TIDMKOO
RNS Number : 3118G
Kooth PLC
29 March 2022
Kooth plc
("Kooth" or the "Company" or the "Group")
Final results
Delivery against strategic aims and growth plans for key future
markets identified
Kooth (AIM: KOO), a leading digital mental health platform ,
announces audited final results for the financial year ended 31
December 2021.
Strategic highlights
-- Increased reach and uptake of Kooth's services in key markets
_ Children and Young People (CYP): 7.1 million are able to
access Kooth's products (2020: 6.2 million), with an uptake of
1-in-33 of that population using Kooth (2020: 1-in-36)
_ Adult: 3.8 million people now have access (2020: 1.5 million),
with eight new whole population contracts signed during the period
(2020: five)
-- Ongoing growth in Kooth's offering for employees, Kooth Work
_ Launched first benchmark to measure mental health of a business
_ Strategic focus on frontline and key workers delivered contract wins
-- International has seen continued focus, with the US
highlighted as a key market to enter in 2022
_ US leader onboarded and go-to-market strategy outlined
-- Continued recruitment of new employees, with 406 at year end
(2020: 306), of which 252 are clinical and practitioners
Financial highlights
-- 28% revenue growth in line with expectations, continuing adoption of digital-first healthcare
-- >90% of revenue from contracts of 12+ months
-- 109% Net Revenue Retention (2020: 107%)
-- 89% ARR growth to GBP1.7m for Kooth Adult
-- Gross margin 0.3ppt down with benefit from covid in 2020 due
to quicker go live periods and flattening of demand curve offset by
improving operational efficiency in 2021
-- Strong balance sheet with GBP7.1m net cash at 31 December
2021, with net cash generated from operations of GBP1.9m offset by
capitalised development costs of GBP2.5m during the year
Current trading and outlook
The new financial year has started in line with expectations,
giving a current ARR of GBP18 million. Kooth has signed a number of
new contracts in 2022, including continued momentum for Kooth Adult
with new commissions in Greater Manchester, Norfolk, Warwickshire,
and the Wirral. Finally, we are starting to see a positive response
to our early steps in the US market.
Tim Barker, Chief Executive Officer of Kooth said :
"Following Kooth's entry to AIM in 2020, we have grown from
strength to strength. In 2021, working in partnership with the NHS,
over 200,000 people across the UK used Kooth. We have begun to grow
in new corporate markets and have embarked on our strategy to
establish Kooth in the US. We have achieved this because our
mission of making effective, personalised digital mental health
care accessible to all is more important now than it's ever
been.
"We look to the future with confidence, as underlined by the
contracts already signed in 2022. At a time when the NHS is under
extreme pressure, our approach to providing free mental health
support without barriers or waiting lists has never been more
pertinent. With Dr Tim Budden joining as Chief Technology Officer,
and Kevin Winter as our North American General Manager, we are well
positioned to continue to focus and deliver to help tackle the
global crisis in mental health. "
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ('MAR') (which forms
part of domestic UK law pursuant to the European Union (Withdrawal)
Act 2018).
- Ends -
Kooth plc investorrelations@kooth.com
Tim Barker, CEO
Sanjay Jawa, CFO
Panmure Gordon, Nominated Adviser and Joint Broker
Corporate Finance:
Dominic Morley, Ailsa MacMaster +44 (0) 20 7886 2500
Corporate Broking:
Erik Anderson
Stifel, Joint Broker +44 (0) 20 7710 7600
Ben Maddison, Nick Adams, Nicholas Harland
FTI Consulting kooth@fticonsulting.com
Jamie Ricketts, Alex Shaw, Usama Ali
Notes to Editors
About Kooth
Kooth (AIM:KOO) is the UK's leading digital mental health
platform. Our mission is to provide accessible and safe spaces for
everyone to achieve better mental health. Our platform is
clinically robust and accredited to provide a range of therapeutic
support and interventions. All our services are predicated on easy
access to make early intervention and prevention a reality.
Our four services are:
-- Kooth: for children and young persons
-- Kooth Student: for university and higher-education students
-- Kooth: for Adults
-- Kooth Work: for employees
Kooth is a fully safeguarded and pre-moderated community with a
library of peer and professional created content, alongside access
to experienced online counsellors. There are no thresholds for
support and no waiting lists. Currently, Kooth sees over 4,000
logins a day.
For adults, Kooth operates across distinct locations and serves
specific cohorts, including parents, teachers, victims of crime,
and those who have suffered from or continue to experience domestic
violence. It is also offered as a benefit by a number of corporate
organisations delivering anonymous digital mental health support
services to employees.
Kooth is the only digital mental health provider to hold a
UK-wide accreditation from the British Association of Counselling
and Psychotherapy (BACP).
In 2021, Kooth was named 'Best Newcomer' at the European
Mediscience Awards, winner in the category of 'Tech for Good' at
the UK Tech Awards and recognised as the 'HealthTech Pioneer of the
Year' at the UK Business Tech Awards for its role in 'Supporting
the Nation's Mental Health'.
Chair's statement
After a year in which our priority was the support of a nation
in need, I would first like to thank our employees who are the most
important foundation for our success.
Our staff have shown their resilience, flexibility, and
professionalism in dealing with the challenges and changes that we
have all experienced in the last two years. We are proud of the
support we have provided, and of our close partnership with the NHS
that aims to reduce the strain on stretched mental health services
by providing a digital-first approach to reach people in need of
support.
In 2021, we not only saw the continued expansion of Kooth with
1.3 million logins (18% YoY growth). We also saw an increase in the
severity of need from people that came to Kooth, with more than 60%
of people visiting Kooth measuring as 'severe' on a scale of
acuity. Our teams of practitioners, clinical psychologists,
moderators, and safeguarding experts have adjusted to this emerging
'new normal' with professionalism and compassion.
I am pleased to report that our financial performance has been
in line with market expectations, with revenue up 28% to
GBP16.7million, adjusted EBITDA growth from GBP0.9 million to
GBP2.1 million and an improved adjusted EBITDA margin to 12.5%
(2020: 7.2%).
We have seen continued growth and expansion in our service for
children and young people, with 90% of Commissioners in England
choosing Kooth as their digital mental health platform. This
includes all 32 boroughs in London, plus a clear expansion into
Scotland and Wales. In total 7.1 million children and young people
have access to Kooth across the UK today, with 1 in 33 of these
having accessed Kooth in 2021. We continue to see a growing demand
in the public sector for our Kooth Adult service. In 2021 we added
14 new contracts to our roster, with 3.8 million adults now having
free access to Kooth nationwide.
ARR grew by 20% to GBP16.9 million (2020: GBP14.1 million) which
included an 89% increase in Adult ARR to GBP1.7 million (2020:
GBP0.9 million). Over 90% of Kooth's revenue comes from recurring
annual contracts of 12 months or longer. Given the nature of our
subscription based business model, this provides strong forward
revenue visibility giving us confidence to invest in the growth of
our platform and people.
In terms of outlook, the business has continued to thrive over
the last year as evidenced by our financial and operational
performance, demonstrating that our growth strategy continues to
deliver. Our high level of customer retention, and strong recurring
revenue visibility position the Group well. We enter FY22 in a
solid financial position, with revenue growth, a good cash position
with no debt and a proven business model. Trading during the new
financial year has been broadly in line with the Board's
expectations with strong levels of existing and new client
activity.
Looking further ahead, we continue to see a significant
potential opportunity in supporting businesses to improve the
mental wellbeing of their workforce, and to expand Kooth into
international markets including the USA, where, as previously
announced, we have hired a General Manager to develop that business
during 2022. Since our IPO in September 2020, our focus has been to
invest to support the long-term growth of our technology platform.
These newer, nascent growth initiatives have made encouraging
progress in 2021 setting them up for a successful year ahead.
Peter Whiting
Non-Executive Chair
28 March 2022
Chief Executive Officer's statement
Delivering measurable impact at scale
As an organisation with 20 years of experience in digital-first
mental health care, we have seen a surge of interest in how digital
can play a role in the long-term future of healthcare in the last
two years.
For digital truly to embed itself into healthcare systems, there
are three questions that every healthtech company in the mental
health sector, including Kooth, must answer:
1. Can clinical and economic outcomes be evidenced?
2. Can the approach address the growing, global shortage of practitioners?
3. Can it be delivered efficiently, at scale?
The long term sustainability of every provider in the healthtech
ecosystem, and the growth of the ecosystem itself, depends on
satisfactorily answering these three questions.
1. Clinical and economic outcomes
Underpinned by a decade of applied research, Kooth is a
trailblazer in research, development and outcome measures to
evidence the therapeutic, social, and economic impact of our
platform. This has led to the development of new therapies, many of
which are only possible through a digital delivery model. We've
made substantial progress in 2021 in continuing to innovate and
evidence our impact:
Responsive ("drop-in") chat: We have a high proportion of
individuals that we may engage with only once, or on an ad-hoc
basis in what we call a 'responsive chat'. By developing a new
outcome measure, and validating it independently with CORC (Child
Outcomes Research Consortium), we can evidence that 72% of users
achieve their wants and needs. This is an impressive outcome in an
environment where typically 50% is considered a good level of
efficacy.
Community support and self-therapy: The London School of
Economics undertook a study to evaluate the clinical impact of
Kooth's community and self-therapy activities. 75% of individuals
find these beneficial to their mental health. In addition, 50% of
people that engage with the community go on to help someone
else.
Economic impact : In 2021 we initiated a project with YHEC (York
Health Economics Consortium) to deliver what will be one of the
first ever assessments of the economic benefit of early
intervention support for young people. This will be published in
2022 and demonstrates our commitment to deliver a clinically and
economically effective service.
Innovating in digital therapies: In 2021 we delivered a
'collections' programme, a first step in providing individuals with
personalised, guided help through a challenge or change in their
lives. We intend to build on this to provide self-guided programmes
that provide both self-guided and professional support.
2. Addressing the growing, global shortage of therapists
Globally, there are not enough health care professionals to meet
the level of demand. In Europe there are 15 therapists per 100,000
of population. In the USA, 1-in-3 of the population lives in a
designated health professional shortage area.
Our approach in addressing this is twofold:
Innovating in self-therapy and community support
Today, only c.40% of people who use Kooth engage with a
practitioner to get the support they need, and/or through messaging
and responsive (drop-in) chat. Around 60% get the help they need
through the community, therapeutic content, and self-therapy
activities we provide. We are making good progress on delivering an
integrated range of support options to meet the wants and needs of
each individual. This has been demonstrated by the progress that
has been made in our outcome measures.
Hiring and building the careers of our practitioners
Kooth hires practitioners and develops their careers. This has
been an increased area of focus over the last 18 months. We map
career development and progression pathways, providing additional
training and development opportunities (e.g. trauma informed
therapy, management development programmes). We have expanded our
team of Emotional Wellbeing Practitioners to bring people with
experience from social work, teaching, or other related professions
into Kooth. As a result, over 2021 we grew the size of our
practitioner and clinical team from 183 to 252.
