TIDMKOO
RNS Number : 2275V
Kooth PLC
04 April 2023
4 April 2023
Kooth Plc
("Kooth" or the "Company" or the "Group")
Full year results
2022 revenue up 21%, in line with expectations
Selected for significant US contract in California
Kooth (AIM: KOO), the UK's leading digital mental health
platform, announces audited results for the twelve months ended 31
December 2022. All figures relate to this period unless otherwise
stated.
Strategic Highlights
-- Excellent progress with US expansion strategy
o $3m pilot contract in the State of Pennsylvania
o Selected for significant contract in California to support all
13-25 year olds (post period end)
-- Strengthening of our market-leading position supporting children and young people in the UK
o More than 60% of 10-25 year olds have free access to Kooth in
the UK
o New commissions in Scotland, expanding from four to nine
contracts
-- Momentum for adult strategy in the UK
o Adult public sector: 76% Annual Recurring Revenue (ARR) growth
to GBP3m, eight new regions added
o Kooth Work (corporate): focus on frontline workers and
charities that support them resulting in wins for Help for Heroes,
MoD and multi-academy trusts
-- Ongoing investment in Kooth platform and technology, including AI and personalised mobile app
Financial Highlights
-- Revenues in line with expectations, up 21% to GBP20.1m (2021: GBP16.7m)
-- Annual Recurring Revenue up 25% to GBP21.1m (2021: GBP16.9m)
-- Resilient business model with 95% of revenues from contracts 12 months or longer
-- Net Revenue Retention of 107% (2021: 109%)
-- Gross margin stable at 68.9% (2021: 69.5%)
-- Adjusted EBITDA of GBP1.6m (2021: GBP2.1m), with investment
in the US and the end of COVID projects offsetting the benefits of
the US ramp up
-- Strong balance sheet with net cash of GBP8.5m at year end (2021: GBP7.1m) and no debt
Current trading and outlook
-- US market presents significant long-term opportunity
-- Expect to finalise terms of California contract in Q2,
resulting in revenues ahead of 2023 market expectations
-- Continuing to deliver on Pennsylvania pilot with a view to
renewing and expanding our activities
-- In the UK, focus on Integrated Care System (ICS)
relationships and expansion to support their UK-wide mental health
strategies
Tim Barker, Chief Executive of Kooth said:
"2022 was a pivotal year for Kooth. We have a clear mission, to
digitally transform access to effective, personalised care. I am
proud of the progress we made towards this goal on a number of
fronts. Not only did we enjoy success expanding our service for
children, young people and adults across the UK; we won our first
US contract in the State of Pennsylvania. This resulted in strong
revenue growth, in line with expectations, and a net cash position
that supports our growth ambitions, notably in the US.
"Kooth is uniquely positioned to respond to long-term demand for
digital mental health services in the US and UK, with a proven
track record and strong efficacy profile, strong recurring revenue
and a net cash position. This is shown by our significant contract
win in California, in March 2023, as part of California Governor
Gavin Newsom's $4.7bn investment in youth behavioural health. As we
enter 2023, our model, strategy, and market position in the UK and
US, coupled with the talent and dedication of our employees, give
us confidence of further progress this year."
The information contained within this announcement is considered
to constitute inside information as stipulated under Article 7 of
the Market Abuse Regulation (EU) no. 596/2014 as incorporated into
UK domestic law by virtue of the European Union (Withdrawal) Act
2018 ("UK MAR").
Enquiries:
Kooth plc investorrelations@kooth.com
Tim Barker, CEO
Sanjay Jawa, CFO
Panmure Gordon, Nominated Adviser
and Joint Broker
Corporate Finance: +44 (0) 20 7886 2500
Dominic Morley, James Sinclair-Ford,
Daphne Zhang
Corporate Broking:
Rupert Dearden
Stifel, Joint Broker +44 (0) 20 7710 7600
Ben Maddison, Nick Adams, Nicholas Harland,
Richard Short
FTI Consulting, Financial PR kooth@fticonsulting.com
Jamie Ricketts, Alex Shaw, Usama Ali
About Kooth plc:
Kooth's (AIM: KOO) mission is to make effective, personalised
mental health care accessible to everyone.
Our integrated digital mental health platform creates a
welcoming, stigma-free space for both children and adults.
Individuals have rapid access to support through self-help
resources, peer-support communities, and 1:1 professional help, all
without barriers or waiting lists.
We partner with governments, healthcare providers, insurers and
employers to deliver population-wide services to tackle mental
health issues before things deteriorate, reducing the demand for
downstream expensive mental health treatments.
Established in 2001, Kooth has supported over one million
individuals both in the UK and the US (where Kooth is expanding
rapidly to address the youth mental health crisis).
For more information, please visit www.koothplc.com.
Chair's statement
This year's annual report illustrates the huge efforts that have
been made by everyone at Kooth towards our vision of expanding
access to digital mental healthcare at a population-wide scale. I
want to thank all members of our team for their continued hard work
and dedication in helping to make this vision a reality.
