Nightingale Health Plc: Adoption of International Financial Reporting Standards (IFRS) and unaudited financial information for the comparative period
Company releases Oct 27, 2022
Nightingale Health Plc
Company release 27 October 2022 at 9:00 a.m. (EEST)
Nightingale Health Plc ("Nightingale Health" or the "Company") will publish its first consolidated financial statements prepared in accordance with IFRS for the financial year ended 30 June 2022. Nightingale Health has prepared the following unaudited IFRS financial information for the comparison periods to provide its investors with comparative information on Nightingale Health's consolidated statement of income, statement of financial position and key financials. Comparative information is provided for the financial year ended 30 June 2021, and for the opening IFRS statement of financial position as at the transition date, 1 July 2020. The IFRS transition does not affect the Company's business targets.
The financial information presented in this company release has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and in force as at 30 June 2022. The date of transition to IFRS is 1 July 2020, and the Group applies IFRS 1 First-time Adoption of International Financial Reporting Standards in the transition. Nightingale Health's previous consolidated financial statements and half-year reports ("FAS financial information") were prepared in accordance with Finnish Accounting Standards ("FAS"). Further information on financial information prepared in accordance with FAS is available on Nightingale Health 's website.
Nightingale Health will publish the accounting policies according to IFRS in the consolidated financial statements that will be published on 27 October 2022.
The financial information in this company release has not been audited.
Key financials for the financial year 1 July 2020-30 June 2021
— Revenue was EUR 2,305 thousand
— EBITDA was EUR -7,301 thousand
— Operating profit (loss) was EUR -9,754 thousand
— Profit (loss) for the period was EUR -9,725 thousand
— Earnings per share (EPS) amounted to EUR -0,23 (Series A shares and EMP shares) and EUR -0,23 (Series B shares)
— Cash and cash equivalents at the end of the period totaled EUR 113,807 thousand
Consolidated statement of income and consolidated statement of comprehensive income 1 July 2020-30 June 2021
EUR thousand | FAS 30 June 2021 | Total IFRS adjustments | IFRS 1 July 2020 - 30 June 2021 |
Revenue | 2,081 | 224 | 2,305 |
Other income | 303 | 1 | 304 |
Materials and services | -319 | - | -319 |
Employee benefits | -2,649 | -3,716 | -6,365 |
Depreciation, amortization and impairment losses | -470 | -1,983 | -2,453 |
Other expenses | -4,224 | 873 | -3,351 |
Share of joint venture’s result | 56 | 69 | 125 |
Operating profit (loss) | -5,222 | -4,532 | -9,754 |
Finance income | 2,258 | - | 2,258 |
Finance costs | -8,225 | 5,999 | -2,227 |
Net finance items | -5,968 | 5,999 | 31 |
Profit (loss) before tax | -11,190 | 1,467 | -9,723 |
Income tax expense | -2 | - | -2 |
Profit (loss) for the period | -11,192 | 1,467 | -9,725 |
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
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Profit (loss) for the period | -11,192 | 1,467 | -9,725 |
Other comprehensive income |
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Items that may be reclassified subsequently to profit or loss |
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Foreign operations - foreign currency translation differences, net of tax | - | 12 | 12 |
Other comprehensive income for the period, net of tax | - | 12 | 12 |
Total comprehensive income for the period | -11,192 | 1,479 | -9,713 |
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A more detailed bridge calculation of the IFRS transition from the consolidated statement of income is presented in appendix A of this company release and the IFRS adjustments made are described in more detail in appendix C.