3. Efficiency at scale
As Kooth grows, delivering a high quality service, efficiently,
at scale, is paramount. Data and insights play an important role in
measuring the quality and predictability of our service.
In 2021 we established targets in collaboration with
practitioners to define what 'good' looks like in terms of
operational efficiency. In addition, Kooth's clinical team audits
each practitioner quarterly to help ensure a consistently high
quality of support. We also continue to invest in our technology
platform to help improve the experience, efficiency, and
effectiveness of Kooth.
As a result, our platform and team of 252 practitioners and
clinicians supported over 200,000 people in 2021, delivering a
gross margin of 69.5% to reinvest back into the business.
Foundations for long term growth and impact
By investing in these areas, we not only strengthen our
foundations for future growth, but are able to reach and positively
impact the lives of more people in need of help. This is why we are
here.
4. #StandWithUkraine: Impact of the war in Ukraine
Finally, while Kooth does not have any customers or assets in
Ukraine or Russia, all of us at Kooth are devastated as we watch
the war unfold in Ukraine. In the first two weeks of the war, our
data showed an increase in depression, suicidal thoughts, and lack
of motivation from individuals coming to Kooth. To assist, we've
issued guidance from our expert psychologists on how to discuss the
war with young children, and will continue to identify ways to
support those directly and indirectly impacted by this trauma.
Tim Barker
Chief Executive Officer
28 March 2022
Market review
Undoubtedly, the pandemic has been a catalyst for change in the
mental health ecosystem. It has helped de-stigmatise the topic in
mainstream media and businesses and has raised awareness of the
barriers in accessing help. In addition, it has spurred investment
by technology companies to rise to the global challenge of
supporting individuals with their mental health and wellbeing.
A growing number of people unable to access support
Given that demand for mental health support outstrips available
resources in the NHS, there is a growing challenge of dealing with
waiting lists. This has been exacerbated by COVID-19.
In addition to the 1.4m that are on mental health waiting lists
(mental health trusts & NHS providers) an additional eight
million people are unable to get professional support based on the
threshold levels that dictate who gets access to treatment.
Kooth's focus is on supporting this 'sub-threshold' population
to help them build their resilience and recovery.
A growing 'call to action' to invest in early intervention
support
Given the increased prevalence of mental health problems in the
population, there is a growing recognition and 'call to action' for
a focus and investment in early intervention and prevention
support.
In England, The Health and Social Care Committee report on
'Children and young people's mental health' published a set of
recommendations in November 2021, including:
"The Department of Health and Social Care-in partnership with
the Department for Education and all other relevant Government
departments-must take radical steps to shift the focus in mental
health provision towards early intervention and prevention."
Likewise, in the US, the imperative for early intervention is
clear, based on the call to action published by the US Surgeon
General in the 'Protecting Youth Mental Health' report.
The reorganisation of NHS England into Integrated Care Systems
(ICS)
During 2022, NHS England will be reorganised into 42 regional
Integrated Care Systems. ICSs bring together NHS, local authority
and third party sector bodies to take on responsibility for the
resources and health of an area or 'system'. Their aim is to
deliver better, more integrated care for patients.
Currently, Kooth is commissioned by Clinical Commissioning
Groups, of which there are 135 across England. We believe the shift
to ICSs will simplify the commissioning structure and approach,
by:
-- Bringing public health and a focus on preventative support
into the remit of ICSs, whereas before it was the responsibility of
local authorities.
-- Enabling Kooth to work strategically with ICSs to support
their whole population. For example, today we may be commissioned
in one district of a city for 11-18 year olds, but 10-25 year olds
for its neighbouring district. By working with an ICS we can
'level-up' support for Kooth across a whole region and
age-range.
Prioritising wellbeing in your workforce
In addition to partnering with healthcare providers, Kooth
engages with businesses who are committed to building a mentally
healthy and resilient workplace.
There is a growing acceptance in businesses of all sizes, and
across all sectors, of the important role they play in supporting
the mental health and wellbeing of employees. According to Bupa
Global's Executive wellbeing index 2021 almost three in ten
business leaders are making employee mental health their number one
priority. As a result, they will be increasing their investment in
employee mental health and wellbeing by 18% in 2022.
Strategy
Kooth has a pragmatic four pillar growth strategy to meet the
global demand for clinically and cost effective mental health care.
This is powered by Kooth's proprietary, integrated technology
platform and clinical operating model.
1. Expanding Kooth to support children and young people across
the UK
As of the end of 2021 Kooth is contracted by 90% of England
commissioners. As we progress to near-nationwide coverage, our key
priorities are:
Expansion into devolved nations: We see the opportunity to
expand further into Scotland, Wales, and Northern Ireland. In 2021
we won our first 4 contracts in Scotland, and continue to expand in
Wales, where we are contracted by over 60% of commissioners.
Focus on expansion within existing contracts through
over-performance and age-range expansion: As awareness and usage
grows within the regions, we aim to over-perform on the agreed
contract, thereby building the business case for expansion. In
addition, currently 44% of our contracts span the full age range of
up to age 25.
Continuous incremental improvement in Quality (experience,
effectiveness, efficiency): As a proven, established service, our
focus is on continuous improvement of experience, effectiveness,
and efficiency.
2. Early intervention support for adults via the NHS
The NHS spends over GBP11 billion a year on adult mental health,
the majority of this being invested in acute care services. Kooth
Adult (known as Qwell) provides early intervention and prevention
support for NHS commissioners, taking the strain off other NHS
services, and stemming the demand for acute support. Our strategy
is to replicate the success we have had supporting young people
with a focus on three key areas:
Building the business case and momentum for Kooth Adult: Kooth
Adult is the number one priority for our new business team. We are
seeing a growing recognition that more needs to be done to support
'sub threshold' individuals who do not qualify for a referral into
NHS services. This growing awareness is reflected in the strong
growth in go-lives in 2021 where we added 14 new commissions
including Bolton, Newcastle and Gateshead, South East London,
Humber, Coast and Vale.
Promoting Kooth Adult by working in partnership with
stakeholders: Healthcare professionals (such as GPs), welfare
organisations (such as food banks), and educational organisations
(such as colleges and universities) all have a key role to play in
promoting Kooth's free service to their population. In addition to
working with stakeholders, we are focused on digital, social, and
content marketing to reach individuals seeking support.
Platform and service innovation: We are focused on ensuring that
our platform can meet the needs of a diverse population. In doing
so, our research, participation, and product teams are focused on
ensuring that we are developing and delivering a service that
matches the population's needs.
3. Supporting the mental health of employees
The market for employee mental wellbeing support is nascent, but
growing. Given the spectrum of providers entering the market, from
meditation apps to companies building a marketplace of business
coaches, it is key for Kooth to pick a niche it can compete and win
in repeatedly and economically.
Predominantly, we are focusing on supporting key/frontline
workers in industries such as healthcare, social care, education,
public services, retail and transport. This 'niche', according to
ONS figures, represents 33% of the UK workforce and builds on the
success we have had supporting emergency services, retail
workforces and school staff.
4. Expanding into the USA
In October 2021 we appointed Kevin Winters as General Manager,
America to establish Kooth in the US market, with a strategic focus
on bringing our service for children and young people to market.
The focus for 2022 will be to build the foundations for our
go-to-market by building the team, establishing pilot projects to
prove Kooth locally, and identifying potential partners in
Healthcare and Education markets.
5. Kooth Platform and Clinical Delivery Model
Kooth's proprietary technology platform underpins everything we
do at Kooth. A key reason for our AIM listing was to enable us to
invest in our technology to support the long term growth of Kooth.
Our investment strategy in technology is focused on three key
areas:
Delivering a welcoming and engaging space: Reaching out to ask
for help can be hard. For Kooth to succeed, we must offer a
stigma-free, safe space where people feel welcome and empowered to
get support that they want and need. We continue to invest in
user-research, participation, and experience-design to deliver on
this.
Delivering clinically and cost effective access to mental health
support: Kooth is a trailblazer in research, development and
outcome measures to evidence the therapeutic, social, and economic
impact of our platform. This has led to the development of new
therapies, many of which are only possible through a digital
delivery model. We see huge potential to continue to innovate and
deliver in new support models spanning self-therapy, community and
peer support, and professional support.
Applying AI to improve the experience, efficiency, and
effectiveness: Over Kooth's lifetime, we have delivered over
930,000 hours of professional support, all via text and chat based
interactions. Collectively, this represents one of the world's
largest anonymous mental health data sets. The opportunity now is
to safely leverage this data using machine learning and artificial
intelligence for the benefit of practitioners and service users.
This is an exciting, long term strategic imperative, led by Dr Tim
Budden, our recently appointed Chief Technology Officer who brings
deep domain experience in AI, machine learning, and natural
language processing.
6. Digital clinical delivery model: i-RESPOND
Safety and Clinical Effectiveness
Fortunately, the shift that many traditional services have had
to make to adapt to the use of technology to support clinical
practice has been less of a challenge for us at Kooth. We have a
wealth of experience in this area.
However, ensuring that the services we provide are safe and
effective has always been a number one priority and we are
constantly reviewing and improving our systems and practices to
support this.
Kooth's i-RESPOND clinical framework underpins our approach:
integrative, responsive, evidence based, safe, person centred,
outcomes focused, non-judgemental and data informed.
As part of Kooth's focus on ensuring its work is safe and
evidence-based, we introduced a system of improved reporting and
root cause analysis. This helps the team to identify earlier on any
opportunities for improvement, and learning.
2021 also saw Kooth's i-RESPOND framework being fully embedded
into our audit process - offering all practitioners the opportunity
for individual professional development as well as important
learning for the wider clinical team. Both of these improvements
have led to additions to our in-house training programmes as well
as an enhanced offering for clinical supervision and support.
A much discussed topic within the Kooth Advisory Board and
Leadership team is ensuring that our service and practitioners are
responsive to the changing mental health needs of the population.
In 2021, working with external experts we have focused on embedding
trauma informed approaches into our service.
A crucial part of this evidence based intervention is ensuring
that there continues to be an assessment of suicidal thoughts.
Kooth's own data supports a wider consensus that this has increased
significantly over the pandemic period, hence the need to introduce
this approach alongside careful consideration of our risk
management processes as part of our specific focus on the SAFE
element of our framework. We will continue to test and refine this
model in the year ahead.
Over the last 12 months, Kooth has continued in our ambition to
be at the centre of driving evidenced based approaches within
digital mental health services. This included an invitation to give
evidence at the UK government's Health and Social Care Select
Committee and being referenced in the final report as an example of
good practice.
