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1
A network of specialists
leading the way in
teleradiology
ANNUAL REPORT AND ACCOUNTS
31 December 2021
Our mission:
Our mission is to lead the way in
delivering collaborative and responsive
telemedicine solutions that put patient
outcomes at the heart of what we do.
We will achieve this through technical
innovation underpinned by the highest
standards of clinical excellence.
Our vision:
Our vision is to provide market leading
diagnostic services by connecting
healthcare professionals and organisations
with talent and technology. A trusted
partner, we will be pioneering in
adapting our offering to deliver
sustainable and scalable services for
customers and their patients.
Improving your
outcomes through
a collaborative
approach to care
Creating value through our core commitments
Our worldwide breadth and scale:
300+
Employees
750+
Current network of
specialist doctors
and clinical staff
200+
Clients
1.2m+
Reports and
exams in 2021
Contents:
Strategic report
02 Highlights
04 Chairman’s statement
06 CEO report
12 Business Model and Services
14 ESG
23 Human Story: Radiographer
COVID impact
24
Group Themes
26 Delivery: UK
28 Delivery: Ireland
30 Delivery: RadMD
32 Financial Review
34 Risks and Uncertainties
Governance
38 Our Directors
40
Corporate Governance Report
44 Report of Audit Committee
46 Report of Nomination Committee
48 Clinical Quality and
Governance Committee
49
ESG Committee
50 Remuneration Committee
72 Directors’ report
76 Section 172
1
77 Independent Auditors Report
Financials
87 Consolidated income statement
and consolidated statement of
comprehensive income
88
Consolidated statement of
financial position
89
Consolidated statement of
cash flows
90
Consolidated statement of
changes in equity
91
Notes to the financial statements
125 Company statement of
financial position
126
Company statement of
changes in equity
127
Notes to the financial statements
132 Key advisors
133 Glossary of terms
Medica Group PLC is the
market-leading provider
of teleradiology services
in the UK and Ireland.
Medica prides itself on delivering the highest
quality service, underpinned by strong clinical
governance and a culture of customer-
centric process improvement. Medica
provides a fast and reliable service during
out-of-hours for urgent reporting, as well
as support for routine diagnostic reporting
throughout the week. Medica has developed
a bespoke IT interface with customers,
allowing comprehensive access to diagnostic
images enabling our reporters the best
opportunity to deliver high-quality reports
for our clients and in turn, for their patients.
Through its subsidiary, RadMD, in the United
States, Medica also provides pharmaceutical
and biotech clients and contract research
organisations (CROs) with high quality,
complex imaging services for international
clinical trials. RadMD has gained vast
experience in the space, having contributed
to over 500 international clinical trials, in
all phases of clinical research from proof
of concept to phase III and with expertise
in oncology, as well as a wider range
of therapeutic areas including medical
devices, neurology and cardiovascular
Our values:
Patient first and truly collaborative
We are focused on our goal of
improved patient experience and
outcome and achieve so much
more together by working in a
collegiate and cooperative way.
Adaptive and pioneering
We strive to offer the best at all times
which means adapting our services
and using pioneering software and
technologies to ensure the best
customer and patient experience.
Responsive and accountable
We are responsive and flexible in our
approach, processes and services
in order to meet the changing
requirements of our customers. We
take our responsibilities seriously
and act professionally at all times.
Excellence in our DNA
Our reliability and quality of delivery
is what our customer’s value most
highly about Medica. We are always
prepared to go the extra mile to
deliver a service that adds value
and exceeds expectations.
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
01
Annual Report for the year ended 31 December 2021
1 The Section 172 report forms part of the 2021 strategic report
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
www.medicagroupplc.com l stock code: MGP
02
Financial Highlights
Highlights
(1) Underlying operating profit is a non-IFRS measure and is calculated as operating profit before exceptional items and one-off costs relating to the GDI
acquisition and associated extension to the debt facility, share based payments, intangible amortisation in respect of acquired assets.
(2) Underlying Earnings per share is a non-IFRS measure and is calculated based underlying operating profits less financing costs and taxation
(3) Net cash/(debt) is a non-IFRS measure and is calculated by subtracting bank borrowings from cash and cash equivalents
• Delivered sales of £61.9m, representing 68% and 33%
revenue increase on 2020 and 2019, respectively
– UK revenues rose 33% to £47.1m as a result of a continued
strong performance from NightHawk and a full recovery
in Elective scanning activity by the year end
– Medica Ireland contributed £9.7m in its first full
year since acquisition in November 2020, in-line
with expectations, and generated a return on capital
employed (ROCE) in its first full year ahead of the Group
target of 15%
– RadMD contributed £5.2m of revenues for the nine-
month period since acquisition in March 2021, broadly
in-line with expectations at the time of purchase
• Increase in gross profit margin to 50.7% (2020: 47.4%) due
to mix effect in UK, cost management and positive impact
of acquisitions
• Recovery in underlying operating profit to £12.1m, up 141%
from 2020 and 6.9% versus 2019, with underlying operating
margins recovering to 19.5% (2020: 13.6%)
• Net cash at 31December 2021 of £3.9m, an improvement of
£7.8m on net debt of £3.9m at 31December 2020
The Board declared an interim dividend for 2021 of 0.89pence
per share and is now proposing a final dividend for 2021 of
1.79pence per share, which will, if approved, result in total
dividends for 2021 of 2.68pence per share, up 5% on 2020
£61.9m
Revenue
£31.4m
Gross Profit
50.7%
Gross Profit Margin
£12.1m
Underlying Operating Profit
1
7.8 3p
Underlying Earnings Per Share
2
£38.9m
£46.5m
£36.8m
2018
2019
2020
2021
£19.0m
£22.3m
£17.5m
2018
2019
2020
2021
49.0%
47.8%
47.4%
2018
2019
2020
2021
£9.7m
£11.3m
£5.0m
2018
2019
2020
2021
7.75 p
8.13p
3.47p
2018
2019
2020
2021
7.8 3 p
£12.1m
50.7%
£31.4m
£61.9m
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Annual Report for the year ended 31 December 2021
Operational
highlights
• Effective management of elective
scanning capacity and demand as
volumes recovered as COVID-19
restrictions eased
• Continued growth of NightHawk
service with net contract wins
and renewals
• Restructured the organisation to
create additional management
bandwidth and create new
group functions to support
future growth
• Reorganised business to integrate
support functions and maximise
efficiency
• Established a UK Leadership Team
focused on driving growth and
executing strategy
• Successfully deployed Augmented
Intelligence solution into Medica’s
out-of-hours stroke reporting
• Expanded radiology reporting
capacity in the UK by 5%
03
Acquisitions
and Joint
Ventures
• Completed the acquisition and
first stage of integration of
RadMD in Philadelphia
• Post-acquisition of RadMD,
added new members to the
senior team to drive growth and
expand operational capacity
• Completed integration and
rebranding of Global Diagnostics
Ireland as Medica Ireland
• Established MedX, a joint venture
with Integral Diagnostics Pty
in Australia
Dr. Stuart Quin, Chief Executive Officer
of Medica, commented:
“ The year saw Medica continue to
deliver on its strategy by diversifying
its offering, broadening geographic
reach and investing in technology.
With these strategic developments –
including the acquisition of RadMD
in the US, the creation of a new joint
venture in Australia and the successful
launch of Sectra PACS in the UK – as
well as favourable market dynamics as
customers seek to reduce the imaging
backlog caused by Covid-19, there
are strong foundations in place to
support our growth. We look forward
to continuing our momentum through
2022 to consolidate our position
as the trusted, go-to teleradiology
partner for healthcare providers”
Post-period
highlights
• Successful launch of new Picture
Archive and Communication
System (PACS), Medica’s new
enterprise imaging and reporting
software system/platform,
with multiple experience and
functionality improvements
for our radiologists, as first
major milestone of the
FutureTech programme
• Strong start to the year for
NightHawk service through new
contract wins, extensions and
re-tenders
• Launch of new service with
the leading Irish health
insurer in Dublin
• Expanded the team
internationally with a General
Manager for MedX and an
expansion of reporting capacity
outside of the UK
www.medicagroupplc.com l stock code: MGP
04
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Chairman’s Statement
Strong performance in
2021 as our clients recover
and started to process the
backlog of cases requiring
imaging that accumulated
during the pandemic
Medica has once again
demonstrated the resilience
of its business model
in 2021. Having started
the year with further
lockdowns in the UK and
Ireland, our team has
worked closely with clients
to support the return to
pre-pandemic levels of
diagnostic reporting,
as well as enabling
hospitals and clinics to
make initial progress in
undertaking priority cases
that had been postponed
due to the ongoing
COVID-19 pandemic.
I am pleased to report a strong recovery
year for Medica resulting in annual
revenue increasing by 68% year-on-
year to £61.9m with an improvement
in gross profit margin to 50.7% and
operating profit of £12.1m, up 141% from
2020. This also compares favourably
to 2019 with a 33% increase in revenue
(2019 £46.5m), 2.9% increase in gross
margin (2019 47.8%) and 6.9% increase
in operating profit (2019 £11.3m) as
trading improved and Medica started
to book sales from acquisitions in
Ireland and the US. As a result, the
Board has proposed a final dividend
of 1.79pence per share reflecting the
strong performance of the business
last year. It is particularly pleasing to
deliver these results during the ongoing
pandemic in 2021, without the need
to furlough any employees or receive
any government grants, demonstrating
the robust nature of the business.
In addition to the core business, the
recent acquisitions of Medica Ireland
(formerly Global Diagnostics Ireland),
and RadMD performed stronglyin a
challenging year. These acquisitions were
completed during a period of uncertainty
due to the impact of COVID-19. However,
we were confident that any short-term
trading impact would be alleviated as
we emerged from the first wave of the
pandemic. This has been demonstrated
and we are confident that both Medica
Ireland and RadMD are very well placed
for continued strong growth in 2022.
Continued progress made
delivering against new strategic
priorities and improving
governance
Medica has made significant
progress against delivering
its strategy and improving its
governance structure, including:
• Exceeded market expectations in
terms of profitability and cashflow due
to careful cost management and close
client engagement
• Delivering on our stated strategy by
expanding into clinical trial imaging
services via the acquisition of
RadMD, as well as via a joint venture
to collaborate on opportunities in
Australia and New Zealand
• Continuing to improve governance
and strategic input to the board by
recruiting two experienced non-
executive directors; Barbara Moorhouse
(Senior Independent Non-Executive
Director and chair of Audit Committee)
and Dr. Junaid Bajwa (Independent
Non-Executive Director and chair of
Environment, Social and Governance
(ESG) and Clinical Governance and
Quality Committees).
• Developed a comprehensive approach
to develop clear ESG metrics that
drive improved business performance
• Established a Clinical Quality and
Governance Committee of the Board
to increase oversight of factors
that are critical to continuing to
differentiate our service and respond
to client needs
Medium term growth potential
driven by the pandemic recovery
We ended 2021 in a similar position to
2020 with growing COVID-19 cases
due to the increased transmissibility of
the Omicron variant. Whilst it is largely
impossible to predict how the pandemic
will continue to run its course in 2022,
we are increasingly confident that our
clients are now better prepared to handle
COVID-19 cases and to continue to deliver
a largely ‘business as usual’ service to
elective patients. Alongside significant
growth potential in elective reporting,
we have seen, and continue to expect to
“ Despite another challenging year, it has been
pleasing to see the core business, as well as
the recent acquisitions of Medica Ireland
(formerly Global Diagnostics Ireland), and
RadMD performing strongly during 2021.
We continue to have a positive view on the
future outlook for the business and believe
the market dynamics are still very favourable
for Medica.”
Roy Davis
Chairman
Annual Report for the year ended 31 December 2021
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
see, a marked increase in the number of
patients attending Accident & Emergency
(A&E) departments requiring imaging
procedures to diagnose their conditions.
Both of these growth drivers in the UK
and Ireland will require us to recruit
more reporters across our business. We
have had continued success this year in
our ability to attract and retain expert
reporters as evidenced by an increase
in total reporter capacity of 5% during
2021. We continue to believe this is due
to the quality of the service we offer and
the breadth and depth of work available
for reporters to build their careers and
expertise with Medica and RadMD.
In 2020, we started to accelerate our
recruitment of radiologists in Australia
and New Zealand. Through our MedX
joint venture in Australia with Integral
Diagnostics, we have continued to
recruit in 2021 and, as we seek to
fulfil the demand from our customers,
we will be ramping up our efforts in
in 2022. In addition, we will look to
other regions for further reporting
capacity from expert General Medical
Council (GMC) certified radiologists.
In terms of our clinical trials business,
RadMD, the year started slowly as
some pharmaceutical and biotech
clients opted to delay the start of trials
due to COVID-19 until more patients
were enrolled. However, business
performance improved in H2 2021 as
we signed additional contracts with
both new and existing clients, as well
as resumed studies put ‘on-hold’ by
the pandemic. As a result, the majority
of the initial deferred element of the
contingent consideration due to the
founders of RadMD will be paid in 2022,
which is testament to their and their
team’s hard work and performance in
2021, with a small amount of deferred
consideration outstanding into 2023.
We are also starting 2022 with an
increased pipeline and backlog of
opportunities and we continue to invest
in expanding the expert team at RadMD.
Outlook
Whilst we are not yet ‘out of the woods’
in terms of the impact of COVID-19, we
have confidence that we will be able
to support our clients to tackle their
respective backlog of scanning, reporting
and clinical trial studies in 2022. We
continue to have a positive outlook on
the market and think that the dynamics
are still very favourable for Medica as
we observe more and more reporting
capacity pressure in the NHS and Health
Safety Executive (HSE) in Ireland.
Our NightHawk service continues to grow
robustly, and we expect to extend and
renew most of these contracts in 2022.
Medica is ready to take advantage of this
short to medium term market opportunity
by expanding the amount of elective
reporting capacity we can provide to our
clients by
encouraging more radiologists
to report for Medica in the UK and
Ireland. Government-led initiatives in
Ireland have already commenced to
reduce the backlog of patients requiring
scanning and, in the UK, the NHS has
launched its ambitious Community
Diagnostic Hubs programme to conduct
more diagnostic imaging outside of
hospitals, which aligns favourably
with Medica’s core competencies.
Medica is also focussed on continuing to
improve our reporting systems as part of
the FutureTech programme, rolling out
further Augmented Intelligence (“AI”)
solutions, increasing productivity of
existing radiologists, as well as recruiting
more reporters overseas and dual-
certifying radiologists in UK and Ireland
to support our respective businesses.
Further, we are confident that we are
well-positioned to capitalise on the fast-
growing market for imaging services for
clinical trials. We expect to continue to
invest in RadMD to underpin growth in
the team and systems, as well as look
for opportunities to increase our scale.
The healthcare industry is evolving rapidly
and the pandemic has allowed clients to
move at pace and make quick decisions
which would otherwise have taken longer
pre-pandemic. A dependable, reliable
and high-quality provider like Medica
with an equal willingness to embrace
change and look for opportunities
means we should be well-positioned
for growth in the evolving market.