In 2022 we began our international expansion, with a focus on
the US. Our progress so far has exceeded our expectations. In
September we announced our first large-scale deployment in the
State of Pennsylvania - a $3 million pilot contract. After the
year-end, in March, we announced that we had been selected by the
California Department of Health Care Services to provide our
service to every 13-25 year old in the State. This contract, which
is still in the process of being finalised, is part of California's
$4.7 billion 5-year plan to transform access to youth mental
healthcare.
Turning to the UK, in 2022/23 the NHS budgeted GBP15.6 billion
for mental healthcare. We estimate that digital services represent
less than 3% of this spending today, a reminder that the UK is
still very much in the early stages of the digital transformation
of mental healthcare and that significant opportunities remain in
our home market.
Our offering for children and young people continues to grow.
Kooth is now available to over 60% of 10-25 year olds across the
UK, with new commissions demonstrating our potential to become a
near-nationwide service in the future.
Momentum for Kooth Adult continues, with the addition of eight
new regions in 2022, including Greater Manchester, Norfolk, and
Devon, growing ARR 76% to GBP3.0 million (2021: GBP1.7 million),
and expanding free access to 8.8 million (2021: 3.8 million) adults
nationwide.
I am pleased to report that our financial performance has been
in line with market expectations, with revenue growing by 21% to
GBP20.1 million (2021: GBP16.7 million). As previously highlighted,
we are focused on growing our business to ensure that we can take
full advantage of the global opportunities currently available to
Kooth. This increased investment saw adjusted EBITDA decrease from
GBP2.1 million to GBP1.6 million with a consequent reduction in
adjusted EBITDA margin to 8.0% (2021: 12.5%).
Kooth's recurring revenue, which we define as contracts with a
duration of 12 months or more, contributes over 95% of our revenue.
As a subscription-based business, this not only gives us strong
forward revenue visibility, but also allows our growth plans to be
financed with confidence.
We enter 2023 with a solid financial position, significant
growth opportunities in both the US and the UK, GBP8.5 million in
cash, no debt, and a proven business model.
Peter Whiting
Non-Executive Chair
3 April 2023
Chief Executive Officer's statement
Delivering positive social impact, cost effectively and at
scale
As a social impact business, our purpose is to help tackle the
growing global mental health challenge. We do this by delivering a
welcoming digital mental health platform, accessible to all. Our
focus is on creating a service which provides rapid, responsive,
and effective support to individuals to address problems earlier,
reducing the need for, and cost of, acute treatment programs.
Kooth has a quantifiably positive impact on society whilst also
saving healthcare systems money. In 2022, the York Health Economics
Consortium published an independent health economics study showing
that Kooth delivers GBP3.14 in cost savings for every GBP1 spent.
Our own analysis of the US market shows a potential 12:1 saving,
due to the higher healthcare costs seen in that market. In short,
we can ensure that healthcare budgets around the world can achieve
more with less.
Outstanding progress in the US market
Our success in the US can be traced back to our heritage and the
track record we have built in the UK. When I joined Kooth three
years ago, I was attracted by the positive social impact, coupled
with the expertise, passion and thoughtfulness across the team.
This is vital to ensure we can pragmatically address the global
challenge in mental healthcare. With Kooth's 20+ years of
experience and data, no other organisation has our level of
operating expertise and evidence in how to deliver population-wide
digital mental healthcare.
It is encouraging to see our expertise, and the value it can
bring, recognised internationally, with our rapid expansion into
the US a particular personal highlight.
Kooth won its first US contract in October 2022, when the State
of Pennsylvania awarded us a $3 million pilot to expand access to
digital mental health support for up to 150,000 school
students.
In March 2023, Kooth was awarded a contract by the California
Department of Health Care Services (DHCS) to roll out its platform
in January 2024 to over 6 million 13-25 year olds as part of the
State's $4.7 billion 5-year plan to transform access to youth
mental health care. This was a competitive process, where Kooth
competed against 450 vendors and content providers.
The imperative to act on the youth mental health crisis is one
that both Federal and State governments are increasingly acting
on.
The need for action is laid bare in a recent report from the US
CDC (Centers for Disease Control and Prevention). It highlights
that 22% of high school students seriously considered attempting
suicide during the past year, with 10% attempting suicide one or
more times.
A study by Pew Research published in January 2023 found that
youth mental health is now the top concern for parents with
children under 18: Forty percent are either very or extremely
worried. This is a crisis that Kooth can, and must, help
address.
There is a clear need and opportunity for Kooth to focus on in
the US. This will remain a key strategic priority for the business
in 2023.
UK market expansion, and an increase in the levels of support
people need
Reviewing Kooth's UK progress in 2022, it is clear that we took
significant strides in expanding our service for children and young
people across the UK. New commissions in Scotland were a key
highlight, where we grew from four to nine contracts during the
year.
Availability of our service for adults, Qwell, grew from 3.8
million at the start of the year to over 8 million adults.
