Rutherford Health - Final Results
RNS Number : 6226N
Rutherford Health PLC
30 September 2021
 

Rutherford Health Plc

Full year results

 

30 September 2021: Rutherford Health plc (AQSE: RUTH, the "Group"), a healthcare group committed to providing innovative cancer care of the highest quality, announces its full year audited results for the 12 months ended 28 February 2021.

 

Financial summary

 

·      Revenue growth of 30% to £7.3m (FY20: £5.6m)

·      Investment of £9.1m in property, plant and equipment (FY20: £19.6m)

·      Equity inflow of £9.7m

·      Final £10m drawn down from £20m debt facility

·      £55m funding package secured with Equitix Investment Management for Rutherford Diagnostics

·      Operating loss for the year of £31.1m (FY20: £25.7m).

 

Operational highlights

·    45% growth in patient numbers across all services to despite reduction in referrals due to the pandemic, to 328 (FY20: 225)

·      83% growth in number of NHS oncologists recruited to 120 (FY20: 65)

-     44 now received specialist training in Proton Beam Therapy ("PBT") with a further 30 scheduled during 2021

·      Rutherford Cancer Centre North West opened in Liverpool in July 2020, with PBT due to be commissioned during 2022

·   Signed two key NHS agreements: NHS Shared Business Services to provide cancer services on demand, and NHS England framework agreement to provide cancer treatment and diagnostic imaging services to NHS trusts and clinical commissioning groups

·      Launch of Rutherford Direct, a new membership plan offering access to advanced cancer diagnostics and treatments

·      Launch of Rutherford Diagnostics - the first Rutherford Diagnostics Centre has been opened in Taunton, Somerset

·      All four Rutherford Cancer Centres remained operational throughout the pandemic; no staff furloughed

 

Post period-end

·     £40m infrastructure investment agreed with Equitix Investment Management to pay down debt, fund further investment and working capital

·      £12.35m placing of shares with new investor providing further funds for Working Capital.

 

Mike Moran, CEO of Rutherford Health, commented:

"Progress during the year was positive, with our cancer care provision being undisrupted by the global pandemic and important operational strides that lay the foundations for future growth.

"The Group is now debt free, with sufficient working capital to fund our ambitions over the medium-term. With the opening of our fourth cancer centre and the first of several anticipated community diagnostics hubs, we are well-positioned, enabling us to bring high-quality, all-encompassing healthcare care to more UK patients."

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

 

-Ends-

For more information, please contact:

 

Rutherford Health plc

+44 (0) 16 3381 0661

Michael Moran, Chief Executive Officer
Marcus King, Finance Director

Investors@therutherford.com

 

 

Grant Thornton (Corporate Adviser)

+44 (0) 20 7383 5100

Colin Aaronson/ George Grainger
 

 

Instinctif Partners

+44 207 457 2020

Melanie Toyne-Sewell / Jeremy Durrant / Rozi Morris

Rutherford@Instinctif.com

 

 

Media House International

07788 414 856 / 0207 710 0020

Ramsay Smith

ramsay@mediahouse.co.uk

 

 

About Rutherford Health plc

Rutherford Health plc is a leading UK provider of innovative cancer care. Operating a network of four state-of-the-art centres in Wales, Reading, Northumberland and Liverpool, Rutherford Health offers a comprehensive range of the latest technology in cancer treatments and is the only independent provider of proton beam therapy ("PBT") in the UK. It also provides conventional radiotherapy, chemotherapy, immunotherapy, imaging and wellbeing services.

The Group is listed on the Apex segment of the AQSE Growth Market under the symbol: RUTH. For more information, visit the Group's website: www.rutherfordhealth.com.

 

 

Chairman's statement

 

Expanding access to cancer care

 

The year ended 28 February 2021 has been quite extraordinary for all sectors, but especially in healthcare. As soon as we closed the accounts last year, we entered a year of on and off enforced lockdowns due to the COVID-19 pandemic.

 

Our sympathies of course lie with all those affected by the pandemic, however, behind the headlines, there was another less obvious but significant segment of the population profoundly affected - those with undiagnosed and diagnosed cancer - who could not get to hospital for either diagnosis or treatment.

 

Despite the challenges of COVID-19, Rutherford Health plc and the team forged ahead to ensure the business was fully operational for those patients who continued to need essential cancer care and also to provide capacity for when the threat of the pandemic reduced and priorities around cancer care would return. The management team sought new business avenues to support the core business and develop new opportunities. On behalf of the Board, I am very proud of what the team has achieved this year. Revenues have increased by 30% and operationally, the Group is in a much stronger position for further growth.

 

One of the key highlights of the year was the creation of a strong bond between Rutherford Health plc and the NHS through two agreements. The first was with the NHS Shared Business Services to provide cancer treatment services on demand to any NHS Trust at a pre-agreed set of prices. The agreement lasts for two years with an option to extend for a further two years on the agreement of both parties. By January 2021, this relationship was strengthened further through a framework agreement with NHS England to provide cancer treatment and diagnostic imaging services to NHS Trusts and clinical commissioning groups. This binding together of the private and public sectors makes complete sense to ensure all cancer patients are prioritised and will help the NHS manage the backlog in cancer diagnosis and care.

 

During the year, we made progress with developing our relationship with the NHS. We believe the Company has an important role to play in extending the treatments on offer to cancer patients in this country without the need to travel abroad as well as providing additional resources where the NHS has capacity constraints. Cancer is a disease which strikes fear into those diagnosed and it is important that world-class treatment is available in this country on a timely basis. Since the year end, the current COVID-19 pandemic has stretched the NHS to the limits. This has put current cancer treatments on hold and meant that many cancer diagnoses will have been missed, or people have not sought expert consultation for fear of contracting COVID-19 in hospital. There is now an opportunity for the NHS and the private sector to bury any past ideological differences, put the cancer patients first and ensure that all available treatment capacity is used to diagnose, treat and cure those people, of all ages, whose lives are in avoidable danger. The Company has now commenced dialogue with the NHS to offer services to the NHS in the coming months to help deal with the expected backlog of cancer treatments. Over 200 people are sent abroad for proton beam treatment from the UK each year with all the attendant cost and dislocation. This now does not need to happen and we welcome the opportunity to work with the NHS to facilitate this. Another important milestone during the year was the opening of the Rutherford Cancer Centre North West (Liverpool) in July 2020 to patients for treatment. By September 2020, Rutherford Health plc commissioned its first Elekta Unity MR-Linac for this centre, resulting in the Group now having four operational cancer centres.

 

Like many companies across the world, the economic impact of COVID-19 has been difficult. We have a high fixed cost base and have been investing in our fourth site to make it operational. The Group maintained pre COVID-19 revenue trends, despite a drop in self-pay referrals, with private medical insurance referrals increasing across all services. We managed our cost base carefully and were pleased to avoid furloughing any staff. All four centres remained 100% COVID-19 free and operational throughout the pandemic.

 

As we enter a new financial year, I see the brakes of lockdown and the pandemic coming off Rutherford Health plc's progress. Shortly after the period end, we secured financing of £40m through an infrastructure investment agreement with Equitix Investment Management Limited ('Equitix'). This restructures our balance sheet debt and provides further investment for infrastructure, as well as providing working capital for our development for the medium term.