Participation: ensuring Kooth meets the needs of diverse
communities
To deliver on our purpose to be 'accessible to all', we need to
ensure that Kooth meets the needs of diverse communities,
especially those that may be less likely to use established NHS
services such a Black, Asian, non-white, or LGBTQIA+
communities.
In 2021, we made substantial progress in our participation
approach, forming partnerships with a number of groups across the
country. These are providing invaluable support in helping us
understand why certain adult cohorts do not typically access mental
health services, and how we can improve this via our digital
'ecosystem of support'.
Through these reciprocal relationships, we will improve access
to evidence-based interventions for marginalised groups. In
addition, it will enable us to play a leading role in contributing
to the evidence base in this area and demonstrate how to deliver
safe and clinically effective care digitally
Chief Financial Officer's statement
Significant growth
This is the second set of full year financial statements issued
by Kooth plc following its admission to trading on AIM on 2
September 2020 and represents the first full year of the Group
being quoted on AIM.
Revenue
I am pleased to report Group total revenue grew, in line with
market expectations, by 28% to GBP16.7 million in the year, driven
primarily by fee uplifts from existing public sector clients and
new business in Adult and CYP as well as the tail of a small number
of one-off COVID-19 related projects that started in 2020. Adults
represented approximately 10% of revenue in 2021.
Recurring revenue comprises income invoiced for services that
are repeatable and consumed and delivered on a monthly basis over
the term of a customer contract.
Annual Recurring Revenue (ARR) is the annualised revenue of
customers engaged or closed at that date (31 December) and is an
indication of the upcoming annual value of the recurring revenue.
This is used by management to monitor the long term revenue growth
of the business.
Highlighting the depth and longevity of our customer
relationships, net revenue retention was 109% (2020: 107%). This is
measured by the total value of ongoing ARR at the year end from
customers in place at the start of the year as a percentage of the
opening ARR from those clients.
Gross Profit
Gross profit grew by 27.5% to GBP11.6 million (2020: GBP9.1
million) with gross margin remaining flat at 69.5% (2020: 69.8%).
Direct costs previously included the cost of our practitioners and
our engagement team who are responsible for promoting Kooth to
potential users in a corporate or region. We have taken the
decision to reclassify those engagement costs as administrative
expenses, given they are closer in nature to sales and marketing
expenditure. The comparative numbers have also been reclassified
and full details are set out in note 2.3.
Gross margin was slightly lower, mainly because a one-off
benefit in 2020 relating to COVID-19 did not repeat in 2021. This
one-off benefit in 2020 was from shorter go-live periods between
closing a contract and the commencement of services and revenue as
clients looked to accelerate the implementation of Kooth,
particularly during the national lockdown-enforced closure of
schools.
Statutory loss after tax
The Group loss after tax for the year was GBP0.3million (2020:
loss of GBP1.5 million) with 2020 impacted by the costs incurred
for the IPO and the share based payment expense incurred as a
result of accounting for the fair value of shares acquired by
employees prior to the IPO.
Administrative expenses
Excluding depreciation, amortisation and share based payments,
administrative expenses grew by GBP0.8 million in the year, a 9%
increase year on year, which remains in line with our strategic
investment plan and comfortably below revenue growth. This was
primarily driven by increases in staff costs as we strengthened our
business development and account management teams, salary increases
as well as an upgrade to our finance, people and rota systems and a
full year of the costs associated with being a listed company.
Adjusted EBITDA
Adjusted EBITDA grew by GBP1.1 million (123%) to GBP2.1 million
in the year due to the gross profit increase, offset partially by
higher administrative expenses as outlined above.
Adjusted results are prepared to provide a more comparable
indication of the Group's core business performance by removing the
impact of certain items including exceptional items (material and
non- recurring), and other, non-trading, items that are reported
separately. Adjusted results exclude items as set out in the
consolidated statement of profit and loss and below, with further
details given in Notes 2, 5, 7, 8, 9, 14 & 16 to the financial
statements. In addition, the Group also measures and presents
performance in relation to various other non GAAP measures, such as
gross margin, annual recurring revenue and revenue growth.
Adjusted results are not intended to replace statutory results.
These have been presented to provide users with additional
information and analysis of the Group's performance, consistent
with how the Board monitors results.
Adjusted EBITDA (being EBITDA prior to exceptional costs) is
calculated as follows:
GBP'm 2021 2020
----------------------------- ----- -----
Operating Loss 0.7 1.6
Add back:
Depreciation & Amortisation 2.4 1.5
Share based Payment expense 0.4 0.5
IPO and other exceptional
items - 0.6
----------------------------- ----- -----
Adjusted EBITDA 2.1 0.9
----------------------------- ----- -----
Taxation
There has been no corporation tax charge recognised in the year
due to accumulated losses combined with the overall current year
position (2020: GBPnil). The tax credit for the year ended 31
December 2021 and 2020 relate to Research and Development
expenditure credits in addition to the movement in the deferred tax
asset.
Cash
The Group had good cash management in the year with net cash
generated from operating activities of GBP1.9 million (2020: GBP0.4
million), broadly in line with adjusted EBITDA. The net cash at
year end was GBP7.1 million (2020: GBP7.8 million). The Group
continues to be debt free and maintains a robust financial position
following a full year of the global pandemic and with no recourse
to any government support schemes. Trade receivables have grown by
13% in the year to GBP1.6 million (2020: GBP1.4 million), below the
rate of revenue growth. The Group's cash collection disciplines
remain strong with debtor days at 31 December 2021 of 33 days
(2020: 35)
Capital expenditure
Software and product development costs aside, the Group's
ongoing capital expenditure requirements remain modest at
GBP0.1million (2020: GBP0.1million).
Capitalised development costs
The Group continues to invest in product and platform
development resulting in ongoing improvements in its delivery
platform. Costs are a combination of internal and external spend.
Where such work is expected to result in future revenue, costs
incurred that meet the definition of software development in
accordance with IAS38, Intangible Assets, are capitalised in the
statement of financial position. During the year the Group
capitalised GBP2.5 million in respect of software development
(2020: GBP1.5 million) with an amortisation charge of GBP2.3
million.
Investment in product and development continues to be
significant to the Group and we anticipate capitalising software
costs at a higher rate over the next few years during a period of
accelerated product investment.
Capital and Reserves
The Group continues to maintain a strong balance sheet with
total equity at 31 December 2021 of GBP11.0 million (2020: GBP10.9
million).
Dividend policy
As outlined at the time of the IPO the Group's intention in the
short to medium term is to invest in order to deliver capital
growth for shareholders. The Board has not recommended a dividend
in respect of the year ended 31 December 2021 and does not
anticipate recommending a dividend within the next year but may do
so in future years.
Sanjay Jawa
Chief Financial Officer
28 March 2022
Financial statements
Consolidated statement of profit and loss and other
comprehensive loss
For the year ended 31 December 2021
Note 2021 2020
Continuing operations GBP'000 GBP'000
Revenue 4 16,682 13,012
Cost of sales (5,097) (3,924)
Gross profit 11,585 9,088
Administrative expenses 5 (12,318) (11,216)
Other operating income 6 - 497
Operating Loss (733) (1,631)
Analysed as:
Adjusted EBITDA 2,082 934
Depreciation & amortisation 14, 16 (2,384) (1,498)
Exceptional items 7 - (580)
Share based payment expense 8 (431) (507)
Gain on disposal of subsidiary 9 - 20
Operating loss (733) (1,631)
------------------------------------------- ------ -------- --------
Interest expense 10 - (314)
Interest income 10 13 -
Loss before tax (720) (1,945)
Tax 11 410 467
Loss after tax from continuing operations (310) (1,478)
-------- --------
Profit/(Loss) after tax from discontinued
operations 9 - 1
Total comprehensive loss for the
year (310) (1,477)
-------- --------
Loss per share - basic (GBP) 12 (0.01) (0.06)
On continuing operations (0.01) (0.06)
On discontinued operations - 0.00
Loss per share - diluted (GBP) (0.01) (0.06)
On continuing operations (0.01) (0.06)
On discontinued operations - 0.00
Consolidated statement of financial position
As at 31 December 2021
31 December 31 December
Note 2021 2020
GBP'000 GBP'000
Assets
Non-current assets
Goodwill 13 511 511
Development costs 14 2,867 2,615
Right of use asset 15 - 14
Property, plant and
equipment 16 116 157
Deferred tax 17 435 133
Total non-current assets 3,929 3,430
Current assets
Trade & other receivables 18 2,370 2,097
Contract assets 19 406 107
Cash & cash equivalents 20 7,079 7,823
Total current assets 9,855 10,027
Total assets 13,784 13,457
Liabilities
Current liabilities
Trade payables 21 (417) (275)
Contract liabilities 22 (797) (619)
Lease liability 15 - (17)
Accruals and other creditors 21 (649) (866)
Deferred tax 17 - -
Tax liabilities 21 (948) (827)
Total current liabilities (2,811) (2,604)
Net current assets 7,043 7,423
Net Assets / (Liabilities) 10,973 10,853
----------- -----------
Equity
Share capital 23 1,653 1,653
Share premium account 23 14,229 14,229
P&L reserve 23 (1,879) (1,569)
Share-based payment
reserve 23 959 529
Capital redemption reserve 23 115 115
Merger reserve 23 (4,104) (4,104)
Total equity 10,973 10,853
----------- -----------
The accompanying notes form part of the financial
statements.
Consolidated statement of changes in equity
For the year ended 31 December 2021
Share Share Share P&L reserve Capital Merger Total
capital premium based redemption reserve equity
payment reserve
reserve
Balance at 1 January
2020 - 2 - (2,838) - - (2,836)
Issue of share
capital 400 14,227 - - - 14,627
Share for share
exchange 3,989 - - - 115 (4,104) -
Capital reduction (2,736) - - 2,736 - - -
Share based payments - - 529 - - - 529
Deferred tax - - - 10 - - 10
Total comprehensive
income for the
year - - - (1,477) - - (1,477)
-------- -------- -------- ----------- ----------- -------- -------
As at 31 December
2020 1,653 14,229 529 (1,569) 115 (4,104) 10,853
Balance at 1 January
2021 1,653 14,229 529 (1,569) 115 (4,104) 10,853
Issue of share
capital - - - - - - -
Share based payments - - 430 - - - 430
Total comprehensive
income for the
year - - - (310) - - (310)
-------- -------- -------- ----------- ----------- -------- -------
As at 31 December
2021 1,653 14,229 959 (1,879) 115 (4,104) 10,973
-------- -------- -------- ----------- ----------- -------- -------
The accompanying notes form part of the financial
statements.
