Totally PLC – TLY – Interim results

Totally PLC – TLY – Interim results

Totally plc (AIM: TLY), the provider of a range of healthcare services across the UK and Ireland, is pleased to announce its unaudited interim results for the six months ended 30 September 2020.

Financial highlights

·    Group turnover of £54.1 million (H1 2019: £49.2 million)

·    Gross profit of £10.2 million (H1 2019: £9.8 million)

·    EBITDA profit £2.3 million (H1 2019: EBITDA profit of £1.3 million after exceptional items of £0.8m)

·    Profit before tax £0.1m (H1 2019: £2.6 million loss before tax)

·    Cash at bank of £12.3 million (31 March 2020: £8.9 million)

·    Proposed interim dividend of 0.25p per share to be paid in February 2021

Chairman's Statement

The Group has continued to operate successfully throughout the first half of the year, despite the many challenges presented by COVID-19. As a business on the front line during the current pandemic, we are grateful for the unwavering dedication of our staff who have been working through unprecedented times.  The safety and well-being of all employees across the Group and the provision of high quality care to the patients we serve remains our number one priority and we continue to work hard to ensure that even during these difficult times that remains unchanged as we continue to deliver services throughout the second National lockdown. 

I am pleased to report that the Group has maintained a robust financial position, showing resilient growth in revenue, earnings and cash flow in the period under review.  Although Government-enforced restrictions have meant that our Planned Care and Insourcing divisions have not been operating at full capacity, our Urgent Care division was quick to respond to the considerable increase in demand and changes to clinical pathways due to COVID-19 management and has performed strongly as a result.

We firmly believe that the Group's performance to date has demonstrated its positioning as an important strategic partner to the NHS and other healthcare bodies and remain confident that the strength of these relationships will put us in good stead for further growth.

At the time of writing we continue to see increases in demand for some services as a direct result of COVID-19 and expect this to increase during the second National lockdown. Whilst planned care and insourcing services continue with certain services at this time, we continue to work closely with commissioners and hospitals to ensure we can quickly respond to any changes that need to be made to services as a result of the management of the pandemic - we expect to continue to do so throughout the winter months. Urgent Care will no doubt continue to see demand increase for some services, whilst the other divisions may see waiting lists increase further if elective care is reduced to guarantee access to hospitals. Totally will of course ensure it remains responsive to these changing demands.

I would like to express my thanks to the Group's stakeholders for their continued support. We look to the remainder of the year with confidence as we focus on opportunities to expand existing services, provide new targeted services and work with new commissioners, enabling us to further strengthen our market leading position in the UK healthcare market.


Bob Holt

Chairman

9 November 2020

Operational highlights - Robust performance in the face of COVID-19

Urgent Care

·    Vocare Limited ("Vocare") and Greenbrook Healthcare Limited ("Greenbrook"), which form our Urgent Care Division, were awarded significant extensions to existing contracts across England, worth a total of c. £27 million.

·    The Urgent Care division has worked tirelessly throughout the period delivering existing and new face to face and remote healthcare services:

This has included further innovation of NHS 111 service delivery in response to unprecedented demand and responding quickly by increasing capacity overnight as a direct result of COVID-19.

Deployment of clinical resources into emergency departments to assist patient flow and protect the service through front door streaming of symptomatic patients.

These services have supported the NHS to respond proactively throughout the pandemic. Many of these new services continue to be provided including:

§ Partnership with the Home Office and commissioners in North West London providing initial health screening assessment to asylum seekers.

§ Delivering a new operationally integrated National Clinical Assessment Service (CAS) across all of our 111 services enhancing resilience, providing increased scale and enabling a national rather than local response to call activity.

§ Running COVID secure clinics to support the NHS in combatting the demand caused by symptomatic COVID patients.

Planned Care

·    Services have been impacted by the pandemic; many elective care services were paused across the UK during the first lockdown, while waiting lists for these services continue to grow.

·    Remobilising services where possible, whilst working within new guidance to meet requirements from COVID-19, remains the main priority for the division.

·    Where possible, face to face care has been replaced by video consultations.