 

From a revenue growth perspective, the successful UK COVID-19 vaccination plan will enable the economy to fully reopen over the coming months. In turn, this will allow the myriad of cancer patients who urgently need diagnosis to begin their battle with a disease which is better treated early, and those needing treatment can return to hospital. For patients, the availability of proton beam therapy at our centres is an important differentiator in that we can deliver more effective treatment to many different organ-contained tumours than anywhere else in the UK. In addition, through our relationship with the NHS, Proton Beam Therapy ('PBT') will be accessible to NHS as well as private patients.

 

Besides our main cancer care business, during this year, we launched several other businesses that will drive future growth. Our diagnostic project, Rutherford Diagnostics, launched in June 2020, will be the precursor to diagnostic centres across the UK in a market which is badly in need of further capacity. In addition, our Rutherford Direct membership plan, for both corporates and individuals, was officially launched in December 2020 and provides another line of defence
and comfort for those who want access to the best diagnosis and treatment available against cancer.

 

We could not have achieved as much without the careful management by the senior executive team, which has been strengthened further with the addition of Marcus King to the Board as our Finance Director. He has played an important part in the success that we have achieved to date and on behalf of the Board, I am delighted to welcome him. I would also like to thank all of our staff for their outstanding service and commitment during this most testing of years. They have demonstrated huge commitment and care, as well as maintaining excellent clinical governance - all of which is essential for a successful outcome for our patients.

 

We look forward to the return of more normal times and to see Rutherford Health plc become a leading provider of cancer diagnosis and care.

 

Rupert Lowe

Chairman

30 September 2021

 

 

 

Chief Executive Officer's Report

 

Despite the global pandemic, 2020 was a year of strong progress for Rutherford Health plc and preparation for anticipated growth.

 

Revenues grew by 30%, and we saw a 45% increase in patient numbers on the previous year, even with the reduction in the number of patients overall being diagnosed with cancer due to the pandemic.

 

Our fourth Rutherford Cancer Centre in Liverpool is now complete and opened to patients in July 2020 offering radiotherapy, SACT and imaging, with PBT due to be commissioned during 2022.

 

We now have four centres operating as a network, providing essential resilience should one of our treatment machines require unplanned maintenance. This resilience was tested successfully this year when a cyclotron temporarily powered down, requiring a patient to be sent to another Rutherford Cancer Centre for continuity of treatment, which happened smoothly and without re-planning. We are the first proton beam service in the world to achieve this, which demonstrates the benefits of our network.

 

The Rutherford Cancer Centres have now recruited more than 120 NHS oncologists and provided them with practising privileges to operate within our centres. 44 of these oncologists have now received specialist training in PBT and a further 30 are scheduled for this training during 2021.

 

A Commitment to Excellence

Rutherford Health plc is focused above all on excellence in patient care and safety and optimising outcomes. These priorities enable us to increase our appeal to cancer patients, private medical insurers and to NHS commissioners. This commitment to excellence will also lead to improved financial performance over the short, medium and long-term.

 

There has been a significant upward trend in the demand from self-pay patients driven by several marketing campaigns. In particular, our purple campaign was our first ever mass-reach brand campaign, with regionally and demographically targeted TV adverts on major networks, supported by social media. It was a great success and led to an increase in patient enquiries, many of which then converted into consultations and treatments.

 

Throughout the year we treated 328 patients across all services; 60 PBT, 142 radiotherapy and 126 SACT - in total a 45% increase on the previous year, despite a significant reduction in the number of patients being diagnosed due to the pandemic.

 

COVID-19

The COVID-19 pandemic has been a significant test of our resilience plans and ability to provide patient services during the worst healthcare crisis in recent history. As a business, we have fared very well with zero staff furloughed, full operational capability maintained, no drop-off in financial performance and a significant fund raising achieved.

 

At the outset of the pandemic, the Group employed retired military CBRN specialists, (Chemical, Biological, Radiological and Nuclear), to help support a COVID-19- free environment in all our centres, ensuring they were able to remain open and to provide essential cancer care to patients. As a result, all four Rutherford Cancer Centres have remained 100% operational.

 

We 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 our IT infrastructure has been able to support them seamlessly.

 

Despite a fall-off in self-pay referrals due to COVID-19, there was no impact on revenues. Private medical insurance referrals increased across all services and NHS referrals for SACT and RT also increased. We were also accepted onto the NHS England Increasing Capacity Framework, which allows NHS Trusts to purchase additional capacity from the independent sector to support the increased demand for cancer treatment post COVID-19.

 

Rutherford Diagnostics

In June 2020, we launched our new offering, Rutherford Diagnostics. This aims to combine our innovative healthcare environments with leading technologies, such as state-of-the-art diagnostics, personalised screening and genomic sequencing, to reduce illness and support good health. In partnership with Equitix, the infrastructure funder, and Philips health technology, we will develop five specialist diagnostic centres. With a £55m funding package in place from Equitix, the first Rutherford Diagnostics Centre has opened in Taunton, Somerset, and will offer MRI, CT, X-ray and Ultrasound scans to NHS patients, privately insured patients and self-pay patients.

 

Rutherford Diagnostics has already signed a five year contract with Somerset NHS Foundation Trust to provide a full diagnostic imaging service to NHS patients worth £1.9m per year. The centre is the UK's first Community Diagnostic Hub to be built following the recommendations of the Independent Review of Diagnostic Services for NHS England in November 2020 and is seen as the template for further centres across the UK.

 

Rutherford Direct

Our membership plan, Rutherford Direct, was also formally launched in December 2020, and provides a plan for both individuals and corporates. This enables members to access Rutherford Health's network of cancer facilities and treatments including high-energy proton beam therapy, should they be diagnosed with cancer and meet the plan criteria.

 

It has already started accepting individual and corporate members. Both membership plans include a comprehensive cancer pathway, post-treatment medical costs, daily cash allowance, cancer support services and travel and accommodation, all within an affordable monthly cover plan.

 

The primary goal for Rutherford Direct is to provide members with assurance that they will receive the treatment they need at the appropriate time. Having access to a network of high-quality treatment options is crucial to providing that sense of confidence for patients.

 

Investment

On 16 March 2020, the Group called for the final subscription due under the Woodford Commitment for £9.7m. During the year the Group also drew down the final £10m from Triple Point Leasing Limited as part of its £20m debt facility. The funds were used for the completion of the North West Cancer Centre and for working capital needs.

 

Governance

The Board takes its responsibilities extremely seriously in relation to regulatory compliance and champions the 'well-led' framework described by the Care Quality Commission ('CQC') and the leadership and governance frameworks described by Healthcare Inspectorate Wales ('HIW'). Transparency and high standards of business conduct are vital in a healthcare setting and our Professional Standards Team should be commended for their diligence and support of the Group.

 

As explained in the Governance Report, the Clinical Governance Committee is chaired by the Senior Independent Non-Executive Director, and the committee ensures processes are in place to achieve best practice in meeting the needs of CQC and HIW.