Consolidated statement of financial position 30 June 2021 and 1 July 2020
EUR thousand | FAS 1 July 2020 | Total IFRS adjustments | IFRS 1 July 2020 | FAS 30 June 2021 | Total IFRS adjustments | IFRS 30 June 2021 |
Assets |
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Non-current assets |
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Intangible assets | 12,114 | -1,964 | 10,150 | 14,106 | -2,323 | 11,783 |
Property, plant and equipment | 1,375 | 301 | 1,677 | 721 | 1,694 | 2,415 |
Right-of-use assets | - | 5,811 | 5,811 | - | 5,652 | 5,652 |
Equity-accounted investees | - | - | - | 56 | 69 | 125 |
Investments in convertible loan | - | - | - | 3,274 | - | 3,274 |
Other assets | 716 | -263 | 453 | 833 | -244 | 589 |
Deferred tax assets | - | - | - | - | - | - |
Total non-current assets | 14,205 | 3,886 | 18,091 | 18,989 | 4,848 | 23,838 |
Current assets |
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Inventories | 186 | - | 186 | 658 | - | 658 |
Trade and other receivables | 8,494 | -480 | 8,014 | 736 | -52 | 685 |
Cash and cash equivalents | 905 | - | 905 | 113,807 | - | 113,807 |
Total current assets | 9,585 | -480 | 9,105 | 115,201 | -52 | 115,150 |
Total assets | 23,791 | 3,406 | 27,196 | 134,191 | 4,796 | 138,987 |
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Equity and liabilities |
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Equity |
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Share capital | 8 | - | 8 | 80 | - | 80 |
Reserve for invested unrestricted equity | 12,762 | -512 | 12,250 | 146,378 | -4,934 | 141,444 |
Equity loans | 6,818 | -161 | 6,657 | - | - | - |
Translation differences | 1 | -1 | - | 13 | -1 | 12 |
Retained loss | -10,854 | -1,808 | -12,662 | -22,042 | 3,545 | -18,498 |
Total equity | 8,735 | -2,482 | 6,253 | 124,429 | -1,390 | 123,039 |
Liabilities |
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Non-current liabilities |
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Loans and borrowings | 4 489 | 545 | 5,034 | 3,200 | 865 | 4,064 |
Lease liabilities | - | 3,574 | 3,574 | - | 3,137 | 3,137 |
Deferred tax liabilities | - | - | - | - | - | - |
Total non-current liabilities | 4,489 | 4,119 | 8,608 | 3,200 | 4,001 | 7,201 |
Current liabilities |
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Loans and borrowings | 1,350 | - | 1,350 | 1,860 | 345 | 2,205 |
Lease liabilities | - | 1,365 | 1,365 | - | 1,685 | 1,685 |
Advances received | 224 | - | 224 | 1,941 | -26 | 1,915 |
Trade and other payables | 8,993 | 404 | 9,396 | 2,761 | 181 | 2,942 |
Total current liabilities | 10,567 | 1,769 | 12,336 | 6,562 | 2,185 | 8,748 |
Total liabilities | 15,056 | 5,887 | 20,943 | 9,762 | 6,187 | 15,949 |
Total equity and liabilities | 23,791 | 3,406 | 27,196 | 134,191 | 4,796 | 138,987 |
A more detailed bridge calculation of the IFRS transition from the consolidated balance sheets is presented in Appendix B of this company release, and the IFRS adjustments made are described in more detail in Appendix C.
Key impacts from the adoption of IFRS
The key impacts from the adoption of IFRS to the financial information of Nightingale Health are briefly described below:
- Under IFRS other long-term expenses capitalized by the Company are either classified to other assets or written off from the balance sheet, if they do not meet the asset recognition criteria under IFRS.
- In FAS financial information Nightingale Health recognized lease payments as other operating expenses during lease term and future lease payments subsequent to period end were disclosed as off-balance sheet commitments. Under IFRS a right-of-use asset and a lease liability are recognized at the lease commencement date. Lease payments presented as other operating expenses under FAS are apportioned between the reduction of the lease liability and the interest expense related to the lease liability. Depreciation of the right-of-use assets is recorded in the statement of income. In IFRS transition Nightingale Health recognized leases as right-of-use assets and lease liabilities.
- Nightingale Health has granted stock options to board members, CEO, employees and other key personnel. In FAS, the increase in equity triggered by the exercise of the option to subscribe the share has been recorded in connection with the payment of the subscription price, but no expense related to the options have been recorded in the statement of income. Under IFRS options are measured at fair value at the grant date and expensed over the vesting period.
- Under FAS the sale and leaseback arrangements of certain laboratory devices are treated as a sale of the asset and leasing of the same asset after the sale. As the IFRS criteria for recognizing sales were not met the arrangement has been treated as a sale and leaseback transaction and therefore the sale has been cancelled and the payment received has been recognized as a liability.
- Under IFRS transaction costs that are directly attributable to the issue of new shares are recorded directly to equity. Nightingale Health had material transaction costs arising from the IPO of which transaction costs directly attributable to the issue of new shares were adjusted from finance costs to equity and transaction costs of other than new shares were adjusted to Other expenses in IFRS.