I would like to finish by thanking all
our clients for choosing Medica as
their imaging and diagnostics partner
for clinical diagnosis and clinical
trials. I would also like to recognise
the huge efforts taken by our network
of radiologists, radiographers and
specialist doctors around the world who
strive to provide timely and accurate
reports for our clients day
-in, day-out.
I would like to thank our investors
for their confidence in the Company
in these challenging times. Finally, I
would like to thank our operational
teams based in UK, Ireland and US
who have continued to demonstrate
resilience and progress during what
was another tough year across our
industry and look forward to continuing
the execution of our strategy in 2022.
Roy Davis
Chairman
11 April 2022
05
www.medicagroupplc.com l stock code: MGP
06
CEO report
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
The strong performance
demonstrated in 2021
was again testament to
our excellent team and
their ability to execute
initiatives across the
Group. This extends not
only to our teams working
day and night to deliver
fast, efficient and reliable
reports for patients, but
also to those directly
scanning and screening
patients and participating
in clinical trials. I am
pleased that we ended
2021 with strong run-rate
financial performance
bolstered by a recovery
in our Elective business
above pre-pandemic
levels, significant renewal
of existing NightHawk
contracts coupled with new
client wins and growth in
our international businesses
in Ireland and the US.
The Company has continued to make
excellent progress in 2021 and the first
quarter of 2022. This includes:
• Launching our new PACS. This has
been a significant project requiring
input from all elements of the team
in the UK. This project saw all of
our radiologists, radiographers
and specialist doctors (together
“Reporters”), transition to our new
provider in a short timeframe with
no loss of service to our clients. We
expect that this will have significant
benefits going forward that will drive
operating leverage
• Completing the acquisition of RadMD
and immediately strengthening the
team by recruiting an operations
director, chief commercial officer
and finance director. We have also
expanded the range of customers with
whom we work at RadMD and have
entered some exciting new fields with
contract wins
• Continuing to deliver our patient-
facing ophthalmology screening and
surveillance services in Ireland despite
the huge impact of COVID-19 on
staffing levels and patient activity. Our
team has continued to receive praise
from the National Screening Service
in Ireland for their ongoing ability
to deliver the service despite these
obvious challenges
• Being awarded the prestigious
“Overall Best Project” for Medica’s
delivery of Augmented Intelligence
for Stroke patients in the Association
of Project Management annual
awards beating many other worthy
projects including some from large
FTSE100 companies
• Expanding our team across the UK,
Ireland and the US, as well as hiring
a General Manager to lead our joint
venture in Australia; MedX
In September 2021, the Company
conducted its first Capital Markets Day
event. This was well-attended and gave
us the opportunity to update investors on
our progress against the strategy, as well
as showcase our wider team and projects,
such as our FutureTech programme and
Augmented Intelligence approach. It was
also an opportunity for investors to meet
the heads of our Irish and US businesses
for the first time and to better understand
the significant market opportunities in
both countries. At the event, we reiterated
our strategy to investors and devoted
time to explain the growth opportunities
in each of our market segments.
Significant progress
against our
strategic goals
Medica’s strategy can be summarised
as follows:
1. Be the trusted, go-to partner for
healthcare providers with a reputation
for reliability and transparency to
enhance patient outcomes
2. Invest in our people and systems to
build an engaged and motivated team
3. Be the company of choice for
specialist doctors and clinicians
wanting to expand their expertise in
telemedicine
4. Deliver profitable, diversified growth
underpinned by commitment to ESG
with focus on market-leading clinical
governance
“ The year saw Medica continue to deliver
on its strategy by diversifying its offering,
broadening geographic reach and investing
in technology. With these strategic
developments – including the acquisition
of RadMD in the US and the successful
launch of Sectra PACS in the UK – as well as
conducive market dynamics as customers
seek to reduce the imaging backlog caused
by Covid-19, there are strong foundations in
place to support our growth.”
Dr Stuart Quin
Chief Executive Officer
Annual Report for the year ended 31 December 2021
07
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Taking each in turn, I am pleased that we
have delivered significant progress in 2021
against each of the drivers of our strategy:
1. Be the trusted, go-to partner
for healthcare providers with
a reputation for reliability
and transparency to enhance
patient outcomes
More customers trusted Medica
to deliver services in 2021
than in any previous year.
This trust is underpinned by our
reputation for delivering a high-
quality service 24/7. What this means
in practice is that whenever clients
choose to send urgent or elective scans
to Medica for reporting, we will ensure
that we have the right specialist doctor
or clinician available to report the
exam within the timeframe required.
Not only this, but our reports are
routinely audited to ensure that they
meet the Royal College of Radiologist
standards and so that we can
continue to provide helpful feedback
to our experts on their reports.
Where Medica has long-term
relationships with clients, it is working
more closely with hospitals to improve
communication and information flow
such that Medica is better prepared
to manage peaks in demand for its
services particularly around holiday
periods, but also in support of local
backlog initiatives. Our systems
already support close integration with
hospital data, but often last-minute
requests from clients require additional
reporting capacity at short notice.
By planning more effectively, we can
help support our clients much better.
This client trust is also evident in the
businesses that we have acquired:
RadMD’s experienced team is
frequently trusted to help to resolve
issues with so-called “rescue studies”;
trials that have started but were not
designed correctly and hence are not
delivering the expected endpoints.
This expert knowledge developed
over many years is one of the key
factors in clients’ decisions to work
with RadMD and failure to properly
plan and execute the imaging
component of clinical trials can
result in costly delays to new therapy
approval and, in the worst case,
failure to gain new drug approval.
In Ireland, where Medica scans
patients as well as reports the digital
image, the strong relationship with
clients is also evident. This has
been tested over the last 12 months
where we have had to continue to
deliver a scanning and screening
service in our radiology, ultrasound
and ophthalmology businesses
respectively, despite maintaining social
distancing and increasing the time
between scans to sanitise equipment.
Over time, these relationships
invariably lead to additional
opportunities as Medica is trusted
to deliver one scanning service, but
where support is needed to improve
the performance of other services. In
this way, Medica can expand its range
of services to meet clients’ needs.
NightHawk services continued
to grow strongly driven by
higher admissions at A&E
departments and a growing
requirement for out-of-hours
services in Ireland
Emergency admissions to hospital in
England continued to climb in 2021.
According to NHS England data
published in January 2022, emergency
admission growth over the previous
three months, compared to January
2021, was 9.6%, and over the last 12
months, compared to the preceding
12 months, was 13.3%. This correlates
with the increase in urgent, out-of-
hours exams that have been reported
by Medica in 2021 where we recorded a
circa 1% increase in activity on average
each month throughout the year.
Many of our existing contracts were
renewed in 2021 demonstrating the
fact that clients continue to trust
Medica to deliver an urgent service
24/7. In addition to continuing to
support existing customers, Medica
also won new contracts to deliver
out-of-hours reporting services
across the UK. As we enter 2022, the
Company has a significant number of
new contract opportunities that are
being tendered, as well as renewals
of existing client contracts.
In Ireland, Medica was pleased to be
selected by several hospitals to provide
out-of-hours reporting services. This
market is still nascent in Ireland, but as
we predicted when we acquired Global
Diagnostics Ireland, it is accelerating
as hospitals feel the combined
pressure of increasing imaging
volumes coupled with a shortage of
sub-specialist radiologists available
to report during the night-time.
The UK and Ireland teams have been
working closely together to increase
capacity of reporting. One example
of such a synergy has been the efforts
to ‘dual certify’ many of our UK
radiologists so they are both UK and
Irish Medical Council certified and,
therefore, provide a more flexible pool
of reporters. Additionally, as we grow
our out-of-hours service in Ireland,
the team is increasingly drawing on
both the operational and commercial
expertise of the respective teams.
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CEO report
continued
Elective reporting: confidence
increasing as pandemic
recovery continues
In 2021 we saw a strong recovery
in activity as the impact of the
pandemic on elective activity has
abated. Our clients both in Ireland
and in the UK, are now much better
placed to separate COVID-19 related
cases from Elective cases. This is
evidenced by the continued increase
in month-on-month activity that we
have seen across our portfolio of
clients during 2021. Looking ahead
into the medium term, we expect to
see an increase in scanning activity
as clients get to grips with record
waiting lists for procedures which in
turn drives imaging activity. According
to the NHS, this backlog pressure
is expected to endure for at least
the next two years. In addition, as
noted by the UK Health Secretary
recently, UK waiting times are set
to continue to grow and only likely
to recover in 2024 and initiatives to
tackle this growing backlog will also
increase the requirement for imaging.
In late 2021, the NHS in England
announced those companies that
have been successful in joining
the Community Diagnostic Hubs
framework and Medica was delighted
to be amongst them. This ambitious
project expects to realise around 150
community-based hubs that will offer
a range of out-patient diagnostics
including routine Plain Film (PF;
X-Ray), Computerised Tomography
(CT) and Magnetic Resonance Imaging
(MRI) scanning. Medica is well-placed
to offer reporting services to these
hubs and to play a strategic role in
supporting existing and new clients
with efficient delivery of imaging in
an outpatient, community setting.
In Ireland, Medica has been successful
in winning backlog elective contracts
with the HSE (Irish equivalent of the
NHS), as well as providing reporting
services for independent sector clients
and insurance companies. Medica was
proud to partner with VHI, Ireland’s
leading health insurance company. to
be the exclusive provider of imaging
diagnostic services across their sites,
including at their new flagship site in
Carrickmines in the south of Dublin
which opened in February 2022. We
have also partnered with organisations
such as the Children’s Health Institute
where we have supported them to
develop a bespoke hip screening
service for neonates. These are some
of the examples of the creative ways
that we are building the organisation
in Ireland to support our clients.
Also in Ireland, we have been proud
to continue to be able to deliver
our diabetic retinopathy screening
service throughout the period of the
pandemic, working closely with the
National Screening Service to ensure
that patients are contacted, screened
and appropriately referred for follow
up intervention. This service, now
in its tenth year, serves around half
of the diabetic population in Ireland
delivering both a surveillance and
screening service for patients.
Acquisition of RadMD,
a leader in imaging for
clinical trials
In March 2021, we were excited to
announce the acquisition of RadMD
based outside Philadelphia in the
US. RadMD is a specialist business
focused on design and delivery of the
imaging component of clinical trials.
The company operates in the $1 billion
market which is growing quickly in
response to the increase in demand
for imaging services in therapeutic
areas such as oncology and neurology.
Since the acquisition, we have
recruited new members of the senior
team to support the founders, Drs.
Richard Patt and Kohkan Shamsi,
ahead of expected growth in the
company. This has already had a
positive impact on the business
generating additional opportunities
with numerous new clients and
helping to bring experts into the
team with significant experience
in leading operations for imaging
core labs, as well as extensive
commercial and finance expertise.
Also since acquisition, RadMD
has grown its combined pipeline
and signed backlog of contracts
awaiting commencement in 2021 by
34% from $40m to $53.6m. This is
testament to the hard work of the
team, but also to the acceleration
of studies, many of which were
postponed during the pandemic. We
expect the strong underpinning of
orderbook and pipeline coverage to
translate into strong earnings growth
throughout 2022 and beyond and
are increasing our capacity in both
people and infrastructure accordingly
to ensure that we continue to
expand to meet our clients’ needs.
MedX joint venture in Australia
and New Zealand
In February 2021, Medica formed
a joint venture (JV) with Integral
Diagnostics Pty, listed leader in
radiology clinics and teleradiology
services in Australia and New Zealand.
The initial focus of the partnership
is to accelerate building reporting
capacity during the daytime hours in
Australia and New Zealand to report
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urgent exams in the UK during the
night-time. We have recruited an
experienced general manager for the
MedX joint venture who will support
the growth in reporting capacity for
the respective JV partners, as well
as to develop our wider out-of-hours
teleradiology reporting offering for the
Australian and New Zealand markets.
2. Invest in our people and
systems to build an engaged
and motivated team
Medica has continued to invest in
its people despite the impact of
the pandemic on the underlying
business. We have also reorganised
our business to create a structure
that will provide shared services
across the Group enabling our skilled
finance, medical, clinical governance,
information technology, recruitment,
and compliance teams to support
their colleagues across Medica.
Whilst a new structure was necessary
to underpin our future growth
strategy, it also presented the
opportunity to promote members
of the team into new roles across
the Group or within their country
organisations. This included Sarah
Burns, formerly COO, taking on the
new role of UK Managing Director
and Kevin Terrins, formerly UK
Business Development, assuming
the new role of Group Director of
Corporate Development. Kevin will
be working closely with me to drive
organic growth across the business
and to ensure that we deliver
synergies across our operations.
Further, we have invested in additional
resource to support phase two of our
ambitious “FutureTech” programme
– the first phase of which went
live in February 2022. We see this
as an ongoing programme which
will deliver significant benefits
over the next 24 months but will
remain a critical component of
our strategy going forward as
we deploy further workflow and
Augmented Intelligence solutions.
Outside of the UK, we have also
invested in senior operations
and commercial roles in Ireland
and the US, as well as a finance
director role for RadMD.
Taken together, this represents a
significant investment in all our
people and provides the opportunity
for long-term career development
for all of our employees at Medica.
FutureTech project delivering
on time and on budget
In terms of systems, much of 2021
was spent preparing the groundwork
to launch our new PACS in early
2022. This required significant
stakeholder engagement with our
new PACS provider, Sectra, as well
as with clients, our radiologists
and clinical teams, our service
delivery and IT teams, as well as
finance and compliance functions.
Our FutureTech team was recognised
by the Association of Project
Management winning not only the
“Best Project in IT”, but also the
overall prestigious “Best Project”
awards for delivery of our first
Augmented Intelligence tool powered
by Qure.ai to assist our doctors in
diagnosing intracranial haemorrhage
of patients who have suffered a
stroke. This AI tool has supported
improved quality of reporting by
reducing the chance that hard to
detect brain bleeds are missed, as well
as demonstrating an improvement
in the time to report urgent stroke
cases of 13%. These awards pitted
Medica against some of the largest,
best-known FTSE100 companies
and we were thrilled that the delivery
of this important project received
international recognition. This is credit
not only to our project management
team, but also to the many reporters,
technicians and experts across
Medica who worked hard to ensure
that our new PACS was ready for
deployment by the end of 2021.
In early February 2022, Medica
launched its new PACS – the first time
in our history that we have replaced
our core reporting system in favour of
a state-of-the-art solution. This project
has been managed by a dedicated
team and the first phase was
pleasingly delivered slightly ahead of
time and budget. Whilst the Company
experienced some temporary
reduction in reporting capacity during
the few days of transition to the new
PACS as radiologists familiarised
themselves with a new system and
Medica calibrated the new PACS
to accommodate the volume of
cases reported, the system is now
operating as planned and is starting
to deliver expected benefits.