 

Post Year End Events

In March 2021, Rutherford Health plc concluded a transaction with Equitix to provide £40m of funding through an infrastructure investment involving the freehold transfer of the South Wales centre. This is a long-term agreement that allowed the Group to repay its debt facilities with Triple Point Leasing Limited, and releases further capital for the Group to deploy in developing its services.

 

In September 2021, a further £12.35m of equity was raised from a new investor. This investment will be used for working capital purposes.

 

Key Performance Indicators

Our key performance indicators are Revenue, Gross Fixed Assets, Cash and Patient Numbers.

 

Outlook

Cancer care remains an attractive sector of high potential demand and strong growth and with its established NHS and private medical insurer relationships in place, Rutherford Health plc is well positioned to drive meaningful growth in the short to medium term.

 

The current backlog in UK cancer services caused by COVID-19 presents a significant opportunity for us to be able to support the NHS with its recovery plans and a number of NHS Trusts are already contracted, or are negotiating contracts, for diagnostic, radiotherapy and SACT services.

 

Our efforts to engage with oncologists are making significant progress, helping to grow the PBT market in the UK and foster further demand for the Group's services. More oncologists are signed up for training in PBT during 2021 and we will continue to drive these efforts, increasing knowledge and understanding of the benefits of PBT within the medical community and beyond.

 

We intend to further develop our diagnostics business, in partnership with Equitix, Philips and NHS Trusts. We are currently in discussion with multiple NHS Trusts to provide Community Diagnostic Hubs and managed services, which will not only provide access to high-quality essential services for many NHS patients around the UK, but will also significantly diversify the Group's revenues. This diversification will also be aided by the Rutherford Direct scheme.

 

Finally, I want to say thank you to all Rutherford Health plc employees, stakeholders and patients for their work and support throughout 2020. Alongside our patients, our highest priority is the health and welfare of our own staff and we are very proud to have remained a COVID-19-free work environment. I look forward to continuing to work with our team in 2021 and beyond in our efforts to support patients and the NHS as we progress our long-term plan of becoming a world-class cancer care company, delivering the most advanced treatments available.

 

Mike Moran

Chief Executive Officer

30 September 2021

 

 

 

Group Financial Review

The financial year ended 28 February 2021 was one of steady progress for the Group, despite the COVID-19 pandemic, and saw revenues grow by 30% to £7.3m (FY 2020: £5.6m).

 

The Rutherford Cancer Centre North West in Liverpool opened in July 2020, offering radiotherapy, SACT and diagnostic services. The Group now has four fully operational Cancer Centres, with PBT coming online in the North West in 2022.

 

The Group launched its Rutherford Diagnostics business during 2020, having secured a £55m funding package through Equitix, an infrastructure investor. The first Rutherford Diagnostics Centre is now open in Taunton, Somerset and is providing services to the NHS, private medical insurers and self-pay patients.

 

A summary of key financial results is set out in the table below.

 

 

Year ended

28 February

2021

£'000

Year ended

29 February

2020

£'000

Revenue

7,269

5,606

Operating expenses

(30,911)

(25,247)

EBITDA

(23,642)

(19,641)

Depreciation and amortisation

(7,499)

(6,020)

Operating loss

(31,141)

(25,661)

Finance expense

(1,300)

(3,615)

Loss before tax

(32,441)

(29,276)

Tax credit

213

4,842

Loss for the period

(32,228)

(24,434)

Fair value (loss)/gain on investment

(346)

3,704

Total comprehensive loss

(32,574)

(20,730)

 

Patient Numbers

Patient numbers increased by 45% in FY2021. There was a good mix across the different treatment types. PBT accounted for 18% of total patient throughput. As the market for PBT develops we expect this treatment type to become more dominant in the mix.

 

Revenue

During FY2021 revenue grew by 30% to £7.3m (FY 2020: £5.6m) despite the ongoing pandemic. There has been continued demand for all services and the Group successfully kept all its centres fully operational and COVID-19 free. The opening of the North West Cancer Centre in July 2020 increased our presence in the North of England and has contributed to some of the full year revenue growth.

 

Operating Results

Operating expenses increased in the year by £5.7m, or 22%, to £30.9m. This was mainly due to additional employee costs and premises expenses following the scale up of the North West centre on opening.

 

The Group recognises the importance of incentivising its staff and so operates a share option scheme which is open to all employees. The share-based payment charge in the year amounted to £73,000 (FY 2020: £141,000). Further detail in relation to share-based payments is included in Note 20 of the Consolidated Financial Statements.

 

Depreciation and amortisation increased by £1.5m to £7.5m as a result of the opening of the North West centre.

The operating loss for the year was £31.1m (FY 2020: £25.7m). The finance expense decreased by £2.3m, mainly due to redemption fees due to Shawbrook in FY 2020 which were a one off item.

 

The Group decided not to recognise the increase in the potential deferred tax asset that accrued during the year, however management remain confident of fully utilising this asset against future profits in the medium term.

 

Financial Position

The Group balance sheet at 28 February 2021 can be summarised as set out in the table below:

 

 

Year ended

28 February

2021

£'000

Year ended

29 February

2020

£'000

Property, plant and equipment

151,160

150,317

Intangible assets

60

300

Investments

-

3,704

Deferred tax asset

10,342

10,342

Net current (liabilities)/assets

(16,137)

13,436

Non-current liabilities

(691)

(10,586)

Net assets

144,734

167,513

 

Capital Expenditure

The Group has continued to invest in growing its network of Rutherford Cancer Centres. A further £9.1m (FY 2020: £19.6m) was invested in property, plant and equipment in the financial year, taking the closing net book value at year end to £151.2m (FY 2020: £150.3m). All four centres are operational and PBT is expected to go live in the North West centre during 2022. Approximately £4m will be invested upon commissioning of the machine, as the majority of the purchase price has already been paid.

 

Investments

The Group completed divestment of its 9.7% interest in the Gulf International Cancer Centre in Abu Dhabi (Proton Partners International Healthcare Investments LLC) during the year. Further detail in relation to the divestment can be found in Note 7 to the Consolidated Financial Statements.

 

Treasury Management

At the year end, the Group had total shareholders' funds of £152.0m (FY 2020: £167.5m). During the year, £9.7m of equity was raised under the terms of the Woodford Commitment signed as part of the admission to NEX (Now AQSE) in February 2019. This represented the final investment due under the commitment.

 

At the year end the Group's cash balance stood at £1.5m (FY 2020: £19.2m).

 

Post Balance Sheet Events and Going Concern

The Group announced during January 2021, that future funding options were being explored. In March 2021, the Group completed a transaction with Equitix, which constituted a £40m infrastructure investment into the Group, backed by the transfer of the South Wales Cancer Centre freehold and the other centres as security. This has allowed the Group to repay the £18.6m outstanding under its debt facility with TP Leasing Limited in full. The infrastructure investment has also provided sufficient liquidity to continue developing the business in the short term.

 

In September 2021, a further £12.35m of equity was raised from a new investor. This investment will be used for working capital purposes.

 

The Group is aware that further funding may be required to reach profitability and continues to explore further funding options to develop its business over the longer term. This may involve leveraging further assets on a similar basis with Equitix or raising further equity through the capital markets.

