RNS Number:2568E
Global Health Partner PLC
21 September 2007
Global Health Partner PLC announces interim results for the six months ended
30 June 2007
Global Health Partner PLC (London AIM: GHP) (the "Company" or "GHP"), the
provider of specialist healthcare services, reports its unaudited interim
results for the six month period ended 30 June 2007.
Revenue from operations was #10.2 million and operating loss was #0.4 million.
Net loss before taxation for the period amounted to #0.4 million (2006- #0.2
million) and loss per share was 1.0 pence (2006- 2.7 pence).
The financial key performance indicators are (for the period):
* Revenue from operations - #10.2 million
* Operating results before central costs, #1.1 million, as a percentage
of revenues - 11 %
* Loss before taxation - #(0.4) million
* Borrowings as a percentage of total assets - 26 %
The operating loss for the period of #(0.4) million is stated after central
costs of #(1.5) million which relate to those costs incurred in maintaining the
group central management team. This team oversees the current business and is
also responsible for business development activity to lead growth. Finance
income of # 0.4 million, mainly interest on cash deposits, is offset by interest
expense of # 0.4 million, principally arising on external acquisition financing.
In addition, foreign currency translation also impacted, due to the decline in
the Swedish kronor during the period on balances brought forward in respect of
planned acquisitions, resulting in a foreign exchange loss of #(0.05) million.
This resulted in an overall loss before taxation of #(0.4) million.
At the end of the period as outlined above, the Company has strengthened its
balance sheet and retained significant cash resources, #22.0 million. The
consolidated net cash flow used in operating activities was # (0.4) million for
the period.
Consolidated net assets were #35.2 million (2006- #22.8 million), including
#24.5 million (2006- #22.6million) of goodwill. Total cash balances increased to
#22.0 million (2006- #12.6 million), principally as a result of the February
2007 #12 million share placing. External acquisition finance borrowings, debt
due to minority shareholders and finance leases, principally established against
the cash flows within the operations, were #13.6 million (2006-#13.9 million),
including #2.2 million (2006- #2.1million) of convertible debt.
Chairman and CEO, Per Batelson said:
"We are pleased with the key development steps we have taken in this our first
full six month period to expand our core service line activities in Sweden both
by acquisition and roll out.
The acquisition of Obesity Stockholm establishes a leading presence within an
underserved and fast growing treatment specialty, while the acquisitions of Leif
Sward Ortopedi (IFK-kliniken) and Stockholms Specialistvard (SSV) bring further
leading specialist orthopaedic clinicians into partnership with GHP. We have
also significantly expanded our market presence in Gothenburg and Stockholm. We
are using our Gothenburg Medical Center (GMC) facilities both for the joint
IFK-kliniken and GMC clinic but also to co-locate Spine Center Goteborg, our
first roll out "
Performance review
A number of acquisitions and financings have taken place during the period and
are included in these results:
a) Acquisition of Stockholms Specialistvard AB ("SSV")
On 12 January 2007, the Company announced the acquisition of 88 percent of SSV,
an orthopaedic surgery clinic located in Stockholm, Sweden. The acquisition was
consolidated from the date of announcement and was financed by cash of
approximately #1.0 million.
b) Acquisition of Obesity Stockholm AB group("OS")
On 15 February 2007, the Company announced the acquisition of 65 percent of OS
with its wholly-owned subsidiary Kirurgkliniken Sverige AB, a private obesity
clinic located in Stockholm, Sweden. The acquisition was consolidated from the
date of announcement and was financed by the issuance of 328,829 ordinary shares
at 130 pence each.
c) Acquisition of Leif Sward Ortopedi AB("IFK-kliniken")
On 18 April 2007, the Company announced the acquisition of the entire issued
share capital of IFK-kliniken a private orthopaedic clinic located in
Gothenburg, Sweden. The acquisition was consolidated from the date of
announcement and was financed by cash of approximately #1.1 million and the
issuance of shares in the Group's subsidiary GMC at a value of approximately
#1.0 million and representing a 28% percent minority holding in GMC.
d) Investment in Elderly Care
On 20 June 2007, the Company announced the provision of approximately #0.9
million committed resources to be made available as venture capital to develop
Elutera, a new venture within the Swedish elderly care market in which GHP owns
approximately 43 percent of the operating company and approximately 47 percent
of the investment company, whilst acting in partnership with an elderly care
entrepreneur and a property company.
e) Issue of ordinary shares
On 7 February 2007, the Company announced that it had issued 314,439 ordinary
shares at 71.24 pence to certain senior managers in the GMC business.
