Totally plc (AIM: TLY ), 1H20 unaudited results for the six months ended 30 September 2020 delivered double digit revenue growth, with resilient earnings and positive cash flow in the period under review with the Board recommending a interim dividend of 0.25p 

Financial highlights 

Group revenue increased 10% to £54.1m (1H19: £49.2m) with gross profit advancing 5% to £10.2m (1H19: £9.8m) on a sustained gross margin of approximately 19% from the sales mix, which included: 

  • Urgent Care  - revenue was maintained overall, with additional services relating to the COVID response support provided to the NHS offsetting the reduction in face to face patient income 
  • The Planned Care division - suffered more notably with a c.50% revenue reduction, in line with management forecasts produced at the outset of the pandemic 
  • Insourcing - revenue for the first half of the year was at c.80% of the 2H19 performance of FY19 

Adjusted EBITDA of £2.3 million (1H19: £2.1m before exceptional items of £0.8m) illustrated the resilient operating model despite the disruption caused by COVID-19. 

Importantly for long-term investors, operating cash inflow of £5.0m boosted the already strong balance sheet with cash at bank as at 30 September of £12.3m (FY19: £8.9m) enabled the Board to propose an interim dividend of 0.25p per share to be paid in February 2021. 

A final FY19 dividend of 0.25p per share amounting to a dividend of £0.46m (1H19: £0.45m), in relation to the year ended 31 March 2020, was paid to shareholders in October 2020.  

Chairman of Totally, Bob Holt, commented; “I am pleased to report that the Group has maintained a robust financial position, showing resilient growth in revenue, earnings and cash flow in the period under review.” 

Operating Highlights 

Urgent Care  

Vocare Limited (“Vocare”) and Greenbrook Healthcare Limited (“Greenbrook”), which form the Urgent Care Division, was awarded significant extensions to existing contracts across England, worth a total of c. £27 million. 

This included further innovation of the NHS 111 service delivery in response to the unprecedented rapid rise in demand and subsequent increase in capacity of the service almost overnight as a direct result of COVID-19. 

Deployment of clinical resources into emergency departments to assist patient flow and protect the service through front door streaming of symptomatic patients with support NHS to respond proactively throughout the pandemic.  

Planned Care 

Planned Care Services were negatively impacted by the pandemic as many elective care services were paused across the UK during the first lockdown. 

However, waiting lists for these services continue to grow and management began to remobilise services during August 2020 with services currently continuing throughout the second national lockdown. 

In particular, the Company mobilised the new First Contact Physiotherapy services in Hampshire and was awarded a framework contract to deliver Occupational Health Services for Bedfordshire Fire and Rescue Services – both to be provided following new COVID safe guidelines. 

Insourcing  

Totally Healthcare was initially negatively impacted during the period as many elective care services were paused, particularly in the Republic of Ireland, and across the UK as part of the wider changes made in order to respond to the pandemic. 

However, normal services were resumed in the Republic of Ireland during June 2020 with Northern Ireland remaining largely unaffected as elective care services continue across the UK. 

As of August, all services remain poised to operate at more recent activity levels, depending on local restrictions, with healthy order books ready to be delivered as and when hospitals and NHS Trusts restart elective care.  

Bob added “Although Government-enforced restrictions have meant that our Planned Care and Insourcing divisions have not been operating at full capacity, our Urgent Care division was quick to respond to the considerable increase in demand and changes to clinical pathways due to COVID-19 management and has performed strongly as a result.” 

Outlook 

Urgent Care will no doubt continue to see demand increase for some services, whilst planned and elective care services, paused during the pandemic, continue to see waiting lists increase. 

This building latent demand for the various services offered by the Group, at different stages of the healthcare demand cycle, has provided the Board with enough confidence on the performance of the business, over the medium to langer-term, to propose a interim dividend of 0.25p, equivalent to the FY dividend back in March. 

Wendy Lawrence, CEO of Totally said “We continue to stand shoulder-to-shoulder with and fully support the NHS and other healthcare providers across the UK in the fight against COVID-19.  

The pandemic has affected each of the Group’s divisions very differently; two of our divisions ceased delivering the majority of services for a period of time during the first lockdown, whilst Urgent Care faced, and continues to face, unprecedented demands for services.” 

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

At the time of writing we continue to see increases in demand for some services as a direct result of COVID-19 and expect this to increase during the second National lockdown.” 

Shares in TLY have surged since the outbreak of COVID-19, from lows of 9.85p in April to close at 17.13p prior to 1H20 results. 

3 Reasons to Follow Totally Plc 

Totally is a leading healthcare service provider in the UK and Ireland, working in partnership with the NHS and other providers to deliver healthcare services through its divisions of Urgent Care, Planned Care and Insourcing. 

Unique Market Position 

Totally has established itself as an essential component of the provision of healthcare in Ireland the UK. Its Urgent Care, Planned Care and Insourcing services have all secured significant contracts across its target markets and now class themselves as key partners to the NHS. 

Resilient Operating Model 

Urgent Care, Planned Care and Insourcing services all operate in complementary market segments at different parts of the healthcare cycle. This set of results clearly demonstrates the resilient operating model of the Group with increasing revenue, enviable service-led margins and strong operating cashflow to support a progressive dividend policy for shareholders. 

Fragmented Industry plays to M&A Strategy 

Totally is committed to pursuing a progressive buy-and-build consolidation strategy within the fragmented healthcare services industry. To date the Company has completed a number of acquisitions in the space and continues to evaluate attractive opportunities that its disruptive service model offers, to generate value to shareholders.