Totally – very acceptable progress despite Covid-19

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Totally – very acceptable progress despite Covid-19

Today’s announcement of the interim results for Totally (LON:TLY) were ‘totally’ acceptable.

The six months to end September showed a very healthy advance in group turnover from £49.2m to £54.1m. The EBITDA profit was £2.3m against £1.3m previously.

The actual profit before tax was £0.1m, a massive turnaround from a £2.6m loss last time.

These encouragingly resilient results, in the face of all of the group’s Covid-19 hassles, was even more robust when you see that the group’s cash at bank at the end of the first half was a very strong £12.3m against the last year end’s £8.9m.

The group is one of the UK’s leading providers of innovative and consolidatory solutions to the healthcare sector. Similarly, so too in Ireland.
The company works in a partnership with the National Health Service and other providers to deliver healthcare services through its three main divisions – Urgent Care, Planned Care and Insourcing.

Its Urgent Care division offers NHS 111 services, clinical assessment services, GP out-of-hours services as well as urgent treatment centres.
On its Planned Care side it provides Out-Patient services, referral management services, together with physiotherapy and podiatry services.
The Insourcing operation provides special solutions across a multiple of specialities to NHS Trusts and hospitals in the UK and in Ireland. These services help to reduce waiting lists through using spare capacity outside of normal working hours and at the weekends.

It has not all been plain sailing for the group, like other businesses it too was hit by the effects of the virus – some bad and some good. But the group continued to operate successfully throughout the first half.

The Planned Care side was hit by a 50% reduction in income, while revenues have been steady in Urgent Care. Insourcing ran at about 80% of previous levels.

However, the group has had to adapt to the change in its business and has managed to do so fairly rapidly. Waiting lists have increased across the NHS and other healthcare providers so demand for group services have been able to remobilise where practicable.

Government lockdowns can play havoc, while also slowing down significantly the contract tendering process. The Urgent Care side secured some £27m of additional contracts in the first half.

Chairman Bob Holt told shareholders that “we continue to see increases in demand for some services as a direct result of COVID-19 and expect this to increase during the second National lockdown.

Whilst Planned Care and Insourcing services continue with certain services at this time, we continue to work closely with commissioners and hospitals to ensure we can quickly respond to any changes that need to be made to services as a result of the management of the pandemic – we expect to continue to do so throughout the winter months.

Urgent Care will no doubt continue to see demand increase for some services, whilst the other divisions may see waiting lists increase further if elective care is reduced to guarantee access to hospitals. Totally will of course ensure it remains responsive to these changing demands”.

I like this company and the services it offers to the NHS and others in the healthcare sector.

After hitting 25p in late May the group’s shares have been back down to 16p in the last few months before responding well to the late September Trading Update and subsequently rising back up to 19p.

This company is in the right sector at the right time and it is professionally managed enough to cope and gain from changing circumstances.

On Friday night the shares closed at 17.25p. I await to see what guidance, if any, the group gives to analysts this morning, but in the meantime I continue to rate highly the prospects for the group’s shares rising back over the 25p level within months.

(Profile 12.03.20 @ 12p set a Target Price of 18p*)

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