Greater Manchester Integrated Care System (ICS) represents the
largest Qwell rollout of the year. In this region we are now
available to approximately 2 million people aged 10 to 99+
across all 10 localities. ARR for Kooth Adult grew over 75% to
GBP3 million during the year.
In 2022 new users were accessing Kooth more often than before -
the platform experienced a 15% increase in logins over the previous
year. However, there was a slight reduction in uptake among the
population, from 1-in-33 in 2021 to 1-in-36 in 2022. This is a
result of expanding our reach of Kooth to 19-25 year olds, who
initially engage less than the 10-18 cohort. By comparison usage
pre-covid in 2019 was 1-in-40.
Furthermore, we continue to see a growing trend in the increased
level of severity and safeguarding risk for individuals seeking
support, with 80% of users presenting with a moderately severe or
severe level of acuity.
In response to this shift, our clinical service strategy has
evolved, with an even larger emphasis on the 'responsive', 'safe'
and 'person-centred' elements of our clinical model, expanding our
safeguarding, clinical, and training teams, and ensured that each
practitioner has access to external supervision to support their
professional development.
We are applying this expertise to help reduce the direct burden
on overstretched NHS services. This includes being commissioned in
late 2022 to ameliorate Accident & Emergency attendance by
providing our service to adults in need of urgent mental health
support.
Outlook
Kooth is extremely well-positioned to respond to the long-term
demand for digital mental health services in the US and UK, with a
proven track record and detailed efficacy profile, strong recurring
revenue and a net cash position.
As we enter 2023, our model, strategy, and market position,
coupled with the talent and dedication of our employees, give us
confidence in achieving further progress this year.
In the US, our focus on State-wide contracts, coupled with the
rapid progress we have made in Pennsylvania
and California, has the potential to significantly change the
growth trajectory of Kooth as more States take action to prioritise
youth mental health.
In the UK, the NHS is not only grappling with the backlog
aftermath of the pandemic, but is also dealing with the
reorganisation of NHS England. In June 2022, its structure moved
from 135 Clinical Commissioning Groups (CCGs) to 42 Integrated Care
Systems (ICSs).
While this reorganisation offers great potential for Kooth in
the medium- to long-term, we have seen near-term decision making
slow down as a direct result of these newly formed organisations
finding their feet, filling new roles, and starting to define their
population health strategies. We are starting to see the 'end of
the beginning' for this reorganisation, and I'm optimistic that it
will provide greater opportunities for Kooth.
Tim Barker
Chief Executive Officer
3 April 2023
Chief Financial Officer's statement
Significant growth
The results reflect a successful year for the business as we
continued to execute on our strategic plans and build solid
foundations to support future growth in the UK and
internationally.
Revenue
I am pleased to report Group total revenue grew during the year,
in line with market expectations, by 21% (2021: 28%) to GBP20.1
million (2021: GBP16.7 million). This has been driven by US
expansion, fee uplifts from existing clients and new business in
Adult and Children and Young People. Adult increased to just under
15% of annual recurring revenue at the year end.
Recurring revenue comprises income invoiced for services that
are repeatable, 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 and remains strong at 95% of
total revenues (2021: 94%).
Highlighting the depth and longevity of our customer
relationships, net revenue retention was 107% (2021: 109%). 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. The small decrease from 2021 was
the result of churn with the ending of some COVID-19 related
contracts and partly a slowdown in uplifts as NHS England
consolidates from a Clinical Commissioning Group (CCG) to an
Integrated Care System (ICS) structure.
Gross profit
Gross profit grew by 19.6% to GBP13.9 million (2021: GBP11.6
million) with gross margin slightly down at 68.9% (2021: 69.5%).
Direct costs are the costs of the practitioners directly involved
in the delivery of our services, a total of 267 at the year-end
(2021: 233 heads).
Gross margin was marginally lower as a result of increased staff
costs with the temporary increase during the year of the 1.25%
Health and Social Care levy tax and the end of some COVID-19
related projects at the end of 2021. This was slightly offset by a
positive mix impact as our new US contracts ramped up.
Statutory loss after tax
The Group net loss after tax for the year was GBP0.7 million
(2021: loss of GBP0.3 million).
Administrative expenses
Excluding depreciation, amortisation and share based payments,
administrative expenses grew by GBP2.7 million in the year, a 28.8%
increase year on year, which whilst ahead of revenue growth remains
in line with our strategic investment plan.
This was driven by staff and commission costs in the US as we
strengthened the business development, clinical, HR and customer
success teams. In addition, we started to incur the non- staff
costs of doing business in the US including, legal, insurance and
consulting expenses.
Excluding the US investment, administrative expenses in the UK
grew by 13.3%. This was primarily new headcount in our engagement
and marketing team, pay increases to existing staff and
inflationary increases across certain suppliers.
