5 January 2015
Positive Healthcare PLC
Admission to ISDX Growth Market
The Directors of Positive Healthcare PLC are pleased to announce that 2,000,000 Bonds of GBP 1 each have
been admitted today to trading on the ISDX Growth Market under the ticker symbol DOC.
Positive Mental Health Limited ("PHML"), the wholly-owned operating subsidiary of the Positive Healthcare
PLC ("Positive" or the "Company"), is an established business in the healthcare recruitment business.
PMHL was incorporated in England on 20 February 2014. PMHL operates in the healthcare recruitment sector in
England and recruits mental health doctors, nurses and carers exclusively, including psychologists (all
talking therapies), psychiatrists, community nurses and registered mental nurses. The niche in which PMHL
operates lies within the Allied Health Professions (AHP) sector of the NHS and private hospitals. PMHL has
eight employees and its principal place of business is located at Warlies Park House, Horseshoe Hill,
Upshire, EN9 3SL. PMHL's audited financial statements appear in Appendix II and Appendix III of the
Admission Document. In the 6 months to 30 June 2015, PMHL's turnover was GBP 600,639 and it reported a
profit for the financial period of GBP 28,287. The Directors believe that there are three other specialist
mental health recruiters in the UK that compete with PMHL. The Company's Directors intend to grow PMHL at a
manageable pace and ultimately cover additional niches within the Allied Health Professionals sector.
The Directors intend to expand its family of healthcare recruitment businesses to form a group that
provides a full range of recruitment services to the NHS and other healthcare customers. In so doing, the
Company's Directors intend to create a business with strong brand loyalty, an efficient operating structure
and over time a group which becomes a major player in the healthcare recruitment market.
The intention, with additional bond funding, is to add to the existing business by acquiring one or more
recruitment businesses within the healthcare sector, with between GBP 0.25M and GBP 1M of Earnings before
Interest and Tax ("EBIT"). The acquired companies would initially be run under their own brands but with
some centralised financial control, marketing and training. The Directors will only consider acquisitions
which will be controlled by the Group, i.e. they will not make passive investments. With the bond funding
of GBP 2,000,000 which is available on Admission the Directors are targeting one or two businesses to "bolt-
on" to the current trading group.
Over time the acquired businesses will be brought together under the Positive Healthcare brand. The cash
flows generated from the acquisitions will be used to pay the interest on the Company's Bonds and are
expected to enable the redemption of the Bonds at the end of their term.
The Company's Directors believe that they are well-positioned to implement this growth strategy, as
collectively they possess extensive expertise in recruitment, in buy-and-build strategies and in corporate
finance activities. The Company's Directors include the founder and current non-executive chairman of an
AIM-listed recruitment (non-healthcare) business with an Enterprise Value of approximately GBP 40M and an
experienced specialist in high-growth recruitment businesses as both owner/ manager and investor.
The Company has offered for subscription up to GBP 3,500,000 Bonds at GBP 1 per unit nominal value.
Introduction to the Healthcare Recruitment Subsector
The recruitment industry is a profitable high-growth sector, having increased in 2014/15 by 9.7% to GBP
31.5bn of annual revenues and forecast to keep growing over the next few years by 8.1% in 2015/16, 6.5% in
2016/17 and 7.5% in 2017/18 [Source: Recruitment & Employment Confederation's Recruitment Industry Trends
Survey 2014/15]. Within this high-growth sector, healthcare has been one of the growing sub-sectors with
annual revenues around GBP 2.3bn in 2014/15 Source: Recruitment & Employment Confederation's Recruitment
Industry Trends Survey 2014/15]. This growth is partly attributable to the expenditures of the NHS, which
spent GBP 3.3bn on agency staff in 2014/15 (including non-clinical staff and those sourced through its own
in-house staff bank) [Source: Monitor].
Healthcare recruitment is expected to continue growing strongly due to the expected increase in demand for
healthcare workers in the context of a volatile and fragmented supply of suitably qualified and experienced
staff, causing healthcare providers to rely more and more on agency staff.
The Company's Directors believe that the market is likely to change significantly in favor of ethical,
valued and trusted suppliers by pushing out of the market those agencies described by the Health Secretary
in June 2015 as "ripping off the NHS." The Company's Directors see great opportunity in the upcoming market
upheaval for healthcare recruitment companies such as theirs that seek to do well by doing good.