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CEO report
continued
The immediate benefits of the new
PACS are multifactorial and include
an improved reporting environment,
increased speed of reporting and
throughput of studies and reduced
workflow steps for our radiologists
and clinical teams. Going forward,
our ambition is to be able to more
easily integrate new tools such as
Augmented Intelligence, advanced
visualisation and data analytics. The
Company has indicated to investors
that it expects the initial planned
phases of the FutureTech programme
to be delivered by 2023 and to cost
up to £6m. Once fully deployed, our
expectation is that the new systems
will not only deliver an improved
reporting environment, enhanced
productivity and functionality, but will
also generate operating leverage and
increased scalability to meet demand.
3. Be the company of choice
for specialist doctors and
clinicians wanting to expand
their expertise in telemedicine
We continue to have the largest
network of radiology experts in the
UK and we are expanding this network
into other countries to provide more
resilience and capacity to support
our clients. In 2021, we expanded
our network in Australia and New
Zealand, as well as in Ireland. We
now have an increasing pool of
radiologists that are dual certified
to report cases in Ireland and the
UK which provides resilience in our
capacity. We have also invested
in developing and growing our
radiologist recruitment team and
now have a robust team to manage
the relationship with our doctors and
clinicians from the first moment they
speak to Medica and throughout the
time that they choose to work with us.
In the US, our RadMD business
focused on clinical trials, has also
widened its pool of radiologists to
support new studies both in the
US, but increasingly in Europe with
some studies now starting in Asia.
During 2021, we focused on improving
our continuing education programme
for our reporters. We started hosting
regular seminars on topics that are
relevant to our radiologists and
clinical experts. These seminars count
towards the continuing education that
our doctors are required to do as part
of their roles in the NHS. They also
allow experts within our network to
share their expertise across a range
of diverse topics such as AI tools,
cancer reporting criteria and specialist
areas of imaging such as Positron
Emission Tomography (PET-CT) and
have been well attended and received.
4. Deliver profitable, diversified
growth underpinned by our
commitment to ESG with
focus on market-leading
clinical governance
At the Capital Markets Day
management reiterated its short to
medium financial and investment
targets- which are as follows:
• Group Growth Rate and Revenue
Target – Growth of core UK
business at 12-14% and recently
acquired US and Irish companies
by over 15% in the short to
medium term with an overall
target of c.£100m revenues in
3-5 years excluding any non-
organic growth
• Target Margins – Gross margins
of over 45% and underlying
operating profit margins of over
20% in the short to medium term
• Target Return on Capital
Employed (ROCE) – ROCE of
at least 15% within a reasonable
period for such opportunities
whilst looking to maintain group
ROCE above 20% overall
• Target Cash Conversion –
Underlying operating profit to
cash conversion of at least 80%
Commitment to ESG
Medica has significantly revised its
approach to measuring and reporting
ESG metrics in 2021. Our framework
focuses on four key areas of our business
that benefit from our commitment to
ESG. These areas are aligned to the
Sustainability Accounting Standards
Board (SASB) international standards
for healthcare companies.
1. People and Community
2. Responsible Operations
3. Environmental Impact
4. Customer Centricity
Details of our ESG framework, approach
and measures are set out in detail in our
new ESG report on Pages 14 to 22 of the
Strategic Report.
Clinical governance
Medica has a commitment to audit up
to 2% of Elective plain film and 5% of
Elective cross-sectional (MRI/CT) scans.
The Clinical Governance Committee
at Medica chaired by Dr.Robert
Lavis, Group Medical Director, meets
monthly to review performance data
in terms of audit, regulation and any
clinical matters requiring attention. The
members of this committee include
expert radiologists that cover the main
disciplines within the clinical service.
The audit process is governed as part
of the Clinical Governance and Quality
Committee of the Medica Board, which
meets quarterly and is chaired by Non-
Executive Director, Dr. Junaid Bajwa, and
establishes the framework to monitor
overall clinical governance across Medica.
The NHS tends not to audit exams unless
there are specific clinical reasons to do so,
hence if you are an NHS radiologist, you
tend not to receive regular feedback on
the quality of your reporting. Therefore,
our radiologists continually cite the fact
that Medica regularly audits a proportion
of their reports as being a differentiator
and very useful feedback that they can
not only use to improve the quality of their
reporting at Medica, but can also take
with them back into their NHS day jobs.
Diversified growth
opportunities
Telepathology reporting
As hospitals make progress with digitising
histology and cytology specimens
embedded in glass slides thereby creating
a digital image, this presents Medica with
the opportunity to be able to establish
a similar remote reporting service for
pathology cases, as well as radiology.
This not only presents a new market
opportunity for Medica, but importantly
it offers existing clients an integrated
service that focuses on broader diagnosis
of a patient’s condition. The best
example is the diagnosis of cancer which
requires often both analysis of tissue or
individual cells, as well as radiological
examination of the tumour in situ. These
data, taken together, would provide an
integrated report for the oncologist and
medical team in the hospital. To do this,
Medica will need to integrate pathology
reporting applications into its current
PACS reporting system, which it is now
able to do with the migration to Sectra as
our partner. Additionally, Medica would
need to build a network of pathologists to
be able to remotely report the images in
the same way that we currently provide
this service for radiology. This project is
ongoing, and we look forward to being
able to provide this service in the future.
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International expansion and
continued diversification
• Clinical trials: Medica’s entry into
the exciting clinical trial market for
medical imaging will continue to be
an area of focus in 2022. The nature
of the market is such that it provides
services to clinical trials operating
across the globe. RadMD’s customers
are also international and increasingly
we are growing our customer base
outside of the US into Europe and
Asia where there is a fast-growing
life sciences market. As we grow,
RadMD will invest in systems to
generate operating synergies across
our customer base and enable the
company to benefit from the scale
effects that growth brings. Medica
will continue to expand both the range
of services and therapeutic areas
covered, as well as the international
footprint of clients during 2022.
• New teleradiology and telemedicine
markets: In 2020, Medica entered
the Republic of Ireland. We saw the
Irish market as having very similar
dynamics to the UK, but not yet at
the same level of outsourcing of key
clinical services such as radiology.
As we expected, this is changing
and Medica Ireland is well-placed
to take advantage of the growth in
the market. During 2022, Medica
will continue to evaluate new market
opportunities for teleradiology in
Europe and further afield, as well as
continue to look at expanding into
new areas of telemedicine. In addition,
Medica will look to build on existing
international partnerships to expand
its reach into new markets.
Positive start to 2022
Medica has worked closely with existing
customers throughout the past twelve
months to extend existing contracts
and sign new contracts to deliver both
out-of-hours (NightHawk) and Elective
services. In addition, we are seeing
strong growth in patients attending
A&E and requiring imaging in both the
UK and Ireland. Whilst February was a
challenging month as many radiologists
took annual leave and Medica transitioned
to its new PACS as described above,
March performance has returned to
plan and we are focused on accelerating
recruitment of new radiologists whilst
continuing to deliver benefits from the
new, enhanced PACS functionality.
Despite the emergence of the Omicron
strain in late November 2021 which
peaked in January 2022, the adverse
impact on the number of elective cases
being referred to Medica as a result
of this was minimal, although this did
impact the availability of reporters in
some cases. This demonstrates that the
majority of our clients have been able to
successfully resume a level of scanning
not dissimilar from pre-pandemic
levels. We now expect clients to start to
operationalise projects to significantly
deal with the backlog of patients working
with scans including extending scanning
hours within hospitals, closer working
with independent hospital groups and
scanning companies, as well as making
use of central NHS and HSE funding to
invest in upgrading to more efficient,
faster throughput scanning equipment.
With strong demand from our customers,
we will continue to manage capacity
carefully and explore recruitment options
in order to maximise output in the UK and
Ireland. Our focus is on the recruitment of
new sub-specialist radiologists, as well as
working closely with our existing reporter
network to improve the overall efficiency
through better systems and processes
In the US, we have continued to see
conversion of pipeline projects into
signed contracts and new opportunities
materialising in areas allied to our
traditional focus of oncology. The
commercial and operations teams are
actively pursuing a broader pipeline of
opportunities supported by RadMD’s
founders, Drs. Patt and Shamsi. This has
seen RadMD work with new customers
in new markets and with Medica’s
support, we are also starting to work
in areas such as pathology and in new
countries where we see opportunity
to expand our service offering.
Finally, we continue to pursue our organic
growth strategy to further diversify our
remote reporting services into areas
such as telepathology, and to expand the
scale and breadth of our telemedicine
services via potential acquisitions.
I continue to be confident that the
quality of our team and the extensive
network of highly-skilled radiologists,
radiographers, sonographers and other
specialist medical experts delivering our
service, will propel our future organic
growth. Alongside this, we continue
to look for exciting partnerships and
acquisitions that will underpin our
growth strategy and further diversify
our revenue, breadth of services offered
and geographic footprint for the future.
I would like to close by thanking all
of our team including our network of
radiologists, radiographers and specialist
doctors who have contributed their
part in what has been a challenging
recovery year for Medica and the wider
healthcare sector as we started to emerge
from the pandemic. I look forward to
continuing to deliver on our ambitious
growth strategy in 2022 and beyond.
Dr. Stuart Quin
Chief Executive Officer
11 April 2022
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Our services
At its core, our business model
can be summarised as identifying
opportunities to improve the service
available to our clients and patients
using technology and a strong
governance framework. Improvements
in services are demonstrated by any
combination of the following:
• Higher clinical quality, leading to
improved patient outcomes;
• Timely delivery, facilitating improved
patient outcomes and/or improved
patient satisfaction;
• Increased return on investment
forour clients.
Medica Group provides
teleradiology, teleophthalmology,
managed imaging services, and
clinical trial reading and imaging
management services.
Teleradiology is the secure electronic
transmission of radiological patient
images, including PF, CT scans and MRI
scans, from one location to another, for
the purposes of diagnostic interpretation
and reporting by highly qualified
radiologist experts. Through teleradiology,
images can be transmitted from the
hospital setting, where the images are
created, to a reporter who can review
and report on the images remotely.
In the case of Medica, these reporters
comprise consultant radiologists,
reporting radiographers and
rheumatologists, all specialising in
their relevant field, reporting on the
images from their own home office.
Teleradiology improves patient care
by enabling reporters to provide their
services remotely, thereby facilitating the
rapid availability of trained specialists
24 hours a day, 365 days a year.
Teleophthalmology is the secure
electronic transmission of photographs
of the eye from one location to
another, for the purposes of diagnostic
interpretation and reporting by highly
qualified experts. Teleophthalmology
is particularly useful in the context
of community screening for potential
eye diseases. Medica Group currently
provide the Diabetic RetinaScreen service
to around half of the Irish population
in partnership with the Irish National
Screening Service. We provide a full
end-to-end screening service, arranging
appointments, taking photos of the
eye in convenient community locations
which are then collated centrally for
review and reporting. If the images show
no evidence of disease progression (or
other abnormality) the service user is
kept on the surveillance cycle and we
will see them again after an appropriate
interval. If there are signs of disease
progression (or other abnormality) they
will be referred to a specialist centre
for further investigation or treatment.
Managed imaging services, is the
provision of end to end imaging to
healthcare providers. For Medica this
includes the provision of facilities,
staffing, imaging equipment, appointment
scheduling, imaging, and reporting via
our teleradiology service. We provide
a service which is tailored to the
client’s requirement giving them the
flexibility to provide elements of the
service themselves. We provide X-Ray,
CT, MRI, Ultrasound and Dual Energy
X-Ray Absorptiometry (DEXA – bone
density scans) managed services.
These range from short-term contracts
to aid with waiting lists or improved
patient access, right through to long-
term contracts where we establish
lasting partnerships with our clients.
Clinical trials imaging services
Clinical trials support the development
of new treatments (drugs, therapies and
devices) to improve patient care and
patient outcomes. A large proportion
of clinical trials utilise medical imaging
performed at regular intervals to provide
empirical data on the impact of the new
treatment. Medica provide consultancy,
project management, training and reader
services for clinical trial imaging. Clients
include pharmaceutical and BioTech
companies, device manufacturers and
Contract Research Organisations.
Multi-disciplinary teams (MDT)
Medica provides MDT support as part of
our elective reporting service. This service
supports clients who have specialist
radiologist capacity gaps by leveraging
the large cohort of radiologists at Medica
who have experience and expertise
of working in an MDT environment.
Medica radiologists attend virtual
meetings on a regular basis to discuss
the diagnosis and suggested treatment
for individual patients alongside the
hospital’s on-site clinical team. Working
with other healthcare professionals
such as pathologists, haematologists,
and clinical oncologists they assist in
making timely decisions that directly
affect patient treatments and outcomes.
Why might a client
choose Medica?
• Rapid flexible set up options,
providing support to clients when
they need it;
• Experts are available to discuss or
clarify reports with clients;
• Experienced in-house technical team
offering full support 24/7;
• Platform designed with contingency
systems providing a robust and
resilient network;
• Access to a network linking Medica’s
over 500 reporters with over 100
hospitals;
• Market-leading Emergency service
delivering high quality reports in a
timely manner to support critical
decisions in patient care.
• Decades of experience in clinical
trial design and execution, coupled
with an extensive network of
experienced readers.
Business Model and Services
STRATEGIC REPORT
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13
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Our approach to understanding our impact and
building a sustainable business
In order to achieve our mission of leading the way in telemedicine and putting
patient outcomes at the heart of what we do, we recognise the importance of the
Environmental, Social and Governance (ESG) activities that underpin our business.
Our employees, clients, consultant radiologists, radiographers, specialist doctors
and wider stakeholders make achieving our mission possible. Following a detailed
review and materiality assessment during 2021, our framework and approach
to ESG has been updated to focus on four key pillars; People and Community,
Responsible Operations, Environmental Impact and Customer Centricity.
Each pillar is relevant to the Group’s business strategy and the framework has been
approved by Medica’s ESG sub-committee, chaired by independent Non-Executive
Director Dr. Junaid Bajwa. The committee meets quarterly and provides advisory
oversight, supporting the Board and management to develop policies, frameworks
and strategies for key ESG matters. Please refer to the chair’s letter for more
details on the committee and its activities during the year on page 49.
For each of our ESG pillars, we have outlined the key areas of focus below
and the contents of this report includes commentary highlighting the main
activities aligned to these focus areas and progress we have made to date.
SASB (Sustainability Accounting Standards Board)
We are pleased to be reporting against the SASB standard for Healthcare Delivery for
the first time. We think that this is the most appropriate internationally recognised ESG
reporting standard for healthcare companies such as Medica. Our SASB disclosure for
2021 can be found on our website at www.medicagroupplc.com/sasb-disclosure-2021.
People and Community Responsible Operations
Environmental Impact Customer Centricity
Our Mission
Leading the way with collaborative and
responsible telemedicine & putting patient
outcomes at the heart of what we do.
Unless otherwise noted, this report summarises the ESG activities and impact
of our UK and Ireland operations for the reporting period of 1January 2021
to 31December 2021 and our US operations for the period of 23March
2021, the date of acquisition of RadMD, to 31December 2021.
