Kooth plc Annual Report 2022

FY2022 Annual Report · Kooth plc

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Kooth Plc
Annual Report 2022

koothplc.com

Kooth Annual Report 2022We create a welcoming space for
effective personalised digital mental
health care. Accessible to all.

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

Financial Statements

Independent Auditors Report

Consolidated Financial Statements

Notes to the Consolidated Financial Statements

Company Financial Statements

Notes to the Company Financial Statements

Company Information

114

121

143

145

149

Strategic Report

Mental health: A digital approach to the growing, global challenge

Our purpose

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

Kooth Annual Report 2022Kooth Annual Report 2022Strategic Report

Mental health is
the defining public health
crisis of our time. Our mission
is to address this by delivering
effective, personalised, digital
mental health care to everyone.

With more than twenty years of experience,

Demand for digital mental health

Kooth was founded to transform digital access

To address this growing demand, NHS England

to mental healthcare, at population-wide scale.

allocated £15.6bn in mental health funding for

We offer rapid and responsive access to support

2022/23, an increase of 30% from 2017/18.

without thresholds, stigma, or waiting lists, in a

However, the gap between the demand for

way that resonates with those in need of help.

mental health support and the availability of

Our model is responding to a global mental

trained mental health professionals continues

health crisis which is driving long-term demand

to widen. To address this, we believe a digital

for digital mental health and is seeing significant

transformation of mental health care is needed,

ongoing funding commitments.

with a focus on moving further ‘upstream’

to provide support much earlier and quicker,

Global mental health crisis

helping to tackle issues before things deteriorate

The human and economic impact of poor mental

further. In addition, by providing responsive

health make for deeply concerning reading. In

support, without waiting lists or barriers, we

the US, 57% of teen girls feel persistently sad or

can help those with ‘in the moment’ need of

hopeless. 22% of high school students seriously

support.

considered suicide in the past year. In the UK,

latest statistics for 2021 show a record 4.3

Significant mental health funding

million people were referred for mental health

Governments and health care systems are

services, a rise of 15 percent from the previous

starting to recognise this. The NHS Long

year. In 2021, US Surgeon General Dr. Vivek

Term Plan, published in 2019, set out the

Murthy called for urgent action to transform

organisation’s ambitions and targets to expand

access to mental health care for young people,

access to mental health care. This acted as a

calling it the ‘defining public health crisis of our

catalyst for the adoption and growth of Kooth

time.’

across the UK. Most recently, in 2022, the State

of California announced a $4.7

billion investment to transform

access to youth mental health

care in what is arguably the

world’s largest and most ambitious

digital mental health program. We

are proud that our digital platform has

been selected as part of this initiative to

provide support to 13-25 year olds across the

State.

Headline Statistics

£1 trillion

Cost of poor
mental health to the
global economy

10.2%

of NHS England budget
for 2022/23 dedicated to
mental health

> $6 billion

US Federal and State
funding announced in 2022
to improve youth mental
health

Kooth Annual Report 2022Kooth Annual Report 2022Strategic Report

Our
purpose

Kooth provides a welcoming space
for effective, personalised digital
mental healthcare, accessible to all.

Kooth is a public company with social

impact. Our goal is to make accessible,

effective, and personalised mental health

care available to everyone, globally.

To achieve this, we are focused on

achieving three key aims:

Grow access: We work with governments, healthcare systems, and businesses to provide

individuals with access to mental health support with no barriers, thresholds, or waiting lists. By

providing a stigma free, non-judgemental and safe space, we can help tackle health inequity to

reach groups that may not have access to existing services, or feel unable to use them.

Early intervention & responsive support: There is no ‘one size fits all’ for mental health support.

Kooth offers people a choice of support they want, on their own terms and takes a person-centric,

strengths-based approach focused on helping people when and how they need it.

Outcomes: We are a pioneer and leader in digital outcome measures that demonstrate the

therapeutic, social, and economic impact of Kooth, using all the experience we have gained over the

past 20 years to objectively help people around the world. Examples include the 2022 independent

York Health Economics Consortium study showing that Kooth delivers £3.14 in cost savings for

every £1 spent. Our own analysis of the US market shows a potential 12:1 saving, due to the higher

healthcare costs seen in that market.

Early intervention
& responsive support

Self-determination
Person-centric
Strengths-focused

Grow access

No barriers
Safe space
Health equity

Innovating
in outcomes

Therapeutic,
social and economic
outcome measures

Kooth Annual Report 2022

7
7

Strategic Report

Building on the partnership and impact we have made in working with the
NHS, we are delighted to have the opportunity to bring our services to
the US.

Peter Whiting
Non-Executive Chair

Chair’s
Statement

Dear Shareholders,

Turning to the UK, in

2022/23 the NHS budgeted

£15.6 billion for mental

healthcare. We estimate that digital

services represent less than 3% of this

spending today, a reminder that the UK

is still very much in the early stages of the

digital transformation of mental healthcare

and that significant opportunities remain in our

This year’s annual report illustrates the huge

home market.

efforts that have been made by everyone at

Kooth towards our vision of expanding access to

Our offering for children and young people

digital mental healthcare at a population-wide

continues to grow. Kooth is now available to

scale. I want to thank all members of our team

over 60% of 10-25 year olds across the UK, with

for their continued hard work and dedication in

new commissions demonstrating our potential

helping to make this vision a reality.

to become a near-nationwide service in the

In 2022 we began our international expansion,

future.

with a focus on the US. Our progress so far has

Momentum for Kooth Adult continues, with

exceeded our expectations. In September we

the addition of eight new regions in 2022,

announced our first large-scale deployment in

including Greater Manchester, Norfolk, and

the State of Pennsylvania – a $3 million pilot

Devon, growing ARR 76% to £3.0 million (2021:

contract. After the year-end, in March, we

£1.7 million), and expanding free access to 8.8

announced that we had been selected by the

million (2021: 3.8 million) adults nationwide.

California Department of Health Care Services

to provide our service to every 13-25 year old

I am pleased to report that our financial

in the State. This contract, which is still in the

performance has been in line with market

process of being finalised, is part of California’s

expectations, with revenue growing by 21% to

$4.7 billion 5-year plan to transform access to

£20.1 million (2021: £16.7 million). As previously

youth mental healthcare.

highlighted, we are focused on growing our

business to ensure that we can take full

We enter 2023 with a solid financial position,

advantage of the global opportunities currently

significant growth opportunities in both the US

available to Kooth. This increased investment

and the UK, £8.5 million in cash, no debt, and a

saw adjusted EBITDA decrease from £2.1 million

proven business model.

to £1.6 million with a consequent reduction in

adjusted EBITDA margin to 8.0% (2021: 12.5%).

Kooth’s recurring revenue, which we define

as contracts with a duration of 12 months or

more, contributes over 95% of our revenue. As a

subscription-based business, this not only gives

us strong forward revenue visibility, but also

allows our growth plans to be financed with

confidence.

Peter Whiting

Non-Executive Chair

3 April 2023

Kooth Annual Report 2022

Strategic Report

Chief Executive
Officer’s Statement

Delivering positive social impact, cost effectively and at scale

As a social impact business, our purpose is to help tackle the growing global mental health challenge.

We do this by delivering a welcoming digital mental health platform, accessible to all. Our focus is on

creating a service which provides rapid, responsive, and effective support to individuals to address

problems earlier, reducing the need for, and cost of, acute treatment programs.

Kooth has a quantifiably positive impact on society whilst also saving healthcare systems money. In

2022, the York Health Economics Consortium published an independent health economics study

showing that Kooth delivers £3.14 in cost savings for every £1 spent. Our own analysis of the US

market shows a potential 12:1 saving, due to the higher healthcare costs seen in that market. In short,

we can ensure that healthcare budgets around the world can achieve more with less.

Our rapid progress
in the US is further
testament to the
world-class expertise
and technology we
have developed over
the last two decades
to digitally transform
mental healthcare.

Tim Barker

Chief Executive Officer

Kooth Annual Report 2022

Strategic Report

Outstanding progress in the US
market
Our success in the US can be traced back to

our heritage and the track record we have

built in the UK. When I joined Kooth three

years ago, I was attracted by the positive social

impact, coupled with the expertise, passion and

thoughtfulness across the team. This is vital to

ensure we can pragmatically address the global

challenge in mental healthcare. With Kooth’s

20+ years of experience and data, no other

organisation has our level of operating expertise

and evidence in how to deliver population-wide

digital mental healthcare.

It is encouraging to see our expertise, and the

value it can bring, recognised internationally,

with our rapid expansion into the US a

particular personal highlight.

Kooth won its first US contract in October 2022,

when the State of Pennsylvania awarded us

a $3 million pilot to expand access to digital

of high school students seriously considered

15% increase in logins over the previous year.

attempting suicide during the past year, with

However, there was a slight reduction in uptake

10% attempting suicide one or more times.

among the population, from 1-in-33 in 2021 to

1-in-36 in 2022. This is a result of expanding

A study by Pew Research published in January

2023 found that youth mental health is now

our reach of Kooth to 19-25 year olds, who

In the US, our focus on

initially engage less than the 10-18 cohort. By

State-wide contracts, coupled

the top concern for parents with children under

comparison usage pre-covid in 2019 was 1-in-40.

with the rapid progress we

18: Forty percent are either very or extremely

worried. This is a crisis that Kooth can, and

must, help address.

Furthermore, we continue to see a growing

and California, has the potential

trend in the increased level of severity and

to significantly change the growth

safeguarding risk for individuals seeking

trajectory of Kooth as more States take

have made in Pennsylvania

There is a clear need and opportunity for Kooth

support, with 80% of users presenting with a

action to prioritise youth mental health.

to focus on in the US. This will remain a key

moderately severe or severe level of acuity.

strategic priority for the business in 2023.

In the UK, the NHS is not only grappling with

UK market expansion, and an
increase in the levels of support
people need

mental health support for up to 150,000 school

Reviewing Kooth’s UK progress in 2022, it

students.

is clear that we took significant strides in

expanding our service for children and young

In March 2023, Kooth was awarded a contract

people across the UK. New commissions in

by the California Department of Health Care

Scotland were a key highlight, where we grew

Services (DHCS) to roll out its platform in

from four to nine contracts during the year.

January 2024 to over 6 million 13-25 year olds

as part of the State’s $4.7 billion 5-year plan to

Availability of our service for adults, Qwell, grew

transform access to youth mental health care.

from 3.8 million at the start of the year to over

This was a competitive process, where Kooth

8 million adults.

competed against 450 vendors and content

providers.

Greater Manchester Integrated Care System

(ICS) represents the largest Qwell rollout of

The imperative to act on the youth mental

the year. In this region we are now available to

health crisis is one that both Federal and State

approximately 2 million people aged 10 to 99+

governments are increasingly acting on.

across all 10 localities. ARR for Kooth Adult grew

The need for action is laid bare in a recent

report from the US CDC (Centers for Disease

In 2022 new users were accessing Kooth more

Control and Prevention). It highlights that 22%

often than before - the platform experienced a

over 75% to £3 million during the year.

In response to this shift, our clinical service

the backlog aftermath of the pandemic, but is

strategy has evolved, with an even larger

also dealing with the reorganisation of NHS

emphasis on the ‘responsive’, ‘safe’ and

England. In June 2022, its structure moved from

‘person-centred’ elements of our clinical

135 Clinical Commissioning Groups (CCGs) to 42

model, expanding our safeguarding, clinical,

Integrated Care Systems (ICSs).

and training teams, and ensured that each

practitioner has access to external supervision to

While this reorganisation offers great potential

support their professional development.

for Kooth in the medium- to long-term, we

have seen near-term decision making slow

We are applying this expertise to help reduce

down as a direct result of these newly formed

the direct burden on overstretched NHS

organisations finding their feet, filling new

services. This includes being commissioned in

roles, and starting to define their population

late 2022 to ameliorate Accident & Emergency

health strategies. We are starting to see the

attendance by providing our service to adults in

‘end of the beginning’ for this reorganisation,

need of urgent mental health support.

and I’m optimistic that it will provide greater

opportunities for Kooth.

Outlook

Kooth is extremely well-positioned to respond

to the long-term demand for digital mental

health services in the US and UK, with a proven

track record and detailed efficacy profile, strong

recurring revenue and a net cash position.

As we enter 2023, our model, strategy, and

market position, coupled with the talent and

Tim Barker

Chief Executive Officer

dedication of our employees, give us confidence

3 April 2023

in achieving further progress this year.

Kooth Annual Report 2022Kooth Annual Report 2022Children and young people (UK and US):

Workforce (UK): Kooth Work is focused on

As a pioneer in digital mental health for

frontline and key workers - providing employees

children and young people (10-25 years), Kooth

with immediate access to free and confidential

has established itself firmly within the UK

mental health support. Through Kooth Work’s

healthcare landscape, and is making strong

Flourish Mental Health Check employers are

progress on its expansion into the US.

able to benchmark how mentally healthy their

business is and garner anonymous insights that

In the UK, over 60% of all 10-25 year olds have

help to identify strategies that can improve

free access to Kooth, funded by the NHS or their

employee wellbeing.

local authority. According to NHS England data

for 2021/22, Kooth has now become the largest

Expansion into other international markets:

single access provider for mental health support

Beyond the US and UK, our long term ambition

for under 18s, a testament to the trust and reach

is to licence our platform to healthcare operators

that we have achieved in our partnership with

in other geographies and scale economically into

the NHS.

new markets.

Adults (UK): Kooth’s service for Adults (18+),

known as Qwell, is commissioned across a

growing number of NHS commissioners and

local authorities. It provides early intervention

support which helps to reduce demand on acute

care services in the NHS.

Strategic Report

Kooth plc business model

Our markets

In the UK, Kooth’s platform and growth is

focused on three key areas: supporting

children and young people, adults, and

a service to support the wellbeing of

workforces. We provide all of these

services in the UK. Our US strategy is

solely focused on supporting children

and young people, given our world leading

expertise in this area.

The total addressable market for Kooth

represents circa £500 million in the UK. In

the US, we estimate the size of the addressable

market for Kooth’s to be above $1 billion.

Growth pillars

Children and young people

Adults

Workforce

Market Size

Customer

£85m

+$1bn

£300m

£150m

NHS Integrated
Care Systems

Local Authorities

State Government

Medicaid & Insurers

NHS Integrated
Care Systems

‘Key worker’
organisations

Local Authorities

Charities

Kooth platform and
clinical delivery model

Self-help

Content &
Community

Professional
support

Kooth Annual Report 2022

Strategic Report

People self-determine the support they want
and need in a safe space. No ‘one size fits all’.

Activities

Community

Professional Support

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 to seeking help. Kooth provides a safe and confidential space

for help. All content that users post on the Kooth platform (for example, on a community discussion

board) is moderated to ensure that it remains a positive, safe space, without fear of judgement, trolling,

or online abuse.