Consolidated Cashflow Statement
For the year ended 31 December 2021
Note 2021 2020
GBP'000 GBP'000
Cash flows from operating activities
Loss for the year from continuing operations (310) (1,478)
Profit/(Loss) for the year from discontinued
operations 9 - 1
Adjustments:
14, 15,
Depreciation & amortisation 16 2,384 1,498
Income tax received - 268
-------
Share based payment expense 8 520 507
-------
Interest expense 10 - 314
Tax income recognised (410) (466)
Gain on disposal 9 - (20)
Movements in working capital:
(Increase)/decrease in trade and other
receivables 18 (574) 132
Increase/(decrease) in trade and other
payables 21 244 (396)
------- -------
Net cashflow from operating activity 1,854 360
Cash flows from investing activities
Purchase of property, plant and equipment 16 (63) (107)
Additions to intangible assets 14 (2,535) (1,505)
------- -------
Net cash used in investing activities (2,598) (1,612)
Cash flows from financing activities
Proceeds from issue of capital - 16,000
Cost incurred on issue of capital - (1,378)
Receipt/(Repayment) of borrowings - (4,249)
Interest paid - (1,444)
Lease payments - (81)
------- -------
Net cash from financing activities - 8,848
Net increase/(decrease) in cash and
cash equivalents (744) 7,596
Cash and cash equivalents at the beginning
of the year 20 7,823 227
------- -------
Cash and cash equivalents at the end
of the year 20 7,079 7,823
------- -------
The accompanying notes form part of the financial
statements.
Notes to the Financial Statements
1. Corporate Information
Kooth plc is a company incorporated in England and Wales. The
address of the registered office is 5 Merchant Square, London,
England, W2 1AY.
2. Significant Accounting Policies
2.1) Basis of Preparation
The consolidated financial statements of Kooth plc and its
subsidiaries (collectively, the Group) for the year ended 31
December 2021 have been prepared and approved by the directors in
accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006.
Measurement Convention
The financial statements are prepared on the historical cost
basis with the exception of certain items which are measured at
fair value as disclosed in the accounting policies set out below.
These policies have been consistently applied to all years
presented unless otherwise stated. All values are presented in
Sterling and rounded to the nearest thousand pounds (GBP'000)
except when otherwise indicated.
Going Concern
The Directors have a reasonable expectation that the Group as a
whole has adequate resources to continue in operational existence
for the foreseeable future. For this reason, the going concern
basis continues to be adopted in the accounts.
The company's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Strategic report on pages 4 to 60 of the annual
report. In addition, note 25 to the financial statements include
the company's objectives, policies and processes for managing its
capital; its financial risk management objectives; and its
exposures to credit risk and liquidity risk.
During the 2021 financial year the Group generated a loss of
GBP0.3 million (2020: GBP1.5 million). Adjusted EBITDA is GBP2.1
million (2020: GBP0.9 million). The Group is in a net asset
position of GBP11.0 million (2019: GBP10.9 million).
Management has performed a going concern assessment for a period
up to 31 March 2023, which indicates that the Group will have
sufficient funds to trade and settle its liabilities as they fall
due. This assessment takes into account a number of sensitivities,
including a downside scenario and a reverse stress test, which
models the scenarios that would lead to a default by the Group.
Both the downside scenario and reverse stress test reflect lower
activity levels than both the Group forecast and 2021 actual
results. The key assumption used in the assessment is revenue and
Management has analysed the impact of reduced revenue on the
Group's performance.
Whilst Management has concluded that the possibility of the
downside scenario occurring is remote, the Group would still have
adequate resources to be able to trade and settle its liabilities
as they fall due in this scenario. As a result Management also
deems the likelihood of the scenarios in the default model
occurring to be remote.
The Directors have considered the impact of COVID-19 and do not
expect the pandemic to have a material adverse impact on the Group.
Consequently, the directors believe that the company is well placed
to manage its business risks successfully despite the current
uncertain economic outlook.
The Directors have, at the time of approving the financial
statements, a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future and as such continue to adopt the going concern basis of
accounting in preparing the financial statements.
This financial information does not amount to full financial
statements within the meaning of Section 434 of Companies Act 2006.
The financial information has been extracted from the Group's
Annual Report and Financial Statements for the year ended 31
December 2021 on which an unqualified report has been made by the
Company's auditors. Financial statements for the year ended 31
December 2020 have been delivered to the Registrar of Companies.
The 2021 statutory accounts will be delivered in due course; the
report of the auditors on those accounts was unqualified and did
not contain a statement under Section 498 of the Companies Act
2006. Copies of the Annual Report and Financial Statements will be
made available to shareholders shortly and printed copies will be
available from the Company's registered office at 5 Merchant
Square, London W2 1AY.
2.2) Basis of Consolidation
The consolidated financial statements comprise the financial
statements of the Company and its subsidiaries as at 31 December
2021, with the comparatives presented for the previous 12 months
being the Group's combined activities for the 12 months ended 31
December 2020.
Control is achieved when the Group is exposed, or has rights, to
variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the
investee. Specifically, the Group controls an investee if, and only
if, the Group has:
-- Power over the investee (i.e., existing rights that give it
the current ability to direct the relevant activities of the
investee)
-- Exposure, or rights, to variable returns from its involvement with the investee
-- The ability to use its power over the investee to affect its
returns Generally, there is a presumption that a majority of voting
rights results in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of
an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee,
including:
-- The contractual arrangement(s) with the other vote holders of the investee
-- Rights arising from other contractual arrangements
-- The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements of control. Consolidation of a
subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the
subsidiary. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the year are included in
the consolidated financial statements from the date the Group gains
control until the date the Group ceases to control the
subsidiary.
Profit or loss and each component of other comprehensive income
(OCI) are attributed to the equity holders of the parent of the
Group and to the non-controlling interests, even if this results in
the non-controlling interests having a deficit balance. When
necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies in line with the
Group's accounting policies. All intra-group assets and
liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on
consolidation.
A change in the ownership interest of a subsidiary, without a
loss of control, is accounted for as an equity transaction. If the
Group loses control over a subsidiary, it derecognises the related
assets (including goodwill), liabilities, non-controlling interest
and other components of equity, while any resultant gain or loss is
recognised in profit or loss. Any investment retained is recognised
at fair value.
Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the executive directors that make
strategic decisions. As Kooth plc's operations are all in one
location within the United Kingdom, the Directors are of the
opinion that the Group has only one reportable operating segment,
this is in line with internal reporting provided to the executive
directors.
2.3) Summary of Significant Accounting Policies
The following are the significant accounting policies applied by
the Group in preparing its consolidated financial statements:
Revenue from Contracts with Customers
Revenue arises from the provision of counselling services and
mental health support services under fixed price contracts.
Contracts are typically for a 12 month period and are fixed price
based on an expected number of hours of counselling provided.
To determine whether to recognise revenue, the Group follows the
five step process as set out within IFRS 15.
1) Identifying the contract with a customer
2) Identifying the performance obligations
3) Determining the transaction price
4) Allocating the transaction price to the performance obligations
5) Recognising revenue when/as performance obligation(s) are satisfied.
Contracts with customers take the form of signed agreements from
customers. There is one distinct performance obligation, being the
provision of counselling services, to which all the transaction
price is allocated. Revenue from counselling services is recognised
in the accounting period in which the services are rendered. The
contracts are satisfied monthly over the contract term for an
agreed level of support hours. Revenue is recognised over-time, on
a systematic basis over the period of the contract, as this best
represents the stage of completion.
In certain circumstances the number of hours of counselling
provided may surpass the expected number of hours within the
contract. In this circumstance, Management does not recognise
additional revenue during the period, as contractually the Group
has no right to demand payment for additional hours. In some
instances, the Group has recovered additional fees post year end
for the additional hours incurred; this additional revenue is
recognised at a point in time when the Group has agreed an
additional fee and has a right to invoice. At each reporting date
there was no significant overprovision of hours noted.
In instances where the number of counselling hours provided is
less than the contracted number of hours, the full fixed fee is
still payable by the customer.
The Group typically receives cash from customers 29 days after
invoicing a customer.
Contract Assets
Contract assets are recognised for revenue earned not yet
invoiced, for customers who are invoiced on a quarterly basis. Upon
invoicing, the amount recognised as a contract asset is
reclassified to trade receivables. The Group have reviewed the
expected credit losses for the year and note no material expected
credit losses.
Contract liabilities
A contract liability is recognised if a payment is received or a
payment is due (whichever is earlier) from a customer before the
Group transfers the related services. Contract liabilities are
recognised as revenue when the Group performs under the contract
(i.e., transfers control of the related services to the
customer).
Other operating income - government grants
Government grants are recognised in profit or loss on a
systematic basis over the periods in which the entity recognises as
expenses the related costs for which grants are intended to
compensate. Grants are classified as relating either to revenue or
to assets. Grants relating to revenue are recognised in income over
the period in which the related costs are recognised. Grants
relating to assets are recognised over the expected useful life of
the asset. Where part of a grant relating to an asset is deferred,
it is recognised as deferred income.
Tax
Current tax
Current tax assets and liabilities are measured at the amount
expected to be recovered from or paid to the taxation authorities.
The tax rates and tax laws used to compute the amount are those
that are enacted or substantively enacted at the reporting date in
the countries where the Group operates and generates taxable
income.
Current tax relating to items recognised directly in equity is
recognised in equity and not in the statement of profit or loss.
Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes
provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary
differences between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes at the
reporting date. Deferred tax liabilities are recognised for all
taxable temporary differences, except:
-- When the deferred tax liability arises from the initial
recognition of goodwill or an asset or liability in a transaction
that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable
profit or loss
-- In respect of taxable temporary differences associated with
investments in subsidiaries, associates and interests in joint
arrangements, when the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary
differences, the carry forward of unused tax credits and any unused
tax losses. Deferred tax assets are recognised to the extent that
it is probable that taxable profit will be available against which
the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilised,
except:
-- When the deferred tax asset relating to the deductible
temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss
-- In respect of deductible temporary differences associated
with investments in subsidiaries, associates and interests in joint
arrangements, deferred tax assets are recognised only to the extent
that it is probable that the temporary differences will reverse in
the foreseeable future and taxable profit will be available,
against which the temporary differences can be utilised
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be utilised. Unrecognised
deferred tax assets are re-assessed at each reporting date and are
recognised to the extent that it has become probable that future
taxable profits will allow the deferred tax asset to be
recovered.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the
reporting date. Deferred tax relating to items recognised outside
profit or loss is recognised outside profit or loss. Deferred tax
items are recognised in correlation to the underlying transaction
either in OCI or directly in equity.
Tax benefits acquired as part of a business combination, but not
satisfying the criteria for separate recognition at that date, are
recognised subsequently if new information about facts and
circumstances change. The adjustment is either treated as a
reduction in goodwill (as long as it does not exceed goodwill) if
it was incurred during the measurement period or recognised in
profit or loss.