 

Marcus King

Finance Director

30 September 2021

 

 

Consolidated Statement of Total Comprehensive Income

Year ended 28 February 2021

 

 

 

Note

2021

£'000

            2020

£'000

Revenue

15

7,269

5,606

Cost of sales

 

(7,611)

(5,190)

Gross (loss)/profit

 

(342)

416

Administrative expenses

 

(30,799)

(26,077)

Operating loss

 

(31,141)

(25,661)

Finance expense

(3,615)

Loss before taxation

(29,276)

Income tax credit

22

213

4,842

Loss for the financial year

 

(32,228)

(24,434)

Fair value (loss)/gain on investment

7

(346)

3,704

Total comprehensive loss

 

(32,574)

(20,730)

 

All the activities of the Group are from continuing operations.

 

Basic and diluted earnings per share

Note

2021

Pence

2020

Pence

Loss per share attributable to the ordinary equity holders of the Company

29

(12.8)

(12.1)

 

The notes at the end of this announcement are an integral part of these financial statements.

 

 

 

Consolidated Statement of Financial Position

As at 28 February 2021

 

 

Note

2021

£'000

2020

£'000

ASSETS

 

 

 

Non-current assets

 

 

 

Intangible assets

6

60

300

Property, plant and equipment

5

151,160

150,317

Investments

7

-

3,704

Deferred tax asset

14

10,342

10,342

Non-current assets

 

161,562

164,663

Current assets

 

 

 

Trade and other receivables

8

9,465

9,713

Current tax receivable

 

460

510

Cash and cash equivalents

9

1,493

19,157

Current assets

 

11,418

29,380

Total assets

 

172,980

194,043

EQUITY ATTRIBUTABLE TO THE COMPANY'S EQUITY HOLDERS

 

 

 

Called up share capital

10

198

192

Share premium account

11

202,268

192,596

Fair value reserve

 

-

(459)

Accumulated losses

11

(57,732)

(24,816)

Total equity

 

144,734

167,513

LIABILITIES

 

 

 

Non-current liabilities

 

 

 

Borrowings

12

691

10,586

Current liabilities

 

 

 

Borrowings

12

17,582

-

Trade and other payables

13

9,973

15,944

Total liabilities

 

28,246

26,530

Net equity and liabilities

 

172,980

194,043

 

The notes at the end of this announcement are an integral part of these financial statements.

 

These financial statements were approved by the Board of Directors and authorised for issue on 30 September 2021, and are signed on behalf of the Board by:

 

Mr M Moran MBE

Director

 

Company registration number: 09420705

 

Company Statement of Financial Position

As at 28 February 2021

 

 

Note

2021

£'000

2020

£'000

ASSETS

 

 

 

Non-current assets

 

 

 

Intangible assets

6

60

300

Property, plant and equipment

5

461

294

Investments

7

316

3,935

Deferred tax asset

14

1,754

1,754

Non-current assets

 

2,591

6,283

CURRENT ASSETS

 

 

 

Trade and other receivables

8

240,684

199,437

Cash and cash equivalents

9

1,371

19,151

Current assets

 

242,055

218,588

Total assets

 

244,646

224,871

EQUITY ATTRIBUTABLE TO THE COMPANY'S EQUITY HOLDERS

 

 

 

Called up share capital

10

198

192

Share premium account

11

202,268

192,596

Fair value reserve

 

-

(459)

Retained earnings

11

21,888

21,194

Total equity

 

224,354

213,523

LIABILITIES

 

 

 

Non-current liabilities

 

 

 

Borrowings

12

161

10,049

Current liabilities

 

 

 

Borrowings

12

18,431

-

Trade and other payables

13

1,700

1,299

Total liabilities

 

20,292

11,348

Net equity and liabilities

 

244,646

224,871

 

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 £1,382,000 (FY 2020: £351,000).

 

The notes at the end of this announcement are an integral part of these financial statements.

 

These financial statements were approved by the Board of Directors and authorised for issue on 30 September 2021, and are signed on behalf of the Board by:

 

Mr M Moran MBE

Director

 

Company registration number: 09420705

 

 

Consolidated Statement of Changes in Equity

Year ended 28 February 2021

 

 

Called up

share capital

£'000

Share

premium

account

£'000

Accumulated

losses

£'000

Fair value

reserve

£'000

Total

equity

£'000

AT 1 MARCH 2019

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 29 February 2020

192

192,596

(24,816)

(459)

167,513

Loss for the year

-

-

(32,228)

-

(32,228)

Fair value loss on investment

-

-

-

(346)

(346)

TOTAL COMPREHENSIVE EXPENSE FOR THE YEAR

-

-

(32,228)

(346)

(32,574)

Issue of shares

6

9,672

-

-

9,678

Share-based payment expense (net of exercise)

-

-

117

-

117

Reclass divestment

-

-

(805)

805

-

TOTAL INVESTMENTS BY AND DISTRIBUTIONS TO OWNERS

6

9,672

(688)

805

9,795

At 28 February 2021

198

202,268

(57,732)

0

144,734

 

The notes at the end of this announcement are an integral part of these financial statements.

 

 

 

Company Statement of Changes in Equity

Year ended 28 February 2021

 

 

Called up

share capital

£'000

Share

premium

account

£'000

(Accumulated

losses)/

Retained

earnings

£'000

Fair value

reserve

£'000

Total

equity

£'000

AT 1 MARCH 2019

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 EXPENSE FOR THE YEAR

-

-

351

3,704

4,055

Issue of shares

40

69,998

-

-

70,038

Less costs of share issues

-

(330)

-

-

(330)

Share-based payment expense (net of exercise)

-

-

125

-

125

Capital reduction

-

(35,000)

35,000

-

-

TOTAL INVESTMENTS BY AND DISTRIBUTIONS TO OWNERS

40

34,668

35,125

-

69,833

At 29 February 2020

192

192,596

21,194

(459)

213,523

Profit for the year

-

-

1,382

-

1,382

Fair value loss on investment

-

-

-

(346)

(346)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

-

-

1,382

(346)

1,036

Issue of shares

6

9,672

-

-

9,678

Reclass divestment

-

-

(805)

805

-

Share-based payment expense (net of exercise)

-

-

117

-

117

TOTAL INVESTMENTS BY AND DISTRIBUTIONS TO OWNERS

6

9,672

(688)

805

9,795

At 28 February 2021

198

202,268

21,888

-

224,354

 

The notes at the end of this announcement are an integral part of these financial statements.

 

 

Consolidated Statement of Cash Flows

Year ended 28 February 2021

 

 

 

Note

2021

£'000

2020

£'000

Cash flows from operating activities

 

 

 

Net cash used in operations

23

(29,427)

(34,077)

Income taxes received

 

263

31

Net cash used in operating activities

 

(29,164)

(34,046)

Cash flows from investing activities

 

 

 

Purchase of property, plant and equipment

 

(9,055)

(19,550)

Proceeds from sale of property, plant and equipment

 

1,132

-

Proceeds from the sale of investment

 

3,358

-

Net cash used in investing activities

 

(4,565)

(19,550)

Cash flows from financing activities

 

 

 

Net proceeds from issue of shares

 

9,678

69,708

Net proceeds /(repayments) from issue of loans

 

7,677

(15,349)

Lease payments

 

(15)

(72)

Interest paid

 

(1,275)

(2,123)

Net cash generated from financial activities

 

16,065

52,164

Net decrease in cash and cash equivalents

 

(17,664)

(1,432)

Cash and cash equivalents at the start of the financial year

 

19,157

20,589

Cash and cash equivalents at the end of the financial year

9

1,493

19,157

 

The notes at the end of this announcement are an integral part of these financial statements.