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 250 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, the Kooth moderation team reviewed

around 500,000 user generated posts, journals, and comments in 2022 to ensure it remains a safe

space.

Kooth Annual Report 2022

Strategic Report

Business Model

Kooth is a Business-to-Business-to-Consumer

individuals in need regardless of their economic

(B2B2C) model. It provides individuals with

circumstances, and provides our clients with a

free access to mental health support, funded

digital model that can scale to reach the whole

by healthcare systems, insurers, businesses

population in their care.

or charities. This enables Kooth to support

B2B2C Subscription Model. Expansion-focused

(min-max age)

(1-in-N usage)

Define age-range

Estimate uptake

Annual platform
subscription

Digital and
in-person
engagement

Growth usage,
demonstrate
impact

Grow contract value as usage grows
or we expand into new age groups

107% Net Revenue Retention

Kooth’s pricing model is built on a ‘seed and

and welfare organisations. In addition,

grow’ approach. This helps to establish Kooth’s

our marketing team will focus on building

service within a region, and then to grow the

awareness for Kooth in the local region through

contract over time as awareness and usage

both PR and digital marketing campaigns.

grows.

By working with commissioners we will

build the business case to grow contracts further

determine the population they want to provide

to meet increasing demand and usage. We grow

support for, for example, 11-18 year olds.

our contracts based on the increased usage of

With our 20+ year track record and over 25

the platform, or to support additional age groups

As individuals sign-up and usage grows, we

million data points in our platform, we can

such as 19-25 years.

estimate the likely uptake of service within the

first year. This enables us to provide an annual

To illustrate our business model in action, the

subscription that covers the digital platform and

anonymised customer example below shows the

practitioner support that we will be providing.

expansion within a region over a 6 year period

Our team of Kooth Community Mental Health

as the service expanded based on both usage

Champions will promote Kooth to local

and age ranges, resulting in a compound annual

communities, schools/universities, healthcare

growth rate (CAGR) of 32%.

Kooth’s scalable delivery model

Kooth enables individuals to access a range of tools and therapies to support their individual wants and

needs. This approach, which spans self-therapy and professional support (including counselling), is a

key differentiator for Kooth in the industry. It demonstrates the ‘one size does not fit all’ approach that

we view as fundamental to empowering individuals to take control of their mental health. At the same

time, it creates economic benefits as we continue to build new self-guided therapies that require less

intense direct support from practitioners.

Kooth’s scalable delivery model. 95% get the support they want
without need for 1:1 structured counselling

% Users

Outcomes

5%
of users

Structured
Counselling

Goal-based outcomes (CoGS)

74% achieve a positive change in life goals

35%
of users

Responsive (drop-in) chat

Session wants and needs
outcome measure (SWAN-OM)

asynchronous messaging

72% achieve their wants and needs

60%
of users

Community

Self-help content and activities

Kooth Annual Report 2022

Strategic Report

Self-directed therapy

Around 60% of Kooth platform users engage with self-guided

therapy. This enables them to access the support they want and/or

need from helpful content, self-therapy activities, and by engaging

with the Kooth community for peer support.

Professional support

Around 40% of Kooth platform users engage with professional

support, through asynchronous 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.

Benefits

Kooth’s focus on providing help to patients at lower levels of

acuity, and when they would not be able to access traditional

services, ensures that 60% of its users get the help they need

before the need to involve professional 1:1 support. By tackling

issues early before they escalate, we are reducing the demand

for acute mental healthcare support across the nations we serve,

supporting existing healthcare services.

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

Market
review

During the pandemic healthcare systems worldwide were forced to

achieve a decade of digital transformation in a few short years.

There is now an opportunity to continue this drive towards a more

digital approach, enabling healthcare systems across the globe to

provide efficient and supportive access to services as and when

people need them. Kooth is well placed to support and progress

this transformation.

The changing nature of early and responsive support

The image of an ‘early intervention and

prevention service’ gives the impression of a

service that supports individuals who have a low

level of acuity or risk, helping to tackle issues

early before they escalate; or proactive support

allowing those who are well to remain so.

While correct, the trend continues where we

are seeing >80% of users presenting with a

significant level of need or risk:

•

54% have suicidal thoughts or have

self-harmed

•

1-in-3 users accessing professional

support are assessed by

practitioners as ‘red risk’ from a

safeguarding perspective

These users may be experiencing difficulties

for the first time or re-experiencing previously

resolved difficulties as a result of current life

stresses (which may be related to historical

events not known to Kooth). Early support,

Kooth provides clients and commissioners with near real-

alongside preventing the onset of mental health

time anonymous trends and insights into the mental health of

difficulties in those who are low risk, has two

populations. This enables healthcare providers and businesses to

additional functions: relapse prevention and

identify where they need to focus additional resources to improve

crisis prevention.

the wellbeing of their constituents.

Kooth Annual Report 2022

Integrative

Responsive

Evidence Based

Safe

Person Centred

Outcomes
Focused

Non-
Judgemental

Data Informed

In response to this shift, our clinical service strategy has evolved with an even larger emphasis on the

‘responsive’, ‘safe’ and ‘person centred’ elements of our proprietary clinical framework, i-RESPOND

(integrative, responsive, evidence based, safe, person centred, outcomes focused, non-judgemental and

data informed).

Responsive

Safe

Person Centred

Responsive: More focus on

Safe: New system for

Person-centred: Greater

single session interventions

escalation of safeguarding

focus on ‘what happened to

using an innovative and

concerns plus increased focus

you’ as opposed to ‘what’s

externally validated measure

on digital risk management

wrong with you’ through

to enable effective ‘in the

training (including routine

embedding a trauma informed

moment’ support for users.

enquiry for suicidal thoughts).

approach into online clinical

practice.

It is vital that we continue to adapt our offer while maintaining our strengths based, data informed

approach if we are to deliver a person-centric approach to mental health care, while working alongside

health care systems to address the growing levels of demand.

Supporting the NHS as it undergoes challenges and change

The NHS spends over £15.5 billion a year on mental healthcare services. Most of that budget is spent

on in-person support, spanning acute treatment, inpatient care, and community services. Digital

mental healthcare is still in its infancy within the NHS, with Kooth a leading example of service

already operating at scale in many regions.

The past year has been defined by two pivotal themes within the NHS. The first is the reorganisation

from Clinical Commissioning Groups (CCGs) to Integrated Care Systems (ICSs), with the second

involving the response to the unprecedented levels of demand in the aftermath of the pandemic.

Kooth Annual Report 2022

Strategic ReportStrategic Report

An NHS undergoing change: Integrated Care Systems

ICSs were formed with the goal of improving overall population health (including

a focus on early intervention and prevention), tackling health inequity, and delivering

on digital transformation. This reorganisation, completed by NHS England in June 2022,

consolidated 135 CCGs into 42 ICSs.

Kooth is well positioned to help ICSs tackle these strategic priorities, with a digital service that:

• Delivers a population-wide service by providing effective and economic mental health

support across an entire region, accessible to all.

• Helps tackle health inequity by offering a safe, anonymous space for people where

stigma is holding them back from seeking support.

•

Provides population insights to inform healthcare planning by ensuring there’s a

regional and national picture of the changing needs and issues within the population.

Despite this long term potential, the short term impact resulting from this reorganisation is one where

decision making has slowed down. This is a result of ICSs building their leadership teams, creating an

inventory of the services they have available, and starting to shape their future strategy to support

their population.

We have seen this sales cycle extend from the typical 9-12 months to 15+ months. However, early signs

are that we are starting to see the reorganisation coalesce, as we move into the new NHS budget year

for 2023/2024.

US: The growing imperative to address youth mental health

1-in-4 youths aged 6-17 in the US experience a mental health disorder each year. At both a federal and

state level, the US has recognised it is time to take urgent action to address this growing crisis in youth

mental health:

•

In December 2021, the US Surgeon General issued an urgent call for action with the

publication of the report ‘Protecting Youth Mental Health’;

President Biden’s ‘State of the Union’ in March 2022 set out the need for a national

strategy to address this challenge;

• By July 2022, the bipartisan Safer Communities Act set aside $1.3 billion over five years to

improve access to youth mental health support;

•

States are starting to allocate significant budgets to address this crisis: California ($4.7bn),

New York ($1bn), and North Carolina ($1bn) to name a few.

In October 2022, Kooth took a major step into the US market by signing its first pilot contract with

the State of Pennsylvania. It aims to expand access to mental health support for up to 150,000 school

students across 30 school districts, provided to every student regardless of their insurance status. The

contract will run initially for the academic year and, if the pilot is successful, could be extended to

Supporting the NHS as it deals with unprecedented pressures

include more of the State’s 500 school districts.

There is no doubt that the NHS is going through one of its most challenging times and Kooth is

responding to this challenge by providing commissioners with services that address the goal of

reducing short term pressures on an overstretched NHS.

For example, Kooth was recently commissioned in a region of London to play a vital role in helping to

reduce the number of adults that arrive at A&E with a mental health issue, by directing individuals to

Kooth before they reach a level of crisis:

•

Local GPs surgeries can promote Kooth to individuals with a mental health concern (even

before they make an appointment) to help reduce the pressure on NHS services;

In March 2023, Kooth was awarded a contract by the California Department of Health care Services

(DHCS) to make its platform available to all 13-25 year olds in the State (a population of ~6 million). This

forms part of California’s Masterplan for kids’ mental health, a $4.7 billion, 5 year plan to transform

youth mental health services. In awarding this contract, Kooth was evaluated by DHCS alongside 450

other providers.

Throughout 2023, Kooth will be further enhancing its current platform in readiness for a go-live in

January 2024. This includes the development of a mobile app for Apple and Android smartphones,

integrating with crisis and 3rd party care services, and ensuring that Kooth can support the diverse

population of California by developing culturally relevant content and expanding the languages we

• NHS 111 call centres can signpost individuals to Kooth to get ongoing support to help

support beyond English and Spanish.

them;

• As awareness grows for Kooth in a region, we can provide individuals with support

before they reach out to the NHS.

We see this as a key opportunity for Kooth, not just to support the long term strategic objectives for

ICSs, but to help in the ‘here and now’ and tackle the crisis in hand.

The service will launch in January 2024 and is expected to have a highly material impact on ARR and

revenues from 2024 onwards.

These two substantial contracts, coming within the first 18 months of entering the US market, are

encouraging signs that point to the long term potential that Kooth has in the world’s largest healthcare

market.

Kooth Annual Report 2022

Strategic Report

Strategy

Kooth has a four pillar growth strategy to meet the global demand for clinically, and cost effective

mental healthcare. This is powered by Kooth’s proprietary, integrated technology platform.

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 2022 Kooth is available to over 60% of 10-25 year

olds in the UK. Our ambition, and strategy, is to expand to become

a nationwide service, accessible to all. To deliver this, our key

priorities are:

Work in partnership with Integrated Care Systems to help

them achieve goals of improving population health in their

region: Kooth’s service along with its data and insights can

provide a strategic asset to ICSs to help them deliver on their long

term vision to improve population health.

Expansion into devolved nations: To provide UK-wide access, we

are focused on supporting devolved NHS organisations in Scotland,

Wales, and Northern Ireland. In Scotland we grew from four

contracts at the start of 2022, to nine. In Wales, 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 contracts, thereby building the

business case for expansion.

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. Expand Kooth’s
youth-focused
service into the US

Building on our early success

in securing state-level contracts

to tackle youth mental health,

our strategy is to continue to

focus on expanding within current

and additional states. These contracts

provide ‘free at the point of need’ support

to children and young adults, an operating

model that Kooth has deep expertise in from

its UK business. Beyond this, we plan to continue

to explore market opportunities and partnerships

with healthcare systems and payers, with Medicaid a key

area of interest given the lack of mental health provision for

low-income families. Given the highly competitive digital market

for adult mental health care, we plan to focus solely on youth, a

segment where we bring world-class expertise.

Kooth Annual Report 2022Kooth Annual Report 20223. Early intervention
and responsive
support for adults
via the NHS

It is estimated that 8 million adults in England alone would benefit

from additional mental health support, but they do not yet qualify

for treatment i.e., their mental health is not deemed poor enough

to qualify for NHS treatment. Without receiving any support, a

percentage of these individuals will one-day qualify for treatment

as their mental health deteriorates further.

4. Supporting the
mental health of
frontline workers

Kooth Adult is focused on providing support to the whole adult

population within a region, providing early intervention support

to help tackle problems before they escalate. It supports those

that are sub-threshold, and delivers rapid and responsive help

to prevent those that have received treatment from a relapse.

In addition, with a focus on population-health, we aim to reach

and support ‘seldom heard’ groups that may be less likely to

use established NHS services e.g., ethnic minority groups and

LGBTQIA+ communities.

The market for employee mental wellbeing support is both highly

competitive, and has been somewhat commoditised in a ‘race

to the bottom’ by insurer-based Employee Assistance Programs

(EAPs).

However, the paradox is:

While provision is high: More than 70% of businesses provide an

EAP to their employees.

Usage is very low: EAPs are only used by around 5% of

employees. As an insurer-provided product, there is little incentive

for insurers to drive a higher uptake of their services.

Employees want more than an insurance product: As our

recent ‘Missing the Mark’ research revealed, only 18% of

employees think their employer is doing enough to support their

mental health.

But stigma means that leaders are unable to see what

employees need: More than 50% of employees will not talk to

their employer about their mental health for fear of repercussions.

However, absenteeism data shows the scale of the issue: More

than 50% of absenteeism cases are mental health related.

To address this, business leaders need data/insights to understand the problems within their workforce,

a service that is focused/incentivised on driving adoption, and early/rapid support to help individuals

remain healthy.

This is our strategy for Kooth Work. With the recent launch of our ‘Flourishing Assessment’, we can

benchmark the mental health of the organisation and help guide business leaders to better understand

the hidden mental health challenges and practical steps they can take to support their workforce.

To help grow adoption, we provide HR leaders with content and campaigns that can be used to educate

and engage their workforce. This is not just focused on common topics (anxiety, stress, and depression),

but spans 100+ areas, from the menopause to dealing with grief and loss.

In terms of our go-to-market strategy, Kooth Work is focused on frontline workers and the UK charities

who support them. Frontline workers represent 33% of the UK workforce, working in often low paid,

high stress, and sometimes traumatic roles. Kooth offers a person-centric platform that provides

substantial support to these individuals.

Kooth Annual Report 2022

Strategic ReportStrategic Report

5. Kooth’s Platform

Kooth’s proprietary technology platform underpins everything we

do. A key reason for our London listing in 2020 was to enable us to

invest in our technology to support the long term growth of Kooth.

Our investment strategy in technology is focused on three key

areas:

Delivering a welcoming and engaging space

Applying artificial intelligence to improve

the experience, efficiency, and effectiveness.

