2020 Annual Report and Accounts
A copy of the Annual Report and Accounts will be sent to shareholders shortly and will be available on the Company's website at https://www.rutherfordhealth.com/investors/reports-presentations.
The Group's oncology centres in the
Financial highlights:
§ Revenue of
§ Investment in fixed asset additions:
§ Investment resulting in in gross fixed assets:
§ Equity inflow:
§ New
Operational highlights
§ First
§ Three cancer centres operational including proton beam therapy
§
§ Partnership with the
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
The directors of the Company accept responsibility for the content of this announcement.
Ends
Contacts
|
Tel: +44 (0) 16 3381 0661 |
|
|
|
|
|
|
|
|
Tel: +44 (0) 20 7383 5100 |
|
|
|
|
|
|
|
CHAIRMAN'S STATEMENT
Putting past ideological differences aside
Dear Shareholder
It has been a busy year at
This was achieved with support from the Woodford Funds who committed to subscribe for up to
All these three centres are now fully operational and a fourth,
In
During the year, we made some limited progress with developing our relationship with the
Group revenue increased substantially compared to the prior year, from
At the same time as finalising our capital investment programme, we have also been focusing on developing additional routes to market. To this end, I am particularly excited about our new product, Rutherford Direct, which was launched in
I am pleased to report that during the year we strengthened the Board with several new appointments.
We welcome dialogue with our shareholders and are in regular contact with our largest shareholders. We continue to provide assistance to the manager of the remaining Woodford Funds holding while they resolve the future of that shareholding.
I would like to place on record my gratitude to the staff, for their dedication to our patients. Their commitment to achieving the best outcomes for patients despite unprecedented times should be commended.
Credit should go to the Management team for turning considerable financial investment into operating cancer centres populated with the most modern technology available.
I am very proud to be associated with a company that has invested so heavily in helping patients to deal with their cancer problem in a professional, timely, supportive and effective way. We look forward to the future with confidence in what are currently uncertain times.
Chairman
CHIEF EXECUTIVE OFFICER'S REPORT
In the next decade, more people will be living with cancer than dying of it.
This will be achieved through early diagnosis & genomics, the advancement of drug therapies and, the use of precision radiotherapy and proton beam therapy.
I am delighted to be introducing
The financial period under review has been a period of quiet but substantial progress. At the start of the financial year, we had completed the construction of our first three Rutherford Cancer Centres with the fourth centre in
Not only does our network enable us to treat an ever-growing number of patients, it provides us with a resilience should one of our proton therapy cyclotrons require unplanned maintenance. We tested this resilience successfully this year when a cyclotron temporarily powered down which meant sending a patient to another
We have now recruited over 65
A commitment to excellence
Our company is focused above all on excellence in patient care and safety and optimizing outcomes. I believe that these priorities enable us to increase our appeal to cancer patients, private medical insurers and to
We have successfully negotiated contracts with
We have increased the number of insurers, signed up to refer patients, from 19 to 30 with several of them now offering PBT as routine treatments for specific cancers. The attraction of
There has been a significant upward trend in the demand from self-pay patients driven by several marketing campaigns to inform patients of the services available.
We have succeeded in our aim for 2019/20 to transition the focus of the company from construction to service delivery and commercialisation. Throughout the year we treated 317 patients across all services; 88 proton beam therapy (PBT), 127 radiotherapy (RT) and 102 Systemic Anti-Cancer Therapy (SACT) a 356% increase on the previous year.
Governance
Governance remains an essential discipline and a key strength of
In 2019/20 we made sustainability a core part of how we run our business by adopting the
Innovation
We continue to lead on innovation in cancer treatment. This year we worked with Ion Beam Applications (IBA) at the
In addition, we have introduced hyperfractionation across several indications to maximise the effect of radiation on cancer and minimize any negative side effects. Hyperfractionation is radiotherapy in which the total dose of radiation is divided into larger doses and given over a shorter period.
We have also taken the lead on innovation for patients wearing Cardiac Implant Electronic Devices (CIED). We are working with the manufacturers of the devices to determine safe limits of radiotherapy and proton therapy on CIED's and their leads.
Investment
On
Post year end events
In
Key Performance Indicators
The key performance indicators are Revenue, Gross Fixed Assets, Cash and Patient numbers. Further information is provided in the Group Financial Review in the annual report.
Outlook
Healthcare continues to be an attractive sector; it is entering a period of significant change bringing both challenges and opportunities which
The Company continues to lead in precision radiotherapy and early diagnostics, in
We intend to further develop our diagnostics offering via our
Brexit
In
Covid
The COVID 19 pandemic (C19p) was a significant test of the Company's resilience plans and ability to provide patient services during the worse healthcare crisis in recent history. The Company fared very well with zero staff furloughed, full operational capability and no drop off in financial performance.
At the outset of the C19p, the Company employed retired military CBRN specialists, (Chemical, Biological, Radiological and Nuclear), to help support a COVID free environment. This measure contributed to all three Rutherford Cancer Centres remaining 100% operational capability throughout C19p.
The Company maintained a staffing profile of 98.5% available with only 1.5% shielding due to underlying health issues. Non-clinical staff worked from home during lockdown and the IT infrastructure was able to support them seamlessly.
The Company maintained pre-C19p revenue trends, despite a falloff in self-pay referrals. PMI referrals increased across all services and
Work continued on the commissioning and CQC of the Rutherford Cancer Centre North West in
Finally, I want to say thank you to all
Chief Executive Officer
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF TOTAL COMPREHENSIVE INCOME
YEAR ENDED
|
|
2020 |
2019 |
|
Note |
£'000 |
£'000 |
Revenue |
15 |
5,606 |
1,465 |
Cost of sales |
|
(5,190) |
(2,872) |
Gross profit/(loss) |
|
416 |
(1,407) |
Administrative expenses |
|
(26,077) |
(17,718) |
Operating loss |
|
(25,661) |
(19,125) |
Finance expense |
21 |
(3,615) |
(2,393) |
Loss before taxation |
16 |
(29,276) |
(21,518) |
Income tax credit |
22 |
4,842 |
3,253 |
Loss for the financial year |
|
(24,434) |
(18,265) |
Fair value gain/(loss) on investment |
7 |
3,704 |
(4,163) |
Total comprehensive loss |
|
(20,730) |
(22,428) |
All the activities of the Group are from continuing operations.
|
|
2020 |
2019 |
Basic and diluted earnings per share |
Note |
Pence |
Pence |
Loss per share attributable to the ordinary equity holders of the Company |
29 |
(12.1) |
(17.4) |
The notes to the consolidated financial statements are an integral part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT
|
|
2020 |
2019 |
|
Note |
£'000 |
£'000 |
ASSETS |
|
|
|
Non-current assets |
|
|
|
Intangible assets |
6 |
300 |
541 |
Property, plant and equipment |
5 |
150,317 |
137,014 |
Investments |
7 |
3,704 |
- |
Deferred tax asset |
14 |
10,342 |
6,041 |
Non-current assets |
|
164,663 |
143,596 |
Current assets |
|
|
|
Trade and other receivables |
8 |
9,713 |
6,915 |
Current tax receivable |
|
510 |
- |
Cash and cash equivalents |
9 |
19,157 |
20,589 |
Current assets |
|
29,380 |
27,504 |
Total assets |
|
194,043 |
171,100 |
EQUITY ATTRIBUTABLE TO THE COMPANY'S EQUITY HOLDERS |
|
|
|
Called up share capital |
10 |
192 |
152 |
Share premium account |
11 |
192,596 |
157,928 |
Fair Value reserve |
|
(459) |
(4,163) |
Accumulated losses |
11 |
(24,816) |
(35,507) |
Total equity |
|
167,513 |
118,410 |
LIABILITIES |
|
|
|
Non-current liabilities |
|
|
|
Borrowings |
12 |
10,586 |
24,515 |
Current liabilities |
|
|
|
Trade and other payables |
13 |
15,944 |
28,175 |
Total liabilities |
|
26,530 |
52,690 |
Net equity and liabilities |
|
194,043 |
171,100 |
The notes to the consolidated financial statements are an integral part of these financial statements.