Business Strategy
Building on the niche-specific expertise of PMHL and in due course on each acquired business, the Company's
Directors will use their centralised candidate-attraction methodology, group-wide marketing to clients,
wider business expertise and entrepreneurial experience to drive revenue growth. Any cost reductions from
shared overheads will be reinvested in top-line growth. The target is to create a substantial group.
In addition, the Directors intend to drive growth by being at the forefront of what the Directors believe
will become a major feature of the healthcare recruitment market of the future: Managed Service Programs
(MSPs). An MSP is a different way of carrying out recruitment, whereby an external firm is used to act as a
filter between the client and the agencies, ensuring that the recruitment process is carried out
efficiently and effectively, with the best quality staff found at the best possible sustainable commission
rates. At present, very little healthcare recruitment is organised this way but the Company's Directors
believe that setting up more MSPs is one method by which major healthcare providers, such as the NHS, would
be able to regain some degree of control over the spiralling costs of agency staff.
The Directors see MSPs as a high-growth area in future, which are seen as beneficial as they will allow
high-quality recruiters to succeed and grow whilst removing the more exploitative and less well regulated
companies from the industry. The Directors intend to actively encourage and seek such arrangements,
utilising its relationship managers to drive the process. Depending on the negotiated terms of each such
arrangement, the advantage to the Company as an MSP provider is that it will earn a regular retainer
(giving good visibility on future revenues and enabling informed planning) and/or it will allow other
businesses within the Group the first opportunity to fill vacancies and/or to earn a fee for every vacancy
the client fills even if that vacancy is filled by an agency outside the Group.
If suitable businesses are identified to be acquired by the Group then the Company may issue further bonds
on similar or the same terms as the Bonds. The amount of additional bond funding required will be dependent
in significant part on how many businesses are acquired, the multiple payable, the percentage acquired, the
payment terms, the balance sheets of the targets, other sources of funding and the cash generation post-
acquisition.
The Company's Bonds will trade under the ticker 'ISDX: DOC' and the Company's ISIN code is GB00BYSZ9K78.
The sector classification is Support Services.
The directors of the Company are as follows
Gary Peter Ashworth (Chairman)
Christopher Paul Ledbury (Chief Executive Officer)
Alan William Found (Independent Non-Executive Director)
Gareth Maitland Edwards (Non-Executive Director)
The Company has 50,000 GBP 1 Ordinary shares in issue. The interests of the Directors and, their immediate
families, civil partners (as defined in the Civil Partnership Act 2004) and persons connected with them
(within the meaning of sections 252 to 254 of the Act), all of which, unless otherwise stated, are
beneficial as at the date of this announcement, are as follows:
Director Number and class of Percentage of ordinary
Ordinary Shares issued share capital
Gary Peter Ashworth 34,250 68.5%
Christopher Paul Ledbury 9,000 18%
Gareth Maitland Edwards 2,000 4%
Alan William Found NIL NIL
In addition to the above, at the date of this announcement, the Directors are aware that the following
Shareholders will be interested, directly or indirectly, in 3 per cent or more of the votes able to be cast
at general meetings of the Company.
Shareholder Number of Ordinary Percentage of Issued
Shares Ordinary Shares
Luke Oliver Johnson 4,750 9.5%
The Directors have the following interests in the Bonds
Number of Percentage of issued
Director Bonds Bonds
50,000 2.5%
Gary Peter Ashworth
25,000 1.25%
Christopher Paul Ledbury
25,000 1.25%
Gareth Maitland Edwards
NIL NI
Alan William Found
The registered office and principal place of business of the Company is Warlies Park House, Horseshoe Hill,
Upshire, Essex EN9 3SL. The telephone number of the Company is 020 3587 7566. The Company's corporate
website, at which the information about the Company's business, its directors, financial reports, latest
announcements are published and other investor related information as recommended by Rule 75 of the ISDX
Growth Market Rules can be found, is www.positiveplc.co.uk.
Further details are contained in the Company's admission document on the ISDX website.
The directors of Positive Healthcare Plc accept responsibility for this announcement.
FOR FURTHER INFORMATION PLEASE CONTACT:
Chris Ledbury - CEO
www.positiveplc.co.uk.
Tel: +44 (0)203 587 7566
Email: chris@positivementalhealth.co.uk
Corporate Advisor
Nick Michaels and Jon Isaacs
Alfred Henry Corporate Finance Limited
www.alfredhenry.com
Tel: +44 (0)207 251 3762
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