Reaching out to ask for help can be hard. For

Kooth to succeed, we must offer a stigma-free,

Across Kooth’s lifetime, we have delivered over

safe space where people feel welcome and em-

one million hours of professional support, via

powered to get the support that they want and

text and chat based interactions. Collectively,

need. We continue to invest in user-research,

this represents one of the world’s largest anon-

participation, and experience-design to deliver

ymous mental health data sets. The opportunity

on this.

is to safely leverage this data using machine

learning and artificial intelligence for the benefit

Delivering clinically and cost effective access

of practitioners and service users.

to mental health support

Kooth is a trailblazer in research, development

and outcome measures to evidence the ther-

apeutic, 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 2022 we made our first steps in delivering

on this, with the development of an AI-assisted

moderation algorithm to support the review of

the half a million journals, comments, and posts

that our users write each year. This enables

Kooth to flag ‘high risk’ content to our moder-

ation team faster, while reducing the burden

on reviewing content that does not signify an

in new support models spanning self-therapy,

individual at risk.

community and peer support, and professional

support.

Kooth Annual Report 2022Kooth Annual Report 2022Strategic Report

Key performance
indicators

Total revenue

£20.1m
2022

£16.7m
2021

£13.0m
2020

£8.7m
2019

Adjusted EBITDA

£1.6m
2022

£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 were predominantly IPO related in 2020. This metric pro-

vides 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

166
2022

151
2021

132
2020

81
2019

The total number of live contracts with customers. For our contracts in England as the NHS consoli-

dates from 135 Clinical Commissioning Groups to 42 Integrated Care Systems, we are seeing a shift to a

As we continue to invest in and grow our business, revenue growth demonstrates the

smaller number of larger contracts spanning the whole population within an ICS region. We were also

progress we are making.

delighted to add our first customers in the US during the course of 2022.

Annual Recurring Revenue (ARR)

£21.1m
2022

£16.9m
2021

£14.1m
2020

£10.6m
2019

Population coverage

16.7m
2022

10.9m
2021

7.8m
2020

5.9m
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.

The total number of people who have access to the Kooth service is a clear indicator of our accessibility.

This is used by management to monitor the long term revenue growth of the business.

Gross margin

Service user logins

68.9%
2022

69.5%
2021

69.8%
2020

63.6%
2019

1.5m
2022

1.3m
2021

1.1m
2020

0.7m
2019

Gross Profit as a percentage of revenue. Direct costs are the costs of our practitioners directly involved

The number of logins to Kooth from users, demonstrating uptake of our service.

in the delivery of our services.

Kooth Annual Report 2022

Kooth delivered strong growth in 2022
underpinned by our first major contract in the US

Sanjay Jawa
Chief Financial Officer

Chief Financial
Officer’s Review

Significant growth

The results reflect a successful year for the

business as we continued to execute on our

strategic plans and build solid foundations

to support future growth in the UK and

internationally.

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

revenue growth of the business and remains

strong at 95% of total revenues (2021: 94%).

I am pleased to report Group total revenue

Highlighting the depth and longevity of our

grew during the year, in line with market

customer relationships, net revenue retention

expectations, by 21% (2021: 28%) to £20.1

was 107% (2021: 109%). This is measured by

million (2021: £16.7 million). This has been

the total value of ongoing ARR at the year

driven by US expansion, fee uplifts from existing

end from customers in place at the start of

clients and new business in Adult and Children

the year as a percentage of the opening ARR

and Young People. Adult increased to just under

from those clients. The small decrease from

15% of annual recurring revenue at the year end.

2021 was the result of churn with the ending

Recurring revenue comprises income invoiced

partly a slowdown in uplifts as NHS England

for services that are repeatable, consumed and

consolidates from a Clinical Commissioning

delivered on a monthly basis over the term of a

Group (CCG) to an Integrated Care System (ICS)

customer contract. Annual Recurring Revenue

structure.

of some COVID-19 related contracts and

Gross profit

Gross profit grew by 19.6% to £13.9 million

and Social Care levy tax and the end of some

(2021: £11.6 million) with gross margin slightly

COVID-19 related projects at the end of 2021.

down at 68.9% (2021: 69.5%). Direct costs are

This was slightly offset by a positive mix impact

the costs of the practitioners directly involved in

as our new US contracts ramped up.

the delivery of our services, a total of 267 at the

year-end (2021: 233 heads).

Gross margin was marginally lower as a result

of increased staff costs with the temporary

increase during the year of the 1.25% Health

Statutory loss after tax

The Group net loss after tax for the year was

£0.7 million (2021: loss of £0.3 million).

Kooth Annual Report 2022

Strategic Report
Strategic Report

Administrative expenses

Excluding depreciation, amortisation and share

Adjusted results are

based payments, administrative expenses grew

prepared to provide a more

by £2.7 million in the year, a 28.8% increase

comparable indication of the Group’s

year on year, which whilst ahead of revenue

core business performance by removing the

growth remains in line with our strategic

impact of certain items including exceptional

investment plan.

items (material and non-recurring), and other,

non-trading, items that are reported separately.

This was driven by staff and commission costs

in the US as we strengthened the business

Adjusted results exclude items as set out in the

development, clinical, HR and customer success

consolidated statement of profit and loss and

teams. In addition, we started to incur the non-

below, with further details given in Notes 2, 3,

staff costs of doing business in the US including,

4, 5, 6, 11, 12 & 13 to the financial statements. In

legal, insurance and consulting expenses.

addition, the Group also measures and presents

Excluding the US investment, administrative

performance in relation to various other non

expenses in the UK grew by 13.3%. This was

GAAP measures, such as gross margin, annual

primarily new headcount in our engagement

recurring revenue and revenue growth.

and marketing team, pay increases to existing

staff and inflationary increases across certain

Adjusted results are not intended to replace

suppliers.

Adjusted EBITDA

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.

Adjusted EBITDA fell by 23% to £1.6 million

(2021: £2.1 million) in the year, with increases in

revenue and gross profit more than offset by our

Taxation

investment in the US and higher administrative

expenses as outlined above.

£’m

2022 2021

There has been no corporation tax charge rec-

ognised in the year due to accumulated losses

combined with the overall current year position

(2021: £nil). The tax credit for the year ended

31 December 2022 and 2021 relate to Research

and Development expenditure credits which in

Operating Loss

(0.9)

(0.7)

2022 was partly offset by a deferred tax charge

Add Back:

Depreciation and

Amortisation

of £0.6million (2021: £0.2million credit) as the

Research and Development claim for 2021 was

received in cash at a lower effective tax rate

rather than carrying forward as a loss to be used

2.2

2.4

against future profits.

Share based payment expense

0.3

0.4

Adjusted EBITDA

1.6

2.1

Cash

Capital expenditure

The Group has had impressive cash manage-

Software and product development

ment in the year with net cash generated from

costs aside, the Group’s ongoing capital

operating activities of £4.4 million (2021: £1.9

expenditure requirements remain modest

million). Free cashflow, after taking account of

at £0.1 million (2021: £0.1 million).

capital expenditure was £1.3 million in 2022

compared to an outflow of £0.7 million in 2021.

The net cash at year end was £8.5 million (2021:

Capital and Reserves

£7.1 million). Post year end in January 2023,

The strength of the Group’s balance sheet with

an R&D tax receipt relating to the 2021 year of

net assets of £10.5 million (2021: £11.0 million),

£0.6m was received.

The overall improvement is due to advance

payments from clients (particularly in the US)

high levels of recurring revenue and strong cash

generation from operating activities provide the

Group with financial strength with which to

execute on its investment strategy which con-

and good working capital management as debtor

tinues to focus on US expansion and platform

days at 31 December 2022 fell to 20 days (2021:

investment.

33 days) and trade receivables were reduced by

34% in the year to £1.1 million (2021: £1.6 mil-

lion). The Group continues to be debt free and

maintains a robust financial position.

Capitalised development costs

Dividend policy

As outlined at the time of the IPO the Group’s

intention in the short to medium term is to

invest in order to deliver capital growth for

shareholders. The Board has not recommended

The Group continues to invest in product and

a dividend in respect of the year ended 31 De-

platform development resulting in ongoing

cember 2022 (2021: Nil) and does not anticipate

improvements in its delivery platform. Costs are

recommending a dividend within the next year

a combination of internal and external spend.

but may do so in future years.

Where such work is expected to result in future

revenue, costs incurred that meet the definition

of software development in accordance with

IAS38, Intangible Assets, are capitalised in the

statement of financial position. During the year

the Group capitalised £3.0 million in respect of

software development (2021: £2.5 million) with

an amortisation charge of £2.1 million (2021:

£2.3 million).

Investment in product and development con-

tinues to be significant to the Group and we

anticipate capitalising software costs at a higher

rate over the next few years during a period of

accelerated international product investment.

Sanjay Jawa

Chief Financial Officer

3 April 2023

Kooth Annual Report 2022

Strategic Report

Environmental, Social and
Governance (‘ESG’) Report

2022:
Year in Brief

About this report

The 2022 ESG report builds on our efforts in 2021 to acknowledge our responsibility to address global

environmental and social challenges. We are committed to embedding ESG practices and policies into

all aspects of our company and strive to continue learning and implementing new strategies.

Frameworks, guidelines and standards

The information contained in this year’s ESG

support the Sustainable Development Goals. The

Report has been structured around three main

UN Sustainable Development Goals aim to build

frameworks and guidelines: the UN Global

a more sustainable future for people and the

Compact, the Sustainable Development Goals

planet by 2030. The nature of Kooth’s business

and the Task Force on Climate-Related Financial

means we contribute directly to Goal 3: Ensure

Disclosures (TCFD).

healthy lives and promote well-being for all at

all ages. It is only in the last decade that mental

In our 2021 Annual Report, we committed to

health was added to the agenda, when the

becoming a UN Global Compact Signatory in

impact of mental illness on healthcare systems

2022. In August 2022, we became a participant,

was identified. This gap in healthcare is where

committing ourselves to aligning our strategies

Kooth has its greatest impact.

and operations with the Ten Principles on

human rights, labour, environment and anti-

Finally, our environmental impact has been an-

corruption.

alysed and explained to align with the Strategy

and Risk Management Recommendations of the

Governance Pillar

Our participation in the UN Global Compact has

Task Force on Climate-related Financial Disclo-

given Kooth the tools and knowledge to further

sures (TCFD).

84%

of employees work

Data Storage and

Increase in website

remotely (83% in

Processors: Cloudflare

performance =

2021)

(100% renewable) and

reduction in carbon

Environment Pillar

Google Cloud (net zero)

emissions of users

Diversity project

shortlisted for the

CHWA Collective

Power Award

100%

of managers

underwent

management

training

13%

Grew our workforce

by 13% from

2021 (406 to 460

employees)

Social Pillar

97%

Signed up to the

Published first

of our employees

UN Global Compact

Modern Slavery

completed HIPAA

Statement

training

Kooth Annual Report 2022

Strategic Report

Environment

At Kooth, we are aware that a healthy planet is pivotal to both

human health and business sustainability. Kooth is reviewing its

climate-related risks and opportunities in the following areas, (1)

electricity usage, (2) data processing centres and (3) production

and disposal of technologies. The risks and mitigations are

outlined below.

Energy Usage and Carbon Emissions

In the UK, the health and social care system accounts for about

5% of the UK’s greenhouse gas emissions. The digital healthcare

industry plays a pivotal role in reducing these emissions and

keeping health systems environmentally sustainable. In terms of

the first and second component, as listed above, Kooth faces the

following risks and mitigates them in the following ways:

1. Our infrastructure:

• As a largely digital practice, by nature, we generate less

carbon emission through electronic case files, rather than

paper, as well as no need to travel whereas, for example,

currently 1-in-20 journeys on the road are associated with

the NHS.

• As an organisation the majority (84%) of our workforce

are remote, and the rest continue to work in a co-working

space. Our office provider is addressing the environmental

and health impacts associated with the energy, materials

and products it uses, has eliminated single-use plastics from

its facilities and is committed to achieve carbon neutrality

by 2023.

• One of the largest sources of carbon emissions and energy
usage from the digital healthcare industry is the collection

and storage of data. Kooth uses two cloud providers to store

and process our data: Google Cloud and Cloudflare. Google

Cloud has been carbon neutral since 2007 and aims to run

on carbon-free energy by 2030. Kooth has chosen two of

Google Cloud’s’ ‘Low CO2’’ host regions, including our US

region operating on 97% carbon free energy consumption.

Our other data processor, Cloudflare, powers its network

with 100% renewable energy.

2. Our users:

• While the carbon impact of our users is difficult to measure, we know that the way we write our

code can impact this number.

• Last year, work was done on the performance of our website (how long it takes to load a page).
The quicker a page loads, the less carbon impact of our users. In addition, Kooth has set tighter

constraints on developers, both internal and external, on what they can build due to the

potential environmental impact. For example limiting the size of some of our Javascript assets.

Waste Management

As mentioned above, the third component of the digital healthcare industry is the production and

disposal of wearable technologies, robotics and devices. Given that the majority of our workforce works

from home, all employees have a company laptop. Kooth reduces the waste created by laptops by

collecting, wiping and reusing old laptops for new starters.

Promotional Materials

As part of our initiative to reduce environmental impact, we continue to invest in reusable marketing

materials. Kooth uses marketing materials from printers with a ISO 14001 environmental management

accreditation. The sustainable business practices also include reducing the amount of one-use

signage - such as rollup banners that can have vinyl replaced without needing to dispose of the roller

mechanism.

All other promotional materials, for example merchandise for

conferences, are manufactured from chosen companies using

sustainable materials, not single use plastics, and are

recyclable.

Kooth Annual Report 2022

Strategic Report

Social

As a provider:

With 30% of the British population having reported suffering from,

and 1-in-5 Americans diagnosed with, a mental health condition,

reducing wait times is crucial to population health management.

This year Kooth was accessible to over 16 million people and had 1.5

million user logins across our platforms. In the UK, the volume of

people accessing our platform reduced pressure on the NHS, as well

as children and adolescent mental health services (CAMHS), which

are seeing wait times of up to 13 weeks for treatment. Expanding in

the US addresses the shortage of mental health practitioners, where

as many as 1-in-3 people live in federally designated practitioner

shortage areas.

Accessibility

Accessibility is at the forefront of Kooth’s mission. We have created

our site to be accessible by removing potential barriers:

• Anonymity: allows users to access help without disclosing to

others who they are.

• Free at point of use: healthcare can be expensive or stressful

to deal with, this takes away those barriers.

• Web-based: can be accessed from any device with the internet,
a user does not have to own a mobile phone to download an

app.

By being mindful of people with impairments, we can create online

platforms we want for everyone. At Kooth our product team builds

our platforms in-house working closely with our Kooth communities

and participation teams. For example, while Kooth’s content and user

interface is written in English (and Spanish in the US), our web pages

are built to work well with web browsers’ translation features. In

addition, the design team ensures that our content, where necessary,

can be read by a ten-year old - the youngest user that we engage

with.