ESG
14
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Measuring our impact
As part of our ongoing commitment to building a sustainable business, the below table sets out how we measure our ESG impact
and progress.
People and Community Responsible Operations
Our commitments
1. Attract, retain and develop our people to
deliver sustained business growth
2. Promote equality, diversity and inclusion
across our business
3. Supporting and encouraging initiatives
resulting in positive community impact
4. Protect the privacy and security of the data
we are entrusted with
5. Promote ethical standards within our
workforce and onward supply chain
KPIs
• Percentage of women on the Board
of Directors
• Percentage of women on the Wider
Management team
• Internal appointments as a percentage of
total appointments
• Number of material regulatory
compliance breaches
• Total amount of monetary losses as a result
of legal proceedings associated with data
security and privacy
Targets for 2022
• Collecting data and reporting on diversity
and inclusion within the wider business
• Improving our reporter experience through
the delivery of our future tech programme
• Review the United Nations Sustainable
Development Goals (SDGs) to identify
where Medica has the biggest impact and
align to our ESG strategy
• Provide our staff with training on the risks
of modern slavery
• Carry out an employee salary review
against the National Living Wage in Ireland
Environmental Impact Customer Centricity
Our commitments
6. Minimise our impact on the environment
7. Minimise our carbon emissions
8. Put patient outcomes at the heart of
everything we do
9. Deliver exceptional clinical quality
10. Developing long-term partnerships
built on trust
KPIs
• Carbon emissions, tCO
2
• Percentage of NightHawk studies
completed within SLA
Targets for 2022
• Introduce further green travel initiatives
• Begin developing Medica’s net zero strategy
• Report on additional KPIs next year
• Review and align the client survey
programme across the Group and report
on Net Promoter Score
• Increase the reporter engagement
programme across the Group
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ESG
continued
People and Community
Our commitments
• Attract, retain and develop our people to deliver sustained
business growth
• Promote equality, diversity and inclusion across our business
• Supporting and encouraging initiatives resulting in positive
community impact
KPIs
• Percentage of women on the Board of Directors
• Percentage of women on the Wider Management team
• Internal appointments as a percentage of total appointments
Promoting equality, diversity and inclusion
Our people are our most valuable assets. They have been vital
to the success of Medica as market leader in teleradiology in
the UK and Ireland, as well as driving growth in our clinical trial
imaging business. Our ability to attract, retain and develop a
diverse and talented team is crucial to delivering our business
strategy and ensuring our continued sustainability going forward.
We are determined to make Medica a great place to work and
have a firm commitment to equality of opportunity in all our
employment policies, practices and procedures. Our recruitment
and selection processes are geared to selecting the best
candidate regardless of their age, gender, sexuality, ethnicity,
full or part-time status, disability and marital status. Our equal
opportunities policy ensures that no employee or applicant is
discriminated against. We also apply these principles to the
recruitment of the radiologists, radiographers, specialist doctors
and other clinicians that we contract with across our business.
We welcomed 195 new employees following our acquisitions
in Ireland, the US and business growth in the UK.
Our employees in numbers
2021
Total no. of employees (headcount) 329
Employee growth year on year + 146%
Split by gender Female – 60%
Male – 40%
Percentage with a permanent contract 74%
Total no. of full-time employees 207
Total no. of part time employees 122
*reporting to Senior Management Team
Our reporters in numbers
2021
Reporters by gender diversity Female – 26%
Male – 74%
We note that none of our employees are subject to a collective
bargaining agreement or represented by a trade or labour union
and our relationship with employees remains very positive.
Fostering a diverse leadership team
This year we are reporting for the first time on diversity within
our Board of Directors and senior management team (SMT).
Although the Group is not currently in scope, we are pleased
to report positive progress against the targets set out by the
Hampton-Alexander and Parker reviews. Our performance on
ethnic and gender diversity, is outlined in the tables below.
Our Board of Directors in numbers
Number of individuals on the Board 6
Percentage of women on the Board 33.3%
Number of women holding chair or
senior positions 2
Number from an ethnically diverse background 1
Our Wider Management team
Number of individuals on the WMT 27
Percentage of women on the WMT 44%
Number from an ethnically diverse background 1
Engaging with the people who help to
create our story
An engaged team of employees and reporters is vital to our
current and future success. We held regular “town hall” style
meetings, led by Dr. Stuart Quin, CEO, to share updates of our
progress and good news stories with employees across our
UK, Ireland and US based teams. Further updates are shared
with our employees and reporters through our newsletter the
‘Medica Reporter’. New members of our teams are welcomed
into the business, including interview styled introductions.
Alongside this we conducted regular education and “lunch
and learn” sessions with employees, as well as organising
a dedicated educational programme for our reporters
which is run by one of our internal radiologist experts.
Our Independent Non-Executive Director, Jo Easton, hosted
virtual employee forums during the year to hear directly
from our employees and discuss a variety of topics to review
how our people strategy is performing. Topics addressed
included experience of working for Medica, developments
to the way we work as a result of the pandemic, Medica’s
strategy, culture and values, leadership communication,
remuneration and for Medica Ireland, the acquisition and
integration experience. Two formal Board reviews of the output
and feedback took place in August and December 2021.
The Group defines employee performance management through
the setting of company-wide strategic objectives and these are
cascaded throughout the organisation. Performance against
objectives is reviewed and managed via an appraisal process and
through regular meetings between our managers and their teams.
Following on from our 2020 exercise in the UK, our Irish
business was rebranded to ‘Medica Ireland’ in March 2021.
This included updating and launching our existing Medica
values and embedding them into our Irish operations.
Our values have been further embedded into our annual
performance and development process in the UK and
we shall introduce this in Ireland and the US in 2022.
We reviewed and launched an improved staff benefits package in
our UK division, including increased annual leave allowances and
improved parental leave and compensation and benefits. We also
launched our new ‘home working policy’ in the UK, Ireland and the
US providing our employees with greater flexibility to manage their
work remotely. Additionally, we have plans to roll out a new cycle
to work scheme in 2022 that will be open to eligible UK employees.
Annual Report for the year ended 31 December 2021
17
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In addition to the benefits we provide, our ethos of recognising
and rewarding our staff remains at the heart of what we do. At
the end of 2021, our colleagues and the leadership nominated
individuals who embodied Medica’s values and we celebrated
their success with annual virtual ‘Medica Awards’ events.
Developing and growing our talent
Following on from the leadership programme we delivered in
2020, many our UK based junior managers received a similar
leadership and management programme during the year. This
supported individuals to learn and develop the skills and tools
needed to support their teams and the wider business and in
turn to deliver the Group’s strategic objectives and goals.
To further enhance our commitment to clinical excellence, we
delivered a safety critical communication training to our out
of hours NightHawk service. Developing key communication
skills ensures that our teams deal effectively with critical
messages when liaising with our customers and reporters.
Our compliance teams continued to deliver a suite of e-learning
modules for our employees and reporters. This included the
induction process and ongoing training during their time
with the organisation. This resulted in improved employee
and reporter engagement and streamlining of training.
During 2021 we ran a series of virtual ‘lunch and learn’ sessions in
the UK, Ireland and US, enabling staff to access additional training
and increase cross-functional awareness within the organisation.
We have supported the further education of our employees,
including individuals working towards MBAs, masters degrees
and specialist training and recertification across the business.
We continue to invest in our talented workforce, and
this continues to lead to regular internal promotion. This
enables the Group to develop a loyal and highly engaged
workforce, as well as continuing to maintain and develop
our culture. We continue to adopt our “grow your own”
approach to talent and where possible, will always seek
to fill internal roles by offering existing team members the
opportunity to grow and develop within the organisation.
When internal promotion was not possible, our in-house recruitment
team were on-hand to source new talent to join the organisation,
whilst keeping external recruitment agency costs down.
Internal appointments as a percentage of total
appointments
29%
Number of training hours per employee 7
Sustaining the wellbeing, health and safety of
our people
This year we increased our focus on mental health by
running a health and wellness survey across the organisation.
This resulted in the formulation of a wellness strategy
aimed to support our employees across the business.
This included running mental health awareness training
sessions and wellness-focused coffee mornings.
As our employees continued the trend of working remotely
during the year, we arranged virtual access to our coffee
mornings and ‘watercooler’ sessions as an opportunity to share
feedback and discuss key topics such as wellbeing and health.
We also hosted a live webinar with a former Premier League
footballer who shared his story about mental health challenges
through difficult times. Colleagues from all three of our divisions
joined the session and shared incredibly positive feedback.
Additionally, our employees were empowered to setup a social
committee with members joining across the organisation to
arrange social events inside and outside of the workplace.
In the UK, Ireland and US, our employees have the flexibility
to work from home, with some of the team fully remote. In the
US market, our employee health care premiums are fully paid
by the company with an additional fund provided annually in a
health savings account to assist managing the cost of health care
expenses (insurance deductibles). The health plan offers coverage
for health and wellbeing, including psychological counselling
and is a market-leading plan offering for our employees.
We have published the health and safety data collated
across all three divisions for the first time this year,
demonstrating Medica’s safety record across the Group:
TRIR (total recordable incident rate) 0
DART (days away, restricted, or transferred) 0
Attracting and retaining the highest calibre of
clinical expertise
In addition to the earlier stories on our recruitment, engagement
and development activities, the Group continues to invest in
our dedicated in-house recruitment team and our approach
to attract and retain our reporters. Delivering telemedicine
solutions with clinical excellence requires the highest calibre
of expertise. Our clinical recruitment and retention strategy
focuses on the needs of all stakeholders to ensure clinical quality
for our clients and a satisfying and rewarding experience for
our doctors. Although the majority of our reporters are not
employed with us, our strategy focuses on the importance of
investing in ongoing professional development, training and
regular audit which reinforces the quality of their reporting
output. The addition of augmented intelligence tools also
helps to assist our radiologists with reporting of critical,
highly time sensitive diagnosis of stroke out-of-hours.
Our people strategy considers all aspects of a reporter’s
interaction with us and encourages long-term retention. In addition
to our dedicated reporter recruitment and training teams, our
reporter relationship functions in the UK and Ireland provide
assistance with day-to-day queries, requirements and 24/7
support. Our clinical governance team oversee the management
of our reporters. Investment as part of our Future Tech programme
in the UK is targeted to improve the workflow experience for
reporters and functionality of the system to enhance both
the quality of reports, as well as reporter productivity.
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ESG
continued
This year, we implemented the license to
practice (L2P) solution, streamlining the
appraisal process for our reporters and
our clinical governance team. Ongoing
wellbeing has been introduced as a
discussion item for all annual appraisals.
In the UK and Ireland, the job plans for
our Reporters are regularly reviewed to
ensure they are not overworking when
they report for Medica. For further
details on our approach to reporter
governance, please see our ‘Customer
Centricity’ section on page22.
Reporters who partner with Medica
experience more than just reporting
and reading work. We provide flexible
scheduling, with both ad-hoc and regular
reporting work to suit their availability.
This year, we offered leadership
development initiatives, allowing
reporters to participate in working groups,
focus group involvement and present on
a series of educational seminars. We also
supported our reporters with mentorship
opportunities and access to the seminar
series. Our reporters in the UK and
Ireland also have an exciting prospect
of undertaking work for both divisions
as we continue to align and develop
our service offering in both countries.
In the US, our reporters are offered a
flexible schedule and the ability to be
fully remote and work from anywhere
in the world. We support them through
regular communication channels
including updates on upcoming projects
and sharing feedback from labs.
Community impact and
charitable causes
The Medica team is proud to work for a
company that makes a real difference to
improving patient welfare and contributes
to saving lives. Our NightHawk and
Elective services in the UK do this by
providing high quality complex reports
back to hospitals quickly to support
diagnosis of illness and disease that
directs the care of the patient. In Ireland,
our diabetic retinopathy (DR) screening
service can quickly identify and reduce
the likelihood of blindness through a cost-
effective screening approach. Further, in
the US, we support our clients to analyse
imaging data from clinical trials that aim
to demonstrate safety and efficacy of
novel therapies including for cancer.
We are always looking to innovate and
improve the quality of our services. A
recent example of this is the extended
investment in critical communication
training for our emergency out of
hours team. This was directly aimed to
improve patient outcomes particularly
in time-sensitive conditions such as
stroke and trauma diagnosis pathways.
Our business continues to help improve
the day to day reporting experience
for our consultant radiologists and this
ultimately improves patient outcomes.
There are many ancillary benefits of
teleradiology to the NHS apart from
providing much-needed reporting
capacity. Radiologists want a more flexible
portfolio career that allows specialisation
and telemedicine is a great way to
achieve this. Our consultants continue
to augment their expertise by focusing
on particular types of sub-specialist
reporting which benefits the NHS and
in the case of reading for clinical trials,
our pharmaceutical and biotech clients.
Medica’s clinical audit process is valued
by our radiologists as this is rarely
conducted in the NHS or HSE systems.
They receive support and feedback on
their reporting quality and approach and
we also share best practices that help to
develop sub-specialist expertise that is
highly valued in their roles working for the
NHS in the UK or HSE in Ireland and is an
important benefit of working for Medica.
Our core business model relies on us to
continually ‘“do well by doing good” and
through our business model and strong
company values, we believe that we will
have a positive impact on our people
and the Group’s future growth. During
the year we continued to support our
charitable partner RefuAid to sponsor
doctors arriving in the UK as refugees as
they retrain to become qualified in the UK.
Our employees in the UK and Ireland
raised further charitable donations,
including fundraising for local mental
health and homeless charities; the
latter by collecting and donating
clothing and supplies, essential
during the winter months.
Responsible Operations
Our commitments
• Protect the privacy and security of
the data we are entrusted with
• Promote ethical standards within
our workforce and onward
supply chain
KPIs
• Number of material regulatory
compliance breaches
• Total amount of monetary losses
as a result of legal proceedings
associated with data security
and privacy
Behaving ethically with good
governance at the heart of
what we do
We remain committed to maintaining
and implementing policies to ensure
we operate in a manner that is both
responsible and ethical. This is essential
to ensuring that our business grows in a
sustainable manner. Behaving ethically
involves everyone at Medica from
our Board of Directors down and all
employees are required to abide by our
Employee Code of Conduct and is made
available via Medica’s internal network.
We operate in accordance with the
Universal Declaration of Human Rights
and take account of other internationally
accepted human rights standards. We
also promote human rights through our
employment policies and practices,
our supply and value chains.
We conducted a review of the hourly
rate of all UK staff and workers in 2021
to satisfy ourselves that the National
Minimum Wage and National Living Wage
were being paid in all circumstances.
We continue to maintain this position
and obtained the National Living Wage
accreditation during the year as a
further statement of our commitment.