The Group offsets deferred tax assets and deferred tax
liabilities if and only if it has a legally enforceable right to
set off current tax assets and current tax liabilities and the
deferred tax assets and deferred tax liabilities relate to income
taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities which intend either to
settle current tax liabilities and assets on a net basis, or to
realise the assets and settle the liabilities simultaneously, in
each future period in which significant amounts of deferred tax
liabilities or assets are expected to be settled or recovered.
Sales tax
Expenses and assets are recognised net of the amount of sales
tax, except:
-- When the sales tax incurred on a purchase of assets or
services is not recoverable from the taxation authority, in which
case, the sales tax is recognised as part of the cost of
acquisition of the asset or as part of the expense item, as
applicable
-- When receivables and payables are stated with the amount of sales tax included
The net amount of sales tax recoverable from, or payable to, the
taxation authority is included as part of receivables or payables
in the statement of financial position.
Research and Development tax claims
Where Kooth plc has made Research and Development tax claims
under the Small and Medium Enterprise scheme and tax losses have
been surrendered for a repayable tax credit, a current tax credit
is reflected in the income statement.
Property, Plant and Equipment
Property, plant and equipment is stated in the statement of
financial position at cost, less any subsequent accumulated
depreciation and subsequent accumulated impairment losses.
The cost of property, plant and equipment includes directly
attributable incremental costs incurred in its acquisition and
installation.
Depreciation is charged so as to write off the cost of assets
over their estimated useful lives, as follows:
Leasehold improvements 33.33% straight line
Fixtures, fittings and equipment 33.33% -- 50% straight line
Goodwill and Intangibles
Goodwill
Goodwill is initially measured at cost (being the excess of the
aggregate of the consideration transferred and the amount
recognised for non-controlling interests and any previous interest
held over the net identifiable assets acquired and liabilities
assumed). If the fair value of the net assets acquired is in excess
of the aggregate consideration transferred, the Group re-assesses
whether it has correctly identified all of the assets acquired and
all of the liabilities assumed and reviews the procedures used to
measure the amounts to be recognised at the acquisition date. If
the reassessment still results in an excess of the fair value of
net assets acquired over the aggregate consideration transferred,
then the gain is recognised in profit or loss.
After initial recognition, goodwill is measured at cost less any
accumulated impairment losses. For the purpose of impairment
testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Group's cash-generating
units that are expected to benefit from the combination,
irrespective of whether other assets or liabilities of the acquiree
are assigned to those units.
Where goodwill has been allocated to a cash-generating unit
(CGU) and part of the operation within that unit is disposed of,
the goodwill associated with the disposed operation is included in
the carrying amount of the operation when determining the gain or
loss on disposal. Goodwill disposed in these circumstances is
measured based on the relative values of the disposed operation and
the portion of the cash-generating unit retained.
Intangible Assets
Intangible assets acquired separately are measured on initial
recognition at cost. The cost of intangible assets acquired in a
business combination is their fair value at the date of
acquisition. Following initial recognition, intangible assets are
carried at cost less any accumulated amortisation and accumulated
impairment losses. Internally generated intangibles, excluding
capitalised development costs, are not capitalised and the related
expenditure is reflected in profit or loss in the period in which
the expenditure is incurred.
The useful lives of intangible assets are assessed as either
finite or indefinite.
Intangible assets with finite lives are amortised over the
useful economic life and assessed for impairment whenever there is
an indication that the intangible asset may be impaired. The
amortisation period and the amortisation method for an intangible
asset with a finite useful life are reviewed at least at the end of
each reporting period. Changes in the expected useful life or the
expected pattern of consumption of future economic benefits
embodied in the asset are considered to modify the amortisation
period or method, as appropriate, and are treated as changes in
accounting estimates. The amortisation expense on intangible assets
with finite lives is recognised in the statement of profit or
loss.
Intangible assets with indefinite useful lives are not
amortised, but are tested for impairment annually, either
individually or at the cash-generating unit level. The assessment
of indefinite life is reviewed annually to determine whether the
indefinite life continues to be supportable. If not, the change in
useful life from indefinite to finite is made on a prospective
basis.
An intangible asset is derecognised upon disposal (i.e., at the
date the recipient obtains control) or when no future economic
benefits are expected from its use or disposal. Any gain or loss
arising upon derecognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying
amount of the asset) is included in the statement of profit or
loss.
Expenditure on internally developed software products and
substantial enhancements to existing software product is recognised
as intangible assets only when the following criteria are met:
-- The technical feasibility of completing the intangible asset
so that the asset will be available for use or sale
-- Its intention to complete and its ability and intention to use or sell the asset
-- How the asset will generate future economic benefits
-- The availability of resources to complete the asset
-- The ability to measure reliably the expenditure during development
Following initial recognition of the development expenditure as
an asset, the asset is carried at cost less any accumulated
amortisation and accumulated impairment losses. Amortisation of the
asset begins when development is complete and the asset is
available for use. It is amortised over the period of expected
future benefit. Amortisation is recorded in the Statement of Profit
and Loss. During the period of development, the asset is assessed
for impairment annually.
Amortisation is charged on a straight line basis over the
estimated useful life of 3 years.
Expenditure on research activities as defined in IFRS is
recognised in the income statement as an expense is incurred.
Impairment testing of intangible assets and property, plant and
equipment
For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately independent cash
inflows (CGU). Those intangible assets including goodwill and those
under development are tested for impairment at least annually. All
other individual assets or CGUs are tested for impairment whenever
events or changes in circumstances indicate that the carrying
amount may not be recoverable.
An impairment charge is recognised for the amount by which the
asset or CGUs carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of fair value, reflecting market
conditions less costs to sell, and value in use. All assets, with
the exception of goodwill, are subsequently reassessed for
indications that an impairment loss previously recognised may no
longer exist.
Financial instruments
The Group classifies financial instruments, or their component
parts, on initial recognition as a financial asset, a financial
liability or an equity instrument in accordance with the substance
of the underlying contractual arrangement. Financial instruments
are recognised on the date when the Group becomes a party to the
contractual provisions of the instrument. Financial instruments are
initially recognised at fair value except for trade receivables
which are initially accounted for at the transaction price.
Financial instruments cease to be recognised at the date when the
Group ceases to be party to the contractual provisions of the
instrument.
Financial assets are included on the balance sheet as trade and
other receivables or cash and cash equivalents.
Trade receivables
Trade receivables are amounts due from customers for services
performed in the ordinary course of business. They are generally
due for settlement within 30 days and are therefore all classified
as current. Trade receivables are recognised initially at the
transaction price. The Group holds the trade receivables with the
objective of collecting the contractual cash flows and therefore
measures them subsequently at amortised cost using the effective
interest method.
The Group assess each receivable on a customer by customer basis
for the expected lifetime credit loss, which is based on an
unbiased weighted average probability of default both at initial
recognition and subsequent reporting dates. Where an expected
credit loss is identified a provision is made against the
receivable. Significant financial difficulties of the customer,
probability that the customer will enter bankruptcy or financial
reorganisation default or delinquency in payments, and the
unavailability of credit insurance at commercial rates are
considered indicators that the receivable may be impaired. When
these factors are confirmed for a trade receivable it is considered
uncollectible and a default event is triggered. At this point it is
written off against the credit loss provision account. Subsequent
recoveries of amounts previously written off are credited against
administrative expenses in the income statement.
Trade payables
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
if the company does not have an unconditional right, at the end of
the reporting period, to defer settlement of the creditor for at
least twelve months after the reporting date. If there is an
unconditional right to defer settlement for at least twelve months
after the reporting date, they are presented as non-current
liabilities. Trade payables are recognised initially at fair value
and all are repayable within one year and hence are included at the
undiscounted amount of cash expected to be paid.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand and call
deposits, and other short-term highly liquid investments that have
a maturity date of 3 months or less, are readily convertible to a
known amount of cash and are subject to an insignificant risk of
change in value.
Leases
Short term leases or leases of low value are recognised as an
expense on a straight-line basis over the term of the lease.
The Group recognises right-of-use assets under lease agreements
in which it is the lessee. The underlying assets mainly include
property and office equipment and are used in the normal course of
business. The right-of-use assets comprise the initial measurement
of the corresponding lease liability payments made at or before the
commencement day as well as any initial direct costs and an
estimate of costs to be incurred in dismantling the asset. Lease
incentives are deducted from the cost of the right-of-use asset.
The corresponding lease liability is included in the consolidated
statement of financial position as a lease liability.
The right-of-use asset is depreciated over the lease-term and if
necessary impaired in accordance with applicable standards. The
lease liability shall initially be measured at the present value of
the lease payments that are not paid at that date, discounted using
the rate implicit in the lease. The lease liability is subsequently
measured by increasing the carrying amount to reflect interest on
the lease liability (application of the effective interest method)
and by reducing the carrying amount to reflect the lease payments
made. No lease modification or reassessment changes have been made
during the reporting period from changes in any lease terms or rent
charges.
Employee Benefit plans
Defined Contribution Plans
The Group operates a defined contribution pension plan. Payments
to defined contribution pension plans are recognised as an expense
when employees have rendered services entitling them to the
contributions.
Share-based payment
Benefits to employees are provided in the form of share-based
payment transactions, whereby employees render services in exchange
for shares or rights over shares ('equity settled transactions').
The fair value of the employee services rendered is measured by
reference to the fair value of the shares awarded or rights
granted, which takes into account market conditions and non-vesting
conditions. This cost is charged to the income statement over the
vesting period, with a corresponding increase in the share based
payment reserve.
The cumulative expense recognised at each reporting date until
the vesting date reflects the extent to which the vesting period
has expired and the company's best estimate of the number of shares
that will ultimately vest. The charge or credit to the income
statement for a period represents the movement in the cumulative
expense recognised at the beginning and end of that period and is
recognised in share based payment expense.
Assets and liabilities classified as held for sale and
discontinued operations
Assets classified as held for sale are presented separately and
measured at the lower of their carrying amounts immediately prior
to their classification as held for sale and their fair value less
costs to sell. However, some held for sale assets such as financial
assets or deferred tax assets, continue to be measured in
accordance with the Group's relevant accounting policy for those
assets. Once classified as held for sale, the assets are not
subject to depreciation or amortisation. Financial liabilities
continue to be measured in accordance with the Group's relevant
accounting policy for those items.
Any profit or loss arising from the sale or remeasurement of
discontinued operations is presented as part of a single line item.
Assets and liabilities of disposal groups are presented separately
in the statement of financial position.
Discontinued operations
A disposal group qualifies as discontinued operation if it is a
component of an entity that either has been disposed of, or is
classified as held for sale, and:
-- Represents a separate major line of business or geographical area of operations
-- Is part of a single co-ordinated plan to dispose of a
separate major line of business or geographical area of
operations
-- Is a subsidiary acquired exclusively with a view to resale
Discontinued operations are excluded from the results of
continuing operations and are presented as a single amount as
profit or loss after tax from discontinued operations in the
statement of profit or loss. Additional disclosures are provided in
Note 9. All other notes to the financial statements include amounts
for continuing operations, unless indicated otherwise.