These financial statements were approved by the Board of Directors and authorised for issue on
Mr M Moran MBE
Director
Company registration number: 09420705
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT
|
|
2020 |
2019 |
|
Note |
£'000 |
£'000 |
ASSETS |
|
|
|
Non-current assets |
|
|
|
Intangible assets |
6 |
300 |
541 |
Property, plant and equipment |
5 |
294 |
823 |
Investments |
7 |
3,935 |
137 |
Deferred tax asset |
14 |
1,754 |
1,785 |
Non-current assets |
|
6,283 |
3,286 |
CURRENT ASSETS |
|
|
|
Trade and other receivables |
8 |
199,437 |
141,586 |
Cash and cash equivalents |
9 |
19,151 |
20,589 |
Current assets |
|
218,588 |
162,175 |
Total assets |
|
224,871 |
165,461 |
EQUITY ATTRIBUTABLE TO THE COMPANY'S EQUITY HOLDERS |
|
|
|
Called up share capital |
10 |
192 |
152 |
Share premium account |
11 |
192,596 |
157,928 |
Fair Value reserve |
|
(459) |
(4,163) |
Retained earnings/(accumulated losses) |
11 |
21,194 |
(14,282) |
Total equity |
|
213,523 |
139,635 |
LIABILITIES |
|
|
|
Non-current liabilities |
|
|
|
Borrowings |
12 |
10,049 |
23,934 |
Current liabilities |
|
|
|
Trade and other payables |
13 |
1,299 |
1,892 |
Total liabilities |
|
11,348 |
25,826 |
Net equity and liabilities |
|
224,871 |
165,461 |
The company has elected to take the exemption under Section 408 of the Companies Act 2006 not to present the Parent Company Income Statement.
The profit for the financial year of the Company was
The notes to the consolidated financial statements are an integral part of these financial statements.
These financial statements were approved by the Board of Directors and authorised for issue on
Mr M Moran MBE
Director
Company registration number: 09420705
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
YEAR ENDED
|
|
Share |
|
|
|
|
Called up |
premium |
Accumulated |
Fair Value |
Total |
|
share capital |
account |
Losses |
reserve |
Equity |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
AT |
121 |
111,309 |
(17,416) |
- |
94,014 |
Loss for the year |
- |
- |
(18,265) |
- |
(18,265) |
Fair value loss on investment |
- |
- |
- |
(4,163) |
(4,163) |
TOTAL COMPREHENSIVE EXPENSE FOR THE YEAR |
- |
- |
(18,265) |
(4,163) |
(22,428) |
Proceeds of share issues |
31 |
47,554 |
- |
- |
47,585 |
Less costs of share issues |
- |
(935) |
- |
- |
(935) |
Share-based payments |
- |
- |
174 |
- |
174 |
TOTAL INVESTMENTS BY AND DISTRIBUTIONS TO OWNERS |
31 |
46,619 |
174 |
- |
46,824 |
AT |
152 |
157,928 |
(35,507) |
(4,163) |
118,410 |
Loss for the year |
- |
- |
(24,434) |
- |
(24,434) |
Fair value gain on investment |
- |
- |
- |
3,704 |
3,704 |
TOTAL COMPREHENSIVE EXPENSE FOR THE YEAR |
- |
- |
(24,434) |
3,704 |
(20,730) |
Issue of shares |
40 |
69,998 |
- |
- |
70,038 |
Less costs of share issues |
- |
(330) |
- |
- |
(330) |
Capital reduction |
|
(35,000) |
35,000 |
- |
- |
Share based payment expense (net of exercise) |
- |
- |
125 |
- |
125 |
TOTAL INVESTMENTS BY AND DISTRIBUTIONS TO OWNERS |
40 |
34,668 |
35,125 |
- |
69,833 |
AT |
192 |
192,596 |
(24,816) |
(459) |
167,513 |
On
The notes to the consolidated financial statements are an integral part of these financial statements.
COMPANY STATEMENT OF CHANGES IN EQUITY
YEAR ENDED
|
|
|
Retained |
|
|
|
|
Share |
Earnings/ |
|
|
|
Called up |
premium |
(Accumulated |
Fair Value |
Total |
|
share capital |
account |
Losses) |
reserve |
Equity |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
AT |
121 |
111,309 |
(14,843) |
- |
96,587 |
Profit for the year |
- |
- |
387 |
- |
387 |
Fair value loss on investment |
- |
- |
- |
(4,163) |
(4,163) |
TOTAL COMPREHENSIVE EXPENSE FOR THE YEAR |
- |
- |
387 |
(4,163) |
(3,776) |
Issue of shares |
31 |
47,554 |
- |
- |
47,585 |
Less costs of share issues |
- |
(935) |
- |
- |
(935) |
Share-based payments |
- |
- |
174 |
- |
174 |
TOTAL INVESTMENTS BY AND DISTRIBUTIONS TO OWNERS |
31 |
46,619 |
174 |
- |
46,824 |
At |
152 |
157,928 |
(14,282) |
(4,163) |
139,635 |
Profit for the year |
- |
- |
351 |
- |
351 |
Fair value gain on investment |
- |
- |
- |
3,704 |
3,704 |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
- |
- |
351 |
3,704 |
4,055 |
Issue of shares |
40 |
69,998 |
- |
- |
70,038 |
Less costs of share issues |
- |
(330) |
- |
- |
(330) |
Capital reduction |
- |
(35,000) |
35,000 |
- |
- |
Share based payment expense (net of exercise) |
- |
- |
125 |
- |
125 |
TOTAL INVESTMENTS BY AND DISTRIBUTIONS TO OWNERS |
40 |
34,668 |
35,125 |
- |
69,833 |
AT |
192 |
192,596 |
21,194 |
(459) |
213,523 |
On
The notes to the consolidated financial statements are an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED
|
|
2020 |
2019 |
|
Note |
£'000 |
£'000 |
Cash flows from operating activities |
|
|
|
Net cash (used in)/generated from operations |
23 |
(34,077) |
1,365 |
Income taxes received |
|
31 |
43 |
Net cash (used in)/generated from operating activities |
|
(34,046) |
1,408 |
Cash flows from investing activities |
|
|
|
Purchase of property, plant and equipment |
|
(19,550) |
(42,322) |
Purchase of intangibles |
|
- |
(39) |
Proceeds from the disposal of property plant and equipment |
|
- |
304 |
Net cash used in investing activities |
|
(19,550) |
(42,057) |
Cash flows from financing activities |
|
|
|
Net proceeds from issue of shares |
|
69,708 |
45,968 |
Net (repayments)/proceeds from issue of loans |
|
(15,349) |
10,519 |
Lease payments |
|
(72) |
(92) |
Interest paid |
|
(2,123) |
(1,852) |
Net cash generated from financial activities |
|
52,164 |
54,543 |
Net (decrease)/increase in cash and cash equivalents |
|
(1,432) |
13,894 |
Cash and cash equivalents at the start of the financial year |
|
20,589 |
6,695 |
Cash and cash equivalents at the end of the financial year |
9 |
19,157 |
20,589 |
The notes to the consolidated financial statements are an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED
1. General information
The Group's principal activity is that of developing cancer centres including Proton Beam Therapy, together with facilitating the provision of clinical treatment.
