Out-of-hours services provider Totally Plc said today that it was continuing to make significant progress against its ‘buy and build growth strategy’ as 2017 revenue leaped more than four-fold to £21.4m.
Announcing unaudited results for the year ended 31 December 2017, the Aim-listed company said its acquisition of out-of-hospital services provider Vocare for £11m in October had been ‘transformational’ and that it planned to focus on integrating the business to maximise efficiency and growth over the coming year.
The increased turnover helped propel the company into a small but positive EBITDA of £15,000 against an EBITDA loss of £1.2m in 2016. However, alongside the surge in revenue, the company reported a massive increase in costs, including £1.2m related to the acquisition and £292,000 in connection with a fair value adjustment of deferred consideration on previous acquisitions. The result was that pre-tax losses deepened to £2m (2016: £1.5m).
Nevertheless, the company remains confident it can achieve further synergies and consolidation across its subsidiaries to further reduce its costs and capitalise on emerging opportunities in the market.
Vocare is one of the UK’s leading providers of integrated urgent care services to the NHS, including GP out-of-hours services, the NHS 111 service and urgent care centres working in conjunction with NHS A&E departments. It has recently secured a number of new contracts, including a £13.1m contract to deliver the NHS 111 service for Wiltshire, which is due to commence on 1 May.
CEO Wendy Lawrence said the acquisition meant the Group was well placed to take ‘significant market share’ in the fragmented urgent care market.
‘This is an area of strategic importance in the healthcare sector, particularly following the Integrated Urgent Care Service specification published by the NHS in August 2017,’ she said. ‘The NHS is now completely reviewing its approach to urgent care with the aim to provide care closer to people’s homes and help tackle the rising pressures on all urgent care services.’
As well as the Wiltshire contract, Vocare secured a number of contract extensions during the year and successfully mobilised a five year deal worth £10.2m to provide NHS 111 services for Cornwall and the Scilly Isles.
‘Our existing businesses have performed well, winning a number of new and renewed contracts demonstrating their continued commitment to service delivery and their strong relationships with our partners in both the public and private sector health care markets…Our priority remains securing high-quality contracts with clear and sustainable margins and ensuring we provide a first-class service. As the outsourced healthcare market continues to evolve I am confident that our enhanced service offering and national footprint places us in a strong position to benefit and capitalise on the opportunities we begin to see emerging,’ Lawrence added.
The company said it would also continue to evaluate value accretive acquisition opportunities focused on consolidating the outsourced healthcare services market.
Chairman Bob Holt said: ‘The acquisition of Vocare brings significant scale and diversity to Totally and, with the release of the new Integrated Urgent Care requirements by NHS England, offers a significant opportunity for the enlarged Group. We now enter a period of consolidation and operational focus to enable the continued delivery of earnings enhancing milestones. Whilst the acquisition of Vocare has not been without its challenges, we remain committed to building a profitable platform for growth and our vision of establishing Totally as the leading out-of-hospital services provider and in turn delivering value to our shareholders.’
The company is in the process of changing its accounting reference date to the end of March to align with the NHS financial year and will publish audited results for the 15 months to March 2018 in September.