The Group publishes a Modern Slavery
statement in line with the requirements
of the Modern Slavery Act 2015. We
also have a Modern Slavery Policy
that reflects our commitment to act
ethically and with integrity in all our
business relationships. The Policy is
made available to all workers to ensure
they understand our responsibility and
attitude towards modern slavery. Our
annual Modern Slavery Statement can
be found on the footer of our website
at www.medicagroupplc.com.
Medica maintains and implements
policies that demonstrate commitment
to adhere to regulations on tax and
financial transparency. We refrain
from using offshore jurisdictions for
tax planning and our tax payments are
aligned with revenue generating activity.
We continue to adhere to regulations
on anti-bribery, anti-corruption and
anti-money laundering. We reviewed
our policies and process with external
auditors to ensure continued adherence
with the Criminal Finances Act 2017.
Our Whistleblowing policy enables
anyone from any level of the organisation
to report known or potential breaches
of our code of conduct and policies.
Annual Report for the year ended 31 December 2021
19
STRATEGIC REPORT
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We have further developed our risk
management framework and this has
been further embedded into our business,
following our acquisitions in 2020 and
2021. During the year we aligned risk,
project and performance management
across our UK, Ireland and US divisions.
Further information on our approach
to risk can be found in our Risks &
Uncertainties report on pages 34 to 37.
We would also refer you to our Corporate
Governance report on pages 40 to 42.
Number of material regulatory
compliance breaches 0
Ensuring we work with ethical
and responsible supply
chain partners
We are committed to working with
suppliers who demonstrate highly
ethical business practices. Our supplier
management and assurance process
ensures that suppliers are assessed for
supply chain risks, including modern
slavery, privacy and data security. This
is driven by our internal Information
Security & Risk team with support and
engagement across the business. In 2022,
our target is to develop a supply chain
code of ethics policy to further support
our existing supplier risk processes.
Protecting the security and
privacy of the data we are
entrusted with
The risks from cyber security continue
to rise globally and so too does
the need to protect our customer’s
patients, our employees and Medica’s
other information assets.
Cyber and privacy risk is reviewed
alongside our wider risk management
approach and was regularly reported
on by our Head of Information
Security & Risk and discussed
with the Senior Management
Team and Board of Directors.
Our UK and Ireland divisions are
accredited and certified to a number of
quality and security focused standards,
including the Quality Standards of
Imaging (QSI) and CHKS for our
teleradiology operations and both ISO
27001 and Cyber Essentials to support our
internal information security management
system. In addition to our own internal
audit process, our management systems
are regularly audited by external
certification and accreditation bodies
to provide assurance against the
standards, our policies and our controls.
Our IT, security and business
teams successfully identified and
stopped a number of cyber attacks
during the year. One such example
originated from China, attacking one
of our external facing systems.
To fully support and develop awareness,
employees are provided with regular
training on relatable security and
privacy topics, including the risks
from the internet, email security and
data protection (UK and EU GDPR).
Medica has dedicated budget for
investment in cyber security with a
particular focus on staff awareness and
IT security technologies. We have also
obtained Cyber Insurance for the Group.
More information can be found in our
‘Information Security and Data Protection
Overview’ publication, located on
our website at www.medicagroupplc.
com/privacy-security-overview.
Total amount of monetary
losses as a result of legal
proceedings associated with
data security and privacy
(£) zero
Environmental Impact
Our commitments
• Minimise our impact on the
environment
• Minimise our carbon emissions
KPI
• Carbon emissions, tCO
2
Minimising our
environmental impact
Medica actively considers its
environmental footprint and the
impact that decisions may have on
the environment and particularly
climate change. As a technology &
services focused Group with most of
its staff either working from home or
employed in one office location and
radiologists contracted mainly from
their own homes, we believe our own
environmental footprint remains small.
Our environmental policy sets
out our core foundation of
environmental and sustainability
principles, a copy is available on our
website at: www.medicagroupplc.
com/environmental-policy.
Following on from the pandemic we
have implemented a working from home
policy in our UK and Ireland divisions.
This has resulted in higher levels of
remote working and reduced travel into
the office. Although we do not have the
data available, we believe that reducing
employee travel has positively impacted
our related carbon footprint. In the US
our team already benefit from home
working and reduced travel time.
We have continued to reduce our
environmental impact through
partnerships including leveraging existing
delivery networks, rather than delivering
reporter workstations around the UK
ourselves. This also benefits our business
with reduced lead times, quicker overall
deployment of workstations and an
improved experience for reporters.
This year we have explored the use
of virtual desktop infrastructure (VDI)
to further minimise the potential
transport of large workstations, in
particular as we continue to grow
our overseas based reporters.
We continue to maintain our clear
approach to recycling by encouraging
those in the office to use conveniently
placed bins for standard paper &
plastic recyclables, and separate
secure confidential paper recycling.
During the year, we continued to drive
the recycling of higher value items such
as redundant workstations, laptops,
PCs and cabling etc. Our process has
been further adopted for non-office
based equipment, such as server
infrastructure. Due to our approach to
re-use equipment where practicable, we
did not require any physical recycling
by our Waste Electrical and Electronic
Equipment (WEEE) regulated partners
in 2021. We do however have plans to
green recycle equipment that can no
longer be re-purposed during 2022.
In 2021, our documents requiring
execution were processed using an
e-signature solution. The use of this
solution has positively impacted our
environmental impact with estimated
savings of over 1,700kg of carbon, 100kg
of physical waste, and 700kg of wood.
Following a review of our leased
head office, we have been advised
that the building was supplied
with 100% renewable source
electricity during the year.
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STRATEGIC REPORT
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ESG
continued
Climate Disclosure Project (CDP) and Task Force on Climate-Related Financial Disclosures (TCFD)
The Group submitted its first corporate response to the annual CDP Climate Change survey and also recognises the TCFD
recommendations, in particular the relevance for organisations who have identified key risk exposure to climate change impact.
Medica’s exposure to climate risk over the near-term has been assessed and is considered immaterial due to our operating model,,
we have however set a target to start beginning the development of a climate strategy during 2022 that will set out our ambition to
become carbon neutral and achieve net zero in the future. Please find our responses to the TCFD recommendations below:
TCFD recommendation Our disclosure
Description of Medica’s governance
arrangements to assess and
manage climate-related risks and
opportunities
Medica’s Environmental Social and Governance Committee has been appointed by the Board to
identify, assess and strategically manage climate-related risks and opportunities that materially
impact the Group.
The Group’s Audit Committee is responsible for providing oversight of Group risks and
opportunities, and this includes environmental and climate-related risk. This includes risk
mitigation, strategic alignment, scenario analysis and reviewing progress against targets where
these have been set.
The ESG Committee met once during 2021 and have committed to meeting bi-annually in 2022
onwards. Medica has a very limited direct impact on the environment and is not a significant
producer of greenhouse gas emissions. Therefore, climate risk has been assessed as very low
and is considered immaterial to the Group’s future success. However, the Group recognises
that it still has a key part to play in global climate-related challenges and continues to seek
out opportunities to positively impact in this area. Our actions and impact is outlined in the
‘Minimising our environmental impact’ section on page 19.
Climate risks and opportunities are identified, assessed and managed through the Group’s
existing risk management framework and further details on this can be found in our Risks and
Uncertainties report on pages 34 to 37.
Description of how Medica
identifies, assesses and manages
climate-related risks and
opportunities
Description of how processes
for identifying, assessing, and
managing climate-related risks
are integrated into the overall risk
management process
Description of the climate-related
risks and opportunities that Medica
has identified and the time period(s)
Medica has reviewed climate-related risk and as a business we are not materially exposed to
environmental risks in the next 0-5 years. The Group employs less than 330 employees globally
and all of our offices are leased. Therefore we have not yet carried out an assessment of
climate-related scenarios.
For transparency, we have detailed the climate-related risks and opportunities that we have
identified and assessed, below:
Risk: Environmental impact events (floods, fires, storms etc.)
Our offices in the UK and Ireland are located in areas of very low risk to flooding, fires and
storms. Our office in the US is located in an area known for flood risk, however there has been
no historical impact from floods in the region. Medica’s remote working strategy, combined
with resilient IT infrastructure, means that our employees and reporters who are dispersed
globally, minimise any potential impact from such localised environmental events.
Risk: Changes to government or regulatory policies on climate change
Our leadership team continue to monitor climate policy changes and ensure that Medica are
able to comply and disclose appropriately.
Opportunity: Increasing demand for healthcare delivery
Demand analysis shows that if global temperatures rise, this may increase the impact on
human health and this could increase the demand on healthcare delivery and in particular
Medica’s services.
Medica recognises that the effects of climate change need to be continually assessed and
analysed for the short, medium and longer term and we will continue to report on this annually.
Description of the impact
of climate-related risks and
opportunities on the organisation’s
business, strategy and
financial planning.
Description of the actual and
potential impacts of the principal
climate-related risks and
opportunities on the business model
and strategy
Analysis of the resilience of the
business model and strategy against
different climate-related scenarios
Description of targets to manage
climate-related risks and/or realise
climate-related opportunities and
performance against them
As stated earlier, Medica has assessed climate-related risk to be immaterial, however we have
set ourselves targets to introduce further green travel initiatives and to begin developing a net
zero strategy as set out in the ‘Measuring our impact’ table on page 15.
In addition we continue to report on carbon emissions metrics as a KPI in line with SECR
and have enhanced our disclosure this year to include limited scope 3 reporting. These will
continue to be monitored to assess climate-related risks and opportunities. Further details of
greenhouse gas emissions can be found on page 21.
Description of the key performance
indicators used to assess progress
against targets used to manage
climate-related risks and realise
climate-related opportunities and
a description of the calculations
on which those key performance
indicators are based.
Annual Report for the year ended 31 December 2021
21
STRATEGIC REPORT
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FINANCIALS
Our energy use and greenhouse gas (GHG) emissions during the year
The Group reports on energy consumption and the associated GHG emissions in
compliance with the Streamlined Energy and Carbon Reporting (SECR) legislation.
Greenhouse gas emissions and energy use data –
UK and Offshore
(for the period 1January to 31December 2021) 2021 2020 2019
Scope 1 in tCO
2
e 0 0 0
Scope 2 (location based) in tCO
2
e
Purchased electricity 8.9 10.3 15.4
Total Scope 2 8.9 10.3 15.4
Total Scope 1 and 2 in tCO
2
e 8.9 10.3 15.4
Intensity Ratio
tCO
2
e per £m Revenue 0.1 0.3 0.3
Scope 2 emissions in metric tonnes CO
2
e
(Market based)
Purchased electricity 0 No data No data
Total Scope 2 – Market based 0 No data No data
Scope 3 emissions in metric tonnes CO
2
e
Business travel in employee owned vehicles 13.3 No data No data
Total Scope 3 13.3 No data No data
Total Energy Consumption used to calculate scope
1 & 2 emissions (kWh)
Electricity 42,029 44,263 60,346
Total 42,029 44,263 60,346
Scope
As per previous years reports and for
the 2021, the scope includes our UK
operations only. For 2021, our non-
UK subsidiaries are not included as
they are excluded by way of the SECR
exemptions, as they would not be
obliged if reporting on their own account
and they are also considered immaterial.
We did not purchase or combust fuel
directly, so Scope 1 was not applicable.
Scope 2 emissions are limited to our UK
operations and specifically to electricity
usage at our Group’s head office building.
We have also chosen for the first time to
make a voluntary disclosure for Scope
3 emissions relating to business travel
in employee-owned vehicles this year.
Calculation methodology
The reporting methodology used is the
GHG Protocol Corporate Accounting
and Reporting Standard, operational
control approach. This year we have
also reported market based scope 2
emissions as this data was made available
from our third party building landlord.
The calculations for Scope 2 are derived
from electricity meter readings for
lighting and power and estimates where
applicable. The calculations for Scope 3
are derived from mileage claims for UK
employee expense forms for travel during
the period. Scope 2 & 3 GHG emissions
have been calculated this year using the
2021 UK Government GHG Conversion
Factors for Company Reporting. We
have also re-calculated and re-published
our 2019 and 2020 emissions using the
respective 2019 and 2020 UK Government
Conversion Factors to provide more
comparable year on year data as the
previously published figures for FY 2019
and FY 2020 were generated using the
US centric EPA emissions calculator.
Scope 1: includes emissions from
activities for which the company own
or control including combustion of fuel
and operation of facilities for the UK.
Scope 2: includes emissions from
purchase of electricity, heat, steam
or cooling for own use for the UK.
Scope 3:
includes emissions from business
travel in employee owned vehicles.
We have disclosed one intensity ratio this
year and it is calculated based on total
tCO
2
e emissions in the reporting period
divided by total Group revenue in £m.
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STRATEGIC REPORT
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ESG
continued
Customer Centricity
Our commitments
• Put patient outcomes at the heart of everything we do
• Deliver exceptional clinical quality
• Developing long-term partnerships built on trust
KPI
• Percentage of NightHawk studies completed within SLA
Keeping patient outcomes at the heart of what we do underpinned with clinical excellence
Clinical governance remains paramount
to the delivery of our critical services.
The roup’s oversight utilises regular
reporting from clinical committees in
the UK and Ireland and is consolidated
by the Medical Advisory Board, led
by our roup Medical Director, Dr.
Robert Lavis. The Clinical overnance
and Quality sub-committee of the PLC
Board chaired by Dr. Junaid Bajwa meets
quarterly to ensure oversight of clinical
excellence, highlighting potential clinical
risk and enabling the Board to review
and manage this in line with the roup’s
wider risk management framework.
Onboarding: All of our reporters are taken
through a thorough review, accreditation
and assessment to assure quality of
patient care. This is balanced with careful
management of reporter engagement,
hours worked and wellbeing.
Appraisal: Our high quality appraisal team
are now engaging with overseas reporters
to assist in regaining MC registration
to further increase our overseas
rostered capacity.
Audit: We provided ongoing evolutions of
our clinical audit processes to harmonise
systems across the clinical aspects of our
business. We have changed the focus of
some of our internal audit to target patient
groups with complex studies such as
major trauma so that they were effectively
reviewed in a shorter time frame.
Percentage of NightHawk
studies completed within SLA 97%
Continuing Professional Development
(CPD): We drive excellence through our
reporter engagement exercises such as
feedback surveys, educational seminars
and working groups to enhance reporter
experience and education.
Onboarding
Appraisal
Continuing
Professional
Development
Audit
Building partnerships with clients that go beyond excellence in
service delivery
This year, we continued to offer our pro-bono “pass through” service whereby we
collaborated with radiology departments in response to the impact of the pandemic
to leverage our network of reporting capabilities. This facilitated the home reporting
of internal client work by their own staff utilising our infrastructure. This was provided
during 9am – 5pm weekday NHS contracted hours throughout the year.
The service has enabled NHS hospitals to utilise their radiologists or reporting
radiographers who already contract with Medica, to continue to report from home when
required to self-isolate due to COVID-19. As a result, Medica continues to strengthen its
relationship with clients and to demonstrate our core values.