Adjusted EBITDA
GBP'm 2022 2021
------------------------------ ----- -----
Operating Loss (0.9) (0.7)
Add Back:
Depreciation and Amortisation 2.2 2.4
Share based payment expense 0.3 0.4
------------------------------ ----- -----
Adjusted EBITDA 1.6 2.1
------------------------------ ----- -----
Taxation
There has been no corporation tax charge recognised in the year
due to accumulated losses combined with the overall current year
position (2021: GBPnil). The tax credit for the year ended 31
December 2022 and 2021 relate to Research and Development
expenditure credits which in 2022 was partly offset by a deferred
tax charge of GBP0.6million (2021: GBP0.2million credit) as the
Research and Development claim for 2021 was received in cash at a
lower effective tax rate rather than carrying forward as a loss to
be used against future profits.
Cash
The Group has had impressive cash management in the year with
net cash generated from operating activities of GBP4.4 million
(2021: GBP1.9 million). Free cashflow, after taking account of
capital expenditure was GBP1.3 million in 2022 compared to an
outflow of GBP0.7 million in 2021. The net cash at year end was
GBP8.5 million (2021: GBP7.1 million). Post year end in January
2023, an R&D tax receipt relating to the 2021 year of GBP0.6m
was received.
The overall improvement is due to advance payments from clients
(particularly in the US) and good working capital management as
debtor days at 31 December 2022 fell to 20 days (2021: 33 days) and
trade receivables were reduced by 34% in the year to GBP1.1 million
(2021: GBP1.6 million). The Group continues to be debt free and
maintains a robust financial position.
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 GBP3.0 million in respect of software development
(2021: GBP2.5 million) with an amortisation charge of GBP2.1
million (2021: 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 international product investment.
Capital expenditure
Software and product development costs aside, the Group's
ongoing capital expenditure requirements remain modest at GBP0.1
million (2021: GBP0.1 million).
Capital and Reserves
The strength of the Group's balance sheet with net assets of
GBP10.5 million (2021: GBP11.0 million), high levels of recurring
revenue and strong cash generation from operating activities
provide the Group with financial strength with which to execute on
its investment strategy which continues to focus on US expansion
and platform investment.
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 2022 (2021: Nil) and does
not anticipate recommending a dividend within the next year but may
do so in future years.
Sanjay Jawa
Chief Financial Officer
3 April 2023
Financial Statements
Consolidated statement of profit and loss and other
comprehensive loss
For the year ended 31 December 2022
Note 2022 2021
GBP'000 GBP'000
Revenue 4 20,120 16,682
Cost of sales (6,265) (5,097)
---------- ----------
Gross pro t 13,855 11,585
Administrative expenses 5 (14,767) (12,318)
---------- ----------
Operating loss (912) (733)
--------------------------------- ---------- ---------- ----------
Analysed as:
Adjusted EBITDA 1,612 2,082
Depreciation & amortisation 11, 12, 13 (2,232) (2,384)
Share based payment expense 6 (292) (431)
Operating loss (912) (733)
--------------------------------- ---------- ---------- ----------
Interest income 7 81 13
---------- ----------
Loss before tax (831) (720)
Tax 8 115 410
---------- ----------
Total comprehensive loss for
the year (716) (310)
---------- ----------
Loss per share - basic (GBP) 9 (0.02) (0.01)
Loss per share - diluted (GBP) 9 (0.02) (0.01)
Consolidated statement of financial position
As at 31 December 2022
Note 31 December 31 December
2022 2021
Assets GBP'000 GBP'000
Non-current assets
Goodwill 10 511 511
Development costs 11 3,681 2,867
Right of use asset 12 68 -
Property, plant and equipment 13 122 116
Deferred tax 14 - 435
----------- -----------
Total non-current assets 4,382 3,929
Current assets
Trade and other receivables 15 2,618 2,370
Contract assets 16 649 406
Cash and cash equivalents 17 8,492 7,079
----------- -----------
Total current assets 11,759 9,855
----------- -----------
Total assets 16,141 13,784
Liabilities Current
liabilities Trade payables 18 (680) (417)
Contract liabilities 19 (2,583) (797)
Lease liability 12 (68) -
Accruals and other creditors 18 (977) (649)
Tax liabilities 18 (967) (948)
Deferred tax 14 (348) -
----------- -----------
Total current liabilities (5,623) (2,811)
----------- -----------
Net current assets 6,136 7,044
----------- -----------
Net Assets / (Liabilities) 10,518 10,973
----------- -----------
Equity
Share capital 20 1,653 1,653
Share premium account 20 14,229 14,229
P&L reserve 20 (2,595) (1,879)
Share-based payment reserve 20 1,221 959
Capital redemption reserve 20 115 115
Merger reserve 20 (4,104) (4,104)
----------- -----------
Total equity 10,518 10,973
----------- -----------
The nancial statements of Kooth plc (Company registration number
12526594) were approved by the Board of Directors and authorised
for issue on 3 April 2023. They were signed on its behalf by:
Sanjay Jawa
Chief Financial Officer
3 April 2023
The accompanying notes form part of the financial
statements.