- Accounting for financial instruments differs between FAS and IFRS. Under FAS, convertible loan withdrawn by the Company was measured at nominal value. Under IFRS, the convertible loan is measured at fair value through profit or loss, and the change in fair value is recognized in consolidated statement of income.
- Nightingale Health has netted the deferred tax liabilities against deferred tax assets, because they were related to the same taxation authority and Nightingale Health has the right to net them against each other.
Key adjustments related to Opening IFRS statement of financial position as at 1 July 2020 and statement of financial position as at 30 June 2021.
Nightingale Health derecognized other long-term assets capitalized as intangible assets such as marketing and branding costs as well as expenses considered as long-term under FAS. The adjustment reduced other long-term expenses included in intangible assets and equity by EUR 2,075 thousand at the IFRS transition date 1 July 2020 and EUR 2,235 thousand at 30 June 2021. Other adjustments were recognized to Intangible assets resulting in adjustments totaling to decrease of EUR 1,964 thousand in Intangible assets and Equity on 1 July 2020 and EUR 2,086 thousand at 30 June 2021.
As result of the change in accounting treatment of the leases Nightingale Health recognized right-of-use assets of EUR 5,811 thousand and Lease liabilities of EUR 4,939 thousand at 1 July 2020, respectively right-of-use asset of EUR 5,652 thousand and lease liabilities of EUR 4,822 thousand at 30 June 2021. In addition, the accrued lease items recorded under FAS financial information were adjusted by reducing the items Other assets by EUR 263 thousand, Trade and other receivables by EUR 179 thousand and increasing Trade and other payables by EUR 4 thousand at 1 July 2020, respectively reducing other assets by EUR 84 thousand, trade receivables and other receivables by EUR 179 thousand and accounts payable and other payables by EUR 224 thousand at 30 June 2021. An adjustment of EUR 427 thousand was recognized at 1 July 2020 and of EUR 791 thousand at 30 June 2021 to Retained losses reflecting the difference in the adjustments due to the changed accounting treatment of leases.
Nightingale Health reversed sale and leaseback transactions recorded in the FAS financial information. The adjustment increased Property, plant and equipment by EUR 1,227 thousand, Loans and borrowings by EUR 1,239 thousand as well as Trade and other payables by EUR 5 thousand, and increased Retained losses by EUR 18 thousand.
Key adjustments related to Consolidated statement of income 1 July 2020 – 30 June 2021
Nightingale Health adjusted the transaction costs related to the issuance of new shares in the IPO by EUR 6,469 thousand from Finance costs to a deduction from equity. The adjustment improved the Profit (loss) for the period. The proportion of transaction costs of other than new shares amounting to EUR 1,110 thousand was adjusted from Finance costs to Other expenses.
Nightingale Health recognized share options issued and benefits given in connection with the share issues issued to its employees and other key personnel as an expense for the vesting period. The adjustment reduced the Profit (loss) for the period by EUR 3,886 thousand.
The adoption of IFRS had a total positive impact on the Profit (loss) for the period of EUR 1,467 thousand.
The individual most significant adjustments described above do not include the tax effect of the adjustments, but the tax effects have been treated as a separate adjustment.
The adjustments made in the IFRS transition are described in more detail in Appendix C of this company release.
Nightingale Health Plc will publish its first consolidated financial statements prepared in accordance with IFRS on 27 October 2022. Comparative IFRS periods for the half-yearly periods ended on 30 June 2022 and 31 December 2021 will be published before the publication of the H1/2023 half-yearly report. The materials will be available after publication at nightingalehealth.com/investors.
For further information, please contact:
CEO Teemu Suna
ir@nightingalehealth.com
Appendices
Nightingale Health Plc Company release IFRS transition, which includes:
Appendix A Consolidated statements of income and consolidated statements of comprehensive income 1 July 2020 - 30 June 2021
Appendix B Consolidated statements of financial position 1 July 2020 and 30 June 2021
Appendix C Descriptions of the IFRS adjustments
About Nightingale Health
Nightingale Health is The Preventative Health Company. Staying healthy is one of the top priorities in human life. Our health has a profound impact on our quality of life, and it’s also strongly connected to the lives of those close to us. Nightingale Health enables prevention by combining the power of our in-house developed, advanced blood analysis technology with unprecedented access to global health repositories and world-leading medical research. With this combination, we go beyond the traditional healthcare and wellbeing tools: We provide the scientific connection to multiple health and disease outcomes and the ability to predict future healthy years.