2. Accounting policies
Summary of significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.
2.1 Basis of preparation
The Group's financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the
The Company's individual financial statements have been prepared on a going concern basis under the historical cost convention and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' (FRS 101) and the Companies Act 2006.
Both the Group and Company financial statements are prepared in Pounds Sterling, rounded to the nearest thousand, unless otherwise indicated.
The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts in the financial statements. The areas involving a higher degree of judgment or complexity, or areas where assumptions or estimates are significant to the financial statements are disclosed in Note 4.
The IFRS primary financial statements are presented in accordance with IAS 1 - 'Presentation of Financial Statements'.
2.2 Going Concern
The Group is funded through a combination of equity funding and a debt finance facility of
The Group has prepared cashflow forecasts that take account of the current capital expenditure plans, draw down of committed funding and an expectation of increases in patient numbers across all its sites. However, the Group is still in the early stages of its revenue life cycle and the future cash flow forecasts prepared by the Group include some significant growth assumptions.
Sensitivity analysis has been prepared on the cash flow projections to evaluate the uncertainty as to the future impact on the Group of the recent COVID-19 outbreak. Thus far, we have seen a slower growth rate in patient numbers due to COVID-19 and the sensitivity analysis assumes: continued slow down in revenue growth across the centres, no reductions in overheads and forecast capital expenditure continues to plan.
This downside scenario is currently considered unlikely, not least because the current low rate of treatment of cancer in the
This matter will be referred to in the audit opinion.
2.3 New accounting standards and interpretations
(a) New standards, amendments and interpretations
No new standards, amendments or interpretations, effective for the first time for the financial year beginning on or after
New standards, amendments and interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are effective for periods beginning after
2.4 Disclosure exemptions - Parent Company individual financial statements
In preparing its individual financial statements under FRS 101, the Company has taken advantage of the following disclosure exemptions permitted by FRS 101:
● IFRS 7, 'Financial Instruments: Disclosures';
● Paragraphs 91 to 99 of IFRS 13 'Fair value measurement' (disclosure of valuation techniques and inputs used for fair value measurement of assets and liabilities);
● The requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15;
● The requirements of paragraphs 52 and 58, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases;
● The following paragraphs of IAS 1, 'Presentation of financial statements': 16 (statement of compliance with all IFRS);
● 38A (requirement for minimum of two primary statements, including cash flow statements);
● 38B-D (additional comparative information);
● 134-136 (capital management disclosures);
● IAS 7, 'Statement of cash flows'; and
● Paragraph 30 and 31 of IAS 8 'Accounting policies, changed in accounting estimates and errors'; Paragraph 17 of IAS 24, 'Related party disclosures' (key management compensation); and
● The requirements in IAS 24, 'Related party disclosures' to disclose related party transactions entered into between two or more members of a group.
2.5 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (and its subsidiaries) made up to 29 February each period.
Control is achieved where the Company has power over the investee: exposure, or rights, to variable returns from its involvement with the investee; and the ability to use its power over the investee to affect the amount of the investor's returns.
Where necessary, adjustments are made to the reported results and financial position of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.
Intercompany transactions and balances between Group enterprises are eliminated on consolidation.
2.6 Revenue recognition
The Group generates its revenue from fees receivable from the operation of its cancer treatment centres. Revenue is recognised when the treatment is provided.
A typical treatment is broken down into planning and delivery. A planning review is completed for each patient followed by treatment delivery which is broken down into a number of "fractions" or "cycles" depending on the treatment provided.
Generally, prices are agreed separately for planning, and for each fraction or cycle.
Where a patient does not complete the course of treatment, only those fractions or cycles delivered to that point will be charged for and recognised as revenue
2.7 Foreign currency translation
Functional currency and presentation
The functional and presentation currency is Pounds Sterling ('£' or 'GBP').
Transactions and balances
Foreign currency transactions are translated into the functional currency (sterling) using the exchange rate prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of last year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
2.8 Property, plant and equipment
Property, plant and equipment is stated at historic cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. This includes the direct cost of labour and attributable overheads for assets which have been internally constructed.
Subsequent costs are included in an asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that the future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.
The costs of repairs and maintenance are charged to profit or loss in the period in which they are incurred.
Depreciation on other assets is calculated using the straight-line method to allocate their cost over their estimated useful lives, as follows:
Class |
Rates |
Freehold land |
Not depreciated |
Freehold buildings |
25 years |
IT equipment |
3 years |
Fixtures & fittings |
3 years |
Motor vehicles |
3 years |
Machinery |
10 years - 25 years |
Right of Use Assets |
Shorter of useful life and lease term on straight-line basis |
Assets under construction |
Not depreciated |
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within administrative expenses in profit or loss.
2.9 Investments in subsidiary undertakings
Investments in subsidiaries are measured at cost less accumulated impairment.
2.10 Financial assets
2.10.1 Classification
The Group classifies its financial assets in the following measurement categories:
● those to be measured subsequently at fair value (either through other comprehensive income ('OCI'), or through profit or loss), and
● those to be measured at amortised cost.
The classification depends on the entity's business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through OCI.
2.10.2 Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.
(a) Debt instruments
Subsequent measurement of debt instruments depends on the Group's business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Group classifies its debt instruments:
● Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the asset is derecognised or impaired. Interest income from these financial assets is included in finance income using the effective interest rate method.
● Fair value through other comprehensive income ('FVOCI'): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/ (losses). Interest income from these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains and losses and impairment expenses in other expenses.
● Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognised in profit or loss and presented net in the statement of profit or loss within other gains/(losses) in the period in which it arises.
(b) Equity instruments
The Group subsequently measures all equity investments at fair value. Where the Group's management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income when the Group's right to receive payments is established.
Changes in the fair value of financial assets at fair value through profit or loss are recognised in other gain/ (losses) in the statement of total comprehensive income as applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.
2.10.3 Impairment
The Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
2.11 Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments, with original maturities of three months or less. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
2.12 Share capital
Ordinary shares are classified as equity.
2.13 Dividends
Dividends distributed to the Group's shareholders are recognised as a liability in the Group's financial statements in the period in which the dividends are approved by the Group's shareholders or paid following the approval of the Directors.
2.14 Trade and other payables
Trade and other payables are non-derivative financial liabilities with fixed or determinable payments and relate to obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade and other payables are included in current liabilities, except for maturities greater than twelve months after the balance sheet date. These are classified as non-current liabilities. Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method.
