue on 28 March 2022. They were signed on its behalf by:
Sanjay Jawa
Chief Financial Officer
28 March 2022
Parent Company Statement of Changes in Equity
Share
capital
Share
premium
Share
based
payment
reserve
P&L
reserve
Capital
redemption
reserve
Merger
reserve
Total
equity
Balance at 19 March 2020
-
-
-
-
-
-
Issue of share capital
Share for share exchange
Capital reduction
Share based payments
Total comprehensive loss
for the year
400
3,989
(2,736)
-
14,222
-
-
-
-
-
-
529
-
-
2,736
-
-
115
-
-
- 14,622
-
-
529
(4,104)
-
-
-
-
-
(114)
-
-
(114)
As at 31 December 2020
1,653
14,222
529
2,622
115 (4,104) 15,037
The notes on pages 146 to 150 form part of these financial statements.
Balance at 1 January 2021
1,653
14,222
529
2,622
115 (4,104) 15,037
Share based payments
Total comprehensive loss
for the year
-
-
-
-
430
-
-
(391)
-
-
-
-
430
(391)
As at 31 December 2021
1,653
14,222
959
2,231
115 (4,104) 15,076
The notes on pages 146 to 150 form part of these financial statements.
144
144
145
145
Notes to the Parent Company Financial Statements
34. Investments
Basis of Preparation
The Financial Statements are presented in pound sterling, rounded to the nearest thousand, unless
otherwise stated. They are prepared under the historical cost basis, except that derivative financial
instruments are stated at their fair value, and in accordance with Financial Reporting Standard 101
Reduced Disclosure Framework (FRS 101) and the Companies Act 2006.
As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available
under that standard in relation to share-based payments, financial instruments, capital management,
presentation of comparative information in respect of certain assets, presentation of a cash flow
statement, standards not yet effective, impairment of assets and certain related party transactions.
Where required, equivalent disclosures are given in the Consolidated Financial Statements.
As permitted by section 408(4) of the Companies Act 2006, a separate income statement and
statement of comprehensive income for the Company has not been included in these Financial
Statements. The principal accounting policies adopted are described below. They have all been
applied consistently to all years presented.
Amounts receivable by the Company’s auditor and its associates in respect of services to the
Company and its associates, other than the audit of the Company’s Financial Statements, have not
been disclosed as the information is required instead to be disclosed on a consolidated basis in the
Consolidated Financial Statements.
Investment in subsidiaries
35. Intercompany
Intercompany receivable balances
Kooth Group Limited
Intercompany payable balances
Kooth Digital Health Limited
36. Cash and cash equivalents
The following are key accounting policies for the Company:
Cash and cash equivalents
2021
£'000
4,414
2020
£'000
4,414
2021
£'000
6,708
2020
£'000
6,734
(2,616)
(2,891)
2021
£'000
6,533
2020
£'000
6,674
- Basis of Preparation
- Going concern
- Trade receivables and payables
- Cash and cash equivalents
These policies of the company are consistent with those adopted by the Group and disclosed in note
2 to the consolidated financial statements. The following are additional accounting policies that
relate to the Company.
Investments
Investments are stated at their cost less impairment losses.
Intercompany
Intercompany balances are intercompany loans, and comprise of amounts owed to/owing from
subsidiaries. IFRS 9 expected credit losses have been assessed as immaterial in relation to these
balances.
Any key judgements or estimates are consistent with those adopted by the Group.
37. Related parties
Key management personnel are the executive members of the Board of Directors. Remuneration
applicable to the Company is disclosed below, with further information disclosed in the
Remuneration Committee report.