Consolidated statement of changes in equity
For the year ended 31 December 2022
Share Share Share Capital Merger
capital premium based P&L reserve redemption reserve Total equity
payment reserve
reserve
Balance at 1 January
2021 1,653 14,229 528 (1,569) 115 (4,104) 10,852
Share based payments - - 431 - - - 431
Total comprehensive
loss for the year - - - (310) - - (310)
-------- -------- -------- ------------- ----------- --------- --------------
As at 31 December
2021 1,653 14,229 959 (1,879) 115 (4,104) 10,973
Balance at 1 January
2022 1,653 14,229 959 (1,879) 115 (4,104) 10,973
Share based payments - - 262 - - - 262
Total comprehensive
loss for the year - - - (716) - - (716)
-------- -------- -------- ------------- ----------- --------- --------------
As at 31 December
2022 1,653 14,229 1,221 (2,595) 115 (4,104) 10,518
Consolidated Cash Flow Statement
For the year ended 31 December 2022
Note 2022 2021
GBP'000 GBP'000
Cash ows from operating activities
Loss for the year Adjustments: (716) (310)
11, 12,
Depreciation & amortisation 13 2,232 2,384
Income tax received 8 330 -
Share based payment expense 6 292 520
Income tax recognised 8 (115) (410)
Interest income 7 (81) -
Movements in working capital:
(Increase) / decrease in trade and
other receivables 15 78 (574)
Increase / (decrease) in trade and
other payables 18 2,364 244
--------- ---------
Net cash ow from operating activity 4,384 1,854
Cash ows from investing activities
Purchase of property, plant and equipment 13 (100) (63)
Additions to intangible assets 11 (2,952) (2,535)
--------- ---------
Net cash used in investing activities (3,052) (2,598)
Cash ows from nancing activities
Interest income 7 81 -
--------- ---------
Net cash from nancing activities 81 -
Net increase / (decrease) in cash
and cash equivalents 1,413 (744)
Cash and cash equivalents at the beginning
of the year 17 7,079 7,823
--------- ---------
Cash and cash equivalents at the end
of the year 17 8,492 7,079
--------- ---------
Notes to the Financial Statements
1. Corporate Information
Kooth plc is a company incorporated in England and Wales. The
address of the registered of ce is 5 Merchant Square, London,
England, W2 1AY.
2. Signi cant Accounting Policies
2.1) Basis of Preparation
The preliminary results for the year ended 31 December 2022 are
an abridged statement of the full Annual Report which was approved
by the Board of Directors on 3 April 2023. The consolidated
financial statements in the full Annual Report are prepared in
accordance with UK-adopted International Financial Reporting
Standards ('IFRS'), with IFRS as issued by the International
Accounting Standards Board ('IASB') and with the requirements of
the Companies Act 2006. The auditor's report on those consolidated
financial statements was unqualified, did not draw attention to any
matters by way of emphasis without qualifying their report and did
not contain statements under section 498(2) or 498(3) of the
Companies Act 2006. The preliminary results do not comprise
statutory accounts within the meaning of section 434(3) of the
Companies Act 2006. The Annual Report for the year ended 31
December 2022 will be delivered to the Registrar of Companies
following the Company's Annual General Meeting. The financial
information included in this preliminary announcement does not
itself contain sufficient information to comply with IFRS. The
annual report and audited financial statements for the year ended
31 December 2022 will be made available on the Company's website in
April 2023.
Measurement Convention
The nancial 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 67. In addition,
note 22 to the nancial statements include the company's objectives,
policies and processes for managing its capital; its nancial risk
management objectives; and its exposures to credit risk and
liquidity risk.
During the 2022 nancial year the Group generated a loss of
GBP0.7 million (2021: GBP0.3 million). Adjusted EBITDA is GBP1.6
million (2021: GBP2.1 million). The Group is in a net asset
position of GBP10.5 million (2021: GBP11.0 million).
Management has performed a going concern assessment for a period
of 12 months from signing, which indicates that the Group will have
suf cient 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 re ect lower
activity levels than both the Group forecast and 2022 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. Management deemed the
combination of factors occurring as set out in the default model to
be implausible.
The Directors have, at the time of approving the nancial
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 nancial statements.
2.2) Basis of Consolidation
The consolidated nancial statements comprise the nancial
statements of the Company and its subsidiaries as at 31 December
2022, with the comparatives presented for the previous 12 months
being the Group's combined activities for the 12 months ended 31
December 2021.
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.
Speci cally, 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 nancial statements from the date the Group gains
control until the date the Group ceases to control the
subsidiary.
Pro t 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 de cit balance. When
necessary, adjustments are made to the nancial 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 ows 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 pro t 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 identi ed as the executive directors that make
strategic decisions. Kooth plc's operations take place in the UK
and the US.
2.3) Summary of Signi cant Accounting Policies
The following are the signi cant accounting policies applied by
the Group in preparing its consolidated nancial statements:
Revenue from Contracts with Customers
Revenue arises from the provision of counselling services and
mental health support services under xed price contracts. Contracts
are typically for a 12 month period and are xed price based on the
population covered and an expected number of hours of counselling
provided.