On 20 February 2007, the Company announced that it had placed, with existing
shareholders, a further 12 million ordinary shares of 50 pence each at an issue
price of #1 per share, raising approximately #12 million after expenses. The net
proceeds of the placing has been utilised as additional working capital to fund
the growth of GHP both organically and by acquisition.
Service Line: Spine surgery and rehabilitation
During the first half of 2007 Stockholm Spine Center (SSC), continued its
satisfactory performance since its acquisition in August 2006. It has been
successful in maintaining its key contracts with Stockholm County Council which
account for approximately half of its revenues and has also expanded its
activities to other public health authorities. Greater numbers of private
patients are being treated. SSC has also continued to develop its research
activities funded primarily by third party implant companies and in March 2007
appointed its first emeritus professor of spine surgery, Claes Olerud, which
will strengthen the capability in research and clinical trials.
As part of the development activities in Sweden, a key next step has been taken
through the successful establishment of Spine Center Goteborg with three
surgeons commencing operations from June 2007 at our GMC facilities where they
are co-located.
Service Line: Dental implant surgery and prosthesis surgery
Dental implants has strong operating margins but has been held back in the
period by the loss of momentum created by the combined effects of the March 2007
fire at the periodontology clinic at Skanegatan, (which while fully insured as
to financial impact has held back practice development) and some evidence of
cooling of the market at the dental surgery clinic at Sophiahemmet following the
announcement by the Government of a new scheme for financial compensation as of
July 2008.
Using the network of GHP partners discussions have advanced with other clinics
within Sweden. GHP continue to believe that the opportunity exists to build
through acquisition at reasonable prices by acquiring individual clinics in a
fragmented market.
During July 2007, agreement was reached to establish GHP's first clinic in the
UK, located in Leeds, our first international roll out. It is expected to open
in October 2007. It is intended that this forms a potential blueprint for the
roll-out of further regional clinics in the UK where GHP believe that the market
will expand as the efficacy of the dental implant solution becomes more widely
understood.
Service Line: Orthopaedic and sports medicine surgery and rehabilitation
The acquisition of SSV was completed in January 2007. SSV is an orthopaedic
surgery clinic with two operating theatres and is situated in the same premises
as SSC at the Lowenstromska Hospital. Following the acquisition considerable
progress has been made to turnaround performance at the clinic by replacing
certain contracts recently ended and adding new contracts. The acquisition has
performed to date ahead of expectations and provides a good opportunity for GHP
to expand its operating capacity in specialist orthopaedic surgery in the
Stockholm market.
In April 2007, GHP completed the agreement to acquire IFK-kliniken, the leading
orthopaedic surgery and sports medicine clinic which operated at the
Carlanderska private hospital in Gothenburg. IFK-kliniken possesses a strong
reputation for clinical excellence in orthopaedic and sports medical surgery
operating both on contracts from the public and private sectors and is headed by
an internationally renowned physician.
The IFK-kliniken and GMC clinics now form a joint clinic within orthopaedic
clinical services. A new clinic is being developed for out patients and day
surgery and it is situated in the centre of Gothenburg. GHP is pleased that Ulf
Tornqvist has agreed to join as Chief Executive of the combined clinic from 1st
November 2007. The original acquisition of GMC to found the Orthopaedic surgery
and rehabilitation service line in September 2006 was effectively from
administration and, while progress has been made to reconstruct operations
revenue development has taken longer and operations required greater
restructuring expenditure than originally expected. There remains some
investment and considerable work to be done to increase activity and bring the
GMC clinic up to acceptable operating margins. The combination of IFK-klinken's
reputation for surgical excellence and GMC's operating capacity is potentially
very strong.
During the period GHP has also formed two new separate companies jointly with
hospital surgeons at both Angelholm and Motala Public Hospitals for the purpose
of bidding for the contracts to provide outsourced orthopaedic clinical services
at these hospitals. The right to bid jointly with the existing clinicians has
been won in the face of established competitors. If successful, the new
companies will treat patients utilising existing hospital facilities and staff
in a separate legal entity, "spun-out" from the hospital, and jointly owned by
GHP and the clinicians.