 

Notes to the Financial Statements

Year ended 28 February 2021

 

1. General information

Rutherford Health plc (hereinafter the 'Company', and together with its subsidiaries, the 'Group') is a public limited company incorporated and domiciled in the United Kingdom. The registered office of the Company is Suite 4 Penn House, 9-10 Broad Street, Hereford, HR4 9AP. The registered company number is 09420705. A list of the Company's subsidiaries is presented in Note 7.

 

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 accounting standards in conformity with the requirements of the Companies Act 2006. The "requirements of the Companies Act 2006" here means accounts being prepared in accordance with "international accounting standards" as defined in section 474(1) of that Act, as it applied immediately before Implementation Period ('IP') completion day (end of transition period), including where the Group also makes use of standards which have been adopted for use within the United Kingdom in accordance with regulation 1(5) of the International Accounting Standards and European Public Limited Liability Company (Amendment etc.) (EU Exit) Regulations 2019. The financial statements have been prepared on a going concern basis under the historical cost convention, unless otherwise stated.

 

The Company's individual financial statements meet the definition of a qualifying entity under FRS 100 'Application of Financial Reporting Requirements' issued by the Financial Reporting Council. As such the Company's financial statements have been prepared in accordance with FRS 101 'Reduced Disclosure Framework' ('FRS 101'). The financial statements apply the recognition, measurement and presentation requirements of international accounting standards in conformity with the requirements of the Companies Act 2006, but make amendments where necessary in order to comply with the Act and take advantage of the FRS 101 disclosure exemptions.

 

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 accordance with international accounting standards in conformity with the requirements of the Companies Act 2006, 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 financial statements apply the recognition, measurement and presentation requirements of international accounting standards in conformity with the requirements of the Companies Act 2006, but make amendments where necessary in order to comply with the Act and take advantage of the FRS 101 disclosure exemptions.

 

2.2 Going concern

The Group is funded through a combination of equity and borrowings which supported the building of its facilities and cashflow requirements during the growth phase of the business. Since the balance sheet date, the Group have generated further funds from an equity raise of £12.4m and a secured borrowing of £40m. Part of the proceeds from the secured borrowing was used to repay the current borrowing disclosed in note 12.

 

All four centres were operational in 2020/2021, however revenues are growing at a slower rate than initially anticipated. As a result, the Group expects to continue to be loss-making in the current financial year.

 

The Group has prepared cashflow forecasts that take account of the current capital expenditure plans 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 ongoing COVID-19 global pandemic. We have continued to see a slower growth rate in patient numbers due to COVID-19 and the sensitivity analysis assumes: continued slowdown in revenue growth across the centres, no reductions in overheads and forecast capital expenditure continues to plan.

 

A downside scenario is currently considered unlikely, not least because the current low rate of treatment of cancer in the UK does not represent a reduction in cancer in the population, but it is still plausible as it is difficult to predict the continuing impact of COVID-19 over the coming year. Under a downside scenario whereby there is a significant delay in the Group achieving its planned revenue growth, it is likely that additional funding would be required. The board regularly reviews its financing options and discussions with potential funders and investors indicate that should the Group require further funding, this would be available, however at this point is not committed. As such a downside scenario detailed above indicates the existence of a material uncertainty which may cast significant doubt upon the Group's ability to continue as a going concern. The Consolidated Financial Statements do not include the adjustments that would result if the Group were unable to continue as a going concern.

 

2.3 New accounting standards and interpretations

New standards, amendments and interpretations

No new standards, amendments or interpretations, effective for the first time for the financial year beginning on or after 1 March 2020 have had a material impact on the Group or Company.

 

New standards and interpretations not yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory for 28 February 2021 reporting periods and have not been early adopted by the group. These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

 

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';

·    Paragraph 30 and 31 of IAS 8 'Accounting policies, changes 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.

·    The requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect of : (a) paragraph 73 (e) of IAS 16 Property, Plant and Equipment

 

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 28 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's revenue is primarily derived from fees from patients receiving treatments at one of the Group's cancer treatment centres. Revenue for each treatment is measured at the fair value of the consideration received or receivable and represents the invoiced value for the treatment received net of sales taxes, rebates and discounts.

 

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. Each fraction or cycle is treated as a performance obligation and revenue is recognised when a fraction or cycle has completed and collectability of the related receivables is reasonably assured.

 

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 property                25 years

Plant and machinery             10 years - 25 years

IT equipment                        3 years

Fixtures & fittings                3 years

Motor vehicles                     3 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 12 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 prepayment for liquidity services and amortised over the period of the facility to which it relates.

 

2.16 Leases

The Group and Company lease various office premises and land. Rental contracts are typically made for fixed periods of three to five years for office premises and 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.

 

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 12 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 tax 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 Rutherford Health plc's Company Share Option Plan.

 

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 £100,000 and is expressed in a currency other than Sterling, or in which a domestic currency payment amount is calculated using an exchange rate which has not been fixed and agreed in advance must be approved in advance by the Finance Director.

 

Currency hedging strategy for specific large projects or acquisitions in excess of £5m is agreed in advance by the Board.

 

As at 28 February 2021, the Group held outstanding liabilities of $605,349 and €2,158,420 (2020: $6,824 and €8,408).

 

(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 UK.

 

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 NHS.

 

Private Medical Insurers and the NHS are deemed to be of low credit risk. There are relatively few Private Medical Insurers in the market, and have sufficient credit ratings to support credit terms. The NHS is a state-backed institution. Credit terms for Private Medical Insurers and the NHS range from 30 to 60 days.

 

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 UK bank/building society deposits, denominated in Pounds Sterling. Furthermore, funds will only be invested with Prudential Regulatory Authority regulated UK financial institutions. In addition, only banks or building societies obtaining a satisfactory rating - at least a B+ grade (high quality/upper medium grade/strong) - with Standard and Poors, Fitch and Moody's will be selected.

 

(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:

 

At 28 February 2021

Less than

1 year

£'000

Between

1 and 2 years

£'000

Between

2 and 5 years

£'000

Over

5 years

£'000

Trade payables and other payables

9,973

-

-

-

Borrowings

18,526

-

-

-

Lease liabilities

59

64

131

437

 

28,558

64

131

437

 

 

At 28 February 2020

Less than

1 year

£'000

Between

1 and 2 years

£'000

Between

2 and 5 years

£'000

Over

5 years

£'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

 

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 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) Deferred taxation assets

As disclosed in Note 14, the Group has recognised deferred taxation assets of £10,342,000 (2020: £10,342,000), and unrecognised deferred taxation assets of £7,350,705 (2020: £355,890) arising predominantly from unutilised trading losses.