Salaries
Social security costs
Pension costs
Total remuneration
2021
£'000
430
57
8
495
2020
£'000
157
21
3
181
146
146
147
147
38. Trade Receivables
Prepayments and other receivables
VAT receivable
39. Deferred tax assets
At 1 January 2020 - asset/(liability)
At 1 January 2020 - asset/(liability)
Movement - (charge)/credit
Movement - (charge)/credit
At 31 December 2020 - asset/(liability)
At 31 December 2020 - asset/(liability)
At 1 January 2021 - asset/(liability)
At 1 January 2021 - asset/(liability)
Movement - (charge)/credit
Movement - (charge)/credit
At 31 December 2021 - asset/(liability)
At 31 December 2021 - asset/(liability)
40. Trade Payables
Trade payables
VAT payable
41. Equity
Ordinary A shares
148
2021
£'000
50
-
50
2020
£'000
38
76
114
Tax losses
-
15
15
15
37
52
2020
£'000
23
-
23
2020
£'000
2021
£'000
35
29
64
2021
£'000
Number of shares
Ordinary A shares
2021
33,055,776
2020
33,055,776
The share capital of Kooth plc consists of fully paid ordinary shares with a nominal value of £0.05 per
share.
The A ordinary shares have attached to them full voting, dividend and capital distribution rights
(including on winding up). They do not confer any right of redemption. B ordinary shares have
attached to them no voting, dividend or capital distribution rights (including on winding up). They do
not confer any rights of redemption.
Upon incorporation of Kooth plc, the Company entered into a share for share exchange agreement
whereby 1,000,000 A ordinary and 367,928 B ordinary £3 shares were issued in the capital of Kooth
plc.
The Company then undertook a reduction of capital whereby the total aggregate nominal amount of
share capital was reduced from £4,104,000 to £1,368,000 by reducing the nominal value of each
share from £3 to £1.
Subsequent to this, and prior to the listing on AIM, the Company undertook a reorganisation whereby
1,000,000 A ordinary shares and 367,928 B ordinary shares £1 shares were sub-divided into
20,000,000 A ordinary shares and 7,358,560 B ordinary shares of £0.05. These shares were
reclassified into 25,055,776 ordinary A shares and 2,302,784 deferred shares of £0.05. The deferred
shares were subsequently bought back and cancelled by the Company.
On 2 September 2020, Kooth plc issued 8 million new ordinary A shares of 200p each via an Initial
Public Offering and admission to AIM. This brought the total shares in issue to 33,055,776.
Upon Admission, the B shares converted into Ordinary A shares.
Share Premium
2021
£'000
14,222
2020
£'000
14,222
Share premium represents the funds received in exchange for shares over and above the nominal
value.
1,653
1,653
Share based payment reserve
148
2021
£'000
959
2020
£'000
529
149
149
The share based payment reserve represents amounts accruing for equity settled share options
granted plus the fair value of growth shares realised upon IPO.
Merger reserve
2021
£'000
(4,104)
2020
£'000
(4,104)
The merger reserve was created as a result of the share for share exchange during the year ended 31
December 2020.
Capital redemption reserve
2021
£'000
115
2020
£'000
115
The capital redemption reserve was established as a result of the deferred share buyback during the
year ended 31 December 2020.
Company Secretary
Richard Almond
5 Merchant Square
London
W2 1AY
Nominated Adviser
and Broker
Joint Broker
PR Advisers
Panmure Gordon (UK) Limited
One New Change
London
EC4M 9AF
Stifel Nicolaus Europe Limited
150 Cheapside
London
EC2V 6ET
FTI Consulting LLP
200 Aldersgate, Aldersgate Street
London
EC1A 4HD
Registrars
Auditors
Legal Advisers
Equiniti Limited
Aspect House, Spencer Road
Lancing, West Sussex
BN99 6DA
Grant Thornton (UK) LLP
30 Finsbury Square
London
EC2A 1AG
Squire Patton Boggs (UK) LLP
7 Devonshire Square
London
EC2M 4YH
150
151
151
150
Company Registered Office
Kooth plc
5 Merchant Square
London
W2 1AY
Company no: 12526594
152152
koothplc.com
investorrelations@kooth.com