2.15 Borrowings
Borrowings are initially recorded at fair value, including the costs incurred in raising the debt. In subsequent periods they are valued at amortised cost and the difference between the funds obtained (net of the costs involved in raising the funds) and the repayment value, as the case may be, and if it is significant, are recorded in profit or loss over the life of the debt using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre payment for liquidity services and amortised over the period of the facility to which it relates.
2.16 Leases
Leases are recognised as a right-of-use asset and corresponding liability at the date on which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of:
● fixed payments (including in-substance fixed payments), less any lease incentives receivable;
● variable lease payments that are based on an index or rate;
● amounts expected to be payable by the lessee under residual guarantees;
● the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
● payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the Group's incremental borrowing rate.
Right-of-use assets are measured at cost comprising the following:
● the amount of the initial measurement of the lease liability;
● any lease payments made at or before the commencement date;
● any initial direct costs; and
● restoration costs
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of twelve months or less. Low-value assets comprise IT equipment.
2.17 Current and deferred income tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the Statement of Total Comprehensive Income, except to the extent that it relates to items recognised in OCI or directly in equity.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation, it establishes provisions, when appropriate, as the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority.
2.18 Employee benefits
a) Post-employment obligations:
The Group operates a defined contribution plan. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
b) Share-based compensation benefits
Share-based compensation benefits are provided to employees via
The fair value of options granted under the Company Share Option Plan is recognised as an employee benefits expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted:
● including any market performance conditions (e.g. the entity's share price);
● excluding the impact of any service and non-market performance vesting conditions (e.g. profitability, sales growth targets and remaining an employee of the entity over a specified time period); and
● including the impact of any non-vesting conditions (e.g. the requirement for employees to save or hold shares for a specific period of time).
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
3. Financial risk factors
3.1 Financial risk factors
The Group's operations may expose it to a variety of financial risks that include the market risk, credit risk, operational risk and liquidity risk. The Group, through its Board of Directors, seeks to limit the adverse effects on the financial performance of the Group as follows:
a) Market risk
Market risk for the Group encompasses all those market risk factors that impact the value of the Group's assets and liabilities and the expected value in base currency of the Group's revenues and costs. The main risk factors are currency risk, inflation risk and interest rate risk. The Group's policies for managing these are as follows:
(i) Currency risk
The Group is exposed to translational and transactional foreign exchange risk as it operates in various currencies, including US Dollars and the Euro, which affect the management and levels of working capital.
Any contract in which the settlement amount is in excess of
Currency hedging strategy for specific large projects or acquisitions in excess of
As at
(ii) Inflation risk
The Group has exposure to the inflationary effect in countries in which it operates. This exposure could affect the Group's cost and/or investment base. The Group's cost base is mainly exposed to the inflation rates and changes in payroll taxes in the
No specific hedging of inflation risk has been carried out although any forecast movement in inflation forecasts is modelled within the Group's financial forecasts for adverse effects and to ensure adequate working capital is available for operations.
(iii) Interest rate risk
Interest rate risk arises primarily on the Group's borrowings or on its investment of the cash balances. In particular, interest on the majority of the Group's borrowings is affected by LIBOR.
The Group finances its operations through retained cash reserves and, potentially, overdraft facilities. The policy of the Group is to monitor exposure to interest rate risk and take into account potential movements in interest rates as well as liquidity considerations when selecting methods of financing.
b) Credit risk
Credit risk is the risk that a third party might fail to fulfil its performance obligations under the terms of a financial instrument. For cash and cash equivalents and trade and other receivables, credit risk represents the carrying amount on the balance sheet.
The Group has three main classes of Payor - Self Pay Patients, Private Medical Insurers and the
Private Medical Insurers and the
Self pay patients inherently carry a higher risk profile, and the Group therefore insists on cleared funds in advance before any treatment is delivered.
The Group's business will be predominantly with companies with a low inherent bad debt risk. The Group is therefore unlikely to take out credit insurance in the foreseeable future.
The Group will only invest surplus funds in
c) Operational risk
The Group has numerous operational risks, ranging from control over bank accounts to its processes for delivering and supporting patient care centres to a required level of quality, safety and on a timely basis and retention and recruitment of key personnel. A key risk, as for any Group, is the reputational risk that might arise from poor execution, non-delivery or late delivery of a high profile project or breach of confidentiality for sensitive data.
The Group's Directors regularly review controls over certain aspects of the operations of the Group. In addition, the Directors maintain an operational risk register. The Board attaches importance to maintaining appropriate internal controls to help identify financial risk and treasury management implications.
d) Liquidity risk
Liquidity risk is the risk of loss from not having access to sufficient funds to meet both expected and unexpected cash demands.
The Group seeks to manage financial risk by ensuring that sufficient liquidity is available to meet foreseeable needs and by investing cash assets safely as well as profitably. The Group's working capital report shows forecast monthly movements in working capital and cash for the following year.
The table below analyses the Group's non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows:
|
Less than |
Between |
Between |
Over |
|
1 year |
1 and 2 years |
2 and 5 years |
5 years |
At |
£'000 |
£'000 |
£'000 |
£'000 |
Trade payables and other payables |
15,944 |
- |
- |
- |
Borrowings |
249 |
1,325 |
8,426 |
- |
Lease liabilities |
103 |
44 |
117 |
442 |
|
16,296 |
1,369 |
8,543 |
442 |
|
Less than |
Between |
Between |
Over |
|
1 year |
1 and 2 years |
2 and 5 years |
5 years |
At |
£'000 |
£'000 |
£'000 |
£'000 |
Trade payables and other payables |
28,175 |
- |
- |
- |
Borrowings |
5,457 |
10,457 |
9,241 |
- |
Lease liabilities |
119 |
54 |
248 |
357 |
|
33,751 |
10,511 |
9,489 |
357 |
3.2 Capital management
The objective of the Group in terms of capital management is to safeguard its capacity to continue as a going concern in order to ensure value for its shareholders and profit for other holders of its net equity instruments and to maintain an optimum capital structure and reduce its cost.
Management regards the capital of the Group to comprise the issued share capital and retained earnings. Management will use dividends as the main tool of managing and returning surplus capital to shareholders and to make such returns as and when surplus capital is identified.