In Ireland and the US, our teams worked closely with our clients, including supporting
compliance challenges. This year we performed vendor and site audits on behalf of
sponsors to utilise the expertise within the RadMD business.
Annual Report for the year ended 31 December 2021
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I am a clinical specialist in CT scanning at Our Lady’s Hospital, Navan. The hospital’s CT
service is managed by Medica, who I have worked for since May 2014 when they won the
tender for the equipment and end to end service. I previously worked with Alliance Medical
for 8 years, managing the CT service at the same hospital on their equipment, and prior
to that I worked in a military hospital in Saudi Arabia as a CT and MRI radiographer.
Q
Describe your day-to-day
role both pre-pandemic
and during the pandemic.
What have been the most
significant changes?
How do you adapt to
changes in best practice?
A
COVID-19 had a big impact on my
daily routine in the radiology
department. It was a stressful
environment as early in the
pandemic we didn’t know what COVID-19
was and how serious the situation was.
Pre-pandemic, I would only use personal
protective equipment (PPE) for patients with
tuberculosis or MRSA, so the increased use
of PPE was met with supply difficulties
during the first few weeks of the pandemic.
In addition to PPE, we had to allocate one
scanner to be exclusively used by COVID-19
patients during certain hours in order to
minimise the risk of exposure to other
patients, which meant our service was
running at a reduced capacity.
Q
What has it been like
adjusting to wearing
PPE and carrying out
infection control while
you serve a patient?
A
We must treat all our patients as if
they are carrying the virus, which
means wearing a full PPE suit.
Wearing a full PPE suit can be very
uncomfortable and comes with additional
challenges such as communicating with
patients and staff. We also had to develop
new cardiac arrest protocols to protect both
the staff and patients, which involved a new
cardiac arrest trolley that included fresh
COVID-19 PPE and removing the mouth to
mouth element of resuscitation.
Q
Do you think the
pandemic has affected
both ambulatory and
critical patients, and how
has Medica/you worked
to maintain a patient
first environment?
A
The biggest challenge has been
looking after patients with
co-morbidities, giving them safe
access to the CT service.
Patients, such as those accessing the
oncology service, regularly require scans
to monitor their cancer treatment and
many of these patients are vulnerable and
scared of the risk of COVID-19 when
attending their appointment. I recognised
this issue very early on and came up with
a solution that meant patients didn’t have
to walk through the main hospital and
corridors to attend their appointment. I
located an alternative entrance, which
enabled patients to drive up to the
entrance, attend their appointment
without entering any other part of the
hospital, and then comfortably exit to
their car. This arrangement worked really
well and patients fed back that they were
happy their exposure to the hospital
environment was minimised.
Q
As a frontline member
of staff, you are serving
patients who are critically
ill, some with COVID. How
does this make you feel
and what is it like returning
home after your shift?
A
CT scans have a vital role in the
diagnosis and treatment for
COVID-19 patients. Severe cases
require a CT scan of their chest
and occasionally an angiogram. I have
seen a lot of critically ill COVID-19
patients that come for a CT scan before
being taken straight to ICU for intubation.
Some of them survived and unfortunately
some didn’t. This has been the hardest
part of the pandemic for me, I’ve found it
very mentally exhausting knowing that the
patients did not have the opportunity to
say goodbye to their loved ones.
Q
Did Medica do anything
to support you and your
colleagues throughout
the pandemic?
A
I have not felt alone or
unsupported throughout the
pandemic. Catriona, our
radiology services manager has
been available from day one, even
supplying sets of PPE when we were
running short on stock. There has also
been continuous communication from the
Medica admin team through email and
regular online meetings.
Q
Our working relationships
internally and with our
clients have had to adapt
to ensure the safety
of our patients and
staff. Do you feel this
helped to cement the
relationship with Navan
and your colleagues?
Were they tested/affected
negatively at all?
A
In my time with Medica, there has
always a sense of being part of the
team in Navan, despite being a
private provider in the Hospital.
We really were all in it together here during
the pandemic, and I guess the only impact
from the client support side was our
management team not being allowed on
site during peak affect periods. We kept our
meeting schedules up though with
telephone and video dial in options which
kept key relationships and communications
in focus. We had the further impact last
year of the cyber-security attack across the
HSE which lost Medica access to all
systems – and we even managed to get
radiologists on our team to come to Navan
and stay overnight to ensure the on call/
NightHawk service was maintained. Going
out of our way to support Navan and its
patients in that way strengthened an
already very strong relationship between
Medica and the Hospital.
Human Story:
Alfred Francia shares the impact COVID
had on radiographers
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Leveraging scale across the Group – key themes
As Medica has expanded over the past 18 months into new service lines, as well as new
countries, there is an increased opportunity to leverage the effects of scale across the
company. As we grow, not only can we take advantage of the expertise we have built
as part of Medica’s group functions, but we can also ensure that this learning is a two-
way street with opportunities from one part of the business being utilised to improve
services across the Group. We have selected four areas where the benefits of working as
a Group have improved both the quality of service, but also improved the scalability of the
business which will support the delivery of operating leverage across the company.
1. Integration of acquisitions
Medica has integrated both of its
acquisitions; Global Diagnostics
Ireland (GDI; November 2020) and
RadMD (March 2021) into the Group.
In the case of GDI, the company has now
been rebranded to Medica Ireland and is
successfully building the Medica brand
in Ireland given the strong links to the UK
teleradiology business. In addition, we
have rebranded our diabetic retinopathy
screening service to Medica Vision which
has been similarly successful. Medica
Ireland has already benefited from being
part of the wider Group in areas such as:
• Systems – we now have a combined
team providing support for Ireland,
as well as the UK. This team were
involved in migrating our Irish systems
across to a new datacentre following
acquisition and provide day-to-day
support where needed alongside the
local IT team in Dublin
• Quality and governance – we have
centralised the process and clinical
governance framework to ensure that
both the UK and Irish businesses are
now jointly managed in terms of clinical
governance. This also offers some
Ireland and UK medical council dual-
certified radiologists the opportunity to
report scans in both jurisdictions
• Recruitment – as Medica grows,
it requires an increased reporting
capacity. We have a dedicated
recruitment team that is focused on
building and developing relationships
with our reporters in the UK and
Ireland. This enables us to work
quickly and effectively to ensure we
can react to requests from clients for
more reporting – particularly during
busy times of the year
• Training, development and
incentivisation – we now have a
single team focused on training and
development. In addition, the team in
Ireland are now benefiting from being
part of the wider Medica employee
benefits and incentive scheme which
we hope will improve recruitment and
retention of employees.
In terms of RadMD, the business lines
are quite separate and so synergies are
limited to wider Medica group support in
areas such as finance, HR and IT. However,
we have started to train a number of
UK-based radiologists to be able to read
clinical trial images as an opportunity
to both increase their expertise and
experience, as well as expand into other
sources of revenue. Thisis still early
stage, but we are hopeful that such
opportunities will continue to grow.
2. Working in partnership
In March 2021, Medica entered into a
joint venture partnership with Integral
Diagnostics Pty, an Australian imaging
clinics company based in Sydney with
operations across Australia and New
Zealand. The partnership called MedX
is making good progress with phase one
of the venture which was focused on
recruitment of radiologists in Australia
and New Zealand to support Medica
UK’s out-of-hours service, NightHawk.
Medica now has radiologists reporting
regularly via the joint venture which is
helping to support our clients to deal
with the increasing number of scans
that require urgent reporting between
7pm-7am. In addition, MedX has recruited
a General Manager who is tasked with
developing the joint venture to offer
teleradiology services in Australia
supported by both parent companies.
Group Themes
Annual Report for the year ended 31 December 2021
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3. Investment in people
Medica spent considerable time and
investment during the pandemic to
focus on training and development of its
teams in UK, Ireland and the US. In the
UK, Medica ran a tailored management
training programme to develop the next
leaders in the business. This proved very
successful and as Medica has reorganised
its teams to support Ireland and RadMD
in the US, several senior managers have
been promoted to manage operations
across more than one country. This
creation of a group function and multi-
country responsibility has enabled career
progression across the organisation. In
addition to this, managers across the
Medica Group have benefited from
being part of the company incentive
scheme and well over 30 managers are
now participating in the Performance
Share Plan at Medica. The company
continues to also run an Employee Share
Scheme which allows all UK employees
an opportunity to acquire Medica shares
in a tax efficient manner. Further details
on our investment in people can be found
on pages 14 to 22 of our ESG report.
4. Investment in technology
FutureTech: Over two years ago, we
announced a significant investment
in Medica’s reporting systems and
information technology architecture.
This has culminated in Medica’s
ambitious FutureTech programme
which is a £6m investment that will
continue to run through 2022 and into
2023 to deliver an improved reporting
experience for our radiologists,
radiographers and specialist doctors.
The first phase of FutureTech went live
in February 2022 with the new Sectra
PACS. This is the first time that Medica
has made significant changes to its
operating systems and represents a huge
step forward in terms of the scalability
and functionality it offers. Although it is
still quite early in terms of quantifying
the benefits of the Sectra PACS go-live
in February, we are already observing
improvements in the following areas:
1) New analytics & functionality:
The new PACS has enabled
improvement in the quality of data
which will support improved SLA
management and will enable focused
service improvements including
AI integration & deployment
2) Improved reporter experience &
clinical outcomes: whilst data is still
being analysed, we have already
recorded a decrease in time to report
urgent cases. In addition, the new
system has improved our ability to
allocate studies on a ‘right first time’
basis. As one radiologist noted, “the
new PACS is much more intuitive”
3) Efficiency gains: early results indicate
reduced time to report a study by an
average c.10% per study for acute
workflows Cost reduction: finally,
we estimate that initial savings of c.
£250k have been generated in annual
technical support on a like-for-like
basis, savings which will underpin
our ongoing FutureTech programme
We also anticipate that the new systems
will deliver improved productivity, as
well as enhanced functionality in areas
such as Augmented Intelligence (AI) and
advanced visualisation tools that support
the diagnosis made by the reporter. The
new systems will also be fully scalable and
will underpin Medica’s future growth.
Augmented Intelligence: in December
2020, Medica went live with its new AI
tool from Qure.ai called qER which detects
haemorrhages in the brain indicative
of stroke. This decision support tool is
integrated into the normal way that a
radiologist would review and report a
case, but crucially qER provides additional
information for the radiologist that acts as
a second pair of eyes to flag often what are
very hard to detect micro-haemorrhages
in the brain. The qER tool has >99%
sensitivity meaning that it has a very low
false negative rate – in other words it very
rarely misses a brain bleed. This allows
our radiologists to improve the quality
of their reporting as well as productivity.
Indeed, we have shown that using an AI
tool, it improved the time to report by
7% or 1 minute per scan that normally
takes around 14 minutes to report. Every
minute counts when reviewing a potential
stroke case and so this is improving
patient outcomes, as well as supporting
our specialist radiologists to make the
right decision during the night-time.
Medica’s new PACS will be much
better suited to adopt AI tools into the
workflow and we are expecting that
further solutions will be added this year
and into the future based on what is
most useful to support our radiologists
and also based on client needs.
Clinical trial systems: RadMD, Medica’s
provider of imaging services for clinical
trials has expanded rapidly over
the past few years. As the business
grows, we are looking at ways to
improve economies of scale and
better manage our data, systems and
processes. Work is underway as part
of the wider FutureTech programme to
develop a Clinical Trial Management
System (CTMS) to support growth.
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Despite a lockdown in the early part of 2021, our clients were soon able to start to resume
elective scanning of patients. This recovery continued throughout 2021 to the point that in
Q4, reporting reached pre-pandemic levels. In our UK business, our teams adapted well to an
agile hybrid working model that enabled a combination of home and office- based working
based on the needs of the employee and what was required to fulfil their role. Our business
model, clients and professional reporting workforce were also adapting to the changes that
the pandemic had brought about within the healthcare sector. In November 2021, in response
to the increased backlog of patients waiting for diagnostic tests, the government committed
£250 million in funding for diagnostics. Theyalso announced that the intention was to
increase delivery of diagnostics in a community setting. Whilst already part of the NHS Long
Term Plan, this was accelerated due to the pandemic and the unprecedented numbers of
patients waiting for routine procedures. When implemented, this will see millions of patients
benefit from earlier diagnostic tests closer to home thanks to up to 40 community diagnostic
centres set to open or expand across England in a range of settings from local shopping
centres to football stadiums. The new one-stop-shops for checks, scans and tests will be
backed by a £350million investment from government to provide around 2.8 million scans in
the first full yearofoperation.
The centres will help to achieve:
• earlier diagnoses for patients through
easier, faster, and more direct access
to the full range of diagnostic tests
needed in areas including respiratory,
cancer and ophthalmology
• a reduction in hospital visits which will
help to reduce the risk of COVID-19
transmission
• a reduction in patient waiting times
by diverting patients away from
hospitals, allowing them to treat
urgent patients, while the community
diagnostic centres focus on tackling
the backlog
NHS England Monthly Diagnostic waiting
list data show that despite increasing
capacity as COVID precautions ease,
the volume of patients waiting is
stillincreasing.
Total number of patients waiting at month end for all tests January
2010 to January 2022
0
200,000
400,000
600,000
800,000
1,000,000
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18
Jan-19
Jul-19
Jan-20
Jul-20
Jan-21
Jul-21
Jan-22
1,200,000
1,400,000
1,600,000
Total Diagnostic Test Waiting List
Source: NHS England: NHS Diagnostic Waiting Times and Activity Data. January 2022 Monthly Report.
Firstpublished: 10 March 2022
In addition, all cancer services are back
to or above pre-pandemic levels with
almost half a million people checked for
cancer in June and July – among the
highest numbers on record – while more
than 50,000 people started treatment
for cancer in the same period, a 32%
increase on the same period last year.
Delivery: UK
Revenue:
£47.1m
UK Financial metrics
Gross profit margin:
50.2%
Underlying operating profit:
£9.9m
Annual Report for the year ended 31 December 2021
27
STRATEGIC REPORT
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Medica has responded to these
approaches taken by clients by extending
the range of services that we offer. In
terms of support for cancer diagnosis,
Medica has partnered with clients to
provide Multidisciplinary Team (MDT)
support where Medica radiologists
provide both reporting and advisory
services via a virtual meeting with other
healthcare professionals from our client.
Another example is our Same Day service,
which has also seen growth during
2021, as hospital radiology departments
gear back up to manage their own
competing demands of the backlog of
both elective, cancer and emergency
cases. Same Day service provides
reporting with a report turnaround time
of between 4 -24 hours dependent on
clinical indication. Our service is being
expanded in 2022 as Medica responds
to increasing demand by providing duty
radiologist services alongside the Same
Day reporting service. Duty radiologists
will provide our clients with access to
specialised advice in real time, meaning
care pathways and patient decision
making can be made more efficiently.
Finally, in 2021, we launched a
new Cardiac MR service.