Alternative Performance Measures
Adjusted results are prepared to provide a more comparable
indication of the Group's core business performance by removing the
impact of certain items including exceptional items, and other,
non-trading, items that are reported separately.
The Group believes that EBITDA before separately disclosed items
("adjusted EBITDA") is the most significant indicator of operating
performance and allows a better understanding of the underlying
profitability of the Group. The Group defines adjusted EBITDA as
operating profit/loss before interest, tax, depreciation,
amortisation, exceptional items and share based payments.
The Group also measures and presents performance in relation to
various other non-GAAP measures, such as gross margin, annual
recurring revenue and revenue growth.
Adjusted results are not intended to replace statutory results.
These have been presented to provide users with additional
information and analysis of the Group's performance, consistent
with how the Board monitors results.
Reclassification of Promotional Costs
During the year ended 31 December 2021 the Group made the
decision to reclassify its promotional costs from cost of sales to
administrative expenses. This gives a more appropriate view of the
financial statements, with regard to the criteria for the selection
and application of the Group's accounting policies. As a result the
comparative period has also been reclassified so that comparability
is not impaired.
The impact to the 2020 accounts as a result of the
classification is demonstrated below. The amount relating to
promotion spend included in the 2021 administrative expenses line
is GBP0.95 million.
2020
GBP'000
Revenue 13,012
Direct Costs (5,091)
--------------
Gross Profit (before reclassification) 7,921
--------------
Gross Margin 60.9%
----------------------------------------- --------------
Promotion Costs
---------------------------------------- --------------
Staff Costs 1,146
----------------------------------------- --------------
Travel 22
----------------------------------------- --------------
1,168
---------------------------------------- --------------
Gross Profit (after reclassification) 9,089
--------------
Gross Margin 69.8%
Exceptional Items
Exceptional items are analysed as costs that are not in the
ordinary operating costs of the Group.
Group Restructure
The Company was incorporated as Hamsard 3564 Limited on 19 March
2020 as a private limited company. The Group developed an
appropriate accounting policy to restructure in line with IAS 8 as
follows.
On 6 August 2020, the Company acquired all of the issued share
capital of Kooth Group Limited (formerly Xenzone Group Limited), by
way of a share for share exchange with the shareholders of Kooth
Group Limited. On 24 August 2020, by a special resolution of the
Company, the Company was re-registered as a public company limited
by shares and the name of the Company was changed to Kooth plc.
This was undertaken in anticipation of the IPO to establish Kooth
plc as the parent company of the Group. The structure of the Group
by nature remains the same as prior to the restructure and as such
the transaction falls out of the scope of IFRS 3.
3. Significant Accounting Judgements, Estimates and
Assumptions
In the application of the Group's accounting policies,
management is required to make judgements, estimates and
assumptions about the carrying value of assets and liabilities that
are not readily apparent from other sources.
Estimates and Assumptions
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of revision and future periods
if the revision affects both current and future periods.
The estimates which have the most significant impact on the
amounts recognised in the financial statements are as follows:
Useful economic lives of development costs and property, plant
and equipment
Property, plant and equipment is depreciated over the economic
useful lives of the assets. Useful lives are based on management's
estimates of the period that the assets will generate revenue,
which are reviewed annually for continued appropriateness. The
useful economic lives applied are set out in the accounting
policies. Development costs are amortised on a straight-line basis
over the useful life of the related asset which management estimate
to be three years, which is industry standard.
Share-based payments
Estimating fair value for share-based payment transactions
requires determination of the most appropriate valuation model,
which depends on the terms and conditions of the grant. This
estimate also requires determination of the most appropriate inputs
to the valuation model including the expected life of the share
option or appreciation right, volatility and dividend yield and
making assumptions about them. The basis for these key inputs and
assumptions are described in note 8.
Judgements
The areas of judgement which have the most significant impact on
the amounts recognised in the financial statements are as
follows:
Impairment of intangible assets (including goodwill) and
property, plant and equipment
The Group tests goodwill at least annually for impairment, and
whenever there is an indication that the asset may be impaired. All
other intangible assets and property, plant and equipment are
tested for impairment when indicators of impairment exist.
An impairment charge is recognised for the amount by which the
asset or CGUs carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of fair value, reflecting market
conditions less costs to sell, and value in use. All assets, with
the exception of goodwill, are subsequently reassessed for
indications that an impairment loss previously recognised may no
longer exist.
Deferred tax
The extent to which deferred tax assets can be recognised is
based on an assessment of the probability that future taxable
income will be available against which the deductible temporary
differences and tax loss carry-forwards can be utilised. In
addition, significant judgement is required in assessing the impact
of any legal or economic limits or uncertainties.
Capitalisation of Development Costs
Distinguishing the research and development phases of a new
customised project and determining whether the recognition
requirements for the capitalisation of development costs are met
requires judgement. After capitalisation, management monitors
whether the recognition requirements continue to be met and whether
there are any indicators that capitalised costs may be impaired.
Capitalised development expenditure is analysed further in note
14.
Development costs largely relate to amounts paid to external
developers, consultancy costs and the direct payroll costs of the
internal development teams. Any internal time capitalised is the
result of careful judgement of the proportion of time spent on
developing the platform.
Capitalised development expenditure is reviewed at the end of
each accounting period for indicators of impairment.
4. Revenue
The total turnover of Kooth plc has been derived from its
principal activity wholly undertaken in the United Kingdom.
2021 2020
GBP'000 GBP'000
Provision of online counselling 16,682 13,012
5. Administrative expenses
2021 2020
GBP'000 GBP'000
Employee costs 6,876 5,958
Rent and rates 212 347
IT hosting and software 882 756
Professional fees 680 498
Marketing 494 611
Depreciation & amortisation 2,384 1,498
Exceptional items - 580
Share based payment expense 431 507
Other overheads 359 461
------- -------
Total administrative expenses 12,318 11,216
6. Other operating income
2021 2020
GBP'000 GBP'000
At 1 January - 257
Received during the year - 240
Released to the statement of profit
and loss - (497)
------- -------
At 31 December - -
Government grants have been received from the Small Business
Research Initiative for a project to add functionality to the Kooth
platform to explore how users could benefit from peer-to-peer
support. There are no fulfilled conditions or contingencies
attached to these grants.
7. Exceptional items
2021 2020
GBP'000 GBP'000
IPO fees - 391
Other exceptional items - 189
------- -------
- 580
8. Employee remuneration
2021 2020
GBP'000 GBP'000
Salaries 11,543 9,217
Pensions 286 255
Social security & other staff
benefits 1,203 911
Share based payment expense 520 507
Government grant - 148
------- -------
Total 13,552 11,038
Employee numbers 2021 2020
Direct 204 171
Indirect 126 89
Developers 32 20
---- ----
362 280
Employee numbers disclosed represents the average number of
employees for the year.
Share based payment 2021 2020
GBP'000 GBP'000
Long term incentive awards 520 191
Growth shares - 316
------- -------
520 507
Long Term Incentive Awards
Long term incentive awards have been issued to all staff. The
fair value of the awards has been calculated using the Black
Scholes model, based on the market price of the underlying shares
on the date of grant. Performance conditions are attached to the
incentive awards of Executives, with 50% linked to ARR growth and
50% linked to comparative total shareholder return. Vesting
conditions require that all staff remain employed by the business
for 3 years. The shares vest over a 3 year period with a maximum
term of 10 years.
Exercise Exercise
Number of price per Number of price per
Options share Options share
2021 2021 2020 2020
Outstanding at the beginning
of the year 999,681 - -
Granted 367,173 GBP0.05 1,012,770 GBP0.05
Forfeited (286,788) GBP0.05 (13,089) GBP0.05
Exercised - GBP0.05 - GBP0.05
--------- ---------- --------- ----------
Outstanding at the end
of the year 1,080,066 999,681
Growth Shares
Growth shares were issued to Executive team members during 2019
and 2020. The fair value of growth shares was calculated using the
Black Scholes Model at the grant date. The key assumptions used in
the calculation were:
Risk free rate 1%
Annualised volatility 60%
All shares were realised and equity-settled upon Admission
during the year ended 31 December 2020. The weighted average share
prices of options exercised in the year was GBP2.
Exercise Exercise
Number of price per Number of price
Options share Options per share
2021 2021 2020 2020
Outstanding at the beginning
of the year - 65,604
Granted - GBP0.01 203,153 GBP0.01
Forfeited - GBP0.01 - GBP0.01
Exercised - GBP0.01 (268,757) GBP0.01
--------- ---------- --------- ----------
Outstanding at the end
of the year - -
9. Disposal groups classified as discontinued operations
In December 2017, the directors announced that the Group
intended to dispose of Beam ABA Services Limited. The disposal was
expected to be completed within 12 months, but no proceedable
offers were received until April 2019.
Beam ABA Services Limited represents a separate line of business
and there was a single co-ordinated plan to dispose of this area.
It was therefore treated as held for sale from December 2017 until
the point at which it was sold. Revenue and expenses, gains and
losses relating to the discontinuation of this subgroup have been
eliminated from profit or loss from the Group's continuing
operations and are shown as a single line item in the statement of
profit or loss.
On the 3rd of April 2020, Beam ABA Services Limited was sold to
Root Capital LLP for GBP1.
2021 2020
GBP'000 GBP'000
Revenue - 273
Expenses - (272)
------- -------
Profit/(Loss) after tax from discontinued
operations - 1
The discontinued operations results
contributed the following to the cash
flow: 2021 2020
GBP'000 GBP'000
Net cash inflows /(outflows) from operating
activities - 27
Net cash inflows/(outflows) from investing
activities - -
Net cash inflows/(outflows) from financing
activities - -
------- -------
Net cash inflows/(outflows) arising
on disposal - 27
Reconciliation of disposal
Cash consideration received - -
Carrying amount of net assets sold - (20)
------- -------
Gain on disposal - 20
10. Interest
2021 2020
GBP'000 GBP'000
Interest on loans - (312)
Interest on lease liability - (2)
Interest income on cash deposits 14 -
------- -------
14 (314)
Interest on loans relates to the loan with Root Capital that was
repaid in full during the year ended 31 December 2020.