Every new feature we have built in the last year meets the

WCAG 2.1 AA standard. This has meant we have been careful

not to exclude people due to visual or learning impairments,

which takes diligence and specialised knowledge. We want

everything we design and build to meet the Web Accessibility

Guidelines (WCAG) 2.1 level AA.

Our expansion into the US has been a catalyst to translate Kooth.com

into other languages. At this point, we offer our US site in English and

Spanish - including microcopy, content and chats. We have hired Spanish

speaking practitioners in the US to offer full support.

Diversity and Inclusion

Kooth aims to remove barriers and ensure all individuals - regardless of race, age, gender, disability,

sexuality or socio-economic background - have access to effective mental health services. We are aware

that mental health affects different communities in different ways, as well as acknowledging health

inequalities between communities. Ethnic minority communities face barriers to mental healthcare in

the form of language, fear of stigma and a lack of cultural awareness.

User Demographics:

Ethnicity Stats:
(vs 18% of British population)

Gender stats:
(vs. 0.4% of the British population)

2021

2022

2021

2022

19%

from Ethnic
minority

19%

from Ethnic
minority

7.2%

identify as
non-binary

8.3%

identify as
non-binary or
genderfluid

Kooth Annual Report 2022

Strategic Report

In 2022, we strengthened our partnerships with BlackOut UK and Unity FM to research mental health

needs within minority communities to help shape our service to meet the needs of this population.

Initiatives like this one enable us to create content for specific audiences, ensuring everyone feels seen

and heard. Our 2022 highlights are:

Diversity and Inclusion Projects through partnerships:

‘What men from ethnic minority backgrounds

Language Charter

want’ Project

• Our Participation team worked with

• Our Diversity Council undertook this project
to understand and spread awareness of

Personalised service
Providing a personalised experience is one of Kooth’s

biggest aims through person-centred care. This approach

enables users to be the decision-makers in their Kooth journey.

Giving users options allows them to be in control of their needs.

identify as non-binary

community-based groups Blackout UK

appropriate language for ethnic minority

70% of our users in 2022 used ‘self-directed therapy’ indicating they

and Cultures CIC to co-produce 12 goals

descriptions and groups who experience

chose to use our forums, articles and mini activities on the platform. In

for Kooth to improve access, support and

racism

outcomes

• These goals focus on updating marketing,
engagement, content and our product to

• We conducted workshops with ethnic

minority communities to provide guidance

on engaging men from ethnic minority

better serve men from ethnic minorities
• This work was shortlisted for Culture Health
Wellbeing Alliance (CHWA) Collective Power

backgrounds with mental health support
• This is now used amongst teams across our
organisation and service from participation

Award, which recognises a collaborative

to marketing all the way through to content.

project improving the mental health and

wellbeing of communities

the latter half of 2022, our Research team published three peer-reviewed pa-

pers that provide evidence for the peer support component of Kooth’s ‘Positive Virtual

Ecosystem’. This research looked into the types of support available on Kooth and demonstrated

the helpfulness of peer support. Having an ecosystem of self-directed therapy, peer support and profes-

sional support provides users with the ability to access the help they want.

Building an evidence base
Kooth is committed to developing the evidence base for mental health research as a whole. We contin-

ue to be skilled in developing strong relationships between academia, industry, policy and commission-

ers, and driven by aligning user needs and wants with an evidence base to ensure meaningful research

and data.

In 2022, our Chief Product Officer, Aaron Sefi, contributed to a study looking at how young people

from ethnic minority backgrounds interact with online counselling. Using data provided by Kooth, this

research found that a higher number of young people from Asian and Black ethnicities reached out

through informal sources such as Google, as opposed to health professionals such as GPs. By providing

our data, we are contributing to understanding barriers to mental health access and the role that digi-

tal mental health plays in overcoming these.

Kooth Annual Report 2022Kooth Annual Report 2022Strategic Report

As an employer:

The qualities, skills and commitments of our employees play a major role in Kooth’s business success.

In 2022, we implemented a new HR system, which benefited employees and managers across the busi-

ness. It has led to more centralised and transparent data and offers a new process for employee per-

formance appraisals. Our People team increased by 50% in 2022, including the introduction of a Chief

People Officer, and has been prioritising employee wellbeing in the following ways:

Diversity & Inclusion
With representation from almost all departments, our Diversity Council’s approach is to make this

work a part of everyone’s day job and to embed all work within the business and each team.

Our highlights of 2022 include:

Implemented

Appointment of Dr.

Begin to implement the

foundations of Diversity

Matthew Patrick as our

NHS Health & Wellbeing

Working Groups,working

Wellbeing Guardian to

Framework, including

groups on popular topics,

work with the Board and

gathering our employees’

such as LGTBQIA+,

Executives to promote

views to maximise their

menopause and

employee wellbeing

wellbeing

neurodiversity, are created

for our employees to join

Employees

2021

2022

23.7%

Male

76.3%

Female

20.8%

Male

79.2%

Female

70% women in management positions

Kooth Annual Report 2022

Strategic Report

Gender Pay Gap

Our 2022 gender pay gap (GPG) analysis shows

This year our female workforce as a proportion

our statutory gender pay gap in comparison to

of total employees increased 3% to 79.2% (2021:

our 2021 GPG. It also provides insight into how

76.3%). Kooth employs more women than men,

we are addressing our gender balance. Please re-

which reflects the gender imbalance in the

fer to the definitions below when reading about

healthcare sector. We are aligned with the high

our pay gap metrics:

percentage of female employees in the NHS

(77% as of 2021) and in the US healthcare sector

Median GPG: the difference between the me-

(76%).

dian hourly rate of pay of male full-pay regular

employees and that of female full-pay relevant

The gender pay gap shows the difference in pay

employees.

Mean GPG: the difference between the mean

hourly rate of pay of male full-pay relevant

employees and that of female full-pay relevant

employees.

between men and women across the business,

irrespective of job similarities and seniority. It is

not symptomatic of unequal pay, as a number

of complex factors play a role. The distribution

of male and female employees across the busi-

ness and the type of roles they fill are both key

contributors to the gender pay gap. 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.

Mean Pay Gap

Median Pay Gap

Mean:

2022: 34.8% (Health and social

care average is 9.5%)

2021: 32.8%

Median:

2022: 15.4% (Health and social

care average is 8.5%)

2021: 11.6%

1Our pay gap calculations are based on male and female full-pay relevant employees. This excludes part-time staff.

The increase in the mean pay gap is a result of a large increase in practitioner hiring with the largest

proportion being female, reflecting the industry in both the UK and US. This trend is expected to con-

tinue as the business grows due to the universal disproportionate number of female practitioners.

Throughout 2022, we made improvements to

We continue to be committed to reducing our

addressing our gender pay gap:

pay gap in the following ways:

1. An extensive review into our service

• Offering flexible working policies

delivery employees’ pay was undertaken.

In addition to performance based reviews,

we externally benchmarked all salaries

and increased our banding in line with

NHS equivalent rates

2. All employees receive above the London
living wage irrespective of location

3. The year-end salary review process result-
ed in a more than 6% pay increase across

the firm, in line with the national average

•

Company-wide campaigns to ensure

employees feel informed and connected,

such as our Inform, Support, Change &

Celebrate previously mentioned

• Our counsellors are paid the same regard-

less of gender within the industry; this is

the same within our management team

• We make an effort to understand our

gender and in future, ethnicity data, to

analyse and assess where more focus is

required

• We partake in blind recruitment of our

practitioners and our recruitment pro-

cess includes panel interviews to ensure

a more inclusive approach to hiring and

feedback and decisions

• Our Diversity and Inclusion Council and

Kooth Employee Voice Group ensures em-

ployees have an outlet to raise concerns

and give feedback

Kooth Annual Report 2022Kooth Annual Report 2022Strategic Report

Ethnicity Pay Gap

Of our 265 employees who have disclosed their ethnicity, 84% were

white and 16% were from ethnic minorities.

This year our mean ethnicity pay gap has decreased from -4.9% in 2021 to -9.2% in

2022. Our median pay gap increased from -1.0% in 2021 to 5.8% in 2022.

Given that a significant number of employees (43%) have not shared their ethnicity with us suggests

that minor changes in our demographics and the levels and pay grades at which people operate have a

Recognition & Feedback:

significant impact on our figures. In order to provide a more comprehensive ethnicity pay gap, we will

continue to improve the quality of the data. It is important to us that we continue to see a growing

number of applications from candidates from ethnic minorities. In 2023, we will increase our efforts

through our Diversity Working Groups.

Company Culture

Beyond being seen and heard, it is important that Kooth is a place where employees feel safe and look

forward to showing up to work. We encourage a culture of open and honest communication, recog-

nition and collaboration. In 2022, we have implemented a number of projects across the business to

further build company culture:

Company Intranet: Our Intranet was launched

COSMIC Dragon Boat Race: Our London Office

during 2022 to bring our company-wide news

employees got together in a dragon boat to raise

together, with updates and insights into each

funds for St Mary’s Hospital. It was a great

team. It hosts resources, policies and team-

team building exercise and we came 3rd out of

based information.

20 boats!

Employee Collaboration Group: A group of

Weekly ‘All Hands’: We have weekly

representatives across the company meet on a

company-wide meetings. They are open to any

regular basis to work on key issues for Kooth

employee or team who would like to present on

Employees and focus on making Kooth a great

a specific topic or project. This year we have had

place to work.

presentations on our US expansion, employee

share option plan, and from the Diversity and

Service Delivery & Clinical ‘Learning Day’: In

Inclusion Council.

2022, we held our first ‘learning day’ to bring all

Service Delivery and Clinical staff together. This

day allowed our remote staff to meet and learn

from each other, as well as listen to expert,

guest speakers.

1. Annual Appraisals: We have implemented an electronic sys-

tem for annual appraisals. This enables greater record keep-

ing for reference purposes and increased visibility across the

organisation of the competencies of its employees. It allows

us to focus on career development and training on a greater

holistic level. It enables us to check on a company-wide level

that everyone has a clear career path as well as what training

and development they need to achieve their next steps, and

that everyone receives their appraisals. In the 2022 mid and

end of year reviews there were specific questions around how

the level of feedback and recognition is and questions to ensure

that employees were looking after their wellbeing.

2. OfficeVibe: We utilise an online tool to capture anonymous

feedback from our people across the business, on a regular

basis. We will be generating quarterly engagement plans from

officevibe by understanding the key driver of engagement.

a. 96% say the work they do is impactful on Kooth’s mission

(2021 was 92%)

b. Score of 8.2/10 for relationship with manager

c. 8.2/10 for ‘Pride’ at the end of 2022

3. Company Awards: At the end of half year we run the ‘Kooth

Values’ awards, where individuals are nominated by co-workers

for working in line with our values. Additionally, two employ-

ees win £500 ($600) each for being the Kooth Employees of

the Year.

4. Management training: All of our managers have received our

Management 101 training which focuses on recognising perfor-

mance and how to give feedback.

5. Long Term Incentive Plan: All employees are annually award-

ed nominal cost share options, with senior staff awarded new

options every other year. These options can be exercised after

three years of service.

Kooth Annual Report 2022Kooth Annual Report 2022Strategic Report

Physical and Mental Health

Health care schemes

Kooth is committed to supporting our people

with their physical and mental health. We sub-

sidise membership for all employees to a health-

care scheme once they successfully pass their

probation period.

Our healthcare schemes help with budgeting

for everyday health needs, give people access

to a range of treatment and provide cover for

the unexpected. Eligible employees can use the

scheme to access healthcare services such as

osteopathy, chiropody and counselling, as well

other specialist consultations. Employees can

also extend cover to additional family members.

There are no referrals needed to receive treat-

ment and pre-existing conditions are covered,

this gives staff peace of mind.

Staff benefit from free access to virtual GP ser-

vices through Doctor@Hand, an online, private

GP that people can access at their convenience

and outside of usual working hours.

All staff also have access to an Employee

Assistance Programme. This service is available

24 hours a day, 365 days a year to offer

practical, impartial support on everyday matters.

This ranges from financial and legal matters

(such as debt, buying a house and consumer

rights) to home and family issues (for example

finding childcare, divorce and coping with

elderly relatives). The Employee Assistance

Programme provides mental health support as

well, offering up to eight counselling sessions for

employees that require it.

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.

Governance

The Board views governance as how it makes decisions and provides oversight in order to promote

Kooth’s success for the long term benefit of its shareholders while having regard to the interests of its

other key stakeholders – our service users, customers, colleagues and the communities in which we

operate. Effective governance facilitates the delivery of Kooth’s mission and strategy.

Kooth seeks to conduct all of its operating and business activities

in an honest, ethical and socially responsible manner. These values

underpin our business model and strategy. We are committed to

acting professionally, fairly and with integrity in all of our business

dealings and relationships with consideration for the needs of all

of our stakeholders, including service users, investors, suppliers,

employees. Kooth endeavours to conduct its business in accordance

with established best practice, to be a responsible employer and

to adopt values and standards designed to help guide staff in their

conduct and business relationships.

2022 Highlights:

97%

33%

of employees underwent
HIPAA training

female representation on the
Board of Directors

Published our first Modern
Slavery Statement April
2022

Kooth Annual Report 2022

Strategic Report

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. We

have an Audit Committee and a Remuneration

Committee with formally delegated duties

and responsibilities and with written terms

of reference. Each of these committees

meet regularly on the frequencies

set out below. From time to time,

separate committees may be set up

by the Board to consider specific

issues when the need arises.

Audit Committee: The Audit Committee has

the primary responsibility of monitoring the

quality of internal controls to ensure that the

financial performance of Kooth is properly

measured and reported. It receives and reviews

reports from Kooth’s management and external

auditors relating to the interim and annual ac-

counts and the accounting and internal control

systems in use throughout Kooth. The Audit

Committee meets a minimum of three times in

each financial year and will have unrestricted

access to Kooth’s external auditors. The Audit

Committee comprises Simon Philips and Dame

Sue Bailey and is chaired by Peter Whiting.

Remuneration Committee: The Remuneration

Committee reviews the performance of the

Executive Directors and makes recommenda-

tions to the Board on matters relating to their

remuneration and terms of service. The Remu-

neration Committee meets as and when neces-

sary, but a minimum of three times each year.

In exercising this role, the Directors have regard

to the recommendations put forward in the QCA

Code and, where appropriate, the Remuneration

Committee Guide for Small and Mid-Size Quoted

Companies published by the QCA and associated

guidance.

The Remuneration Committee does, where

possible, adhere to the Remuneration Commit-

tee policy document which includes, inter alia,

a requirement for executive directors of the

Company to hold shares with a value at least

equal to their annual salary, with a tapering

post employment shareholding requirement.