Service Line: Obesity treatment including bariatric surgery
Initially, in September 2006, GHP entered a ten-year development agreement with
Sahlgrenska University Hospital in Sweden to design a comprehensive model for
optimal obesity treatment. In February 2007, a major step forward was taken with
the acquisition of 65 percent of OS, the owner of Kirurgkliniken Sverige, a
private surgery clinic which operates at Sophiahemmet hospital in Stockholm. The
operation is the third largest obesity clinic in Sweden and the largest private
clinic in Sweden by number of procedures. It has performed ahead of expectations
in its initial period post acquisition with patient volume constantly growing.
The combination of the developed model in use within this specialist obesity
clinic, with its reputation for clinical excellence and well established
operating position, gives us a strong position in obesity surgery in the Swedish
market, a market which is likely to grow. Overall, GHP believes that many
European markets are severely underserved and that demand is likely to increase
and we are currently running a number of projects in Sweden, in Scandinavia and
the UK.
As evidence of the potential market development, recent research carried out by
Lars Sjostrom, adviser to GHP, and published in the New England journal of
medicine, has created great interest in the political and medical domain. The
study comprises more than 4,000 patients and clearly shows the increased levels
of morbidity and the clinical effectiveness of gastric bypass surgery.
Appropriate inclusion criteria are presently under discussion.
GHP Investments: Elderly Care
GHP's principal focus will be on the development of specialist services in the
area of acute care. However, where the potential is seen to deliver further
returns to investors in sectors where the management team have specific
experience and expertise, without over-committing management resources, GHP is
prepared to act on a structured basis. Elutera, the recent entry into the
Swedish Elderly Care market on the basis of a structured venture capital
approach is an example where our management expertise can enable GHP to achieve
a market entry. The venture brings together leading elderly care management
expertise and property expertise into one vehicle designed to operate solely in
a growing sector in Sweden.
GHP's Future Plans
GHP's strategy is directed towards an area of significant opportunity in the
European specialised healthcare sector, namely Specialised Healthcare Services
(Service Lines). Both in Sweden and in a number of other jurisdictions, the
private healthcare sector is expected to expand during the next few years, with
the public sector also increasing its purchases of resources from the private
sector to meet provision guarantees. The selected clinical areas of spine
surgery, dental implant surgery, orthopaedic surgery, and obesity treatments,
among others, offer real growth opportunities and good margins which all benefit
from a standardised service model. GHP will focus on the development of these
core Service Lines initially in the Swedish and Scandinavian market over the
next twelve months and aims to build through time international Service Lines in
these areas by rolling out the model from the reference clinics once
established in Sweden. These combine superior standards and results, together
with highly qualified medical staff. GHP will develop a network of specialist,
high performance clinics from this base through rollout and selected
acquisitions. Already the company has developed a community of leading quality
specialist clinicians in the chosen service lines. This is proving powerful in
providing development opportunities in Sweden and Scandinavia.
For Further Information contact GHP:
In the UK: 44-207-665-1833
In Sweden: 46-31-712-5300
www.globalhealthpartner.com
Summarised Consolidated Profit and Loss Accounts (Unaudited)
For the period 1 January to 30 June 2007 (comparative -
6 months ended 30 June 2006)
30 June 30 June
2007 2006
#000 #000
Revenue and other operating income
Revenue 10,181 -
Other operating income 703 -
10,884 -
Operating expenses (11,290) (55)
Operating loss (406) (55)
Share of net profit of associate 3 -
Financial income 421 72
Financial expenses (409) (190)
15 (118)
(Loss) before tax (391) (173)
Taxation (42) -
Net (loss) (433) (173)
Attributable to
Shareholders' equity (484) (173)
Minority interests 51 -
(433) (173)
(Loss) per ordinary share
Basic and diluted (pence) (1.0)p (2.7)p
Summarised Consolidated Balance Sheets (Unaudited)
At 30 June 2007 (comparative - 31 December 2006)
30 June 31 December
2007 2006
#000 #000
Assets
Non-current assets
Intangible assets 24,730 23,034
Other non-current assets 1,803 1,362
Total non-current assets 26,533 24,396
Current assets
Trade and other receivables 4,635 3,034
Financial assets 30 238
Cash and cash equivalents 22,003 12,614
Total current assets 26,668 15,886
Total assets 53,201 40,282
Liabilities
Current liabilities
Short term borrowings 1,232 1,877
Other current liabilities 3,640 3,031
Total current liabilities 4,872 4,908
Non-current liabilities
Long term borrowings 12,379 12,028