11. Taxation
2021 2020
GBP'000 GBP'000
Current tax
UK corporation tax (252) (315)
Total current tax charge/(credit) (252) (315)
Deferred tax (P&L)
Origination and reversal of timing
differences (158) (156)
Effect of tax rate change on opening
balance - 4
Total deferred tax charge / (credit)
(P&L) (158) (152)
Tax charge / (credit) on profit
on ordinary activities (410) (467)
Reconciliation of tax charge
Profit /(loss) on ordinary activities
before tax (720) (1,945)
Expected tax charge on profit
on ordinary activities at standard
CT rate (137) (370)
Effects of:
Expenses not deductible for tax
purposes - 632
Effect of tax rate changing on
opening balance (93) 3
Income not taxable - (487)
R&D additional deduction (430) (348)
Difference between UK CT & DT
rates (33) -
Surrender of tax losses for R&D
tax credit refund 80 98
R&D expenditure credits - 5
Prior year adjustment 203 -
------- -------
(410) (467)
12. Earnings per share
2021 2020
GBP'000 GBP'000
Earnings used in calculation of earnings
per share :
On total losses attributable to equity
holders of the parent (310) (1,477)
On continuing operations (310) (1,478)
On discontinued operations - 1
2021 2020
Weighted average no. of shares (Basic) 33,055,776 24,351,925
Weighted average no. of shares (Diluted) 34,082,252 24,685,152
Shares in issue
B shares in issue - -
Ordinary shares in issue 33,055,776 33,055,776
Share options 1,080,066 999,681
Loss per share (basic, GBP)
On total profits attributable to equity
holders of the parent (0.01) (0.06)
On continuing operations (0.01) (0.06)
On discontinued operations 0.00 0.00
Loss per share (diluted, GBP)
On total profits attributable to equity
holders of the parent (0.01) (0.06)
On continuing operations (0.01) (0.06)
On discontinued operations 0.00 0.00
13. Goodwill
2021 2020
GBP'000 GBP'000
Goodwill as at 1 January and 31
December 511 511
Management has established counselling services as the one CGU
during the relevant periods. All goodwill is attributable to this
CGU.
The Group tests annually for impairment or more frequently if
there are indications that it might be impaired. There were no
indicators of impairment noted during the periods presented.
The Group tests goodwill for impairment by reviewing the
carrying amount against the recoverable amount of the investment.
Management has calculated the value in use using the following
assumptions:
Discount rate 8%
Growth rate 2%
Using alternative discount and growth rates as sensitised
assumptions does not result in any impairment.
The Group prepares forecasts based on the most recent financial
budgets approved by the Board. The forecasts have been used in the
value in use calculation along with the assumptions stated above.
The forecasts used are consistent with those used in the going
concern review and discussed in note 2. There were no impairments
in the years ended 31 December 2021 and 31 December 2020.
14. Development costs
2021 2020
GBP'000 GBP'000
Cost
Balance as at 1 January 4,828 3,297
Additions 2,535 1,531
------- -------
Balance as at 31 December 7,363 4,828
Amortisation
Balance as at 1 January (2,213) (895)
Amortisation (2,283) (1,318)
------- -------
Balance as at 31 December (4,496) (2,213)
Carrying amount 31 December 2,867 2,615
------- -------
The 2021 amortisation charge includes GBP0.2m in respect of
accelerated amortisation on a project where the useful economic
life was reduced from its initial three years.
15. Leases
During the year ended 31 December 2021, the value of all leases
recognised under IFRS 16 were reduced to nil. All remaining leases
are either short-term leases or leases of low value underlying
assets.
2021 2020
GBP'000 GBP'000
Right of use asset
As at 1 January 14 98
Additions - -
Depreciation - (84)
Disposal (14) -
------- -------
As at 31 December - 14
Lease liability
As at 1 January 17 95
Additions - -
Interest charge - 2
Cash payment - (80)
Disposal (17) -
------- -------
As at 31 December - 17
The consolidated statement of cash flows includes the following
amounts relating to leases within scope of IFRS 16:
2021 2020
GBP'000 GBP'000
Cash outflows - 81
16. Property, plant and equipment
2021 2020
GBP'000 GBP'000
Cost
Balance as at 1 January 388 281
Additions 63 107
------- -------
Balance as at 31 December 451 388
Depreciation
Balance as at 1 January (231) (135)
Depreciation (104) (96)
------- -------
Balance as at 31 December (335) (231)
Carrying amount 31 December 116 157
------- -------
Property, plant and equipment refers to computer and office
equipment.
17. Deferred tax assets and liabilities
Fixed asset Other temporary Tax losses Total
temporary differences
differences
At 1 January 2020 - asset/(liability) (388) 193 164 (31)
Movement - (charge)/credit (93) (114) 371 164
At 1 January 2021 - asset/(liability) (481) 79 535 133
------------ --------------- ----------
Movement - (charge)/credit 23 244 35 302
------------ --------------- ----------
At 31 December 2021 - asset/(liability) (458) 323 570 435
Deferred tax assets are recognised to the extent that it is
probable that future taxable profit will be available against which
the deductible temporary differences can be utilised.
18. Trade and other receivables
2021 2020
GBP'000 GBP'000
Trade receivables 1,609 1,430
Prepayments and other receivables 761 667
------- -------
Total trade and other receivables 2,370 2,097
All amounts shown above are short term. The net carrying value
of trade receivables is considered a reasonable approximation of
fair value.
19. Contract assets
2021 2020
GBP'000 GBP'000
Accrued income 406 107
20. Cash and cash equivalents
2021 2020
GBP'000 GBP'000
Cash and cash equivalents 7,079 7,823
21. Trade and other payables
2021 2020
GBP'000 GBP'000
Trade payables 417 275
Accruals and other creditors 649 866
Tax liabilities 948 827
------- -------
Total 2,014 1,967
22. Contract liabilities
2021 2020
GBP'000 GBP'000
Contract liabilities - current 797 619
23. Equity
Share Capital
2021 2020
GBP'000 GBP'000
Ordinary A shares 1,653 1,653
The share capital of Kooth plc consists of fully paid ordinary
shares with a nominal value of GBP0.05 per share.
The A ordinary shares have attached to them full voting,
dividend and capital distribution rights (including on winding up).
They do not confer any right of redemption. B ordinary shares have
attached to them no voting, dividend or capital distribution rights
(including on winding up). They do not confer any rights of
redemption.
Number of Shares
Number of Shares 2021 2020
Ordinary A shares 33,055,776 33,055,776
During the year ended 31 December 2020, 203,152 GBP0.0001 B
shares in Kooth Group Limited (formerly Xenzone Group Limited) were
issued to Executive team members bringing the total number of B
shares to 367,928. These shares were accounted for as a share based
payment transaction under IFRS 2, with the nominal value of these
shares held in share capital and the fair value expense recognised
in the share based payment reserve. See note 6.
Upon incorporation of Kooth plc in September 2020, the Company
entered into a share for share exchange agreement whereby 1,000,000
A ordinary and 367,928 B ordinary GBP3 shares were issued in the
capital of Kooth plc.
The Company then undertook a reduction of capital whereby the
total aggregate nominal amount of share capital was reduced from
GBP4,104,000 to GBP1,368,000 by reducing the nominal value of each
share from GBP3 to GBP1.
Subsequent to this, and prior to the listing on AIM, the Company
undertook a reorganisation whereby 1,000,000 A ordinary shares and
367,928 B ordinary shares GBP1 shares were sub-divided into
20,000,000 A ordinary shares and 7,358,560 B ordinary shares of
GBP0.05. These shares were reclassified into 25,055,776 ordinary
shares and 2,302,784 deferred shares of GBP0.05. The deferred
shares were subsequently bought back and cancelled by the
Company.
On 2 September 2020, Kooth plc issued 8 million new ordinary A
shares of 200p each via an Initial Public Offering and admission to
AIM. This brought the total shares in issue to 33,055,776.
Upon Admission, the B shares converted into Ordinary A
shares.
2021 2020
GBP'000 GBP'000
Share Premium 14,229 14,229
Share premium represents the funds received in exchange for
shares over and above the nominal value.
2021 2020
GBP'000 GBP'000
Share based payment reserve 959 529
The share based payment reserve represents amounts accruing for
equity settled share options granted plus the fair value of growth
shares realised upon IPO.
2021 2020
GBP'000 GBP'000
Merger reserve (4,104) (4,104)
The merger reserve was created as a result of the share for
share exchange during the year ended 31 December 2020.
2021 2020
GBP'000 GBP'000
Capital redemption reserve 115 115
The capital redemption reserve was established as a result of
the deferred share buyback during the year ended 31 December
2020.
24. Auditors remuneration
2021 2020
GBP'000 GBP'000
Fees payable to the auditor for the audit
of the Company and Consolidated financial
statements 75 50
Fees payable to the auditor and its associates
for other services:
Other audit related services 5 139
25. Financial assets and liabilities
2021 2020
GBP'000 GBP'000
Financial assets
Trade and other receivables 2,370 1,782
Cash and cash equivalents 7,079 7,823
Financial liabilities
Trade and other payables 2,015 1,985
Management has assessed that the fair values of cash, trade
receivables, trade payables, and other current liabilities
approximate their carrying amounts largely due to the short-term
maturities of these instruments.
25.1) Financial instruments risk management objectives and
policies
The Group's principal financial liabilities comprise trade and
other payables. The Group has no debt facility as at 31 December
2021 (2020: GBPnil). The main purpose of these financial
liabilities is to finance the Group's operations. The Group's
principal financial assets include trade receivables and cash that
derive directly from its operations.
The Group is exposed to market risk, credit risk and liquidity
risk. The Group's senior management oversees the management of
these risks. The Group's senior management is supported by the
Board of Directors who advise on financial risks and the
appropriate financial risk governance framework for the Group. The
Board provides assurance to the Group's senior management that the
Group's financial risk activities are governed by appropriate
policies and procedures and that financial risks are identified,
measured and managed in accordance with the Group's policies and
risk objectives.
The Board of Directors reviews and agrees policies for managing
each of these risks, which are summarised below.
Market risk
Market risk is the risk that the fair value or future cash flows
of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises three types of risk: interest
rate risk, currency risk and other price risk, such as equity price
risk and commodity risk.
Market risk is deemed to be immaterial to the Group given
that:
-- the Group has no debt facilities in place at the year ended
31 December 2021 (GBP2020: GBPnil) that would cause interest rate
risk, and
-- the Group's activities are solely domestic therefore eliminating foreign currency risk.
Credit risk
The Group's principal financial assets are cash and trade
receivables. The credit risk associated with cash is limited, as
the counterparties have high credit ratings assigned by
international credit-rating agencies. The credit risk associated
with trade receivables is also limited as customers are primarily
government backed organisations such as the NHS or local councils.
Credit losses historically incurred have been negligible.
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient
liquidity is available to meet foreseeable needs by closely
managing its cash balance.
As at the year ended 31 December 2021 the Group is solely funded
by equity and as a result liquidity risk is deemed to be
immaterial. The Group monitors its risk of a shortage of funds
through both review and forecasting procedures.