4. Critical accounting estimates and judgments
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
4.1 Critical judgments in applying the entity's accounting policies
(a) Investment in
Management has assessed the level of influence that the Group has on
4.2 Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.
a) Carrying value of property, plant and equipment (Group)
The Group determines whether property, plant and equipment are impaired when indicators of impairments exist or based on the annual impairment trigger assessment. The annual impairment trigger assessment requires an estimate of the value in use of the CGUs to which the tangible fixed assets are allocated, which is predominantly at the individual cancer centre site level. Estimating the value in use requires the Group to make an estimate of the expected future cash flows from each cancer centre andand discount these to their net present value at a discount rate. The resulting calculation is sensitive to the assumptions in respect of future cash flows and the discount rate applied. The Directors consider that the assumptions made represent their best estimate of the future cash flows generated by the CGUs and that the discount rates used are appropriate given the risks associated with the specific cash flows. A sensitivity analysis is performed over the assumptions used to ascertain how sensitive the analysis is to an potential impairment trigger. Based on the sensitivity analysis performed, the Directors conclude that no impairment triggers have been identified. However, it is considered appropriate to disclose this as an area of significant estimation due to the size of the balance and the fact that it could change as a result of future events.
b) Recognition of deferred tax assets (Group)
The recognition of deferred tax assets is subject to estimations of the future available taxable profits that the Directors consider to be more likely than not to occur, based on the Group's future forecasts. As disclosed in Note 14, the Group has recognised deferred taxation assets of £10,342,000 (2019: £6,041,000), and unrecognised deferred taxation assets of £355,890 (2019: £205,739) arising predominantly from unutilised trading losses. The Directors believe it is probable that the Group will be able to utilise all losses (recognised & unrecognised) within a five year period. However, it is considered appropriate to disclose this as an area of significant estimation due to the size of the balance and the fact that it could change as a result of future events.
c) Recoverability of intercompany balances (Company only)
The Company determines whether intercompany balances, which are all repayable on demand and interest free, are recoverable based on the recovery strategies in place. These recovery strategies include an assessment of whether the Company will experience an expected credit loss which in turn is based on the current financial position of the borrower, the future financial outlook of the borrower, the interest rate on the borrowing and the time it would take to fully recover the outstanding balance from the borrower. The Directors have considered the recovery strategies in place at the year end and concluded that the Company will recover the outstanding balances without experiencing any credit / impairment loss. However, it is considered appropriate to disclose this as an area of significant estimation due to the size of the balance and the fact that it could change as a result of future events.5. Property, plant and equipment.
5. Property, plant and equipment
|
|
|
|
|
|
|
Assets |
|
|
Freehold |
Plant & |
IT |
Fixtures & |
Motor |
Right of use |
under |
|
|
property |
machinery |
equipment |
fittings |
vehicles |
assets |
construction |
Total |
Group |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
Cost |
|
|
|
|
|
|
|
|
At 1 March 2018 |
4,262 |
3,718 |
1,338 |
377 |
11 |
490 |
89,289 |
99,485 |
Additions |
- |
- |
577 |
380 |
- |
399 |
41,363 |
42,719 |
Disposals |
- |
(48) |
- |
(6) |
- |
- |
(250) |
(304) |
Reclass |
- |
66,872 |
- |
- |
- |
- |
(66,872) |
- |
At 28 February 2019 |
4,262 |
70,542 |
1,915 |
751 |
11 |
889 |
63,530 |
141,900 |
Accumulated depreciation |
|
|
|
|
|
|
|
|
At 1 March 2018 |
383 |
99 |
717 |
105 |
9 |
89 |
- |
1,402 |
Reclass |
(307) |
307 |
- |
- |
- |
- |
- |
- |
Charge for the year |
131 |
2,622 |
433 |
163 |
2 |
133 |
- |
3,484 |
At 28 February 2019 |
207 |
3,028 |
1,150 |
268 |
11 |
222 |
- |
4,886 |
Net book value |
|
|
|
|
|
|
|
|
At 28 February 2019 |
4,055 |
67,514 |
765 |
483 |
- |
667 |
63,530 |
137,014 |
At 28 February 2018 |
3879 |
3619 |
621 |
272 |
2 |
401 |
89,289 |
98,083 |
|
|
|
|
|
|
|
Assets |
|
|
Freehold |
Plant & |
IT |
Fixtures & |
Motor |
Right of use |
under |
|
|
property |
machinery |
equipment |
fittings |
vehicles |
assets |
construction |
Total |
Group |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
Cost |
|
|
|
|
|
|
|
|
At 1 March 2019 |
4,262 |
70,542 |
1,915 |
751 |
11 |
889 |
63,530 |
141,900 |
Additions |
9 |
- |
451 |
139 |
- |
45 |
18,906 |
19,550 |
Reclass |
- |
37,572 |
- |
- |
- |
- |
(37,572) |
- |
Disposals |
- |
(501) |
- |
- |
(11) |
(168) |
- |
(680) |
At 29 February 2020 |
4,271 |
107,613 |
2,366 |
890 |
- |
766 |
44,864 |
160,770 |
Accumulated depreciation |
|
|
|
|
|
|
|
|
At 1 March 2019 |
207 |
3,028 |
1,150 |
268 |
11 |
222 |
- |
4,886 |
Charge for the year |
131 |
4,856 |
438 |
213 |
- |
141 |
- |
5,779 |
On disposal |
- |
(36) |
- |
- |
(11) |
(165) |
- |
(212) |
At 29 February 2020 |
338 |
7,848 |
1,588 |
481 |
- |
198 |
- |
10,453 |
Net book value |
|
|
|
|
|
|
|
|
At 29 February 2020 |
3,933 |
99,765 |
778 |
409 |
- |
568 |
44,864 |
150,317 |
At 28 February 2019 |
4,055 |
67,514 |
765 |
483 |
- |
667 |
63,530 |
137,014 |
|
IT |
Fixtures & |
Right of use |
|
|
equipment |
fittings |
assets |
Total |
Company |
£'000 |
£'000 |
£'000 |
£'000 |
Cost |
|
|
|
|
At 1 March 2019 |
1,664 |
21 |
292 |
1,977 |
Additions |
283 |
8 |
43 |
334 |
Disposals |
(1,050) |
(7) |
(104) |
(1,161) |
At 29 February 2020 |
897 |
22 |
231 |
1,150 |
Accumulated depreciation |
|
|
|
|
At 1 March 2019 |
1,032 |
19 |
103 |
1,154 |
Charge for the year |
287 |
4 |
68 |
359 |
On Disposal |
(549) |
(7) |
(101) |
(657) |
At 29 February 2020 |
770 |
16 |
70 |
856 |
Net book value |
|
|
|
|
At 29 February 2020 |
127 |
6 |
161 |
294 |
At 28 February 2019 |
632 |
2 |
189 |
823 |
6. Intangible assets
|
Intellectual |
|
Property |
Group and Company |
£'000 |
Cost |
|
At 1 March 2019 |
721 |
At 29 February 2020 |
721 |
Amortisation |
|
At 1 March 2019 |
180 |
Charge for the year |
241 |
At 29 February 2020 |
421 |
Carrying amount |
|
At 29 February 2020 |
300 |
At 28 February 2019 |
541 |
Acquisition represents Intellectual Property as part of insourcing the IT functions. The asset is being amortised over three years.
There is no further commitment to acquire Intangible Assets going forward.
7. Investments
|
Other |
|
investments |
|
other than |
|
loans |
Group |
£'000 |
Fair value |
|
At 1 March 2019 |
- |
Impairment |
|
Reversal of Impairment |
3,704 |
At 29 February 2020 |
3,704 |
Carrying amount |
|
At 29 February 2020 |
3,704 |
At 28 February 2019 |
- |
|
|
Other |
|
|
Shares in |
investments |
|
|
Group |
other than |
|
|
undertakings |
loans |
Total |
Company |
£'000 |
£'000 |
£'000 |
Cost/Fair value |
|
|
|
At 1 March 2019 |
137 |
- |
137 |
Additions |
94 |
- |
94 |
Reversal of Impairment |
- |
3,704 |
3,704 |
At 29 February 2020 |
231 |
3,704 |
3,935 |
Carrying amount |
|
|
|
At 29 February 2020 |
231 |
3,704 |
3,935 |
At 28 February 2019 |
137 |
- |
137 |
Subsidiaries, associates and other investments
Details of the investments in which the group and the parent company have an interest of 20% or more are as follows:
|
|
Percentage of |
|
|
Class of share |
shares held |
Principal Activity |
Rutherford Cancer Care Limited |
Ordinary |
100 |
Medical practice activities |
Rutherford Diagnostics Limited |
Ordinary |
100 |
Medical practice activities |
Rutherford Estates Limited |
Ordinary |
100 |
Development of property |
Rutherford Innovations Limited |
Ordinary |
100 |
Development activity |
Proton Partners International Limited |
Ordinary |
100 |
Dormant |
Rutherford Infrastructures Limited |
Ordinary |
100 |
Development of property |
All subsidiaries are directly held by the Company. The registered office of Rutherford Diagnostics Limited is Accelerator, 1 Daulby Street,
Other investments - Group and Company
Other investments are classified as financial assets at FVOCI.