 

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 over a reasonable period of time.

 

(b) Carrying value of property, plant and equipment

Property, Plant and Equipment is capitalised at acquisition cost and depreciated over its useful economic life. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See Note 2.7 for the economic useful lives for each class of assets. Impairment triggers are assessed annually by the Directors with estimates being made to determine the fair value of property, plant and equipment at the balance sheet date. Fair value for this assessment is considered to be the higher of value in use (determined by a discounted cash flow model) or selling price less cost of disposal (determined by a market valuation). No triggers were identified at 28 February 2021.

 

5. Property, plant and equipment

 

Group

Freehold

property

£'000

Plant &

machinery

£'000

IT

equipment

£'000

Fixtures &

fittings

£'000

Motor

vehicles

£'000

Right-of-use

assets

£'000

Assets

under

construction

£'000

Total

£'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

Disposals

-

(501)

-

-

(11)

(168)

-

(680)

Transfer in/(out)

-

37,572

-

-

-

-

(37,572)

-

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

 

 

 

Group

Freehold

property

£'000

Plant &

machinery

£'000

IT

equipment

£'000

Fixtures &

fittings

£'000

Motor

vehicles

£'000

Right-of-use

assets

£'000

Assets

under

construction

£'000

Total

£'000

Cost

 

 

 

 

 

 

 

 

At 1 March 2020

4,271

107,613

2,366

890

-

766

44,864

160,770

Additions

-

3,986

754

82

-

136

4,097

9,055

Transfer in/(out)

-

20,380

-

-

-

-

(20,380)

-

Disposals

-

(1,081)

(29)

-

-

(143)

-

(1,253)

At 28 February 2021

4,271

130,898

3,091

972

-

759

28,581

168,572

Accumulated depreciation

 

 

 

 

 

 

 

 

At 1 March 2020

338

7,848

1,588

481

-

198

-

10,453

Charge for the year

147

6,073

555

215

-

269

-

7,259

On disposal

-

(201)

(2)

-

-

(97)

-

(300)

At 28 February 2021

485

13,720

2,141

696

-

370

-

17,412

Net book value

 

 

 

 

 

 

 

 

At 28 February 2021

3,786

117,178

950

276

-

389

28,581

151,160

At 29 February 2020

3,933

99,765

778

409

-

568

44,864

150,317

 

Company

IT

equipment

£'000

Fixtures &

fittings

£'000

Right-of-use

assets

£'000

Total

£'000

Cost

 

 

 

 

At 1 March 2020

897

22

231

1,150

Additions

294

-

136

430

Disposals

(29)

-

(143)

(172)

At 28 February 2021

1,162

22

224

1,408

Accumulated depreciation

 

 

 

 

At 1 March 2020

770

16

70

856

Charge for the year

97

3

91

191

On disposal

(2)

-

(98)

(100)

At 28 February 2021

865

19

63

947

Net book value

 

 

 

 

At 28 February 2021

297

3

161

461

At 29 February 2020

127

6

161

294

 

 

6. Intangible assets

Group and Company

Intellectual property

£'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

 

 

Group and Company

Intellectual property

£'000

Cost

 

At 1 March 2020

721

At 28 February 2021

721

Amortisation

 

At 1 March 2020

421

Charge for the year

240

At 28 February 2021

661

Carrying amount

 

At 28 February 2021

60

At 29 February 2020

300

 

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

 

Group

Other

investments

other than

loans

£'000

Fair value

 

At 1 March 2019

-

 

 

Fair value gain on holding in PPIHI LLC

3,704

At 29 February 2020

3,704

Carrying amount

 

At 29 February 2020

3,704

 

Group

Other

investments

other than

loans

£'000

Fair value

 

At 1 March 2020

3,704

 

 

Divestment of holding in PPIHI LLC

(3,358)

Fair value adjustment upon divestment

(346)

At 28 February 2021

-

Carrying amount

 

At 28 February 2021

-

At 29 February 2020

3,704

 

 

Company

Shares in

Group

undertakings

£'000

 Other investments

£'000

Total

£'000

Cost/Fair value

 

 

 

At 1 March 2019

137

-

137

Additions

94

-

94

Fair value gains on investment

-

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

 

 

Company

Shares in

Group

undertakings

£'000

 Other investments

other than

loans

£'000

Total

£'000

Cost/Fair value

 

 

 

At 1 March 2020

231

3,704

3,935

Additions

85

-

85

Divestment of holding in PPIHILLC

-

(3,358)

(3,358)

Fair value adjustment upon divestment

-

(346)

(346)

At 28 February 2021

316

-

316

Carrying amount

 

 

 

At 28 February 2021

316

-

316

At 29 February 2020

231

3,704

3,935

 

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:

 

Name of subsidiary

Class of share

Percentage of

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

Rutherford Estates Management Limited

Ordinary

100

Property management

Rutherford Investments Canada Inc.

Ordinary

100

Investments

 

All subsidiaries are directly held by the Company. The subsidiaries' registered offices are Suite 4 Penn House, 9-10 Broad Street, Hereford, HR4 9AP.

 

Other investments - Group and Company

Other investments are classified as financial assets at FVOCI.

 

Other investments comprise of Nil (2020: £3,704,000) following the sale of the holding in Proton Partners International Healthcare Investments LLC.

 

8. Trade and other receivables

 

Group

Company

 

2021

£'000

2020

£'000

2021

£'000

2020

£'000

Trade debtors

3,823

591

-

-

Amounts due from subsidiary companies

-

-

236,972

195,815

Prepayments and accrued income

5,389

3,911

494

451

Other debtors

242

3,232

3,218

3,171

VAT recoverable

11

1,979

-

-

Total trade and other receivables

9,465

9,713

240,684

199,437

 

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.

 

There were no provisions for impairment made during the year and there is no deemed impact of applying Expanded Credit Loss ('ECL') methodology under IFRS 9 as in the prior year.

 

9. Cash and cash equivalents

 

 

Group

Company

 

2021

£'000

2020

£'000

2021

£'000

2020

£'000

Cash at bank and in hand

1,493

19,157

1,371

19,151

Net cash and cash equivalents

1,493

19,157

1,371

19,151

 

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

shares

Growth

shares

Deferred

shares

Ordinary

shares

Growth

shares

Deferred

shares

Total

At 1 March 2019

152,701,897

-

-

152

-

-

152

Issued in year

39,794,600

-

-

40

-

-

40

At 29 February 2020

192,496,497

-

-

192

-

-

192

Issued in year

5,515,204

-

-

6

-

-

6

At 28 February 2021

198,011,701

-

-

198

-

-

198

                   

 

On 11 March 2020, the Company allotted 5,476,742 £0.001 Ordinary shares for £1.76 each.

 

On 27 May 2020 the Company issued 38,462 £0.001 Ordinary shares for £1.00.

 

In all instances of issues of Ordinary shares, consideration was satisfied by cash.

