• Mark Watson-Mitchell

Totally – the excellent trading continues as a trusted partner with the NHS

25th June 2021


It can not have been easy to have been doing business with the NHS over the last fifteen months or so.


With all concentration on hospitals being ready to cope with and then care for an ongoing rush of Covid-19 patients – that meant that operations and other procedures went into suspension.


Doctor’s surgeries were closed, with their services being curtailed or abbreviated while everyone needed to be masked up, to self-isolate, and the like.


Chop and change


So just imagine how difficult it must have been for the management of the Totally (LON:TLY) group. They suddenly had to chop and change their service roles in order to make themselves even more useful to the NHS.


Totally is a leading healthcare service provider in the UK and Ireland. It works in partnership with the NHS and other providers to deliver those services through its divisions of Urgent Care, Planned Care and Insourcing.


Urgent Care


Its Urgent Care services include providing cover for NHS 111, GP Out of Hours, Clinical Assessment, Integrated Urgent Care, Urgent Treatment Centres, Urgent Care Centres and Walk-In Clinics.


Those services are provided under contract with local Care Commissioning Groups and can be awarded for up to five years, with an option to extend by a further two years.


Planned Care


The Planned Care side provides dermatology outpatient services, physiotherapy, podiatry, referral management services and clinical health coaching.


Those services are delivered to NHS prisons, police, fire services, the insurance industry and private clients.


Insourcing


Only set up in 2019 the Insourcing division is involved where hospitals subcontract medical services and procedures to providers who use the host hospitals’ premises and equipment for service delivery.


It also provides bespoke insourcing solutions across multiple specialities to trusts and hospitals in the UK and Ireland, reducing waiting lists for minor operations by utilising their spare capacity outside of normal working hours and at weekends.


Going forward Insourcing could well show a very exciting future growth pattern.


Over £92m of new contracts


Over the last few months or so the group has been awarded several contracts and extensions worth in excess of £92m, showing that it does have an excellent relationship with various parts of the NHS.


Those increasing waiting lists within the NHS will, no doubt, offer tremendous scope for Totally as a group, especially over the next couple of years as ‘catch-up’ is played out.


Latest Trading Update


In the Trading Update for the year to end March 2021, published on 13 April, the group stated that


“The resilient and improved trading performance across the group is due to multiple factors but primarily as a result of the company being able to respond proactively and quickly to the numerous demands for its healthcare services during the global Covid-19 pandemic, through which the company has assisted the NHS in providing frontline care across the UK.”


“Against the backdrop of a global pandemic, the year to 31 March 2021 was undoubtedly one of the most challenging periods of time for the company. Through effective management, however, the emergency preparedness and response was quickly and efficiently executed.”


“All operations of the group were impacted with some services, particularly face-to-face, understandably paused. However, with the increased demand for urgent healthcare support, the group was well placed to respond quickly through, among others, the delivery of Covid-19 Management Services, National Clinical Assessment Services and the ramping up of 111 capacity.”


New market guidelines in eleven days


Currently the group has suspended market forecasts which, considering the stop/go policies of late, must have been a very sensible move.


The finals, which will be announced on Tuesday 6 July, will be the occasion for the group to reintroduce its market guidelines.


But what must be noted out of the latest Trading Update, is the fact that at the end of March this year the group had no debt, with all deferred HMRC payments having been paid in full.


It was also boasting a very healthy £14.8m net cash position compared to its market capitalisation of only £71m.


‘Buy to build’ strategy continues


Remember it is part of Totally’s growth strategy to make earnings accretive acquisitions as it strives to build up its overall grouping.


“Totally is committed to pursuing a progressive buy-and-build consolidation strategy within the fragmented healthcare market and looks to capitalise on the attractive opportunities that its disruptive service model offers, to generate value to shareholders.”


Bob is no ‘spoofer’


Whatever you do – do not underestimate the ability of Chairman Bob Holt – he always under plays and over delivers.


But first things first – let us see what actually occurred business-wise in the year to end March 2021 – we already know that it saw record EBITDA being achieved.


We will know what the score was in just eleven days.


My View


I am positive that Holt and his management team will over deliver in the next couple of years and that the group’s shares, now just 38.5p, will scale the heights to 50p, then a great deal higher in due course.


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


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