Other investments comprise of £3,704,000 (2019 - £Nil) relating to Proton Partners International Healthcare Investments LLC.
The Company has reached agreement to sell the investment to a third party. Management has therefore decided to adjust the fair value of the investment to reflect the sales price agreed.
For the year ended 29 February 2020, Other investments were classified as assets held for sale. On the adoption of IFRS 9, the Group has made the irrevocable election to classify these as held at FVOCI.
Upon disposal of these equity investments, any balance within the OCI reserve is reclassified to retained earnings and is not reclassified to profit or loss.
There is no quoted market price in an active market and so the fair value has been measured using an alternative valuation technique being the value of the share sale agreement.
8. Trade and other receivables
|
Group |
|
Company |
||
|
2020 |
2019 |
|
2020 |
2019 |
|
£'000 |
£'000 |
|
£'000 |
£'000 |
Trade debtors |
591 |
175 |
|
- |
- |
Amounts due from subsidiary companies |
- |
- |
|
195,815 |
137,473 |
Prepayments and accrued income |
3,911 |
1997 |
|
451 |
397 |
Other debtors |
3,232 |
3,649 |
|
3,171 |
3,645 |
VAT Recoverable |
1,979 |
1,094 |
|
- |
71 |
Total trade and other receivables |
9,713 |
6,915 |
|
199,437 |
141,586 |
The debtor balances are shown at their amortised cost and there are no significant differences with respect to their fair value. There were no provisions for impairment made during the year.
The carrying amounts of the receivables are all denominated in Pounds Sterling.
Amounts due from subsidiary companies are interest free and repayable on demand.
9. Cash and cash equivalents
|
Group |
|
Company |
||
|
2020 |
2019 |
|
2020 |
2019 |
|
£'000 |
£'000 |
|
£'000 |
£'000 |
Cash at bank and in hand |
19,157 |
20,589 |
|
19,151 |
20,589 |
Net cash and cash equivalents |
19,157 |
20,589 |
|
19,151 |
20,589 |
All balances were held at a financial institution with a suitable credit rating.
10. Called up share capital
Issued, called up and fully paid
|
Group and Company |
|
|
||||||
|
Number of Shares |
|
£'000 |
|
|
||||
|
Ordinary |
Growth |
Deferred |
|
Ordinary |
Growth |
Deferred |
|
|
|
shares |
shares |
shares |
|
shares |
shares |
shares |
|
Total |
At 1 March 2018 |
120,673,956 |
5,188,833 |
- |
|
121 |
4 |
- |
|
125 |
Issued in Year |
26,293,132 |
740,558 |
- |
|
26 |
1 |
- |
|
27 |
Redesignated |
5,734,809 |
(5,734,809) |
- |
|
5 |
(5) |
- |
|
- |
Repurchased |
- |
(194,582) |
- |
|
- |
- |
- |
|
- |
At 28 February 2019 |
152,701,897 |
- |
- |
|
152 |
- |
- |
|
152 |
Issued in Year |
39,794,600 |
|
|
|
40 |
- |
- |
|
40 |
At 29 February 2020 |
192,496,497 |
- |
- |
|
192 |
- |
- |
|
192 |
On 17 May 2019, the Company allotted 5,681,818 £0.001 ordinary shares for £1.76 each.
On 10 June 2019, the Company allotted 1,420,454 £0.001 ordinary shares for £1.76 each.
On 17 June 2019, the Company allotted 1,420,454 £0.001 ordinary shares for £1.76 each.
On 4 July 2019, the Company allotted 11,363,637 £0.001 ordinary shares for £1.76 each.
On 14 August 2019, the Company allotted 10,000 £0.001 ordinary shares for £1.00 each.
On 13 September 2019, the Company allotted 7,102,274 £0.001 ordinary shares for £1.76 each.
On 22 October 2019, the Company allotted 11,873 £0.001 ordinary shares for £1.00 each.
On 24 December 2019, the Company allotted 8,522,727 £0.001 ordinary shares for £1.76 each.
On 31 January 2020, the Company allotted 4,261,363 £0.001 ordinary shares for £1.76 each.
In all instances of issues of Ordinary shares, consideration was satisfied by cash.
Post year end, on 11 March 2020, the Company allotted 5,476,742 £0.001 ordinary shares for £1.76 each.
11. Reserves
Share premium account
The share premium account represents amounts raised on the initial allotment of share capital in excess of the nominal value of the shares issued.
Retained earnings/(accumulated losses)
Retained earnings/(accumulated losses) represent the accumulated profits and losses of the Group and Company less any distributions made.
12. Borrowings
|
Group |
|
Company |
||
|
2020 |
2019 |
|
2020 |
2019 |
|
£'000 |
£'000 |
|
£'000 |
£'000 |
Non-current |
|
|
|
|
|
Loans |
9,880 |
23,737 |
|
9,880 |
23,737 |
Lease liabilities |
706 |
778 |
|
169 |
197 |
|
10,586 |
24,515 |
|
10,049 |
23,934 |
Loans
Non current loans consist of one loan agreement (2019: 2) attracting fixed interest of 6.25% with a maturity profile as follows:
|
Group |
|
Company |
||
|
2020 |
2019 |
|
2020 |
2019 |
|
£'000 |
£'000 |
|
£'000 |
£'000 |
Repayable in: |
|
|
|
|
|
Less than one year |
249 |
5,457 |
|
498 |
5,457 |
One to two years |
1,325 |
10,457 |
|
2,651 |
10,457 |
Two to five years |
8,426 |
9,241 |
|
6,851 |
9,241 |
More than five years |
- |
- |
|
- |
- |
Total repayable |
10,000 |
25,155 |
|
10,000 |
25,155 |
Less: unamortised debt issue costs |
(120) |
(1,418) |
|
(120) |
(1,418) |
Carrying value |
9,880 |
23,737 |
|
9,880 |
23,737 |
The carrying value of loan approximates to their fair value.
The loan is secured by means of composite debenture, fixed and floating charges over all property and assets of the Company and Group. A further £10m is available in October 2020.
Leases
The Group and Company lease various office premises and land. Rental contracts are typically made for fixed periods of three to ten years for office premises and ten to 98 years for land. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.