The Remuneration Committee comprises Peter

Whiting and Dame Sue Bailey and is chaired by

Our Business Ethics
In August 2022, Kooth became a UN Global

Modern slavery
We recognise that all businesses have a key

Compact Signatory, ensuring that our business

role to play in preventing all types of modern

ethics align to the Ten Principles of the United

slavery in their own business and supply

Nations Global Compact in the following areas:

chains. We have published a Modern Slavery

human rights, labour, environment and anti-

Statement on our website. This statement sets

corruption. This commitment involves an

out our commitment to improving our practices

independent Commitment of Progress to the

to ensure that slavery and human trafficking

UNGC annually.

are not taking place in any part of our business

or supply chain. We circulate and share our

Kooth’s learning and development platform,

Modern Slavery Statement with employees. We

Litmos, holds mandatory training and voluntary

do this to make sure everyone understands the

guides for all employees to access. We have

risks of modern slavery and human trafficking

materials on Safeguarding for Non-Delivery,

in our business and supply chain. In addition,

Adults and Children, GDPR policies, and

we require all new starters to review and

mandatory training on Cyber Security. Our

confirm their understanding of our Modern

training platform offers content targeted to

Slavery Statement as part of their online

Kooth employees, for example bullying and

induction process.

harassment in the workplace, anti-fraud, bribery

and corruption and diversity and inclusion.

We also offer content aimed at those working

directly with our users, such as recognising

Bribery and corruption
Our Anti-Corruption and Anti-Bribery Policy

sets out our responsibilities in observing and

child abuse, sexual exploitation and equality and

upholding a zero-tolerance position on bribery

diversity.

We have specific staff policies in the

following areas: Health & Safety, GDPR and

and corruption. The policy applies

to all employees who work for Kooth. We

require all team members to read, understand

and comply with the information contained

Environmental. Each policy has an individual

within the policy.

owner and is revised annually. Every change to

a policy is tracked to ensure transparency and

accountability.

Kooth Annual Report 2022

Strategic Report

Accreditations:
We continue to be a BACP (British Association for Counselling and Psychotherapy) accredited

service and indeed are the only nationwide digital mental health service to hold this accolade. This

demonstrates that we offer an accountable, ethical, professional and responsive service to all of

our stakeholders as assessed by the BACP through the submission of evidence via annual review.

Specifically, there are a number of benefits to this accreditation. For example, in the face of a growing

number of new digital service providers, our accredited status with the UK’s leading governing body

provides reassurance for new and existing users of Kooth that we are safe; enhances recognition and

credibility with employers and funding bodies; helps with the acquisition of new contracts and supports

our recruitment and retention programmes.

IT Security
We have a Data Protection Office, headed up by the Data Protection Officer and Head of Information

Security, which monitors our compliance with international data, security and privacy standards such

as SOC 2 and ISO 27001. Kooth has been awarded the Cyber Essentials certification. Management

carries out diligence to seek to ensure that third party suppliers are maintaining good standards of

security. Kooth continues to ensure that all members of staff receive annual mandatory cyber security

training. Kooth takes the threat of a cyber incident very seriously and endeavours to mitigate the

risk wherever possible, although it is recognised by the Board and management that it will never be

possible to fully mitigate cyber risk.

Kooth Annual Report 2022

Strategic Report

Section 172 Statement

The Board understands the views of 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.

Stakeholder Engagement

We have identified our key stakeholders as follows:

Employees

We understand that our

employees are at the core

of everything we do and

maintain a focus on their

interests and wellbeing.

Surveys

In 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. This has reported

improved employee sentiment and engagement in 9 out of 10

categories during 2022.

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

Our Diversity and Inclusion Council implemented the

foundations for our Diversity Working Groups: working

groups on popular topics, such as LGTBQIA+, menopause and

neurodiversity were created for our employees to join.

Share Scheme

Long term nominal cost share options are awarded to all of our

employees on an annual basis and biannual for senior staff.

Flexible Working

We have continued to support employees by implementing

remote and hybrid-working for our office-based staff when

possible and in addition 48% of employees work flexible hours.

Kooth Annual Report 2022

Strategic Report

Customers

Communication with our

customers is fundamental to

understanding how we can

continue to add value through

our digital mental health

services.

Customer Base

UK Business

Kooth continues to meet increasing demand from children and

young people for fast and effective access to mental health

support. The addition of new commissions in Scotland in

addition to our significant coverage across Wales has brought us

closer to our goal of establishing a UK-wide service.

Momentum for Kooth Adult (known as Qwell) continues, with

the addition of eight new regions for the service in 2022.

Kooth is now being mobilised to help reduce the burden on

acute-need NHS services, including being commissioned to

ameliorate Accident & Emergency attendance by providing our

service to adults in need of urgent mental health support.

US Business

Kooth’s ambition to expand our leading digital mental health

platform to the US market has good momentum. In October

2022, we formalised a one-year pilot contract with the State of

Pennsylvania to provide mental health support to up to 150,000

school students across the State of Pennsylvania. Upon the

successful delivery of the pilot, the opportunity exists to expand

this further. In March 2023 we were notified that we have been

awarded a contract by the California Department of Health Care

Services (DHCS) to provide support to the State’s population of

13-25 year olds, launching in January 2024.

We are seeing interest from a number of US States in our

effective, personalised digital mental healthcare, driven by a

will to address challenges within the youth community.

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.

Kooth Annual Report 2022

Strategic Report

Investors

The Board maintains strong

relationships with investors

and supports open channels of

communication.

Communities

Kooth is committed to

providing an accessible and

diverse service to all.

Investor Meetings

Regular meetings are held between the Chief Executive Officer,

Chief Financial Officer and institutional investors and analysts

at investor roadshows and industry specific bank conferences

to ensure that the Company’s strategy, financial performance

and business developments are communicated effectively.

Investor Presentations

The CEO and CFO provide live presentations relating to

investing in the future of mental healthcare. Presentations

are open to all existing and potential shareholders. There is a

dedicated contact (investorrelations@kooth.com) for investor

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 LGTBQIA+ and

ethnic minority influencers to provide appropriate content to

our communities.

In 2022, we strengthened our partnerships with BlackOut

UK and Unity FM to research mental health needs within

minority communities to help shape our service to meet the

needs of this population. Initiatives like this one enable us to

create content for specific audiences, ensuring everyone feels

seen and heard. This year 19% of our users were from ethnic

minority backgrounds. For comparison, 18% of the British

population are ethnic minorities.

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.

Kooth Annual Report 2022

Strategic Report

Suppliers

The relationship we have

with our suppliers is crucial

to ensuring the smooth-

running of our business and

its operations.

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.

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 Kooth’s financial risk management objectives and policies, and exposure to foreign exchange

risk, market risk, credit risk and liquidity risk are given in note 22 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

Kooth requires stable and robust systems

and hosting services to enable the service

to function. The access of Kooth’s users and

its customers to its digital platforms and

the ease with which customers can use and

navigate these, along with the broad range of

functionality and services that are available,

are key features that affect the attractiveness

of Kooth’s services. Any disruption to this could

result in compromised Service User experience

and/or reputational damage. To prevent this

Kooth has regular testing on its systems in

addition to active monitoring and a specific

recovery plan.

Safeguarding incidents

Kooth is not a crisis service however, the

core component of our business is providing

counselling services to children and young

people, and to adults, some of whom are

vulnerable. Therefore, given the nature of

Kooth’s activities, it is necessary to have

significant procedures in place to ensure that

our most vulnerable users are prioritised and

dealt with appropriately, and to mitigate any

potential reputational damage in the event of a

serious safeguarding incident.

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/or 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.

Kooth Annual Report 2022

Strategic Report

Cyber security and data protection

Kooth must ensure ongoing compliance

with various data protection laws, including

the retained EU law version of the General

financial information is collected, and all data

Data Protection Regulation (Regulation (EU)

is encrypted in compliance with NHS data

2016/679) (‘UK GDPR’), Data Protection Act

standards. Nevertheless, there is a risk that any

2018 and the retained Privacy and Electronic

data breach within Kooth could have significant

Communications (EC Directive) Regulations

reputational impact, given the nature of the

2003. Kooth is under an obligation to protect

services we offer. In the United States, there

the private and personal data that it holds,

is continued focus on Kooth’s SOC2 type II

including that of its employees. Further, as

compliance to ensure we have sufficient controls

Kooth expands its footprint in the United States

with the management of data and ISO 27001

of America, it will ensure continued compliance

certification to ensure we meet international

with key federal privacy and security laws

standards around information security. As

such as Health Insurance Portability and

much of our service focuses on children and

Accountability Act of 1996 and the Children's

young people, we are ensuring compliance with

Online Privacy Protection Act of 1998 (‘COPPA’)

COPPA, to protect the data of children and

in addition to local state laws.

obtaining the appropriate parental consent for

those under the age of 13 to access our services.

Kooth is required to take steps to ensure

The Board considers that Kooth has in place

compliance with the UK GDPR and relevant

adequate procedures to ensure compliance with

laws and to ensure the security of any personal

UK GDPR and US laws and controls to ensure

data that Kooth holds in respect of its employees

the security of the data collected.

and Service Users. There is an inherent risk such

data could be processed in a manner which is

Kooth has a Data Protection Officer and

in direct breach of the relevant data protection

appointed a new Head of Information Security

legislation, the consequence of which would not

to oversee data protection compliance and data

only be a potentially significant fine but may

security through Kooth’s Data Protection Office,

also result in damage to Kooth’s reputation,

which draws together relevant expertise across

further impacting Kooth’s revenue.

our company, including the company’s legal and

clinical teams in the United Kingdom and the

The nature of the service means that the data

United States of America.

that Kooth collects from its Service Users is

typically anonymised and collected with explicit

consent, but it is possible that identifiable data

from Service Users may be collected during

the course of the provision of services; no

Cost of Living

The recent increase in the cost of living exposes all employers, including Kooth, to the risk of

heightened staff costs and reduced government funding.

It is critical to our ongoing success that we retain and attract a skilled, engaged and motivated

workforce. Failure to do so may negatively impact our ability to deliver on performance targets and

strategic priorities. Software development and counselling are areas of strong competition for talent

and are subject to cost inflation like all jobs.

Kooth is committed to being a leading employer that cares for its employees, by providing an optimum

work environment. Our people team has developed and manages a wide range of policies, procedures

and practices designed to support all employees – spanning Diversity, Equity and Inclusion; Gender Pay

Gap; Ethnicity Pay; Physical and Mental Health; and Recognition and Feedback. Competition for talent

and wage expectations continues to be a challenge which we review and monitor on an ongoing basis.

Whilst the cost of living crisis will impact government bodies and could impact public sector spend,

we do not anticipate significant near-term funding changes for digital mental health support given the

critical nature of – and demand for – these services.

Russia’s Invasion of Ukraine

Although the terrible situation in the Ukraine is having a major impact on the world economy, the

current impact on Kooth is negligible with no customers, suppliers or employees in Russia or Ukraine.

The directors monitor emerging news and trends and remain alert to any potential impact on the

trading of the Group.

Kooth Annual Report 2022

Corporate Governance

The Board

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 70.

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 ultimate responsibility for the successful operations of the Group and meets

approximately monthly to set the overall direction and strategy of the Group.

Chair’s Introduction to Governance

Dear Shareholder,

I am pleased to present the Corporate Governance Statement as Chair of the Board of 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.

Kooth Annual Report 2022

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.

Almond CS Limited 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, in-

cluding 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:

Corporate Governance

Peter Whiting
Independent Chair

Joined May 2020

Peter had a twenty-five year career as an investment analyst
in equity capital markets, and has spent the past ten years as
a non-executive director on the boards of several public and
private companies (currently including FDM Group plc and D4t4
Solutions plc). He has experience in a broad range of sectors, but
has focused on technology, and on software in particular.

Sue Bailey
Independent Non-

Executive Director

Joined August 2020

Professor Dame Sue Bailey OBE worked as a Child and Adolescent
Psychiatrist for over 30 years. Sue’s national health policy work
and research centres on how to improve healthcare delivery
and training of all health practitioners to enable them to best
meet the needs of any patient in the context of the unique
circumstances of the individual’s life.

Simon Philips
Non-Executive Director

Joined October 2015

Simon is Chief Executive of Scaleup Capital, a specialist
investor that provides growth capital and expertise to scale-up
stage businesses with revenues in the range of £1 million to
£20 million in the technology, digital, business services and
information sectors.

Tim Barker
Chief Executive Officer

Joined January 2020

With over 30 years of experience in the B2B software industry,
Tim has helped build and scale SaaS industry leaders. In his
journey from Software Engineer to CEO, Tim founded Koral, a
pioneer in online collaboration (acquired by Salesforce), led EMEA
Marketing at Salesforce to scale them to become a billion-dollar
business, and was previously CEO of DataSift, a privacy-by-design
analytics and AI platform, acquired by Meltwater in 2018.

Sanjay Jawa
Chief Financial Officer

Joined March 2020

Before joining Kooth from Scaleup Capital where he was an
Operating Partner, Sanjay previously held senior finance positions
at a combination of public and private equity backed technology
and services businesses including QualiTest, Barclays and FTI
Consulting. Sanjay, qualified as a Chartered Accountant and was
an audit manager at Price Waterhouse.

Kate Newhouse
Chief Operating Officer

Joined May 2020

Kate is COO and a former member of the government’s
Healthtech Advisory Board. Kate was previously CEO at leading
venture builder, Blenheim Chalcot and at Doctor Care Anywhere,
taking it from digital health concept to global business, serving
over 140 corporate clients at the time of leaving.

Kooth Annual Report 2022

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 and objectives;

• Reviewing performance against Kooth’s strategic aims, objectives and business plans;

• Overseeing Kooth’s operations;

• Approving changes to Kooth’s capital, corporate, management or control structures;

• Approving results announcements and the annual report and financial statements;

• Approving the dividend policy;

• Declaring the interim dividend and recommending the final dividend and any special dividend;

• Approving any significant changes in accounting policies;

• Approving the treasury policy;

• Approving Kooth’s risk appetite and principal risk statements;

• Reviewing the effectiveness of Kooth’s risk and control processes;

• Approving major capital projects and material contracts or arrangements;

• Approving all circulars, prospectuses and admission documents;

• Ensuring a satisfactory dialogue with shareholders;

• Establishing Board committees and approving their terms of reference;

• Approving delegated levels of authority;

• Approving changes to the Board and its committees;

Audit Committee

Remuneration Committee

The Audit Committee comprises three Non-

The Remuneration Committee comprises

Executive Directors, namely; Peter Whiting

Simon Philips (Chair), Sue Bailey (INED) and

(Committee Chair), Sue Bailey (INED) and Simon

Peter Whiting (INED). Only members of the

Philips (NED), two of whom are independent.

committee have the right to attend meetings,

At the discretion of the Committee Chair, the

however other individuals such as the CEO,

CFO was invited to attend meetings of the Audit

the Chief People Officer and external advisors

Committee during the year.

may be invited to attend at different points

during the year at the discretion of the Chair.