26. Related party transactions
Note 28 provides information about the Group's structure,
including details of the subsidiaries and the holding company. The
Group has taken advantage of the exemption available under IAS 24
Related Party Disclosures not to disclose transactions between
Group undertakings which are eliminated on consolidation.
The following table provides the total amount of transactions
that have been entered into with related parties for the relevant
financial year.
2021 2020
GBP'000 GBP'000
Monitoring fees - ScaleUp Capital
Limited 50 91
------- -------
50 91
Key management personnel are the executive members of the Board
of Directors of the Group and their remuneration is disclosed below
and in the Remuneration Committee report.
2021 2020
GBP'000 GBP'000
Base salary and fees 430 393
Pension 8 9
Gain on exercise of share options - 132
------- -------
Total 438 534
27. Capital management policies and procedures
The Group's capital management objectives are:
-- to ensure the Group's ability to continue as a going concern
-- to provide an adequate return to shareholders by pricing
products and services in a way that reflects the level of risk
involved in providing those goods and services.
The Group monitors capital on the basis of the carrying amount
of equity, less cash and cash equivalents as presented in the
statement of financial position.
The Group has no debt facilities in place as at 31 December 2021
(2020: GBPnil).
Management assesses the Group's capital requirements in order to
maintain an efficient overall financing structure while avoiding
excessive leverage. The Group manages the capital structure and
makes adjustments to it in the light of changes in economic
conditions and the risk characteristics of the underlying
assets.
The amounts managed as capital by the Group for the reporting
periods under review are summarised as follows:
2021 2020
GBP'000 GBP'000
Total equity 10,973 10,853
Cash and cash equivalents 7,079 7,823
------- -------
Capital 18,052 18,676
Total equity 10,973 10,853
Lease liability - 17
------- -------
Financing 10,973 10,870
28. Subsidiaries and associated companies
Name Country of Proportion Activity Registered Address
Incorporation Held
Kooth Group Limited UK 100% Platform development 5 Merchant Square,
London, England, W2
1AY
Kooth Digital Health UK 100% Provision of 5 Merchant Square,
Limited online counselling London, England, W2
and support 1AY
to children,
young people
and adults in
need
Xenzone Alliance UK 100% Dormant 5 Merchant Square,
CIC London, England, W2
1AY
29. Standards issued but not yet effective
At the date of authorisation of these consolidated financial
statements, several new, but not yet effective, Standards and
amendments to existing Standards, and Interpretations have been
published by the IASB. None of these Standards or amendments to
existing Standards have been adopted early by the Group.
Management anticipates that all relevant pronouncements will be
adopted for the first period beginning on or after the effective
date of the pronouncement. New Standards, amendments and
Interpretations not adopted in the current year have not been
disclosed as they are not expected to have a material impact on the
Group's consolidated financial statements.
30. Ultimate Controlling Party
No shareholder owns a majority of shares. The directors do not
consider that there is one ultimate controlling party.
31. Events after the reporting date
There have been no material events.
32. Capital commitments
The Group's capital commitments at 31 December 2021 are GBPnil
(FY20: GBPnil).
33. Parent Company Statement of Financial Position
Note 31 December 2021 31 December 2020
GBP'000 GBP'000
Assets
Non-current assets
Investments 34 4,414 4,414
Current assets
Trade & other receivables 38 50 114
Deferred tax 39 52 15
Intercompany receivables 35 6,707 6,734
Cash & cash equivalents 36 6,533 6,674
Total current assets 13,342 13,537
Total assets 17,756 17,951
Liabilities
Current liabilities
Trade payables 40 (64) (23)
Intercompany payables 35 (2,616) (2,891)
Total current liabilities (2,680) (2,914)
Net current assets 10,662 10,623
Non-current liabilities - -
Net assets 15,076 15,037
---------------- ----------------
Equity
Share capital 41 1,653 1,653
Share premium account 41 14,222 14,222
P&L reserve 41 2,231 2,622
Share-based payment
reserve 41 959 529
Capital redemption
reserve 41 115 115
Merger reserve 41 (4,104) (4,104)
Total equity 15,076 15,037
---------------- ----------------
As permitted by section 408 of the Companies Act 2006, the
income statement of the parent company is not presented as part of
the financial statements. The parent company's loss for the
financial period was GBP391k (2020: GBP115k).
The accompanying notes form part of the financial
statements.
Parent Company Statement of Changes in Equity
Share Share Share P&L reserve Capital Merger Total
capital premium based redemption reserve equity
payment reserve
reserve
Balance at 19 March
2020 - - - - - -
Issue of share capital 400 14,222 - - - - 14,622
Share for share exchange 3,989 - - - 115 (4,104) -
Capital reduction (2,736) - - 2,736 - - -
Share based payments - - 529 - - - 529
Total comprehensive
loss for the year - - - (114) - - (114)
-------- -------- -------- ----------- ----------- -------- -------
As at 31 December
2020 1,653 14,222 529 2,622 115 (4,104) 15,037
Balance at 1 January
2021 1,653 14,222 529 2,622 115 (4,104) 15,037
Share based payments - - 430 - - - 430
Total comprehensive
loss for the year - - - (391) - - (391)
-------- -------- -------- ----------- ----------- -------- -------
As at 31 December
2021 1,653 14,222 959 2,231 115 (4,104) 15,076
The accompanying notes form part of the financial
statements.
Notes to the Parent Company Financial Statements
Basis of Preparation
The Financial Statements are presented in pound sterling,
rounded to the nearest thousand, unless otherwise stated. They are
prepared under the historical cost basis, except that derivative
financial instruments are stated at their fair value, and in
accordance with Financial Reporting Standard 101 Reduced Disclosure
Framework (FRS 101) and the Companies Act 2006.
As permitted by FRS 101, the Company has taken advantage of the
disclosure exemptions available under that standard in relation to
share-based payments, financial instruments, capital management,
presentation of comparative information in respect of certain
assets, presentation of a cash flow statement, standards not yet
effective, impairment of assets and certain related party
transactions. Where required, equivalent disclosures are given in
the Consolidated Financial Statements.
As permitted by section 408(4) of the Companies Act 2006, a
separate income statement and statement of comprehensive income for
the Company has not been included in these Financial Statements.
The principal accounting policies adopted are described below. They
have all been applied consistently to all years presented.
Amounts receivable by the Company's auditor and its associates
in respect of services to the Company and its associates, other
than the audit of the Company's Financial Statements, have not been
disclosed as the information is required instead to be disclosed on
a consolidated basis in the Consolidated Financial Statements.
The following are key accounting policies for the Company:
- Basis of Preparation
- Going concern
- Trade receivables and payables
- Cash and cash equivalents
These policies of the company are consistent with those adopted
by the Group and disclosed in note 2 to the consolidated financial
statements. The following are additional accounting policies that
relate to the Company.
Investments
Investments are stated at their cost less impairment losses.
Intercompany
Intercompany balances are intercompany loans, and comprise of
amounts owed to/owing from subsidiaries. IFRS 9 expected credit
losses have been assessed as immaterial in relation to these
balances.
Any key judgements or estimates are consistent with those
adopted by the Group.
34. Investments
2021 2020
GBP'000 GBP'000
Investment in subsidiaries 4,414 4,414
35. Intercompany
2021 2020
Intercompany receivable balances GBP'000 GBP'000
Kooth Group Limited 6,708 6,734
Intercompany payable balances
Kooth Digital Health Limited (2,616) (2,891)
36. Cash and cash equivalents
2021 2020
GBP'000 GBP'000
Cash and cash equivalents 6,533 6,674
37. Related parties
Key management personnel are the executive members of the Board
of Directors. Remuneration applicable to the Company is disclosed
below, with further information disclosed in the Remuneration
Committee report.
2021 2020
GBP'000 GBP'000
Salaries 430 157
Social security costs 57 21
Pension costs 8 3
------- -------
Total remuneration 495 181
38. Trade Receivables
2021 2020
GBP'000 GBP'000
Prepayments and other receivables 50 38
VAT receivable - 76
------- -------
50 114
39. Deferred tax assets
Tax losses
At 1 January 2020 - asset/(liability) -
Movement - (charge)/credit 15
----------
At 31 December 2020 - asset/(liability) 15
At 1 January 2021 - asset/(liability) 15
Movement - (charge)/credit 37
----------
At 31 December 2021 - asset/(liability) 52
40. Trade Payables
2021 2020
GBP'000 GBP'000
Trade payables 35 23
VAT payable 29 -
------- -------
64 23
41. Equity
2021 2020
GBP'000 GBP'000
Ordinary A shares 1,653 1,653
Number of shares 2021 2020
Ordinary A shares 33,055,776 33,055,776
The share capital of Kooth plc consists of fully paid ordinary
shares with a nominal value of GBP0.05 per share.
The A ordinary shares have attached to them full voting,
dividend and capital distribution rights (including on winding up).
They do not confer any right of redemption. B ordinary shares have
attached to them no voting, dividend or capital distribution rights
(including on winding up). They do not confer any rights of
redemption.
Upon incorporation of Kooth plc, the Company entered into a
share for share exchange agreement whereby 1,000,000 A ordinary and
367,928 B ordinary GBP3 shares were issued in the capital of Kooth
plc.
The Company then undertook a reduction of capital whereby the
total aggregate nominal amount of share capital was reduced from
GBP4,104,000 to GBP1,368,000 by reducing the nominal value of each
share from GBP3 to GBP1.
Subsequent to this, and prior to the listing on AIM, the Company
undertook a reorganisation whereby 1,000,000 A ordinary shares and
367,928 B ordinary shares GBP1 shares were sub-divided into
20,000,000 A ordinary shares and 7,358,560 B ordinary shares of
GBP0.05. These shares were reclassified into 25,055,776 ordinary A
shares and 2,302,784 deferred shares of GBP0.05. The deferred
shares were subsequently bought back and cancelled by the
Company.
On 2 September 2020, Kooth plc issued 8 million new ordinary A
shares of 200p each via an Initial Public Offering and admission to
AIM. This brought the total shares in issue to 33,055,776.
Upon Admission, the B shares converted into Ordinary A
shares.
2021 2020
GBP'000 GBP'000
Share Premium 14,222 14,222
Share premium represents the funds received in exchange for
shares over and above the nominal value.
2021 2020
GBP'000 GBP'000
Share based payment reserve 959 529
The share based payment reserve represents amounts accruing for
equity settled share options granted plus the fair value of growth
shares realised upon IPO.
2021 2020
GBP'000 GBP'000
Merger reserve (4,104) (4,104)
The merger reserve was created as a result of the share for
share exchange during the year ended 31 December 2020.
2021 2020
GBP'000 GBP'000
Capital redemption reserve 115 115
The capital redemption reserve was established as a result of
the deferred share buyback during the year ended 31 December
2020.
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END
FR BKFBNKBKBCNB
(END) Dow Jones Newswires
March 29, 2022 02:00 ET (06:00 GMT)
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