One Health Group reports strong increases in revenue, profitability and cash

One Health Group plc (AQSE: OHGR), a provider of NHS-funded medical procedures, has announced its unaudited interim results for the six months ended 30 September 2024.

Financial Highlights

The Group performed well in the first half with strong increases in revenue, profitability and cash, ahead of previous management expectations, representing significant increases on H1 24. The interim dividend has been increased by 2% to 2.07p per share. Highlights below reflect first time reporting under IFRS and consolidation of the Employee Benefit Trust (“EBT”).

*Restated under IFRS with consolidation of EBT and a legacy property valuation adjustment.

Declaration of Interim Dividend

One Health Group plc is pleased to announce that the Board of Directors has declared an interim dividend at the rate of 2.07 pence per share, in line with the Board’s stated dividend policy, to be paid on 24 January 2025 to shareholders on the register as at close of business on 3 January 2025.  The ex-dividend date will be 2 January 2025.

Operational Highlights

·    Received 7,857 new patient referrals (H1 24: 6,091) an increase of 29% and a new record

·    Delivered 19,674 consultations (H1 24: 15,239) an increase of 29%

·    Surgical procedures carried out on 3,427 NHS patients through 9 independent hospitals (H1 24: 2,997) a 14% increase

·    Onboarded 7 new clinicians to the business to support growth

·    Outreach clinics expanded to 37 (H1 24: 33) a 12% increase

·    NHS Tariff price uplift following junior doctors’ settlement to benefit H2 revenue and margin

·    Government change has had a positive effect including active promotion of ‘Patient Choice’ and an increased use of independent sector support cited as one of the key actions to reduce NHS waiting lists

·    Established 5-year contracts with our largest NHS commissioners, moving away from the historic annual renewal process

·    Adoption of International Financial Reporting Standards (IFRS) in advance of a potential move to AIM in the second half of the year (Note 2.4)

Post-period updates

·      Additional surgical capacity being established with two new independent hospitals in new geographical areas

·      Full planning on the planned new build surgical hub being submitted in H2 which is expected to deliver significant additional operating capacity in 2026 and has the potential to significantly increase the profitability of the Group

·      Further surgical hubs are being actively pursued to increase the Group’s surgical capacity to help to satisfy the demand from the NHS

·      Continued review of the Group’s IT systems and control environment ahead of a potential AIM Listing in 2025 (Note 11)

·      NHS outsourced activity is historically weighted towards the second half of the year as commissioners look to spend budget allocations before year end

·      Demand continuing from NHS Trust Waiting List transfers representing 8% of H1 25 revenue, with an uplift expected in H2

IFRS Conversion

Previously, the Group had reported its results under United Kingdom Generally Accepted Accounting Principles (UK GAAP). In consideration of a potential move to AIM, the interim results for the six months ended 30 September 2024 (and comparatives for H1 2023), are presented under IFRS. The key presentational changes and accounting policy adjustments that arise from the first-time adoption of IFRS by the Group are set out in note 2 of this announcement.

On adoption of IFRS, the EBT, which owns a significant portion of the Group’s ordinary share capital and which was established for the benefit of the employees of the Group and is considered to be controlled by the Group, has been consolidated into the Group results for the first time.

The Group has therefore recognised a prior year restatement to consolidate the EBT, which has reduced the previously reported profits of the Group, removed a receivable balance previously recognised by the Group, and introduced a new component of equity, termed as an own shares reserve.

Review of the period

Operationally, 2024 has seen a further increase in the national NHS waiting list and industrial action causing disruption to NHS patients care caused by cancelations. As a result, demand for support from One Heath and other independent sector providers increased during the first half of the year. During the same period, we saw continued demand for waiting list transfers and direct referrals from NHS Trusts. The Group has onboarded seven new clinicians to the Group into new geographical areas and continues to expand surgical capacity in existing areas, meaning One Health is well placed to support the NHS in the second half of the year, traditionally our busiest period. The Group continues to work closely with more NHS trusts to support the reduction of waiting lists for elective care.

From a financial perspective One Health has performed very well in the first half of the year. As reported in the trading update on 28 October 2024, financial performance was ahead of previous management expectations and as we enter our busiest period of the year.

Cash at the end of September 2023 of £4.9m supporting ongoing investment in growth and our progressive dividend policy. The Board is therefore declaring an increased interim dividend of 2.07p per Ordinary Share (H1 22/23: 2.03p per share) to be paid on 24 January 2025 to shareholders on the register as at close of business on 3 January 2025

Adam Binns, Chief Executive Officer, said:

“One Health has performed strongly in the first six months of the financial year, significantly ahead of last year with turnover up 22% to £13.3m, underlying EBITDA up 40% to nearly £1m and new patient referrals up 29% at 7,857.

“These referrals include a continuation of NHS patients transferring to One Health from local Trusts to help them reduce their internal waiting lists. The Trust transfer activity is in addition to patients received through the traditional route by choosing to be referred to One Health through ‘Patient Choice’ after visiting their GP.

“We are very pleased with performance in the first half of the year and expect to achieve our year end forecasts.”

Outlook

Since the period end, record high levels of NHS patient referrals to One Health have continued. In addition, and as anticipated, several NHS Trusts have also approached One Health to establish additional capacity available over the second half of H2 25 and H1 2026 to support their demanding internal year-end waiting list targets. We have also benefitted directly from the settlement of the junior doctors’ industrial action which resulted in a retrospective increase in the NHS Tariff (the payment mechanism used for outsourced NHS activity) back to April 2024. The 2025 full year revenue and margin benefit is expected to be c£750k and c£275k respectively. Since the period end, good progress has been made in all areas including onboarding additional consultants and commencing initial commercial discussions with four new independent hospitals with a view to placing work in Q4 and FY 26. We also anticipate submitting full planning for the first surgical hub early in Q4. Taking these factors into account we approach FY 25 with good confidence that we will be in line with current market expectations on a revenue and underlying EBITDA basis.