The Audit Committee is responsible for the

No individual was present for any discussion on

annual and half-yearly reports to shareholders,

their own remuneration.

other public announcements of a financial

nature, review of the likelihood of any fraud

The role of the Remuneration Committee

risks, review of the effectiveness of Kooth’s

includes responsibility for all aspects

internal control and risk management system

of the remuneration of Executive Directors,

and oversight of the relationship with the

including salary, annual bonus and share-based

external auditors.

payments, and an awareness of remuneration

The Audit Committee also reviews the

administration of all share-based remuneration

appointment of the external auditor, their

plans within the organisation.

independence, the audit fee, and any questions

of resignation or dismissal.

The Remuneration Committee met six times

within the wider workforce and the

during the year.

• Determining the remuneration policy for the Directors and other senior executives; and

The Audit Committee met three times during

• Providing a robust review of Kooth’s corporate governance arrangements.

the year.

Kooth Annual Report 2022

Corporate Governance

Relationships with stakeholders

Board Evaluation

The Board is committed to open and ongoing engagement with the Company’s Shareholders. The Board

An informal board evaluation process led by the Chair took place during the year in which the Chair

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.

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.

Outside of the period, a formal external board evaluation was also carried out by Almond CS Limited,

who have experience in evaluating Boards of AIM listed companies. Evaluation based questionnaires

were circulated and completed by all members, and a thorough analysis of the responses was

conducted.

The evaluation was designed to give an overview of the Board’s performance based on its alignment

with the QCA Code and served to support the Board in identifying challenges and implementing

change.

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.

The Chairs of the Board and Committees are available to meet with 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, technological and

other risks. In addition to the Head of Legal

and Risk, a Head of Information Security was

hired to strengthen controls and processes and

the Board, via the Audit Committee, regularly

reviews the risks and ensures that they are

being addressed.

Kooth Annual Report 2022

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

shareholder needs and

shareholders are the Annual Report and Accounts, the annual and

Company adheres to and applies the standards of corporate governance. The Board and Committees

expectations

half-year results announcements, capital markets day, trading

Principle 2: Seek to

understand and meet

The Board is committed to an open and ongoing engagement

with its shareholders. The main methods of communication with

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 four

a business strategy and

key pillars that represent a £1 billion+ international addressable

business model which

market and £500 million UK addressable market, with a platform

promotes long-term value for

and operating model that can scale into all markets to tackle the

shareholders

global mental health challenge. The four pillars being Children and

Young People, Adults, International and Workforce.

Full disclosure of our strategy and business model can be found in

pages 4 to 67 of the Annual Report which is also 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 forms part of the Annual Report.

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 advance of or during the meeting.

Principle 3: Take into account

The Company takes ESG very seriously and the Board is conscious

wider stakeholder and social

of the impact that the Company’s business activities may have in

responsibilities and their

these areas. The Board recognises that its long-term success will

implications for long-term

necessitate the maintenance of effective working relationships

success

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 on pages 38 - 57 and 58 - 67.

Kooth Annual Report 2022Kooth Annual Report 2022Principle 4: Embed effective

The Board has ultimate responsibility for the Company’s system

risk management, considering

of internal controls and for reviewing its effectiveness. Such

both opportunities and

systems are designed to manage risk of failure to achieve business

threats, throughout the

objectives. The Board meets frequently during the year during

organisation

which 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 65.

Principle 5: Maintain the

The Board comprises of six directors: the Independent Chairman,

Board as a well- functioning,

two Non-Executive Directors and three Executive Directors.

balanced 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.

Principle 7: Evaluate board

Although the Company is not required to undertake a formal

performance based on clear

independent evaluation, the Board undertook an informal

and relevant objectives,

evaluation process led by the Chair which took place during

seeking continuous

the year. The Chair conducted individual discussions with each

improvement

director, followed by a collective discussion with the board on its

effectiveness and ways to improve.

Outside of the period, a formal external board evaluation was

also carried out by Almond CS Limited, who have experience in

evaluating Boards of AIM listed companies. Evaluation based

questionnaires were circulated and completed by all members, and

a thorough analysis of the responses was conducted.

The evaluation was designed to give an overview of the Board’s

performance based on its alignment with the QCA Code and

served to support the Board in identifying challenges and

implementing change.

Principle 8: Promote a

The Board places significant importance on the promotion of

The Board is also supported by the Committees (Audit and

corporate culture that is

ethical values and good behaviour within the Company and takes

Remuneration) each with specific remits. The detail of the number

based on ethical values and

ultimate responsibility for ensuring these are promoted and

of meetings and attendance by Directors is noted on page 71.

behaviour

maintained throughout the organisation.

Principle 6: Ensure that,

The Board consistently evaluates those skills that are required

between them, all Directors

and whether they are adequately provided for across the Board

have the necessary up to

and executive team. In doing so, and where relevant, it will

date experience, skills and

consider guidance available on appointment and training of Board

capabilities

members.

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.

The Company’s culture and values which are highlighted on pages

46 to 56 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.

This is reviewed annually to ensure it remains relevant and up to

date.

Kooth Annual Report 2022

Corporate GovernancePrinciple 9: Maintain

The Board held 11 meetings during the year.

Principle 10: Communicate

The Company places a strong emphasis on the standards of good

governance structures and

how the Company is governed

corporate governance and maintaining an effective engagement

processes that are fit for

The Company Secretary works closely with the Chairman and the

and is performing

with its shareholders and key stakeholders, which it considers to

purpose and support good

Chairs of the Board Committees to ensure that Board procedures,

by maintaining an open

be integral to longer-term growth and success.

decision-making by the Board

including setting agendas and the timely distribution of papers,

dialogue with Shareholders

are complied with and that there are good communication flows

and other relevant

The Company’s Annual reports and accounts, and its half

between the Board and its Committees, and between senior

stakeholders

year report are key communication channels through which

management and Non- Executive Directors.

There is a formal agenda at each Board Meeting which includes

operational updates from the Chief Executive Officer, financial

updates from the Chief Financial Officer and commercial updates

from the Chief Operating Officer. All reports cover different areas

within the Company and cover new business opportunities. Board

papers are circulated to the Directors in advance of meetings to

enable proper consideration of the content of the papers.

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.

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

Almond CS Limited
Company Secretary

3 April 2023

Kooth Annual Report 2022

Corporate GovernanceReport of the Audit
Committee

Committee Chair’s introduction

As the Chair of the Audit Committee of Kooth (‘the Committee’), I present the Committee Report for

the year ended 31 December 2022, 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 two other listed company Board and

Audit Committee positions. During the year ended 31 December 2022, 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.

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

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; and

• Considered significant issues and areas of judgement with the potential to have a material

impact on the financial statements.

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

Interim Accounts and results announcements), reviewing internal control and risk management, and

auditors;

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

2022 audit. In addition, the Committee reviewed the audit provided by Grant Thornton UK LLP,

Kooth’s external auditors. The Committee concluded that Grant Thornton UK LLP is delivering the

necessary audit scrutiny.

Accordingly, the Committee recommended to the Board that Grant Thornton UK LLP be re-appointed

for the next financial year.

• To make recommendations to the Board concerning the approval of the remuneration 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; and

• The Terms of Reference are reviewed annually and are available on the

Company’s website.

Kooth Annual Report 2022

Corporate Governance

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 2023 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.

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 21.

I am satisfied that the Committee has satisfactorily discharged its duties in the year in accordance with

its terms of reference.

Peter Whiting
Chair of the Audit Committee

3 April 2023

Kooth Annual Report 2022

Report of the
Remuneration Committee

Committee Chair’s introduction

As the Chair of the Remuneration Committee of Kooth (‘the Committee’), I present the Remuneration

Committee Report for the year ended 31 December 2022, which has been prepared by the Committee

and approved by the Board.

Committee meetings and attendance

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.

The three members of the Committee are Dame Sue Bailey, Peter Whiting and me. The Board

• To determine such remuneration policy, taking into account all factors which it deems

considers that I have sufficient relevant experience to chair the Committee, given the numerous Board

necessary (including relevant legal and regulatory requirements);

level positions currently (including the Remuneration Committee Chair of another listed company) and

previously held.

During the year ended 31 December 2022, the Committee met six 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 2022

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;

• Encourage value creation through consistent and transparent alignment of incentive

arrangements with the agreed company strategy over the long term; and

• 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.

• 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; and

• To consider any matter specifically referred to the Committee by the Board.

Kooth Annual Report 2022

Corporate Governance

Director’s remuneration: salary

Salaries are normally reviewed annually with effect from 1 January taking into account inflation,

salaries paid to directors of comparable companies, Group and personal performance. Salaries of

Executive Directors are determined by the Remuneration Committee. The Board as a whole decides the

remuneration of the Chair and Non-Executive Directors. Salaries and fees for directors effective from 1

January 2023 are as follows:

Director’s remuneration: long
term incentives (audited)

The Group adopts a Long Term Incentive 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.

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.

The fair value of the awards was calculated

using the Black Scholes model. Non-market

based vesting conditions are included in

assumptions about the number of options

that are expected to become exercisable or

the number of shares that the employee will

ultimately receive. This estimate is revised at

each balance sheet date to allow for options

that are not expected to vest and the difference

is credited to the Consolidated Statement of

Comprehensive Income with a corresponding

adjustment to reserves.

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

A breakdown of the Directors’ current interests

in the long term incentives awards is set out

below.

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.

Kooth Annual Report 2022

Corporate Governance

Executive Directors’ Remuneration: current year

Executive Director’s remuneration for the years ended 31 December 2022 and 31 December 2021 was

as follows.

Gain on exercise
of share options

244

709

251

730

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 2023 are noted above.

Simon Philips
Chair of the Remuneration Committee

3 April 2023

Kooth Annual Report 2022

Corporate Governance

Directors’ report

The Directors present their report and the audited financial statements of Kooth plc for the year ended

31 December 2022.

Political contributions

The Group made no political donations during

the year (2021: nil).

Directors’ insurance

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

The Group maintains appropriate insurance

cover in respect of any legal action against its

year and indications of future development are set out within the Strategic Report, and this also incor-

directors.

porates the requirements of the Companies Act 2006.

Comparatives

The 2021 comparatives shown cover the year ended 31 December 2021.

Dividends

Research and Development

During the year the Group invested £3.1 million

in Research and Development. More information

on this is provided in the Strategic Report and in

the notes to the financial statements.

The Directors do not recommend the payment of a dividend (2021: £nil).

Anti-Bribery

Disabled employees

Applications for employment by disabled persons are always fully considered, bearing 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 pro-

motion of disabled people should, as far as possible, be identical to that of other employees.

Directors

The directors who held office during the year and up to the date of signing these financial statements

were as follows:

• Tim Barker, Chief Executive Officer

• Sanjay Jawa, Chief Financial Officer

• Kate Newhouse, Chief Operating Officer (appointed January 2022)

• Peter Whiting, Chair and Non-executive director

• Simon Philips, Non-executive director

• Sue Bailey, Independent Non-executive director

It is our policy to conduct all our business in an

honest and ethical manner. We take a zero-tol-

erance approach to bribery and corruption and

are committed to acting professionally, fairly

and with integrity in all our business dealings

and relationships.

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, per-

formance and position are set out in the Strategic report on pages 4 to 67. In addition, note 22 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 2022 financial year the Group generated a loss of £0.7 million (2021: £0.3 million loss). Ad-

justed EBITDA is £1.6 million (2021: £2.1 million). The Group is in a net asset position of £10.5 million

(2021: £11.0 million). The Group generated an inflow of £1.4m in cash in 2022 (2021: £0.7m outflow)

and ended 2022 with a cash balance of £8.5m (2021: £7.1m)

Kooth Annual Report 2022

Management has performed a going concern assessment for a period of 12 months from signing, 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 2022 ac-

tual 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. Management deemed the combination of factors occurring as set out in the default

model to be implausible.

The Directors have considered the impact of the current climate of increased inflation and interest

rates and do not expect this 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.

Employee involvement

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 and our Employee

Voices Group.

As a result of the IPO in 2020 we are able to offer our staff long term, annual 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

Following the year end Kooth was selected as the primary vendor partner to deliver its digital mental

health platform to all 13-25 year olds in the State of California. Kooth will provide services integral to

the Behavioral Health Virtual Services Platform, a new technology-enabled services solution, for all

children, youth, and families in the State. The service is expected to launch in January 2024. Kooth

expects the contract details to be agreed during the course of Q2 2023, with an associated highly

material impact on revenues and ARR from 2024 onwards.

Auditor

Grant Thornton UK LLP was re-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.

Significant shareholders

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 2022.

Name

% of Issued Share Capital

Root Capital Fund II LP trading as Scale Up Capital

Cannacord Genuity Group Inc

LF Gresham House UK Micro Cap

Stancroft Trust Limited

J O Hambro Capital Management Limited

Premier Miton Investors

37.30%

14.30%

8.70%

6.10%

5.10%

4.90%

Sanjay Jawa
Chief Financial Officer

3 April 2023

Kooth Annual Report 2022

Corporate Governance

Directors’
responsibilities statement

In respect of the Annual Report and the financial statements

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 UK-adopted 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 UK-adopted 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; and

• 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.

The directors confirm that:

•

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 informa-

tion 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 UK-adopted 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

3 April 2023

Kooth Annual Report 2022

Corporate GovernanceIndependent auditor’s report

Opinion

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 2022 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 cash flow statement, the Parent company statement of financial position,

the Parent company statement of changes in equity and notes to each of 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 2022 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

3 April 2023

Independent auditor’s reportIndependent auditor’s reportKooth Annual Report 2022Kooth Annual Report 2022Basis 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:

• Considering the current cash resources of the Group, in the context of the forecast cash

requirements during the forecast period.

• Challenging the key assumptions in the forecasts and the scope of scenario planning

undertaken, given current social and economic conditions. Key management assumptions

included revenue growth rate, new business wins, contract renewal rate, growth rates in

the underlying forecasts, and net working capital structure of the Group.

• Critically assessing both the outcomes of reverse stress testing and the availability of

controllable mitigating future actions within the going concern assessment.

• Assessing management’s historical forecasting accuracy.

• Assessing the suitability of the models used to forecast cash flows, including testing of the

mathematical accuracy.

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 the war in Ukraine and the cost of living crisis, 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.

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.

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.

Our approach to the audit

Overview of our audit approach

Overall materiality:

Group: £400,000, which represents 2% of the group’s revenue.

Parent company: £250,000, which represents 1.5% of the parent

company’s total assets.

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 2021 included no key audit matters that have not

been reported as key audit matters in our current year’s report.

We performed audits of the financial information of the significant Group components Kooth plc,

Kooth Group Limited and Kooth Digital Health Limited using component materiality (full scope audit

procedures). We performed specified audit procedures on Kooth US LLC, a newly incorporated trading

entity in the year. One previous Group component was dissolved in the year and as such, no procedures

were performed on this entity.