·    Services began to remobilise during August 2020 following the first national lockdown and have continued. It is the intention to continue to deliver services throughout the second national lockdown with the continuation of planned care with all clinics working to new models of care in COVID safe environments.

·    Mobilised new First Contact Physiotherapy services in Hampshire and awarded a framework contract to deliver Occupational Health Services for Bedfordshire Fire and Rescue Services - both to be provided following new COVID safe guidelines.

·    New contract mobilisation in Manchester delayed until April 2021 as a result of challenges in local geographies as a result of the pandemic. About Health continues to work closely with commissioners to ensure this new service is mobilised when local circumstances permit.

Insourcing

·    Totally Healthcare was impacted during the first half of the year as elective care services were paused, as part of the wider changes made in order to respond to the pandemic.

·    Services resumed during June 2020 in the Republic of Ireland and have continued during the period. Services have not been impacted by the recent lockdown in Ireland as elective care services are continuing across the UK.

·    During August, services also resumed in other parts of the UK, depending on geographical impacts and restrictions of the pandemic. These services continue at the time of writing and all are delivered using new COVID safe care models.

·    Due to the growth in waiting lists across all clinical specialities, the order book of work is healthy and ready to be delivered as and when hospitals and NHS Trusts are able to restart elective care.

Operational Review - "working in new ways delivering exceptional care"

I am proud that, in spite of the difficulties faced during the ongoing pandemic, the Group's performance has remained strong, seeing growth in revenue, earnings and cash. At the half year and beyond, we are trading in line with management expectations and every effort is being made to ensure that Totally remains in as strong a position as possible as we progress through the second half of the financial year.  We will continue to deliver frontline healthcare services and to respond to the unprecedented demands of the pandemic. At the time of writing this statement our divisions are responding to the increased demand for access to Urgent Care services and supporting hospitals to ensure that as waiting lists grow, we have plans for delivering our services which can be mobilised quickly. During the second national lockdown all healthcare providers, including the NHS, plan to continue to deliver elective care services which means we anticipate all divisions continuing to operate through this period.

We continue to stand shoulder-to-shoulder with and fully support the NHS and other healthcare providers across the UK in the fight against COVID-19. The pandemic has affected each of the Group's divisions very differently; two of our divisions ceased delivering the majority of services for a period of time during the first lockdown, whilst Urgent Care faced, and continues to face, unprecedented demands for services. Our strategy to create a diversified business with three distinct divisions has afforded the Group the flexibility to continue to operate and grow even under the pressures that the pandemic has caused.

The Group's Urgent Care division, providing NHS 111 services, experienced unprecedented levels of demand during the period and whilst it secured a number of significant contract extensions across the UK plus funding to pilot additional clinical services, worth a total of c.£27m, focus has remained on proactively managing the demand created by COVID-19 by expanding and adapting the services to operate in COVID safe environments. We continue to work closely with NHS England ensuring that the 111 service is utilised as efficiently as possible as a key component in the patient pathway and - as we do every year - to ensure we are well prepared for the winter, which will bring further intricacies as a result of seasonal flu.

We expect the provision of all our services to continue at this time, but some remain dependent on local government-enforced lockdowns and restrictions on planned care provision. Whilst both our Planned Care and Insourcing divisions were impacted during the first national lockdown, and we needed to manage the pausing and suspension of services in a number of areas across the UK and Ireland, services remobilised from June onwards and continue at this time. Services that were disrupted have seen waiting lists increase and therefore both divisions have experienced demand for services increase as services have been able to remobilise.

During the period, the Group has also invested in its internal services and personnel, not only to adapt to  new ways of working (moving from face-to-face to remote care provision and harnessing the use of technology), but also to uphold the highest standards of safety and well-being for all employees across the Group all within COVID safe environments. Through the introduction of new processes and systems for managing all absences of staff and the interpretation of all guidance from Government relating to COVID-19,  we are able to support our staff on an individual basis so that they can continue to carry out their roles and deliver services to patients wherever possible.