To determine whether to recognise revenue, the Group follows the
ve 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 as/when performance obligation(s) are satis ed
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 satis ed 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 signi cant overprovision of hours noted.
In instances where the number of counselling hours provided is
less than the contracted number of hours, the full xed fee is still
payable by the customer.
A pilot contract in the US was awarded to the Group as a
government grant. Revenue on this contract was treated in the same
manner as UK revenue contracts with revenue recognised over-time,
on a systematic basis over the period of the contract, as this best
represents the stage of completion.
Revenue on a proof of concept project in the US was recognised
on the percentage of completion method of accounting. As the
outcome of the contract were reliably measurable, revenue and costs
were recognised in proportion to the stage of completion of the
contract.
The Group typically receives cash from customers 40 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 reclassi ed
to trade receivables. The Group has 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).
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 pro t 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 nancial 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 pro t nor taxable pro t
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 pro t 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 pro t nor taxable pro t 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 pro t 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 suf cient taxable pro t 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 pro ts 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
pro t or loss is recognised outside pro t or loss. Deferred tax
items are recognised in correlation to the underlying transaction
either in OCI or directly in equity.
Tax bene ts 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 pro
t 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 signi cant 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 nancial 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 re ected in the income statement.
Property, Plant and Equipment
Property, plant and equipment is stated in the statement of
nancial 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: Computer and of ce
equipment 33.33% 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 identi able 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 identi ed 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 pro t 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 bene t 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 re ected in pro t or loss in the period in which the
expenditure is incurred.
The useful lives of intangible assets are assessed as either
nite or inde nite.
Intangible assets with nite 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 nite 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 bene ts 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 nite
lives is recognised in the statement of pro t or loss.
Intangible assets with inde nite useful lives are not amortised,
but are tested for impairment annually, either individually or at
the cash-generating unit level. The assessment of inde nite life is
reviewed annually to determine whether the inde nite life continues
to be supportable. If not, the change in useful life from inde nite
to nite 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 bene
ts 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 pro t 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 bene ts
-- 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 bene t. Amortisation is recorded in the Statement of Pro t
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 three years.
Expenditure on research activities as de ned in IFRS is
recognised in the income statement as an expense.
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
in ows (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, re ecting 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 classi es nancial instruments, or their component
parts, on initial recognition as a nancial asset, a nancial
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 classi ed
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 ows 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 identi ed a provision is made against the
receivable. Signi cant nancial dif culties of the customer,
probability that the customer will enter bankruptcy or nancial
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 con rmed 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 classi ed 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 three months or less, are readily convertible to
a known amount of cash and are subject to an insigni cant 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 of ce 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 nancial 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 re ect interest on
the lease liability (application of the effective interest method)
and by reducing the carrying amount to re ect the lease payments
made. No lease modi cation or reassessment changes have been made
during the reporting period from changes in any lease terms or rent
charges.
Employee Bene t plans
De ned Contribution Plans
The Group operates a de ned contribution pension plan. Payments
to de ned contribution pension plans are recognised as an expense
when employees have rendered services entitling them to the
contributions.
Share-based payment
Bene ts 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 re ects 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.
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 signi cant indicator of operating
performance and allows a better understanding of the underlying pro
tability of the Group. The Group de nes adjusted EBITDA as
operating pro t/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.
3. Signi cant 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 signi cant impact on the
amounts recognised in the nancial 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 6.
Judgements
The areas of judgement which have the most signi cant impact on
the amounts recognised in the nancial 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.
Assessing whether an indicator of impairment exists is a
judgement. The value in use calculated by management is an
estimate.
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, re ecting 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, signi cant 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
11.
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 undertaken in the UK and the US.
2022 2021
GBP'000 GBP'000
Provision of online counselling -
UK 18,648 16,682
Provision of online counselling -
US 1,472 -
-------- --------
20,120 16,682
5. Administrative expenses
2022 2021
GBP'000 GBP'000
8,701 6,876
Employee costs
Rent and rates 316 212
IT hosting and software 963 882
Professional fees 1,307 680
Marketing 490 494
Depreciation & amortisation 2,236 2,384
Share based payment expense 292 431
Other overheads 462 359
---------- ----------
14,767 12,318
6. Employee remuneration
2022 2021
GBP'000 GBP'000
Salaries 12,033 11,543
Pensions 317 286
Social security & other staff bene
ts 1,396 1,203
Share based payments 304 520
------- -------
14,050 13,552
Employee numbers 2022 2021
Direct 234 204
Indirect 139 126
Developers 33 32
---- ----
406 362
Employee numbers disclosed represents the average number of
employees for the year.
Share based payment 2022 2021
GBP'000 GBP'000
Long term incentive
awards 304 520
A portion of long term incentive awards are capitalised which
accounts for the difference in long term incentive awards shown in
this note compared to the amount disclosed as an expense in the
Statement of Pro t and Loss.
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 three years. The shares vest over a three year period with a
maximum term of 10 years.