100

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Independent auditor’s reportIndependent auditor’s reportKooth Annual Report 2022Kooth Annual Report 2022Key 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.

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 (£20.1m, 2021: £16.7m)

In responding to the key audit matter, we

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 in respect of the

completeness of deferred revenue.

performed the following audit procedures:
• 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.

• Utilising data analytics techniques to

Furthermore, during the year, the invoicing and

identify revenue postings to unusual account

revenue deferral process was manual in nature,

codes and investigating those transactions.

which gives rise to the risk of errors being made

in the processing of both.

In the year, the Group began trading in the

US under a newly incorporated subsidiary.

This expansion into a new territory gives rise

to further risks of misstatement in revenue

recognition in the year, due to differences in

the healthcare industry and how the different

contract structures are accounted for.

We therefore identified revenue recognition

as one of the most significant assessed risks of

material misstatement due to fraud and error.

• Testing a sample of transactions from
management’s billing summary, to

determine that the amount of revenue

recognised in the year and the amount

deferred at the balance sheet date was

complete and accurately calculated, based

on progress of the underlying contract. This

testing also included comparing invoices

raised to cash receipts in the bank.

• Testing a sample of items in the deferred

income balance for accuracy in accordance

with the invoices raised and the contract

terms.

• Further completeness testing on deferred
income was performed by sampling after-

date revenue and cash transactions
• Testing of all material contracts entered
into in the US in the year, to ensure the

treatment was consistent with the contract

terms, the Group accounting policy and IFRS

15 requirements. We also compared cash

receipts from these contracts through to

bank statements.

102

103

Independent auditor’s reportIndependent auditor’s reportKooth Annual Report 2022Kooth Annual Report 2022
Key Audit Matter - Group

How our scope addressed the
matter – Group

Key Audit Matter - Group

How our scope addressed the
matter – Group

Relevant disclosures in the Annual Report

Our results

Relevant disclosures in the Annual Report

• Discussing the overall projects in the

2022

Financial statements: Note 2.3, accounting

policy for revenue from contracts with

customers; Note 4, Revenue.

Based on procedures performed, we did not

identify any material misstatements in the

revenue recognised during the year or the

deferred income recognised at year end.

Accounting for capitalised internal

In responding to the key audit matter, we

development costs (£3.0m, 2021: £2.5m)

performed the following audit procedures:

We identified accounting for capitalised internal

disclosure for compliance with IAS 38.

development costs as one of the most significant

• Obtaining and assessing management’s

assessed risks of material misstatement due to

judgement on the level of employee costs

• Assessing the accounting policy and

error.

to be capitalised across the year, which was

split into different projects.

The Group capitalises costs associated with

• Performing a test of details on a sample of

development of their online platform, which is

these costs, agreeing amounts to underlying

being developed internally.

payroll information or external invoices.

Where external invoices were capitalised,

The costs associated with the time spent on this

we corroborated the nature of the work to

development are capitalised in the Statement of

assess whether any research elements had

Financial Position at the year end.

been inappropriately been capitalised.

• For a sample of capitalised costs,

Costs must be capitalised when they meet

making enquiries with employees in the

the requirements of International Accounting

development team to gain an understanding

(‘IAS’) 38 ‘Intangible Assets’. This includes

of the nature of the work they had

management judgement in determining the

performed which had been capitalised and

distinction between research and development

the proportion of their time which was

costs.

104

spent on qualifying development costs. This

included assessing whether the nature of

the costs capitalised met the criteria as set

out in IAS 38.

• Obtaining the budget for the projects

capitalised as developments in the year

and assessing how the project was

progressing against this, including whether

the necessary resources were in place to

complete the project.

2022

year directly with the Chief Technology

Officer. This enabled us to consolidate our

Financial statements: Note 2.3, accounting

understanding of whether management’s

policy for intangible assets; Note 3, significant

assessment of whether the costs met the

accounting judgement for capitalisation of

criteria for capitalisation was appropriate

development costs; Note 11, Development costs.

and whether their assessment that there

were no indicators of impairment was

reasonable.

• Assessing the amortisation policy used

by management for appropriateness,

considering the underlying development

projects and their anticipated useful life. We

also performed an amortisation recalculation

based on management’s accounting policy.

Our results

Our testing did not identify any material

misstatements in the accounting for capitalised

internal development costs.

105

Independent auditor’s reportIndependent auditor’s reportKooth Annual Report 2022Kooth Annual Report 2022Our 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
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

£400,000, which is 2% of
revenue.

£250,000, which is 1.5% of total
assets.

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.

2% 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. We
have increased the percentage
in the year as we are satisfied
that the entity operates in a
stable business environment
and is currently trading with no
external debt, howeverwe kept
the percentage below the highest
end of our acceptable range to
reflect the risks 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 2021 to reflect the
growth in revenue during the
year.

Total assets was considered the
most appropriate benchmark
because the Parent company
does not trade and holds material
investments in subsidiary
companies. 1.5% of total assets
is at the upper end of our
acceptable range and has been
selected to reflect the lack of
complexity in the transactions it
undertakes.

Materiality for the current year
is higher than the level that we
determined for the year ended
31 December 2021, as in the
previous year the materiality
was capped at the level of
Group materiality arising from
our ISA 600 assessment. In the
current year, Group materiality
has increased to the extent that
capping of Parent company
materiality was no longer
required.

Materiality measure

Group

Parent company

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

£280,000, which is 70%
of financial statement
materiality.

£175,000, which is 70%
of financial statement
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

•

Significant judgements
made by auditor in
determining the
Materiality measure

changes to our risk
assessment, including
our assessment of the
group’s overall control
environment

• Consideration of the

number and individual
magnitude of audit
adjustments observed in
the previous period.
• We concluded that an

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 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

£20,000 and misstatements
below that threshold that, in
our view, warrant reporting on
qualitative grounds.

£12,500 and misstatements
below that threshold that, in
our view, warrant reporting on
qualitative grounds.

106

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Independent auditor’s reportIndependent auditor’s reportKooth Annual Report 2022Kooth Annual Report 2022The graph below illustrates how performance materiality interacts with our overall materiality and the

tolerance for potential uncorrected misstatements.

FSM: Financial statements materiality, PM: Performance materiality, TFPUM: Tolerance for potential uncorrected

misstatements

An overview of the scope of our audit

We performed a risk-based audit that requires an understanding of the group’s and the parent

company’s business and in particular matters related to:

Understanding the group, its components, and their environments, 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.

Identifying significant components

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,

Type of work to be performed on financial information of Parent and other components

(including how it addressed the key audit matters)

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 and implementation of relevant controls

and performed data analytics alongside substantive procedures.

For the remaining areas, we assessed the design and implementation effectiveness of controls deemed

relevant to the audit and performed substantive procedures.

Performance of our audit

Audit approach

No. of
components revenue

%coverage %coverage %coverage
LBT
total assets

Full-scope audit
Analytical procedures

3
1

>98%
<1%

93%
7%

>98%
<1%

Changes in approach from previous period

We performed specified audit procedures on Kooth USA LLC for the first time this year, due to it

generating 7% of overall revenue. In the current year we did not deem the entity to yet be a significant

component and so performed specified procedures on certain balances within the entity. Previously,

considering the relative size of each component as a percentage of total Group revenue, net assets,

Xenzone Alliance CIC was in scope for analytical procedures; in the current year this entity was

and loss before tax. Kooth plc, Kooth Group Limited and Kooth Digital Health Limited were significant

dissolved and so no procedures were performed in respect of the Group opinion.

components for which we performed full scope audit procedures using the respective component

materiality.

108

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Independent auditor’s reportIndependent auditor’s reportKooth Annual Report 2022Kooth Annual Report 2022

Other information

The other information comprises the information included in the annual report, other than the financial

statements and our auditor’s report thereon. The directors are responsible for the other information

contained within the annual report. Our opinion on the financial statements does not cover the other

information and, except to the extent otherwise explicitly stated in our report, we do not express any

form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other

information is materially inconsistent with the financial statements or our knowledge obtained in the

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 themselves. If, based on the work we have performed, we

conclude that there is a material misstatement of this other information, we are required to report that

fact.

We have nothing to report in this regard.

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement pages 96 to 97, 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

Our opinion on other matters prescribed by the Companies Act 2006 is
unmodified

exists.

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 their

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.

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. 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 the industry in which they operate. We determined that the following

laws and regulations were most significant: UK-adopted international accounting standards,

Financial Reporting Standard 101 ‘Reduced Disclosure Framework’, the Companies Act 2006, the

Quoted Companies Alliance Corporate Governance Code 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 are 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;

110

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Independent auditor’s reportIndependent auditor’s reportKooth Annual Report 2022Kooth Annual Report 2022• 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;

assessing the design and implementation 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, including in relation to the

intangible asset capitalisation as set out in our Key Audit Matters;

identifying and testing journal entries, in particular any journal entries posted which we

deemed to be higher risk and those 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; and

• 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.

• 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/auditors responsibilities. This

description forms part of our 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

3 April 2023

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Independent auditor’s reportIndependent auditor’s reportKooth Annual Report 2022Kooth Annual Report 2022Financial Statements
Kooth Plc Annual Report 2022

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Financial Statements

Financial Statements
Kooth Plc Annual Report 2022

Consolidated statement of ﬁnancial position
As at 31 December 2022

Consolidated statement of proﬁt and loss and other comprehensive loss
For the year ended 31 December 2022

Note

31 December 2022
£'000

31 December 2021
£'000

Revenue

Cost of sales

Gross proﬁt

Note

2022

£'000

20,120

(6,265)

2021

£'000

16,682

(5,097)

13,855

11,585

Administrative expenses

(14,767)

(12,318)

Operating loss

(912)

(733)

Analysed as:

Adjusted EBITDA

1,612

Depreciation & amortisation

11, 12, 13

(2,232)

Share based payment expense

(292)

2,082

(2,384)

(431)

Operating loss

(912)

(733)

Interest income

Assets
Non-current assets
Goodwill
Development costs
Right of use asset
Property, plant and equipment
Deferred tax

Total non-current assets

Current assets
Trade and other receivables
Contract assets
Cash and cash equivalents

Total current assets

Total assets

Liabilities
Current liabilities
Trade payables
Contract liabilities
Lease liability
Accruals and other creditors
Tax liabilities
Deferred tax

Loss before tax

(831)

(720)

Total current liabilities

Tax

115

410

Total comprehensive loss for the year

(716)

(310)

Loss per share - basic (£)

(0.02)

(0.01)

Loss per share - diluted (£)

(0.02)

(0.01)

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

10
11
12
13
14

15
16
17

18
19
12
18
18
14

20
20
20
20
20
20

511
3,681
68
122
-

4,382

2,618
649
8,492

11,759

16,141

(680)
(2,583)
(68)
(977)
(967)
(348)

(5,623)

6,136

511
2,867
-
116
435

3,929

2,370
406
7,079

9,855

13,784

(417)
(797)
-
(649)
(948)
-

(2,811)

7,044

10,518

10,973

1,653
14,229
(2,595)
1,221
115
(4,104)

10,518

1,653
14,229
(1,879)
959
115
(4,104)

10,973

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Financial Statements

The ﬁnancial statements of Kooth plc (Company registration number 12526594) were approved by the Board of
Directors and authorised for issue on 3 April 2023. They were signed on its behalf by:

Consolidated statement of changes in equity
For the year ended 31 December 2022

The ﬁnancial statements of Kooth plc (Company registration number 12526594) were approved by the Board of
Sanjay Jawa
Directors and authorised for issue on 3 April 2023. They were signed on its behalf by:
Chief Financial Ofﬁcer
3rd April 2023

The notes on pages [121 to 142] form part of the ﬁnancial statements.

121 to 142 form part of the financial statements.

Sanjay Jawa
Chief Financial Ofﬁcer
3rd April 2023

The notes on pages [121 to 142] form part of the ﬁnancial statements.

Share
capital

Share
premium

Share based
payment
reserve

P&L reserve

Capital
redemption
reserve

Merger
reserve

Total equity

Balance at 1 January 2021

1,653

14,229

528

(1,569)

115

(4,104)

10,852

Share based payments
Total comprehensive loss for
the year

431

(310)

431

(310)

As at 31 December 2021

1,653

14,229

959

(1,879)

115

(4,104)

10,973

Balance at 1 January 2022

1,653

14,229

959

(1,879)

115

(4,104)

10,973

Share based payments
Total comprehensive loss for
the year

262

(716)

262

(716)

As at 31 December 2022

1,653

14,229

1,221

(2,595)

115

(4,104)

10,518

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Financial Statements

Consolidated Cash Flow Statement
For the year ended 31 December 2022

Cash ﬂows from operating activities

Loss for the year

Adjustments:

Note

2022

£'000

2021

£'000

(716)

(310)

Depreciation & amortisation

11, 12, 13

2,232

Income tax received

Share based payment expense

Income tax recognised

Interest income

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

Interest income

Net cash from ﬁnancing activities

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

330

292

(115)

(81)

2,364

4,384

2,384

520

(410)

(574)

244

1,854

(100)

(2,952)

(3,052)

(63)

(2,535)

(2,598)

1,413

7,079

8,492

(744)

7,823

7,079

Notes to the Financial Statements

Corporate Information

1.
Kooth plc is a company incorporated in England and Wales. The address of the registered ofﬁce is 5 Merchant
Square, London, England, W2 1AY.

Signiﬁcant Accounting Policies
Basis of Preparation

2.
2.1)
The consolidated ﬁnancial statements of Kooth plc and its subsidiaries (collectively, the Group) for the year ended
31 December 2022 have been prepared and approved by the directors in accordance with UK-adopted
International Accounting Standards in conformity with the requirements of the Companies Act 2006.

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 67. In addition, note 22 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 2022 ﬁnancial year the Group generated a loss of £0.7 million (2021: £0.3 million). Adjusted EBITDA is
£1.6 million (2021: £2.1 million). The Group is in a net asset position of £10.5 million (2021: £11.0 million).

Management has performed a going concern assessment for a period of 12 months from signing, 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 2022 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.
Management deemed the combination of factors occurring as set out in the default model to be implausible.

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.

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Financial Statements

Basis of Consolidation

2.2)
The consolidated ﬁnancial statements comprise the ﬁnancial statements of the Company and its subsidiaries as at
31 December 2022, with the comparatives presented for the previous 12 months being the Group’s combined
activities for the 12 months ended 31 December 2021.

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

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.

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 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. Kooth plc’s operations take place in the UK and the US.

Summary of Signiﬁcant Accounting Policies

2.3)
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 the population covered and
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)
2)
3)
4)
5)

Identifying the contract with a customer
Identifying the performance obligations
Determining the transaction price
Allocating the transaction price to the performance obligations
Recognising revenue as/when performance obligation(s) are satisﬁed

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.