Lease liabilities are repayable as follows:
|
Group |
|
Company |
||
|
2020 |
2019 |
|
2020 |
2019 |
|
£'000 |
£'000 |
|
£'000 |
£'000 |
Repayable in: |
|
|
|
|
|
Less than one year |
103 |
119 |
|
80 |
65 |
One to two years |
44 |
54 |
|
28 |
38 |
Two to five years |
117 |
248 |
|
61 |
94 |
More than five years |
442 |
357 |
|
- |
- |
Total repayable |
706 |
778 |
|
169 |
197 |
Carrying value |
706 |
778 |
|
169 |
197 |
Included within property, plant and equipment are right-of-use assets with a net book value as follows:
|
Group |
|
Company |
||
|
2020 |
2019 |
|
2020 |
2019 |
|
£'000 |
£'000 |
|
£'000 |
£'000 |
Freehold property |
568 |
667 |
|
161 |
189 |
Additions to the Group's right-of-use assets were £45,000 (2019: £399,000).
The depreciation charges recognised in profit and loss on right-of-use assets are as follows:
|
Group |
|
Company |
||
|
2020 |
2019 |
|
2020 |
2019 |
|
£'000 |
£'000 |
|
£'000 |
£'000 |
Freehold property |
141 |
133 |
|
68 |
44 |
Details of finance charges expensed in profit and loss in respect of lease liabilities are disclosed in Note 21.
Details of expenses relating to short-term leases, leases of low-value assets and variable lease payments are given in Note 16.
Details of total cash outflow for leases in the Group are given in the consolidated cash flow statement. The total cash outflow for the Group was £72,000 (2019: £92,000).
13. Trade and other payables
|
Group |
|
Company |
||
|
2020 |
2019 |
|
2020 |
2019 |
|
£'000 |
£'000 |
|
£'000 |
£'000 |
Trade payables |
13,123 |
25,992 |
|
402 |
1,211 |
Accrued expenses |
1,987 |
2163 |
|
408 |
661 |
VAT payable |
- |
- |
|
24 |
- |
Other creditors |
834 |
20 |
|
465 |
20 |
|
15,944 |
28,175 |
|
1,299 |
1,892 |
All trade and other payables are classified as other financial liabilities held at amortised cost.
14. Deferred tax asset
The movement in deferred income tax assets during the year is as follows:
Group
|
|
|
|
Tax losses |
|
|
|
|
Pension and |
carried |
|
|
Accelerated |
Short term |
post |
forward and |
|
|
capital |
temporary |
retirement |
other |
|
|
allowances |
differences |
benefits |
deductions |
Total |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
At 1 March 2018 |
103 |
3 |
2 |
2,693 |
2,801 |
Credit to profit or loss |
408 |
45 |
- |
2,787 |
3,240 |
At 28 February 2019 |
511 |
48 |
2 |
5,480 |
6,041 |
Credit to profit or loss |
456 |
68 |
- |
3,777 |
4,301 |
At 29 February 2020 |
967 |
116 |
2 |
9,257 |
10,342 |
The Group has unrecognised deferred tax assets of £355,890 (2019: £205,739).
The Group expects to utilise the assets more than 12 months after the balance sheet date.
Company
|
|
|
Tax losses |
|
|
|
Pension and |
carried |
|
|
Accelerated |
post |
forward and |
|
|
capital |
retirement |
other |
|
|
allowances |
benefits |
deductions |
Total |
|
£'000 |
£'000 |
£'000 |
£'000 |
At 1 March 2018 |
117 |
2 |
1,942 |
2,061 |
Credit to profit or loss |
29 |
2 |
- |
31 |
Charge to profit or loss |
- |
- |
(307) |
(307) |
At 28 February 2019 |
146 |
4 |
1,635 |
1,785 |
Charge to profit or loss |
- |
- |
(31) |
(31) |
At 29 February 2020 |
146 |
4 |
1,604 |
1,754 |
Deferred tax assets
|
Group |
|
Company |
||
|
2020 |
2019 |
|
2020 |
2019 |
|
£'000 |
£'000 |
|
£'000 |
£'000 |
To be recovered after more than 12 months |
10,342 |
6,041 |
|
1,754 |
1,785 |
Deferred tax is calculated on the temporary differences under the liability method using a tax rate of 17% (2019: 17%).
15. Revenue
The Group has recognised the following amounts relating to revenue in the Consolidated Statement of Total Comprehensive Income:
|
2020 |
2019 |
|
£'000 |
£'000 |
Revenue from cancer treatment |
5,606 |
1,465 |
All revenues arose in the
16. Loss before taxation
Loss before taxation is stated after charging/(crediting):
|
2020 |
2019 |
|
£'000 |
£'000 |
Depreciation charges: |
|
|
- Owned assets |
5,638 |
3,351 |
- Right-of-use assets |
141 |
133 |
Operating lease charges: |
|
|
- Expense relating to low-value assets not on short-term leases |
12 |
3 |
Foreign exchange gains |
193 |
(155) |
Other receivables written off directly to profit and loss |
- |
- |
Employee benefit costs (see Note 18) |
10,131 |
7,798 |
17. Auditor's remuneration
During the period the following services were obtained from the Company's auditor:
|
2020 |
2019 |
|
£'000 |
£'000 |
Fees payable for the audit of the financial statements of the Company |
32 |
23 |
Fees payable for the audit of the financial statements of the subsidiaries |
14 |
5 |
Other services |
3 |
4 |
|
49 |
32 |
18. Employee benefit expense
|
Group |
|
Company |
||
|
2020 |
2019 |
|
2020 |
2019 |
|
£'000 |
£'000 |
|
£'000 |
£'000 |
Wages and salaries |
8,405 |
6,674 |
|
3,019 |
2,612 |
Social security costs |
894 |
734 |
|
327 |
281 |
Other pension costs - defined contribution |
825 |
651 |
|
307 |
262 |
Share-based payment |
141 |
174 |
|
141 |
174 |
|
10,265 |
8,233 |
|
3,794 |
3,329 |
Less: capitalised labour costs |
(134) |
(435) |
|
- |
- |
Employee benefit expense |
10,131 |
7,798 |
|
3,794 |
3,329 |
The average monthly number of persons (including Executive Directors) employed during the year was:
|
Group |
|
Company |
||
|
2020 |
2019 |
|
2020 |
2019 |
|
No. |
No. |
|
No. |
No. |
Managerial |
47 |
31 |
|
19 |
12 |
Clerical |
123 |
93 |
|
28 |
22 |
|
170 |
124 |
|
47 |
34 |
The number of employees in the Group at 29 February 2020 was 183 (2019: 167).
19. Directors' remuneration
The Directors' aggregate remuneration in respect of qualifying services was:
|
2020 |
2019 |
|
£'000 |
£'000 |
Remuneration |
586 |
628 |
Company contributions to defined contribution pension plans |
32 |
38 |
|
618 |
666 |
Retirement benefits accrued to 4 (2019: 4) directors.
The aggregate emoluments for the highest paid Director was £183,655 (2019: £183,518) and the pension contributions for that Director were £19,800 (2019: £19,800).