Number of options Exercise price Number of Options Exercise
per share price per
share
2022 2022 2021 2021
Outstanding
at the
beginning of
the year 1,080,066 GBP0.05 999,681 GBP0.05
Granted 1,096,464 GBP0.05 367,173 GBP0.05
Forfeited (303,174) GBP0.05 (286,788) GBP0.05
Exercised - GBP0.05 - GBP0.05
----------------- -------------- ----------------- ----------
Outstanding
at the end of
the year 1,873,356 GBP0.05 1,080,066 GBP0.05
7. Interest
2022 2021
GBP'000 GBP'000
Interest income on cash
deposits 81 13
8. Taxation
2022 2021
GBP'000 GBP'000
Current tax
Corporation tax (746) (252)
------- -------
Total current tax charge / (credit) (746) (252)
Deferred tax (P&L)
Origination and reversal of timing
differences 631 (158)
------- -------
Total deferred tax charge / (credit)
(P&L) 631 (158)
------- -------
Tax charge / (credit) on pro t on
ordinary activities (115) (410)
Reconciliation of tax charge
Loss on ordinary activities before
tax (831) (720)
Expected tax charge on loss on ordinary
activities at standard CT rate (158) (137)
Effects of:
Effect of tax rate changing on opening
balance - (93)
R&D additional deduction (398) (430)
Difference between UK CT & DT rates 3 (33)
Surrender of tax losses for R&D tax
credit refund 137 80
Prior year adjustment 313 203
Other difference (12) -
------- -------
(115) (410)
9. Earnings per share
2022 2021
GBP'000 GBP'000
Earnings used in calculation of earnings
per share:
On total losses attributable to equity
holders of the parent (716) (310)
2022 2021
Weighted average no. of shares (Basic) 33,055,776 33,055,776
Weighted average no. of shares (Diluted) 34,360,798 34,082,252
Shares in issue
Ordinary shares in issue 33,055,776 33,055,776
Share options 1,873,356 1,080,066
Loss per share (basic, GBP)
On total losses attributable to equity
holders of the parent (0.02) (0.01)
Loss per share (diluted, GBP)
On total losses attributable to equity
holders of the parent (0.02) (0.01)
10. Goodwill
2022 2021
GBP'000 GBP'000
Goodwill as at 1 January 511 511
and 31 December
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 nancial
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 2022 and 31 December 2021.
11. Development costs
2022 2021
GBP'000 GBP'000
Cost
Balance as at 1 January 7,363 4,828
Additions 2,952 2,535
--------- ---------
Balance as at 31 December 10,315 7,363
Amortisation
Balance as at 1 January (4,496) (2,213)
Amortisation (2,138) (2,283)
--------- ---------
Balance as at 31 December (6,634) (4,496)
--------- ---------
Carrying amount 31 December 3,681 2,867
--------- ---------
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.
12. Leases
2022 2021
GBP'000 GBP'000
Right of use asset As at 1 January
- 14
68 -
Additions - -
Depreciation Disposal - (14)
-------- --------
As at 31 December 68 -
Lease liability As at 1 January - 17
68 -
- -
Additions Interest charge Cash payment - -
Disposal - (17)
-------- --------
As at 31 December 68 -
13. Property, plant and equipment
2022 2021
GBP'000 GBP'000
Cost
Balance as at 1 January 451 388
Additions 100 63
-------- --------
Balance as at 31 December 551 451
Depreciation
Balance as at 1 January (335) (231)
Depreciation (94) (104)
-------- --------
Balance as at 31 December (429) (335)
-------- --------
Carrying amount 31 December 122 116
-------- --------
Property, plant and equipment refers to computer
and of ce equipment.
14. Deferred tax assets and liabilities
Fixed asset Other temporary Tax losses Total
temporary differences
differences
At 1 January 2021 - asset /
(liability) (481) 79 535 133
Movement - (charge) / credit 23 244 35 302
------------ --------------- ----------- ---------
At 1 January 2022 - asset /
(liability) (458) 323 570 435
Movement - (charge) / credit (119) (98) (566) (783)
------------ --------------- ----------- ---------
At 31 December 2022 - asset
/ (liability) (577) 225 4 (348)
Deferred tax assets are recognised to the extent that it is
probable that future taxable pro t will be available against which
the deductible temporary differences can be utilised.
15. Trade and other receivables
2022 2021
GBP'000 GBP'000
Trade receivables 1,110 1,609
Prepayments and other receivables 1,508 761
-------- --------
2,618 2,370
All amounts shown above are short term. The net carrying value
of trade receivables is considered a reasonable approximation of
fair value.
16. Contract assets
2022 2021
GBP'000 GBP'000
Accrued income 649 406
17. Cash and cash equivalents
2022 2021
GBP'000 GBP'000
Cash and cash equivalents 8,492 7,079
18. Trade and other payables
2022 2021
GBP'000 GBP'000
Trade payables 680 417
Accruals and other creditors 977 649
Tax liabilities 967 948
---------- ----------
2,624 2,014
19. Contract liabilities
2022 2021
GBP'000 GBP'000
Contract liabilities 2,583 797
- current
20. Equity
2022 2021
GBP'000 GBP'000
Ordinary A shares 1,653 1,653
Number of Shares 2022 2021
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.