Other non-current liabilities 757 515
Total non-current liabilities 13,136 12,543
Total liabilities 18,008 17,451
Net assets 35,193 22,831
Total shareholders' equity 34,228 22,523
Minority interests 965 308
Total equity 35,193 22,831
Summarised Statement of Changes in Consolidated Shareholders' Equity (Unaudited)
Opening balance at 1 January 2007 22,523
Issue of share capital (net of 12,594
expenses)
Net loss (484)
Foreign exchange and other movements (405)
Closing balance at 30 June 2007 34,228
Summarised Statements of Cash Flows (Unaudited)
For the period 1 January to 30 June 2007 (comparative -
6 months ended 30 June 2006)
30 June 30 June
2007 2006
#000 #000
Operating activities
Operating loss (406) (55)
Depreciation and amortisation 404 -
Other operating activities - net (661) 72
Changes in working capital - net 239 8
Net cash flow (used in) from operating
activities (424) 25
Investing activities
Acquisition of subsidiaries (1,638) -
Other investing activities (130) -
Net cash flow (used in) investing (1,768) -
activities
Financing activities
Movement in borrowings - net (506) -
Issue of ordinary share capital (net of
expenses) 12,166 -
Net cash flow from financing activities 11,660 -
Effects of exchange rate changes (79) (190)
Net increase (decrease) in cash and cash
equivalents 9,389 (165)
Cash and cash equivalents at the
beginning of 12,614 3,554
the period
Cash and cash equivalents at the end of
the period 22,003 3,389
Notes to the Summarised Consolidated Financial Information (unaudited)
Basis of Preparation
GHP, a UK registered company, was listed on AIM on 16 August 2006, following its
14 August 2006 merger with Bombshell Limited, an AIM listed shell company whose
sole asset was cash.
The financial information in this report contains the unaudited results of GHP
and its subsidiary undertakings for the period from 1 January 2007 to 30 June
2007 and as comparative data the unaudited results of Bombshell Limited for the
period from 1 January 2006 to 30 June 2006 in respect of summarised consolidated
statements of profit & loss and cashflows, together with GHP's audited
Consolidated Balance Sheet as at 31 December 2006. It has been prepared on a
consistent basis using the same accounting policies as the audited financial
statements for the nine months ended 31 December 2006.
1. Introduction
The consolidated financial information has been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union,
including interpretations from the International Financial Reporting
Interpretations Committee.
The unaudited consolidated financial information does not constitute full
financial statements within the meaning of Section 240 of the UK Companies Act
1985.
Unless otherwise stated, all amounts in the consolidated financial information
are denominated in thousands of UK pounds sterling.
The preparation of consolidated financial information in conformity with
generally accepted accounting principles requires the use of estimates and
assumptions that affect the reported amounts of asset and liabilities at the
date of the consolidated financial information and the reported amounts of
revenues and expenses during the reporting period. Although these estimates are
based on management's best knowledge of the amount, event or actions, actual
results ultimately may differ from those estimates.
2. (Loss) per ordinary share
Basic (loss) per ordinary share has been calculated on the (loss) attributable
to equity shareholders divided by the weighted average number of ordinary shares
in issue during the period.
30 June 30 June
2007 2006
(Loss) for the period (#000) (484) (173)
Weighted average number of ordinary 50,667,641 6,433,455
shares in issue
(Loss) per ordinary shares (pence) (1.0)p (2.7)p
The impact of the issuance of ordinary shares in future periods, which at 30
June 2007 solely arises from the convertible bond, is anti-dilutive in nature.
3. Share capital
As 30 June 2007, there were 54,345,492 allotted, called up and fully paid
ordinary shares of 50p each in issue (31 December 2006 - 41,702,224). During the
period, 12,000,000 shares were issued for cash, 328,829 shares were issue as
consideration for acquisitions and 314,439 shares were issued to certain senior
managers in the GMC business.
4. Short term and long term borrowings
At 30 June 2007, the Company had secured borrowings of #13.6 million, including
external bank loans, finance leases and loans to minority shareholders of
subsidiary undertakings. Of this amount #1.2 million is classified as short term
and #12.4 million is long term, including convertible debt of #2.2 million in
respect of an acquisition.
5. Financial income and expense
30 June 30 June
2007 2006
Financial income: #000 #000
Bank interest receivable 421 72
421 72
Financial expense:
Bank interest payable (361) -
Foreign exchange loss (48) (190)
(409) (190)
6. Taxation
Taxation principally arises on the operations in Sweden. No deferred tax assets
have been recognised in respect of certain corporate and other costs arising in
Sweden and the UK.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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