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 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.

A pilot contract in the US was awarded to the Group as a government grant. Revenue on this contract was treated
in the same manner as UK revenue contracts with revenue recognised over-time, on a systematic basis over the
period of the contract, as this best represents the stage of completion.

Revenue on a proof of concept project in the US was recognised on the percentage of completion method of
accounting. As the outcome of the contract were reliably measurable, revenue and costs were recognised in
proportion to the stage of completion of the contract.

The Group typically receives cash from customers 40 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 has
reviewed the expected credit losses for the year and note no material expected credit losses.

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Financial Statements

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).

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.

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:

●

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.

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.

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:

Computer and ofﬁce equipment

33.33% 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

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Financial Statements

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 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.

Amortisation is charged on a straight line basis over the estimated useful life of three years.

Expenditure on research activities as deﬁned in IFRS is recognised in the income statement as an expense.

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.

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.

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Financial Statements

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 three 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 conditions. This cost is charged to the income statement over the
vesting period, with a corresponding increase in the share based payment reserve.

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.

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.

Signiﬁcant Accounting Judgements, Estimates and Assumptions

3.
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
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 periods.

The estimates which have the most signiﬁcant impact on the amounts recognised in the ﬁnancial statements are
as follows:

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 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 6.

Judgements
The areas of judgement which have the most signiﬁcant impact on the amounts recognised in the ﬁnancial
statements are as follows:

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.

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.

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.

Assessing whether an indicator of impairment exists is a judgement. The value in use calculated by management is
an estimate.

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Financial Statements

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 11.

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.

Revenue

The total turnover of Kooth plc has been derived from its principal activity undertaken in the UK and the US.

Provision of online counselling - UK

Provision of online counselling - US

5. Administrative expenses

Employee costs

Rent and rates

IT hosting and software

Professional fees

Marketing

Depreciation & amortisation

Share based payment expense

Other overheads

2022

£'000

18,648

1,472

20,120

2022

£'000

8,701

316

963

1,307

490

2,236

292

462

2021

£'000

16,682

2021

£'000

6,876

212

882

680

494

2,384

431

359

14,767

12,318

6. Employee remuneration

Salaries

Pensions

Social security & other staff beneﬁts

Share based payments

Employee numbers

Direct

Indirect

Developers

2022

£'000

12,033

317

1,396

304

14,050

2022

234

139

406

Employee numbers disclosed represents the average number of employees for the year.

Share based payment

Long term incentive awards

2022

£'000

304

2021

£'000

11,543

286

1,203

520

13,552

2021

204

126

362

2021

£'000

520

A portion of long term incentive awards are capitalised which accounts for the difference in long term incentive
awards shown in this note compared to the amount disclosed as an expense in the Statement of Proﬁt and Loss.

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 require that all staff remain employed by the business for
three years. The shares vest over a three year period with a maximum term of 10 years.

Number of Options

Exercise price per
share

Number of Options

Exercise price per
share

2022

1,080,066

1,096,464

(303,174)

2022

£0.05

2021

999,681

367,173

(286,788)

1,873,356

£0.05

1,080,066

2021

£0.05

Outstanding at the
beginning of the year

Granted

Forfeited

Exercised

Outstanding at the
end of the year

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131

Financial Statements

7. Interest

Interest income on cash deposits

8. Taxation

Current tax

Corporation tax

2022

£'000

2022

£'000

2021

£'000

2021

£'000

(746)

(252)

Total current tax charge / (credit)

(746)

(252)

Deferred tax (P&L)

Origination and reversal of timing differences

Total deferred tax charge / (credit) (P&L)

631

(158)

Tax charge / (credit) on proﬁt on ordinary activities

(115)

(410)

Reconciliation of tax charge

Loss on ordinary activities before tax

(831)

(720)

9. Earnings per share

2022

£'000

2021

£'000

Earnings used in calculation of earnings per share:

On total losses attributable to equity holders of the parent

(716)

(310)

Weighted average no. of shares (Basic)

33,055,776

Weighted average no. of shares (Diluted)

34,360,798

34,082,252

2022

2021

Shares in issue

Ordinary shares in issue

Share options

Loss per share (basic, £)

33,055,776

1,873,356

1,080,066

On total losses attributable to equity holders of the parent

(0.02)

(0.01)

Loss per share (diluted, £)

On total losses attributable to equity holders of the parent

(0.02)

(0.01)

10. Goodwill

Goodwill as at 1 January and 31 December

2022

£'000

511

2021

£'000

511

Management has established counselling services as the one CGU during the relevant periods. All goodwill is
attributable to this CGU.

Expected tax charge on loss on ordinary activities at
standard CT rate

Effects of:

Effect of tax rate changing on opening balance

R&D additional deduction

Difference between UK CT & DT rates

Surrender of tax losses for R&D tax credit refund

Prior year adjustment

Other difference

(158)

(137)

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.

(398)

137

313

(12)

(115)

(93)

(430)

(33)

203

(410)

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
Growth rate

8%
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 2022 and 31 December 2021.

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133

Financial Statements

11.

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

2022

£'000

7,363

2,952

10,315

(4,496)

(2,138)

(6,634)

2021

£'000

4,828

2,535

7,363

(2,213)

(2,283)

(4,496)

13. Property, plant and equipment

Cost

Balance as at 1 January

Additions

Balance as at 31 December

Depreciation

Balance as at 1 January

Depreciation

Balance as at 31 December

2022

£'000

451

100

551

(335)

(94)

(429)

2021

£'000

388

451

(231)

(104)

(335)

Carrying amount 31 December

3,681

2,867

Carrying amount 31 December

122

116

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.

Property, plant and equipment refers to computer and ofﬁce equipment.

14. Deferred tax assets and liabilities

12.

Leases

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

At 1 January 2021 - asset / (liability)

Movement - (charge) / credit

At 1 January 2022 - asset / (liability)

Movement - (charge) / credit

Fixed asset
temporary
differences

Other temporary
differences

Tax losses

Total

(481)

(458)

(119)

244

323

(98)

535

133

302

570

435

(566)

(783)

At 31 December 2022 - asset / (liability)

(577)

225

(348)

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.

2022

£'000

2021

£'000

(14)

(17)

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135

Financial Statements

15. Trade and other receivables

Trade receivables

Prepayments and other receivables

2022

£'000

1,110

1,508

2,618

2021

£'000

1,609

761

2,370

All amounts shown above are short term. The net carrying value of trade receivables is considered a reasonable
approximation of fair value.

16. Contract assets

Accrued income

17. Cash and cash equivalents

Cash and cash equivalents

18. Trade and other payables

Trade payables

Accruals and other creditors

Tax liabilities

2022

£'000

649

2022

£'000

8,492

2022

£'000

680

977

967

2,624

2021

£'000

406

2021

£'000

7,079

2021

£'000

417

649

948

2,014

19. Contract liabilities

Contract liabilities - current

20. Equity

Ordinary A shares

Number of Shares

Ordinary A shares

2022

£'000

2,583

2022

£'000

1,653

2021

£'000

797

2021

£'000

1,653

2022

2021

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.

Share Premium

2022

£'000

14,229

2021

£'000

14,229

Share premium represents the funds received in exchange for shares over and above the nominal value.

Share based payment reserve

2022

£'000

1,221

2021

£'000

959

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

2022

£'000

(4,104)

2021

£'000

(4,104)

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137
137

Financial Statements

The merger reserve was created as a result of the share for share exchange during the year ended 31 December
2020.

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.

Capital redemption reserve

2022

£'000

115

2021

£'000

115

22.1 Financial assets and liabilities
The Group’s principal ﬁnancial liabilities comprise trade and other payables. The Group has no debt facility as at
31 December 2022 (2021: £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 capital redemption reserve was established as a result of the deferred share buyback during the year ended 31
December 2020.

21. 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:

2022

£'000

2021

£'000

Other audit related services

22. Financial assets and liabilities

Financial assets

Trade and other receivables

Cash and cash equivalents

Financial liabilities

Trade and other payables

2022

£'000

2,618

8,492

2021

£'000

2,370

7,079

2,692

2,014

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.

The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

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 2022 (2021: £nil) that would
cause interest rate risk, and
the Group’s activities are conducted in the UK and the US, both of which are deemed to be stable
economies, thereby signiﬁcantly reducing 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 State governments. 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.

As at the year ended 31 December 2022 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.

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139
139

Financial Statements

23.

Related party transactions

Note 25 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

2022

£'000

2021

£'000

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.

Base salary and fees

Pension

2022

£'000

709

730

2021

£'000

430

438

24.

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 2022 (2021: £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

2022

£'000

10,518

8,492

19,010

10,518

(68)

10,450

2021

£'000

10,973

7,079

18,052

10,973

25. Subsidiaries and associated companies

Name

Country of
Incorporation

Proportion
Held

Activity

Kooth Group Limited

100%

Platform development

Registered Address

5 Merchant Square,
London, England, W2
1AY

Kooth Digital Health
Limited

100%

Kooth USA LLC

100%

Provision of online counselling and
support to children, young people
and adults in the UK

5 Merchant Square,
London, England, W2
1AY

Provision of online counselling and
support to children and young
people in the US

1828 Walnut St, Kansas
City, MO, 64108-1835

26.

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.

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141

Financial Statements

27.

Ultimate Controlling Party

No shareholder owns a majority of shares. The directors do not consider that there is one ultimate controlling
party.

28.

Events after the reporting date

Following the year end Kooth was selected as the primary vendor partner to deliver its digital mental health
platform to all 13-25 year olds in the State of California. Kooth will provide services integral to the Behavioral
Health Virtual Services Platform, a new technology-enabled services solution, for all children, youth, and families
in the State. The service is expected to launch in January 2024. Kooth expects the contract details to be agreed
during the course of Q2 2023, with an associated highly material impact on revenues and ARR from 2024 onwards.

29.

Capital commitments

The Group’s capital commitments at 31 December 2022 are £nil (FY21: £nil).

30. Parent Company Statement of Financial Position

Assets

Non-current assets

Investments

Current assets

Trade and other receivables

Deferred tax

Intercompany receivables

Cash and cash equivalents

Total current assets

Total assets

Liabilities

Current liabilities

Trade payables

Intercompany payables

Tax liabilities

Note

31 December 2022

31 December 2021

£'000

4,414

6,970

6,046

6,707

6,533

13,072

13,342

17,486

17,756

(54)

(2,523)

(53)

(35)

(2,616)

(29)

Total current liabilities

(2,630)

(2,680)

Net current assets

10,442

10,662

Net assets

Equity

Share capital

Share premium account

P&L reserve

Share-based payment reserve

Capital redemption reserve

Merger reserve

Total equity

14,856

15,076

1,653

14,222

1,749

1,221

115

(4,104)

1,653

14,222

2,231

959

115

(4,104)

14,856

15,076

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143
143

Financial Statements

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 £482k (2021:
£391k). The ﬁnancial statements of Kooth plc (Company registration number 12526594) were approved by the
Board of Directors and authorised for issue on 3 April 2023. They were signed on its behalf by:

Sanjay Jawa
Chief Financial Ofﬁcer
3 April 2023

Parent Company Statement of Changes in Equity

Notes to the Parent Company Financial Statements

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.

Share
capital

Share
premium

Share
based
payment
reserve

P&L
reserve

Capital
redemption
reserve

Merger
reserve

Total
equity

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.

Balance at 1 January 2021

1,653

14,222

528

2,622

115

(4,104)

15,036

Share based payments

Total comprehensive loss for the year

As at 31 December 2021

1,653

14,222

431

959

(391)

2,231

431

(391)

115

(4,104)

15,076

The following are key accounting policies for the Company:

●
●
●
●

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.

Balance at 1 January 2022

1,653

14,222

959

2,231

115

(4,104)

15,076

Investments
Investments are stated at their cost less impairment losses.

Share based payments

Total comprehensive loss for the year

262

(482)

262

(482)

As at 31 December 2022

1,653

14,222

1,221

1,749

115

(4,104)

14,856

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.

The notes on pages [145 to 150] form part of these ﬁnancial statements.

145 to 148 form part of these financial statements.

144
144

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Kooth Annual Report 2022

145
145

Financial Statements

31. Investments

Investment in subsidiaries

32. Intercompany

Intercompany receivable balances

Kooth Group Limited

Intercompany payable balances

Kooth Digital Health Limited

33. Cash and cash equivalents

Cash and cash equivalents

34. Related parties

2022

£'000

4,414

2022

£'000

6,970

2021

£'000

4,414

2021

£'000

6,707

(2,523)

(2,616)

2022

£'000

6,046

2021

£'000

6,533

36. Deferred tax assets

At 1 January 2021 - asset / (liability)

Movement - (charge) / credit

At 31 December 2021 - asset / (liability)

At 1 January 2022 - asset / (liability)

Movement - (charge) / credit

At 31 December 2022 - asset / (liability)

37. Trade Payables

Trade payables

38. Tax liabilities

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.

VAT payable

Tax losses

(52)

2021

£'000

2021

£'000

2022

£'000

2022

£'000

Salaries

Social security costs

Pension costs

35. Trade Receivables

Prepayments and other receivables

146
146

2022

£'000

709

100

830

2022

£'000

2021

£'000

430

495

2021

£'000

Kooth Annual Report 2022
Kooth Annual Report 2022

147
147

Financial Statements

39. Equity

Ordinary A shares

Number of shares

Ordinary A shares

2022

£'000

1,653

2021

£'000

1,653

2022

2021

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.

Share Premium

£'000

14,222

£'000

14,222

Share premium represents the funds received in exchange for shares over and above the nominal value.

Share based payment reserve

£'000

1,221

£'000

959

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

£'000

(4,104)

£'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

£'000

115

£'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
Almond CS Limited
Peter’s House, Oxford Road,
Manchester
M1 5AN

Nominated Adviser
and Broker
Panmure Gordon (UK) Limited
40 Gracechurch Street,
London
EC3V 0BT

Joint Broker
Stifel Nicolaus Europe
Limited
150 Cheapside,
London
EC2V 6ET

Registrars
Equiniti Limited
Aspect House, Spencer Road
Lancing, West Sussex
BN99 6DA

Auditors
Grant Thornton (UK) LLP
30 Finsbury Square
London
EC2A 1AG

PR Advisers

FTI Consulting LLP
200 Aldersgate, Aldersgate Street
London
EC1A 4HD

Legal Advisers

Squire Patton Boggs (UK) LLP
7 Devonshire Square
London
EC2M 4YH

148
148

Kooth Annual Report 2022
Kooth Annual Report 2022

149
149

Financial Statements

Company Registered Office

Kooth plc
5 Merchant Square
London
W2 1AY

Company no: 12526594

150
150

150

koothplc.com
investorrelations@kooth.com

Kooth Annual Report 2022
Kooth Annual Report 2022