2022 2021
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.
2022 2021
GBP'000 GBP'000
Share based payment
reserve 1,221 959
The share based payment reserve represents amounts accruing for
equity settled share options granted plus the fair value of growth
shares realised upon IPO.
2022 2021
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.
2022 2021
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.
21. Auditors remuneration
2022 2021
GBP'000 GBP'000
Fees payable to the auditor
for the audit of the Company
and Consolidated nancial
statements 85 75
Fees payable to the auditor
and its associates for other
services:
Other audit related services 5 5
22. Financial assets and liabilities
2022 2021
GBP'000 GBP'000
Financial assets
Trade and other receivables 2,618 2,370
Cash and cash equivalents 8,492 7,079
Financial liabilities
Trade and other payables 2,692 2,014
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.
22.1 Financial assets and liabilities
The Group's principal nancial liabilities comprise trade and
other payables. The Group has no debt facility as at 31 December
2022 (2021: GBPnil). The main purpose of these nancial liabilities
is to nance the Group's operations. The Group's principal nancial
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 nancial risks and the appropriate
nancial risk governance framework for the Group. The Board provides
assurance to the Group's senior management that the Group's nancial
risk activities are governed by appropriate policies and procedures
and that nancial risks are identi ed, 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 ows
of a nancial instrument will uctuate 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 2022 (2021: GBPnil) that would cause interest rate
risk, and
-- the Group's activities are conducted in the UK and the US,
both of which are deemed to be stable economies, thereby signi
cantly reducing foreign currency risk.
Credit risk
The Group's principal nancial 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 State
governments. Credit losses historically incurred have been
negligible.
Liquidity risk
The Group seeks to manage nancial risk by ensuring suf cient
liquidity is available to meet foreseeable needs by closely
managing its cash balance.
As at the year ended 31 December 2022 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.
23. Related party transactions
Note 25 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
nancial year.
2022 2021
GBP'000 GBP'000
Monitoring fees - ScaleUp Capital
Limited 50 50
-------- --------
50 50
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.
2022 2021
GBP'000 GBP'000
Base salary and fees 709 430
Pension 21 8
-------- --------
730 438
24. 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 re ects 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 nancial position.
The Group has no debt facilities in place as at 31 December 2022
(2021: GBPnil).
Management assesses the Group's capital requirements in order to
maintain an ef cient overall nancing 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:
2022 2021
GBP'000 GBP'000
Total equity 10,518 10,973
Cash and cash equivalents 8,492 7,079
-------- --------
Capital 19,010 18,052
Total equity 10,518 10,973
Lease liability (68) -
-------- --------
Financing 10,450 10,973
25. Subsidiaries and associated companies
Name Country of Proportion Activity Registered
incorporation Held Address
---------------- --------------- ----------- --------------------- ----------------------
Kooth Group UK 100% Platform development 5 Merchant
Limited Square, London,
England, W2
1AY
---------------- --------------- ----------- --------------------- ----------------------
Kooth Digital UK 100% Provision of 5 Merchant
Health Limited online counselling Square, London,
and support England, W2
to children, 1AY
young people
and adults
in the UK
---------------- --------------- ----------- --------------------- ----------------------
Kooth USA LLC US 100% Provision of 1828 Walnut
online counselling St, Kansas
and support City, MO, 64108-1835
to children
and young people
in the US
26. Standards issued but not yet effective
At the date of authorisation of these consolidated nancial
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 rst 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
nancial statements.
27. Ultimate Controlling Party
No shareholder owns a majority of shares. The directors do not
consider that there is one ultimate controlling party.
28. Events after the reporting date
Following the year end Kooth was selected as the primary vendor
partner to deliver its digital mental health platform to all 13-25
year olds in the State of California. Kooth will provide services
integral to the Behavioral Health Virtual Services Platform, a new
technology-enabled services solution, for all children, youth, and
families in the State. The service is expected to launch in January
2024. Kooth expects the contract details to be agreed during the
course of Q2 2023, with an associated highly material impact on
revenues and ARR from 2024 onwards.
29. Capital commitments
The Group's capital commitments at 31 December 2022 are GBPnil
(2021: GBPnil).
, the news service of the London Stock Exchange. RNS is approved by
the Financial Conduct Authority to act as a Primary Information
Provider in the United Kingdom. Terms and conditions relating to
the use and distribution of this information may apply. For further
information, please contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR UOUBRORUSRAR
(END) Dow Jones Newswires
April 04, 2023 02:00 ET (06:00 GMT)
Kooth (LSE:KOO)
Historical Stock Chart
From Apr 2024 to May 2024
Kooth (LSE:KOO)
Historical Stock Chart
From May 2023 to May 2024