 

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

 

2021

£'000

2020

£'000

2021

£'000

2020

£'000

Current

 

 

 

 

Loans

17,582

9,880

18,431

9,880

Lease Liabilities

59

103

43

80

Non-current

 

 

 

 

Lease liabilities

632

603

118

89

 

18,273

10,586

18,592

10,049

 

Loans

Current loans consist of one loan agreement (2020: one) attracting fixed interest of 6.25% with a maturity profile as follows:

 

 

Group

Company

 

2021

£'000

2020

£'000

2021

£'000

2020

£'000

Repayable in:

 

 

 

 

Less than one year

18,526

249

18,526

498

One to two years

-

1,325

-

2,651

Two to five years

-

8,426

-

6,851

More than five years

-

-

-

-

Total repayable

18,526

10,000

18,526

10,000

Less: unamortised debt issue costs

(944)

(120)

(95)

(120)

Carrying value

17,582

9,880

18,431

9,880

 

The carrying value of loans approximates to their fair value.

 

The loan was secured by means of composite debenture, fixed and floating charges over all property and assets of the Company and Group. This loan became repayable on demand due to a covenant break in February 2021 and was fully repaid in March 2021.

 

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

 

2021

£'000

2020

£'000

2021

£'000

2020

£'000

Repayable in:

 

 

 

 

Less than one year

59

103

43

80

One to two years

64

44

46

28

Two to five years

131

117

71

61

More than five years

437

442

-

-

Total repayable

691

706

160

169

Carrying value

691

706

160

169

 

Included within property, plant and equipment are right-of-use assets with a net book value as follows:

 

 

Group

Company

 

2021

£'000

2020

£'000

2021

£'000

2020

£'000

Freehold property

389

568

161

161

 

Additions to the Group's right-of-use assets were £136,000 (2020: £45,000).

 

The depreciation charges recognised in profit and loss on right-of-use assets are as follows:

 

 

Group

Company

 

2021

£'000

2020

£'000

2021

£'000

2020

£'000

Freehold property

269

141

91

68

 

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 £15,000 (2020: £72,000).

 

13. Trade and other payables

 

 

Group

Company

 

2021

£'000

2020

£'000

2021

£'000

2020

£'000

Trade payables

2,886

13,123

789

402

Accrued expenses

6,260

1,987

699

408

VAT payable

-

-

-

24

Other creditors

827

834

212

465

 

9,973

15,944

1,700

1,299

 

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

 

Accelerated

capital

allowances

£'000

Short-term

temporary

differences

£'000

Pension and

post-

retirement

benefits

£'000

Tax losses

carried

forward and

other

deductions

£'000

Total

£'000

At 1 March 2019

511

48

2

5,480

6,041

Current year credit to income statement

456

68

-

3,777

4,301

At 29 February 2020

967

116

2

9,257

10,342

Current year (charge)/credit to income statement

-

-

-

-

-

At 28 February 2021

967

116

2

9,257

10,342

 

The Group has unrecognised deferred tax assets of £7,350,705 (2020: £355,890).

 

The Group expects to utilise the assets more than 12 months after the balance sheet date.

 

Company

 

Accelerated

capital

allowances

£'000

Short-term

temporary

differences

£'000

Pension and

post-

retirement

benefits

£'000

Tax losses

carried

forward and

other

deductions

£'000

Total

£'000

At 1 March 2019

146

-

4

1,635

1,785

Current year (charge) to income statement

-

-

-

(31)

(31)

At 29 February 2020

146

-

4

1,604

1,754

Current year (charge)/credit to income statement

-

-

-

-

-

At 28 February 2021

146

-

4

1,604

1,754

 

 

Deferred tax assets

 

 

Group

Company

 

2021

£'000

2020

£'000

2021

£'000

2020

£'000

To be recovered after more than 12 months

10,342

10,342

1,754

1,754

 

Deferred tax is calculated at 19%, the rate substantially enacted at the balance sheet date. The Finance Act 2021 increased the UK rate of Corporation Tax to 25% from 1 April 2023. The 25% rate increases the Group's recognised deferred tax asset to £13.6 million and its unrecognised deferred tax asset to "9.6 million, and the Company's recognised deferred tax asset to £2.3 million and its unrecognised deferred tax asset to £0.1 million".

 

15. Revenue

The Group has recognised the following amounts relating to revenue in the Consolidated Statement of Total Comprehensive Income:

 

 

2021

£'000

2020

£'000

Revenue from cancer treatment

7,269

5,606

 

All revenues arose in the United Kingdom and from the principal activity of the Group.

 

16. Loss before taxation

Loss before taxation is stated after charging/(crediting):

 

 

2021

£'000

2020

£'000

Depreciation charges:

 

 

- Owned assets

6,990

5,638

- Right-of-use assets

269

141

Operating lease charges:

 

 

- Expense relating to low-value assets not on short-term leases

12

12

Foreign exchange gains

525

193

Employee benefit costs (see Note 18)

10,997

10,115

 

17. Auditors' remuneration

During the period the following services were obtained from the Company's auditor:

 

 

2021

£'000

2020

£'000

Fees payable for the audit of the financial statements of the Company

42

32

Fees payable for the audit of the financial statements of the subsidiaries

23

14

Other services

11

3

 

76

49

 

18. Employee benefit expense

 

 

Group

Company

 

2021

£'000

2020

£'000

2021

£'000

2020

£'000

Wages and salaries

9,009

8,405

3,030

3,019

Social security costs

934

894

3,217

327

Other pension costs - defined contribution

952

825

344

307

Share-based payment

117

125

117

125

 

11,012

10,249

6,708

3,778

Less: capitalised labour costs

(15)

(134)

-

-

Employee benefit expense

10,997

10,115

6,708

3,794

 

The average monthly number of persons (including Executive Directors) employed during the year was:

 

 

Group

Company

 

2021

No.

2020

No.

2021

No.

2020

No.

Managerial

50

47

17

19

Clerical

173

123

35

28

 

223

170

52

47

 

The number of employees in the Group at 28 February 2021 was 215 (2020: 183).

 

19. Directors' remuneration

The Directors' aggregate remuneration in respect of qualifying services was:

 

 

2021

£'000

2020

£'000

Remuneration

538

586

Company contributions to defined contribution pension plans

27

32

 

565

618

 

Retirement benefits accrued to four (2020: four) Directors.

 

The aggregate emoluments for the highest paid Director were £203,908 (2020: £183,655) and the pension contributions for that Director were £22,000 (2020: £19,800).

 

20. Share-based payment benefits

Set out below is a summary of options granted under the plan:

 

 

2020/2021

2019/2020

 

Average

exercise price

of options

£

Number of

options

Average

exercise price

of options

£

Number of

options

As at 1 March

1.51

4,551,326

1.2

3,353,038

Granted

2.39

818,136

2.39

1,198,288

As at 29 February/28 February

1.64

5,369,462

1.51

4,551,326

 

No options vested in the year ended 28 February 2021 (2020: 1,496,007).

 

No options expired during the year ended 28 February 2021 (2020: Nil). 406,306 options lapsed during the year due to leavers (2020: 606,620).