20. Share-based payment benefits
Set out below is a summary of options granted under the plan:
|
2019/2020 |
|
2018/2019 |
||
|
Average |
|
|
Average |
|
|
exercise price |
|
|
exercise price |
|
|
of options |
Number of |
|
of options |
Number of |
|
£ |
options |
|
£ |
options |
As at 1 March |
1.2 |
3,353,038 |
|
1.01 |
2,229,351 |
Granted |
2.39 |
1,198,288 |
|
1.57 |
1,123,687 |
As at 29 February/28 February |
1.51 |
4,551,326 |
|
1.2 |
3,353,038 |
1,496,007 of the options vested on 29 February 2020 (2019: 1,496,007). 21,873 were exercised during the year ended 29 February 2020 (2019: Nil). The share price at date of exercise was £2.27.
No options expired during the year ended 29 February 2020 (2019: Nil). 606,620 options lapsed during the year due to leavers (2019: 163,961).
Share options at the end of the year have the following expiry date and exercise prices:
|
|
Exercise |
|
|
|
|
price |
2020 |
2019 |
Grant Date |
Expiry date |
£ |
Number |
Number |
6 March 2017 |
5 March 2027 |
1 |
1,568,437 |
1,859,297 |
1 September 2017 |
31 August 2027 |
1.15 |
154,139 |
189,543 |
24 April 2018 |
23 April 2028 |
1.5 |
451,383 |
515,819 |
21 May 2018 |
20 May 2028 |
1.5 |
249,327 |
404,380 |
1 June 2018 |
31 May 2028 |
1.5 |
38,858 |
38,858 |
24 September 2018 |
23 September 2028 |
2 |
127,931 |
164,630 |
14 June 2019 |
13 June 2029 |
2.39 |
1,132,747 |
- |
20 July 2019 |
19 July 2029 |
2.39 |
19,500 |
- |
2,590,075 of the outstanding options were exercisable as at 29 February 2020.
The weighted average remaining contractual life of options at 29 February 2020 was 8 years (2019: 9 years).
The assessed fair value at grant date of options granted during the year ended 29 February 2020 was 22.96 pence per option (2019: 7.37 pence). The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield, the risk-free interest rate for the term of the option and the correlations and volatilities of the peer group companies.
The key model inputs for options granted during the year ended 29 February 2020 included:
|
Date of grant |
|
|
14-Jun |
20-Jul |
|
2019 |
2019 |
Expected vesting period (years) |
3 |
3 |
Share value at date of grant (£) |
1.76 |
1.76 |
Volatility (%) |
33.3 |
33.3 |
Risk-free interest rate (%) |
0.75 |
0.75 |
21. Finance expense
|
2020 |
2019 |
|
£'000 |
£'000 |
Loans |
2,063 |
1,809 |
Amortisation of debt fees |
1,492 |
485 |
Lease liabilities |
60 |
99 |
Total finance expense |
3,615 |
2,393 |
22. Income tax credit
|
2020 |
2019 |
|
£'000 |
£'000 |
Current tax: |
|
|
|
(246) |
- |
Adjustment in respect of prior years |
(295) |
(13) |
Total current tax |
(541) |
(13) |
Deferred tax: |
|
|
Origination and reversal of temporary differences |
(4,378) |
(3,240) |
Adjustment in respect of prior years |
77 |
- |
Total deferred tax |
(4,301) |
(3,240) |
Total tax credit |
(4,842) |
(3,253) |
The tax on the Group's loss before tax differs from the theoretical amount that would arise using the tax rate applicable to losses of the Group as follows:
|
2020 |
2019 |
|
£'000 |
£'000 |
Loss before tax |
(29,276) |
(21,518) |
Notional credit at |
(5,562) |
(4,105) |
Tax effects of: |
|
|
- Expenses not deductible for tax purposes |
64 |
99 |
- Adjustments due to changes in tax rates |
537 |
405 |
- Other differences |
355 |
156 |
- R&D expenditure |
(168) |
(12) |
- Adjustment in respect of prior years |
(218) |
62 |
- Deferred tax asset not recognised |
150 |
142 |
Tax credit for the period |
(4,842) |
(3,253) |
Factors that may affect future tax charges
Deferred tax has been calculated using a tax rate of 17% (2019: 17%).
A reduction in the
23. Cash (used in)/generated from operations
|
2020 |
2019 |
|
£'000 |
£'000 |
Loss before income tax |
(29,276) |
(21,518) |
Adjustments for: |
|
|
- Depreciation and amortisation |
6,020 |
3,664 |
- Finance costs |
3,615 |
2,393 |
- Loss on disposal of Fixed Assets |
468 |
- |
- Non-cash employee benefits expense - share-based payments |
125 |
174 |
Changes in working capital |
|
|
- Trade and other receivables |
(2,798) |
295 |
- Trade and other payables |
(12,231) |
16,357 |
Cash (used in)/generated from operations |
(34,077) |
1,365 |
24. Reconciliation of liabilities arising from financing activities
|
At |
|
|
At |
|
1 March |
Cash |
Loan Fees |
29 February |
|
2019 |
flows |
(Non-cash) |
2020 |
|
£'000 |
£'000 |
£'000 |
£'000 |
Non-current |
|
|
|
|
Loans |
23,737 |
(15,349) |
1,492 |
9,880 |
Lease liabilities |
778 |
(72) |
- |
706 |
Total liabilities arising from financing activities |
24,515 |
(15,421) |
1,492 |
10,586 |
25. Financial instruments by category
Group
|
At amortised |
|
|
|
cost |
FVOCI |
Total |
At 29 February 2020 |
£'000 |
£'000 |
£'000 |
Assets as per balance sheet |
|
|
|
Trade and other receivables excluding prepayments |
5,802 |
- |
5,802 |
Investments |
|
3,704 |
3,704 |
Cash and cash equivalents |
19,157 |
- |
19,157 |
|
24,959 |
3,704 |
28,663 |
|
At amortised |
|
cost |
|
£'000 |
Liabilities as per balance sheet |
|
Borrowings |
9,880 |
Lease liabilities |
706 |
Trade and other payables excluding non-financial liabilities |
15,944 |
|
26,530 |
Company
|
At amortised |
|
|
|
cost |
FVOCI |
Total |
At 29 February 2020 |
£'000 |
£'000 |
£'000 |
Assets as per balance sheet |
|
|
|
Trade and other receivables excluding prepayments |
198,986 |
- |
198,986 |
Cash and cash equivalents |
19,151 |
- |
19,151 |
|
218,368 |
3,704 |
222,072 |
|
At amortised |
|
cost |
|
£'000 |
Liabilities as per balance sheet |
|
Borrowings |
9,880 |
Lease liabilities |
169 |
Trade and other payables excluding non-financial liabilities |
1,299 |
|
11,348 |
26. Capital commitments
The Company had £43,684,077 (2019:£106,420,240) of capital expenditure contracted but not incurred at the year end.
27. Related party transactions
Group
Key management compensation
The compensation paid or payable to key management for employee services is the same as Directors emoluments as disclosed in Note 19.
Transactions with other related parties
Two of the Group's employees are non-dependent children of the Chief Executive Officer. The employee benefit expense disclosed in Note 18 includes £66,000 (2019: £47,000) paid to the related employees.
28. Ultimate controlling party
There is no ultimate controlling party.
29. Loss per share
|
2020 |
2019 |
Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share |
171,885,768 |
128,758,285 |
Total comprehensive expense for the period |
£(20,761,000) |
£(22,428,000) |
Basic and diluted loss per share (pence) |
12.1 |
17.4 |
This information is provided by RNS, the news service of the . RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the