Our Sickness Absence Management service (SAMs) ensures all guidance is interpreted quickly and every member of staff is supported individually to understand how national guidance applies to them. For Totally this has ensured that, at all times, we understand the impacts on our workforce and can make necessary adjustments to working processes and procedures to comply with any changes to guidance. Our SAMs service has been adopted for continuation across Totally in order to support employees during all sickness and absence periods. We also introduced home working for those roles where this was an option and significantly invested in the technology to enable this. Where home working is not an option the provision of Personal Protective Equipment (to meet government guidelines) along with numerous changes to office / premises procedures were implemented and remain in place.

The Group implemented its Emergency Preparedness, Resilience and Response (EPRR) policy which mirrors how the NHS plans for and responds to a wide range of incidents and emergencies that could affect health or patient care. This ensures our staff and services can continue to operate during the pandemic and enables management to make informed decisions about all aspects of the business during unprecedented times. EPRR forms part of our internal Business Continuity Plan.

As announced in our trading update on 7 September 2020, the Group has seen a change in the way in which it secures new business. Although due to current circumstances there are very few new tenders being launched for services already provided by Totally, we are finding a number of opportunities to expand on our existing agreements with commissioners as well as to provide new targeted services in response to changing demands. These opportunities are a direct result of the excellent relationships Totally has with its existing partners and the reputation it has built with the NHS for providing high quality healthcare services. We fully expect this trend in the change of origination of revenue growth to continue in the near to medium term.

We are constantly adapting our businesses, reacting to the ever-evolving measures to best serve our patients and, as such, we feel the Group is well positioned to meet any future fluctuations in demand on the healthcare system. We recognise that these remain difficult times for all, especially our staff who are operating in unprecedented circumstances, and would like to express our thanks for their hard work throughout this period. Similarly, we thank our shareholders for their continued support, and we look forward to updating the market on further progress in due course.

Wendy Lawrence

Chief Executive Officer

9 November 2020

Financial Review

For the six-month period we are pleased to report turnover of £54.1 million (H1 2019: £49.2 million) and earnings before interest, taxation, depreciation and amortisation (EBITDA) of £2.3m (H1 2019: £2.1 million excluding exceptional items and £1.3m including exceptional items).  The profit before tax is £0.1 million (30 September 2019: £2.6 million loss before tax). The profit before tax for the period includes amortisation of acquisition intangibles relating to contracts acquired of £1.0 million (30 September 2019: £2.5 million).

Revenue levels in the Urgent Care division have been maintained overall; additional services relating to the COVID response support we have provided to the NHS and the extension of current services have offset the reduction in face to face patient income.  The Planned Care division has suffered more notably with a reduction of income of c.50%. This is in line with management forecasts produced at the outset of the pandemic. Insourcing revenue for the first half of the year is at c.80% of the H2 performance of FY20.

A gross margin of 18.7% has been achieved in the first half of the year and is ahead of management plans (17% underlying gross margin for H1: 2019). The first half of this financial year has, of course, been unprecedented for all. The extraordinary demand on our 111 services in particular has put pressure on margins, only partially offset by the suspension of contractual KPI penalties.  The significant decline in Urgent Treatment Centre volumes and other Face to Face contact was somewhat protected by block contract arrangements and the absence of 'out of area' patient income during lockdown was offset by direct cost savings.

The Planned Care and Insourcing divisions were able to continue delivery of services albeit at reduced margin as appointment times were increased and higher PPE costs were incurred to maintain staff and patient safety.

Overall, the group has been able to maintain net margin at 4% and deliver a profit before tax of £0.1m (H1 2019: £2.6m loss before tax).  It does, however, remain extremely challenging to forecast with any degree of accuracy given the volatility of demand and accessibility of patient service delivery.  We intend to continue to plan, deliver and respond positively to these changing market dynamics.

Interim Dividend

The Company is proposing to pay an interim dividend of 0.25 pence per ordinary share (H1 2019: 0.25p) in February 2021. The interim dividend will be formally declared and announced ahead of its proposed payment in February 2021. The board remain confident in the Group's future prospects.

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