Our ability to redesign services has
been heavily influenced by the move
of our core PACS system to Sectra,
which was successfully completed in
February 2022. This will furnish our
reporting workforce with improved image
viewing facilities, alongside advanced
visualisation and clinical interpretation
tools including Augmented Intelligence.
Additional anticipated benefits include
increased reporting productivity and a
scalable platform to support the further
development of Medica’s ‘Future Tech’
strategy – a move to more digitised
and automated workflow and process
management. Further automation of
systems and processes will continue in
2022 and 2023. To support our growing
reporter workforce, we moved both our
shift rostering and medical appraisal
process to digital systems. This has
allowed a much more streamlined
approach with reporters having a ‘self-
service’ approach to both their reporting
roster with Medica and documentation
to support information for medical
appraisal – a fundamental requirement
for maintenance of a licence to practice
medicine in the UK. All these technical
developments make it easier to work with
us, supporting our group strategy for
making us the organisation of choice for
specialist radiologists and radiographers.
Whilst recovery was the focus of our
elective service in the UK in 2021, growth
was the outstanding feature of our
NightHawk service. Regularly performing
over 1000 exams per 24-hour period in
H2 2021, Medica provides ever increasing
emergency reporting services for the NHS.
As the graph below shows the number of
A&E attendances increased significantly
from the lock down months of late 2020
and early 2021 and is only now stabilising
However, we expect that attendance
at A&E will continue to rise. However,
we expect that attendance at A&E will
continue to rise.
Total A&E attandances per month
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Oct-2020
Nov-2020
Dec-2020
Jan-2021
Feb-2021
Mar-2021
Apr-2021
May-2021
Jun-2021
Jul-2021
Aug-2021
Sep-2021
Oct-2021
Nov-2021
Dec-2021
Jan-2022
Source: NHS England https://www.england.nhs.uk/statistics/statistical-work-areas/ae-waiting-times-and-
activity/ae-attendances-and-emergency-admissions-2021-22/
Our bespoke acute case management
portal provides real time visibility to our
emergency specialist reporters, referrers
in A&E and our in-house team to manage
and prioritise cases in a clinically time
sensitive manner. We have appointed
an experienced operations manager
to manage the growth of the acute
service and overall, have expanded our
in-house team. Part of our investment
included training on “human factors”
and critical communication methods
which enabled improvement in the way
our team interacts with emergency care
physicians and prioritises and report
urgent clinical cases. During 2022, the
focus in the UK is to further develop the
value proposition with both clients and
our reporting workforce to build long
term relationships, provide a community
where people feel valued, and be a partner
that is responsive and reliable. Future
investment in additional roles in the UK,
namely a new Client Service Manager,
Group Head of Reporter Relations and
Head of Commercial Development will
assist in cementing our stakeholder centric
culture and quality of service delivery.
Increase in
total capacity:
5%
UK Operational metrics:
Increase in average number of
body parts per exam vs. 2020:
6%
NightHawk SLA
adherence:
97%
*
Increase in total exams
reported vs. 2020:
28%
* target – 95%
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Scanning, Screening and Reporting – COVID-19 Recovery and BacklogManagement
Healthcare provision in Ireland in 2021 continued to be impacted by the COVID-19
pandemic throughout the year. This impact was exacerbated by the ransomware
cyberattack on the Health Service Executive (HSE; equivalent to the UK NHS) computer
systems in May. The cyberattack effectively caused the shut down of the HSE IT systems
with a significant impact on hospital appointments across the country, with many
appointments cancelled including all outpatient and radiology services. The cyberattack
impact meant that many hospitals and their radiology teams were scanning and manually
reporting only their urgent studies with no access to NIMIS (National Integrated Medical
Imaging System). This created a significant reporting backlog which Medica were poised
to assist with once the systems were brought back up, and enabled a number of new
client Hospital go lives in the process.
Despite these challenges, Medica was
able to support clients to recover from
the pandemic by delivering diagnostic
scanning and reporting for over five
thousand public patients in our primary
care locations. Our radiographer,
sonographer, screening and patient
facing support teams were able to
continue to examine patients every week
while adhering to PPE and public health
guidelines. In addition, we were able to
support the teleradiology requirements
of a large private diagnostics provider
who scanned significant numbers of HSE
patients but experienced a bottle neck
on the reporting side. In our diabetic
retinopathy screening service we
managed the backlog of cases that had
accumulated following the cessation of
services in 2020 in the initial covid-19
discovery period, by increasing our
capacity to ensure screening could be
delivered 6 days a week in the first half of
2021 which was effective in eliminating
any wait times over 3 months.
Alongside our remote out-of-hours
reporting service in Ireland which has
grown during the pandemic, the team in
Ireland were also proud to have been able
to provide onsite NightHawk radiologist
support to one of our long-term HSE
hospital sites without which critical
patients would have had to be transferred
to alternative hospitals. This is a good
example of the flexible approach that we
have in Ireland which is focused on solving
client issues together as they arise
Our diabetic surveillance programme
also expanded, helping to alleviate some
of the pressures on the hospital waiting
lists. This year more than any, we have
worked in close partnership with the
National Screening Service to clinically
align where we can provide support
and there are further plans to expand
that surveillance programme from a
clinical perspective, allowing further
Medica to acquire additional patient
waiting lists from the hospital systems.
2022 will see the continuation of
the outsourcing of diagnostics and
screening by the HSE as patient
backlogs continue to be managed by
Medica and others, and the team are
looking forward to further exploring
opportunities for our bespoke solutions.
NightHawk Service
Development
At the time of the acquisition of Global
Diagnostics Ireland (now Medica Ireland),
the out-of-hours acute “NightHawk”
service market in Ireland was less
developed in comparison to the UK.
The impetus of the pandemic and cyber
security impact saw Medica expand our
ad hoc services to 365 days/year provision
and win several new HSE NightHawk
clients. Our unique model has been
recognised by the HSE for its simplicity
yet effectiveness and the Irish team is
working closely with the UK team to
enable further expansion of NightHawk
services across the HSE as the market
expands and radiologists become less
available to manage the out-of-hours
shifts in hospitals.
Expansion of our
Vhi Contract
One of the biggest projects embarked
upon in 2021 by the Medica team in
Ireland was the collaboration on the
development of Vhi Health & Wellbeing’s
360 Health Centre in Carrickmines, its
new flagship multi-disciplinary clinical
facility. Vhi 360 Carrickmines, is a state
of the art health centre in a 5,000sq
metres facility which will provide Vhi
customers with access to top of the range
health and wellbeing services delivered
by a highly trained multi-disciplinary
healthcare team – all under the one roof.
Medica had been involved to assist
Vhi in the design of this facility and the
services it will provide. With the new
modality installations and preparatory
work all complete, the new Vhi clinic was
opened on 23February 2022 and is now
Ireland’s largest urgent care facility.
Having worked with the Vhi Health
& Wellbeing teams in our urgent
care diagnostics provision for their
national Swiftcare clinics since
2008, we were proud to continue
as their exclusive services provider
and to expand our partnership with
the Carrickmines 360footprint.
‘The Medica team were highly engaged and
collaborative partners in the development
of our new diagnostic centre in our 360
Health Centre in Carrickmines and our
urgent care radiology services, both in
Carrickmines and across Ireland. We have
found them to be a strong clinical and
commercial service provider and we look
forward to our ongoing work together.’
Vhi Health & Wellbeing Chief
Clinical Officer and Managing
Director Dr. Nicholas Young
Delivery: Ireland
Annual Report for the year ended 31 December 2021
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Integration with Medica
At the time of acquisition of Global Diagnostics Ireland, there were five areas of focus in terms of integration and synergies.
1. Business Development
The rebranding and values transformation project was completed on 31March 2021.
This project involved engagement with both internal and external stakeholders
and enabled Medica to align the definition of our services such as NightHawk and
Elective reporting across the UK and Ireland while developing bespoke materials
for managed services in Ireland. Alongside this, Medica presented and sponsored a
healthcare conferences and are looking forward to our first official joint conference
approach at the European Congress of Radiology in Vienna in July 2022.
2. Radiologist Access
One of the synergies of the acquisition of Global Diagnostics Ireland by
Medica was being able to deliver its first successful contract award for dual
UK & Ireland radiologist reporting, allowing resourcing for elective and sub-
speciality reporting volume. This opportunity would not have been realised
prior to acquisition. In addition, our recruitment and reporter liaison teams in
the UK have been working hard to coordinate current UK reporters and new
onboarding reports to obtain Irish Medical Council (IMC) Specialist register
status. This expansion in reporter access will afford Medica, and in turn the
HSE, greater support to deliver out-of-hours “NightHawk” services.
3. Systems and Readiness
One of the most significant post acquisition projects was the migration across to
Medica infrastructure and a new data centre. This will provide the Irish business
with access to Medica’s bespoke acute services tracking portal, shared e-learning,
audit, rostering and business analytics. The creation of an integrated, shared
business services team – including IT – across the UK and Ireland will help to
support growth in both companies.
4. Governance and Quality
Another example of transformation of Medica Ireland post acquisition was the
integration of the clinical governance, quality and risk structures, and adoption
of the new group governance frameworks. The cross-country participation
in respective governance meetings and the reporting structure to the Board
has worked well and ensures close monitoring of the clinical performance of
both businesses. The Irish management team is now integrated into the wider
Medica Group and is represented on the Executive Committee by the Ireland
Managing Director.
5. Focus and Expertise
The development of matrix structures and cross-country shared service teams
for Recruitment, HR, IT, Marketing, Information Security & Risk and Clinical
Governance will ensure that the Irish business is positioned well for future growth.
One example is the recruitment of a Head of Operations for our diagnostics services
in Ireland.
In summary, during 2021 the Ireland business has now been integrated within the
wider Medica Group and best practices and know-how from both entities continues
to be shared to the benefit of both teams.
Revenue:
£9.7m
Ireland Financial metrics
Gross profit margin:
50.8%
Underlying operating profit:
£1.5m
Increase in total exams reported
vs. 2020:
36%
Ireland Operational metrics:
Increase in number of registered
diabetic opthalmology patients:
32%
www.medicagroupplc.com l stock code: MGP
30
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
The acquisition of RadMD, was completed in March 2021. Since then, investments
have been made in recruitment of new leadership positions in operations, business
development and technology to drive growth and scale the company to support
pharmaceutical and biotech companies with imaging services for clinical trials. Results
during the final nine months of 2021 are very encouraging as a contributor to Medica.
The goal of delivering new treatments
to patients around the world brings
deep meaning to the work of RadMD’s
team. Drs. Rick Patt and Kohkan
Shamsi, founders of RadMD, have
built a reputation for strong clinical
leadership, medical expertise, and a
world-class reader network. The team
assembled proved pivotal in major
RadMD accomplishments in 2021. As an
example, RadMD contributed to the early
FDA approval of a novel KRAS Inhibitor
for lung cancer. Specifically, RadMD
assessed images of lung tumours, crucial
in determining drug efficacy. It is exciting
to contemplate that, given the in excess
of 200 ongoing trials within RadMD
the next breakthrough medicine could
occur in 2022. RadMD exists to drive
change and continually raise standards
within the medical imaging industry, to
support those conducting clinical trials on
lifesaving drugs and devices. To do this,
quality and regulatory compliance are at
the forefront.
The FDA visited RadMD in March of
2021 for an audit. The results yielded
the highest results from the Agency.
The veteran FDA auditor was compelled
to share that this achievement had
only occurred twice in her 20-year
career of audits and this was clearly
helpful to cement the relationship with
RadMD’s client.
Primary RadMD customers are those with
trials in early phase oncology. RadMD’s
therapeutic focus has broadened to
include AI (Augmented intelligence)
Imaging Software and next generation
oncology diagnostic validation trials. This
new business capitalizes on RadMD’s
industry-leading group of expert
radiologists, and oncology expertise.
For example, AI software trials require a
large pool of radiologists (>30) and highly
qualified experts which places RadMD in
the best position among its competition.
RadMD’s deep oncology expertise
resulted in the largest awarded trial in the
history of the company which calls for
validation of next generation oncology
diagnostics to improve patient treatment
options. This is a new area of expertise for
RadMD that stems from the company’s
extensive knowledge of oncology trials.
Marketing of the company to a broader
industry audience is required. Lack of
awareness of RadMD’s value proposition
is its main hurdle to overcome, as well as
perception of RadMD as a small player.
RadMD’s rebranding and marketing
strategy began in 2021 and will continue
during 2022 by expanding the sales
force, attending conferences, increasing
speaking engagements, and sharpening
RadMD’s message. The marketing plan
calls for, among other things, leveraging
the acquisition by Medica, as its listing
on the London Stock Exchange and its
core business in radiology is impactful to
RadMD’s clientele.
Overall, a significant amount of progress
has been made during 2021 and the
first phase of integration of RadMD
into the wider Medica Group has been
achieved. As the two organisations have
spent more time together, it is clear
that there are opportunities to leverage
common expertise in radiology systems,
Augmented Intelligence and the sharing
of expert radiologists to interpret
clinical trial images. In 2022, continued
investment is planned to expand the
RadMD team as we similarly expand the
range of clients that we support.
Delivery: RadMD
Kohkan Shamsi Richard Patt
31
Annual Report for the year ended 31 December 2021
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Revenue:
£5.2m
RadMD Financial metrics
Gross profit margin:
55.2%
Underlying operating profit:
£0.7m
Repeat business:
30%
RadMD Operational metrics:
Number of active studies:
274
Increase in number of reports:
66%
www.medicagroupplc.com l stock code: MGP
32
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Financial Review
Progress against our strategic financial goals
Strategic financial target¹ Medium term Target Actual 2021
Revenue growth rate
UK 12%-14% 33%
Ireland² >15% 27%
US² >15% (2%)
Target Margins
Gross Profit Margin >45% 50.7%
Underlying Net Operating Profit margin 20% 19.5%
Return on Capital Employed
Group >20% 20%
Ireland >15% >15%
US >15% N/A
Group Operating Cash conversion >80% 81%
¹ Non-GAAP unaudited operational performance measures as set out in the CMD presentation in September 2021
² YoY comparison including periods pre-acquisition
Revised segmental analysis
Following the acquisition of RadMD
in March 2021, we have made further
changes to the way we manage and
report on Group operations compared
to 2020. For 2021 we have reported our
results in three geographic segments;
the UK, the Republic of Ireland and the
US reflecting the way we report and
manage the Group. Central PLC costs are
allocated across the three segments.
Revenue
Overall revenue increased 68% to £61.9
million in 2021 from £36.8 million in 2020.
Excluding the impact of acquisitions
on 2021 and 2020, on a like-for-like
basis, revenues increased 33%.
UK
In the UK, NightHawk, our urgent
out-of-hours reporting service, which
started the year fully recovered from
the impact of COVID-19 in 2020 saw
revenues increase 30% to £29.8 million
in 2021 from £23.0 million in 2020.
Elective reporting services, which had
been more severely impacted than
NightHawk and for longer, recovered
steadily throughout the year and ended
the year at its highest ever run rate driven
by a backlog of scanning demand in the
NHS. Revenues increased 38% to £17.3
million in 2021 from £12.5 million in 2020.