 

Share options at the end of the year have the following expiry date and exercise prices:

 

Grant date

Expiry date

Exercise

price

£

2021

Number

2020

Number

6 March 2017

5 March 2027

1.0

1,474,529

1,568,437

1 September 2017

31 August 2027

1.15

143,345

154,139

24 April 2018

23 April 2028

1.5

367,730

451,383

21 May 2018

20 May 2028

1.5

249,327

249,327

1 June 2018

31 May 2028

1.5

38,858

38,858

24 September 2018

23 September 2028

2.0

119,943

127,931

14 June 2019

13 June 2029

2.39

954,939

1,132,747

20 July 2019

19 July 2029

2.39

18,000

19,500

31 August 2020

30 August 2030

2.39

787,481

-

 

2,393,732 of the outstanding options were exercisable as at 28 February 2021 (2020: 2,590,075).

 

The weighted average remaining contractual life of options at 28 February 2021 was seven years (2020: eight years).

 

The assessed fair value at grant date of options granted during the year ended 28 February 2021 was 22.96 pence per option (2020: 22.96 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 28 February 2021 included:

 

 

Date of grant

 

31 Aug

2020

Expected vesting period (years)

3

Share value at date of grant (£)

1.76

Volatility (%)

33.3

Risk-free interest rate (%)

0.75

21. Finance expense

 

 

2021

£'000

2020

£'000

Interest on bank loans

1,217

2,063

Amortisation of debt fees

25

1,492

Lease liabilities

58

60

Total finance expense

1,300

3,615

 

22. Income tax credit

 

 

2021

£'000

2020

£'000

Current tax:

 

 

UK corporation tax

(227)

(246)

Adjustment in respect of prior years

14

(295)

Total current tax

(213)

(541)

Deferred tax:

 

 

Impact of changes in tax law and rates

-

-

Origination and reversal of temporary differences

-

(4,378)

Adjustment in respect of prior years

-

77

Total deferred tax

-

(4,301)

Total tax credit

(213)

(4,842)

 

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:

 

2021

£'000

2021

£'000

Loss before tax

(32,441)

(29,276)

Notional credit at UK corporation tax rate of 19% (2020: 19.%)

(6,163)

(5,562)

Tax effects of:

 

 

- Expenses not deductible for tax purposes

566

64

- Adjustments due to changes in tax rates

(1,254)

537

- Other differences

(3)

355

- R&D expenditure

(241)

(168)

- Adjustment in respect of prior years

(94)

(218)

- Deferred tax asset not recognised/(recognition of previously unrecognised)

6,976

150

Tax credit for the period

(213)

(4,842)

 

Factors that may affect future tax charges

Changes to the UK Corporation tax rate were announced as part of the March 2021 budget. These included increases to the main rate from 19% to 25% from 1 April 2023. This change was not substantially enacted at the balance sheet date so deferred taxes have been measured used the 19% rate and reflected in these Financial statements.

 

23. Cash used in operations

 

2021

£'000

2020

£'000

Loss before income tax

(32,441)

(29,276)

Adjustments for:

 

 

- Depreciation and amortisation

7,500

6,020

- Finance costs

1,300

3,615

- (Profit)/Loss on disposal of fixed assets

(180)

468

- Non-cash employee benefits expense - share-based payments

117

125

Changes in working capital

 

 

- Trade and other receivables

248

(2,798)

- Trade and other payables

(5,971)

(12,231)

Cash used in operations

(29,427)

(34,077)

 

24. Reconciliation of liabilities arising from financing activities

 

At

1 March

2019

£'000

Cash

flows

£'000

Loan fees

(Non-cash)

£'000

At

29 February

2020

£'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

 

 

 

At

1 March

2020

£'000

Cash

flows

£'000

Loan fees

(Non-cash)

£'000

At

28 February

2021

£'000

Current

 

 

 

 

Loans

9,880

7,677

25

17,582

Lease Liabilities

103

(44)

-

59

Non-current

 

 

 

 

Lease liabilities

603

29

-

632

Total liabilities arising from financing activities

10,586

7,662

25

18,273

 

 

25. Financial instruments by category

Group

At 28 February 2020

At amortised cost

£'000

FVOCI

£'000

Total

£'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 28 February 2021

At amortised cost

£'000

FVOCI

£'000

Total

£'000

Assets as per balance sheet

 

 

 

Trade and other receivables excluding prepayments

4,076

-

4,076

Investments

-

-

-

Cash and cash equivalents

1,493

-

1,493

 

5,569

-

5,569

 

At 28 February 2020

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

 

At 28 February 2021

At amortised cost

£'000

Liabilities as per balance sheet

 

Borrowings

17,582

Lease liabilities

691

Trade and other payables excluding non-financial liabilities

9,973

 

28,246

 

Company

At 28 February 2020

At amortised cost

£'000

FVOCI

£'000

Total

£'000

Assets as per balance sheet

 

 

 

Trade and other receivables excluding prepayments

198,986

-

198,986

Investments

231

3,704

3,935

Cash and cash equivalents

19,151

-

19,151

 

218,368

-

222,072

 

At 28 February 2021

At amortised cost

£'000

FVOCI

£'000

Total

£'000

Assets as per balance sheet

 

 

 

Trade and other receivables excluding prepayments

240,189

-

240,189

Investments

316

-

316

Cash and cash equivalents

1,371

-

1,371

 

241,876

-

241,876

 

At 28 February 2020

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

 

At 28 February 2021

At amortised cost

£'000

Liabilities as per balance sheet

 

Borrowings

18,432

Lease liabilities

160

Trade and other payables excluding non-financial liabilities

1,700

 

20,292

 

Credit Quality of Financial Assets

The Group is exposed to credit risk from its operating activities (primarily for trade receivables and other receivables) and from its financing activities, including deposits with banks. The Group's maximum exposure to credit risk, due to the failure of counterparties to perform their obligations as at 28 February 2021, and 28 February 2020, in relation to each class of recognized financial assets, is the carrying amount of those assets as indicated in the balance sheets.

 

Trade Receivables

The Group has three main classes of Payor - Self Pay Patients, Private Medical Insurers and the NHS. Private Medical Insurers and the NHS are deemed to be of low credit risk. There are relatively few Private Medical Insurers in the market, and have sufficient credit ratings to support credit terms. The NHS is a state backed institution. Credit terms for Private Medical Insurers and the NHS range from 30 to 60 days. 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.

 

Cash and Cash Equivalents

The Group will only invest surplus funds in UK bank/building society deposits, denominated in Pounds Sterling. All cash is held in Barclays Bank PLC.

 

26. Capital commitments

The Company had £37,765,906 (2020: £43,684,077) 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 £75,000 (2020: £66,000) paid to the related employees.

 

Mike Moran had a small shareholding in Proton Partners International Healthcare Investments LLC, and received $44,131 in payment for these upon divestment.

 

28. Ultimate controlling party

There is no ultimate controlling party.

 

29. Loss per share

 

2021

2020

Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share

197,777,462

171,885,768

Total comprehensive expense for the period

£(32,574,000)

£(20,761,000)

Basic and diluted loss per share (pence)

16.5

12.1

 

30. Post balance sheet events

On 23 March 2021, the Group completed an Infrastructure transaction with Equitix Investment Management Limited for £40,000,000. £18,432,000 of the proceeds were used to repay the outstanding loan facility with TP Leasing Limited.

 

In September 2021, a further £12.35m of equity was raised from a new investor. This investment will be used for working capital purposes.

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