Positive Healthcare Plc

January 05, 2016 03:00 ET

Admission Announcement

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-

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.


Chris Ledbury - CEO
Tel: +44 (0)203 587 7566
Email: chris@positivementalhealth.co.uk

Corporate Advisor
Nick Michaels and Jon Isaacs
Alfred Henry Corporate Finance Limited
Tel: +44 (0)207 251 3762

-  ENDS  -

Contact Information

  • Positive Healthcare Plc