Ireland
Medica Ireland reported its first full year
since acquisition in November 2020
and reported £9.7 million in revenues
in the year compared to £1.3 million for
the two-month period from November
2020. This represented strong growth
on the run rate immediately prior to
acquisition of €9 million (or £7.6 million)
per year driven overall by a recovery in
the ability to scan and report patients
during the pandemic, as well as the
expansion of existing clients and new
client contracts. It was very pleasing to
note that the Return On Capital Employed
(ROCE) for Ireland exceeded our target
return in its first full year of operation.
US
RadMD, based in the US and focused
on imaging services for clinical trials,
was acquired in March 2021. For the
9-month period in 2021 revenues were
£5.2 million, on a constant currency basis
broadly in line with run-rate revenues
at the time of acquisition. Pipeline and
signed contract backlog also increased
34% since acquisition driven by further
growth in oncology projects, as well as
penetration of new clinical trial areas.
Gross Profit and Gross Profit
Margin (GPM)
Gross Profit is stated after the cost of
reporting radiologists, internal audit
costs required to deliver contractual
commitments and other cost of sales such
as framework costs in the UK. In 2021, Gross
Profit increased by 80% to £31.4 million in
2021 from £17.5 million in 2020 after taking
account of the strong UK recovery and
the positive impact of acquisitions. GPM
increased significantly to 50.7% in 2021
from 47.4% in 2020 as a result of positive
contract negotiations in the UK, careful cost
management and the positive mix impact
of higher margins in Ireland and the US.
Underlying Operating Profit
For 2021, consistent with prior years
we have reported underlying operating
profits that consider the impact of
non-underlying items to provide a
more representative depiction of
underlying activity. Underlying operating
profits increased to £12.1m in 2021
from £5.0m in 2020. This reflected
both the improvement in the UK
performance together with the positive
impact from the US and Ireland.
“ 2021 saw a strong recovery in our
financial performance that included an
excellent result from Medica Ireland,
which generated returns above our
target for acquisitions in its first full
year, and the first contribution from
our US business, RadMD acquired in
March 2021.”
Richard Jones
Chief Financial Officer
Annual Report for the year ended 31 December 2021
33
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Non-underlying costs
Non-underlying costs after tax increased
by £1.4 million to £3.9 million in 2021
from £2.5 million in 2020. These costs
included £0.4 million relating to the
acquisition of RadMD, £2.2 million (2020
£1.0 million) relating to the amortisation
of acquired intangible assets, £0.8
million (2020 £0.2 million) relating to
share-based payments and other one
off legal and professional costs of £0.6
million (2020 £0.1 million). The income
tax credit on these non-underlying costs
was £0.2 million (2020 £0.1 million).
In addition, non-underlying finance
costs included £0.6 million (2020 £nil)
relating to a fair value adjustment
on contingent consideration.
Net finance expense
Finance costs net of finance income
were £0.5 million for the year (2020: £0.3
million). In March 2021 we finalised a
new fully flexible £30.0 million Revolving
Credit Facility (RCF) and drew down £12.0
million of this during H1 2021 to repay the
term debt which had been in place since
IPO and also repaid the previous RCF of
£5.6 million. Since the initial drawdown,
£6 million of the RCF was repaid and
£6 million of the RCF was drawn on
31December 2021. The interest costs for
the year of £0.5 million represent interest
on drawn down balances together with
non-utilisation fees on undrawn amounts.
Profit before Tax
Underlying profit before tax increased by
£6.7 million to £11.5m in 2021 from £4.7
million in 2020 reflecting the increase
in revenues and gross profit, ostensibly
offset by the increase in operating
costs. Total profit before tax, after
taking account of non-underlying and
exceptional items increased by £5.2m to
£7.3m in 2021 from £2.1 million in 2020.
Taxation
The Group has incurred a tax charge of
£1.9m in the year ended 31December
2021 (2020 £0.7 million), with tax on
underlying profits of £2.1 million (2020:
£0.9m). The effective rate of tax for
2021 is 25.5% with the effective tax
rate on underlying profits of 18.1%.
Earnings per share
Underlying basic earnings per share
(EPS) increased by 125.6% to 7.83pence
per share in 2021 from 3.47pence per
share in 2020, reflecting the increase
in profits together with the impact of
the increased number of shares in issue
following the placing in March 2021.
Total basic EPS, after taking account of
non-underlying and exceptional costs
increased by 3.35pence to 4.56pence
in 2021 from 1.21pence in 2020.
Dividends
In 2021, an interim dividend of 0.89pence
per share was declared in September
2021 and paid in October 2021. In line
with our progressive dividend policy
outlined at the Capital Markets Day
last year, the directors are proposing
a final dividend for 2021 of 1.79pence
per share. The final dividend will be
paid on 22 July 2022 to shareholders on
the register on 24 June 2022 subject to
approval by shareholders at the 2022
Annual General Meeting (AGM). The total
dividends for 2021 of 2.68pence per share
represent an increase of 5% over 2020.
Capex
Total capex was £2.7 million in 2021
compared to £2.0 million in 2020. This
included: intangible capex of £0.8 million
(2020: £0.5 million) including expenditure
on the Future Tech programme of
£0.7million (2020: £0.1 million); tangible
capex on infrastructure and equipment
for contracted radiologists of £1.4 million
(2020 £1.5 million) and right of use asset
additions of £0.5 million (2020 £nil).
Cash and debt at
31December 2021
Operating cash generation in 2021
increased strongly to £9.7 million in 2021
from £8.6 million in 2020. Free cashflow,
after taking account of capex was £7.5
million in 2021 compared to £6.6m
in 2020. Operating cash conversion
remained strong at 81%, and above our
target of 80% reflecting in particular
good working capital management in
the UK as the business recovered from
COVID-19 together with the positive
contribution from acquisitions.
After taking account of the acquisition
of RadMD and the associated equity
placing together with strong cash
generation throughout the year, gross
cash at 31December 2021 was ahead
of expectations at £9.6 million (2020
£13.9 million) and net cash was £3.9
million (2020 net debt of £3.9 million).
On 6May 2021 the Group entered into a
new three year fully flexible £30 million
RCF with a syndicate of three banks,
including previous lenders Lloyds,
together with NatWest and Silicon Valley
Bank. The facility is extendable for up to
two years. Variable interest is calculated
on utilised facilities based on leverage
with initial interest at Sterling Overnight
Index Average (SONIA) + 2% and non-
utilisation fees of 35%. Key banking
covenants remain the same with maximum
net debt to adjusted EBITDA of 2.5x and
interest cover of 4x adjusted EBITDA.
Joint Venture
On 22February 2021 the Group
announced an equal Joint Venture (JV)
partnership with Integral Diagnostics
Pty, a leading provider of medical
imaging services across Australia and
New Zealand. The JV, MedX, aims to
provide teleradiology reporting services
and increased reporting capacity in
Australia, New Zealand, the UK and
Ireland. The initial equity investment
by both parties into this JV was AUD
100,000 each (c.£50,000). The joint
venture will be reported on an equity
accounting basis going forward.
Return on Capital from acquisitions
2021 was the first full year performance
from Medica Ireland which was
acquired in November 2020. After
considering underlying operating
profits and assets employed in Ireland,
Return on Capital Employed for Ireland
in 2021 excluding apportioned head
office costs was comfortably ahead
of our target return of 15% which
represents a very strong performance
in the first full year in the Group.
Acquisition of RadMD
On 22March 2021 the Group acquired
RadMD LLC, a company incorporated
in the United States of America. RadMD
is a leading Imaging Contract Research
Organisation (“iCRO”) providing services
to the fast-growing clinical trials market.
The initial cash consideration paid was
$16.3m (£11.7m). Deferred consideration
of $4.9m shall be paid in Q2 2022 based
on profits for the year ended 31December
2021. A further deferred contingent
consideration of $0.3m is expected to
be paid in H1 2023 based on profits for
the year ended 31December 2022.
Equity placing and subscription
On 23March 2021, a total of £16.1
million was successfully raised through
a combined equity placing (£15.6 million
gross proceeds) and subscription (£0.5
million gross proceeds). Total costs in
connection with the fundraise were
£0.5 million. A total of 11,111,110 Ordinary
shares were issued including 10,727,666
Placing Shares and 383,444 subscription
shares which represented, in aggregate,
approximately 9.98 per cent of the issued
ordinary share capital of the Company.
At 31December 2021 total shares in
issue were 122,428,836
after also taking
account of shares granted to satisfy share
options that vested during the year.
Richard Jones
Chief Financial Officer
11 April 2022
www.medicagroupplc.com l stock code: MGP
34
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Managing risk is integral to
the continued success of
our business and our ability
to offer safe and compliant
critical services to our
customers. The Group has
continued to develop its risk
management framework
this year, through post-
acquisition integration with
Ireland and progress in the
US. The Group has ensured
that the processes in place
have supported strategic
risk-based decision-making
and is clearly defined
and quantified across
all business divisions.
It is through the risk
management process that
significant risks faced by
the Group continue to be
identified, assessed and
managed appropriately.
Although the Board of Directors
is ultimately responsible for risk
management within the Group, it has
delegated responsibility for monitoring
the effectiveness of the Group’s risk
management and internal systems
to the Audit Committee. The Audit
Committee receive a quarterly report
and dashboard summary of updates
from the executive management team
on the principal risks and uncertainties
and the steps being taken to manage
them. This process is monitored and
reviewed regularly to ensure it is fit for
purpose and adequately reflects risks in
an ever-changing business environment.
An overview of the risk management
framework is illustrated below:
Risk
Management
Framework
Governance & Board Oversight
Audit Committee
Report &
Monitor
Identify
Assess
Prioritise
Respond
Group Chief Executive Officer
Risk Moderator
Executive Management
Group & Divisional Management
Risk assessment process
The risk management process has
been established and embedded within
the UK and Irish divisions, with partial
implementation in the US and is underpinned
through the use of a suite of risk registers.
Each Group register is maintained by an
owner within the senior management team
and is overseen by the risk moderator. The
identification and evaluation of risks is
carried out through collaboration between
senior management and their teams.
All emerging risks are identified,
reviewed and assessed as part of the risk
management framework process. Risks
may also be identified through the use of
industry and horizon scanning, internal
forums and workshops with management
teams. Any potential new risk is considered
by the senior management team and its
impact and likelihood is assessed before
inclusion in the Group risk register.
The impact and likelihood of each risk are
identified and this generates a risk score that
can be holistically judged on a relative scale to
other risks and the changes to each individual
risk over time. Existing controls are then
identified and assessed resulting in a residual
(or current) risk score being calculated.
The individual risk registers are reviewed
by group and divisional management teams
and then summarised in an overall corporate
risk register that is regularly reviewed
by the executive management and Audit
Committee. The principle risks listed below
are drawn from the risk registers and noted
below is also how they are connected to the
Group’s strategic activities.
The business regularly assesses progress
against project plans and updates the
risk register accordingly when risks are
assessed to have changed as a result of
progress implementing various quality and
performance improvement projects.
Medica’s main strategic risks include the
post-acquisition integration of RadMD
and Medica Ireland into the Group and
the implementation of new technology
including our new PACS system into
the group.
Climate-related risk
Medica has reviewed its exposure to
climate-related risk through the existing
risk management process and has
assessed that the Group is not materially
exposed to this emerging risk. The Group
will continue to monitor and assess
climate-related risks and opportunities
in 2022 onwards. Further details on
this topic can be found in the TCFD
section of our ESG report on page 20.
Embedding the Group’s
recently acquired
divisions into the risk
management process
The Group’s risk management process
continues to evolve and develop in line
with changes in Group complexity and
as the level of risk maturity changes.
Following our acquisitions in Ireland and
the US, the risk management framework
was enhanced to adopt the Group’s risk
process into the acquired companies.
In addition, the risk framework was also
improved to recognise the risks that
are specific to individual geographies
and/or divisions and also new risks that
are common to the enlarged Group.
Details of Medica’s principle risks,
how they have changed compared
to the prior year and our mitigation
strategy for each are set out below:
Risks and Uncertainties
Annual Report for the year ended 31 December 2021
35
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Strategic Risk
Description Change Commentary for 2021
Acquisitions and integrations
In addition to the acquisition of Medica
Ireland in November 2020, the Group
acquired RadMD in March 2021 and created
an expanded group operation covering
new geographies, customers and service
lines. There is a risk that the acquired
companies are more complicated to
manage or integrate fully into the group
or introduce new risks to the group.

Decreased
Risk
The Irish and US divisions have positively contributed to the Group since
acquisition and integration activities are largely complete.
• The trading results (initial part year for RadMD) for both entities have
been in line with our expectations
• The Group has completed key steps for the integration of both
acquisitions
• The Group’s Cyber insurance policy has been extended to cover both
acquisitions and a review of cyber risk, disaster recovery and key IT
infrastructure has been completed
• In Ireland, customer contract terms have been aligned with the UK in
respect of data protection and other key regulatory terms
• In the US Medica has completed a full assessment of the control
environment and has enhanced management oversight with a number
of new key hires during 2021.
• A project is underway to replace the diverse individual financial
systems currently in place with a new globally integrated
financial system.
Advances in future technology
There is a risk that technology advances
reduce our ability to offer a market-
leading and best in class service to our
clients. This could be in areas such as
PACS, AI (“Augmented Intelligence”
or “Artificial Intelligence”), client
connectivity and other areas.

Decreased
Risk
The Group’s FutureTech programme continued to progress well during
the year focused on the upgrade of technology and systems to create a
more efficient and advanced platform for future growth, including:
• Preparation for the new PACs platform was completed during the
year and the system was successfully launched as planned in Q1 2022
• Medica deployed a new electronic online rostering system, enabling
more effective management of reporter capacity.
Financial Risk
Description Change Commentary for 2021
Contract risks
In the UK a number of competitors qualify to
undertake Elective and Out of Hours work
for the NHS and the market remains highly
competitive. Medica typically undertake out
of hours work under our NightHawk service
with contracts tendered for typically three
years directly with NHS trusts, or through
framework contracts. There is a risk that
competitor activity leads either to a loss
of key contracts or reductions in pricing
on renewal of key existing contracts.

Static
Risk
During 2021 Medica successfully re-tendered a number of key contracts
and despite the loss of a small number of contracts had a net overall
positive win rate in the year.
In addition, a continued focus on cost improvements meant that Medica’s
UK’s GPM improved in 2021 compared to prior years.
Medica remains the market leader in both the UK and Ireland and
continues to innovate and invest in service offerings to clients.
In the US, RadMD continued to develop its imaging contract research
organisation (“iCRO”) services direct to pharma sector clients offering a
full range of services to deliver effective imaging in clinical trials.
Medical litigation
In the UK and Ireland, Medica is involved in
services critical to patient care. The Group
therefore is occasionally party to litigation
and this could lead to defence costs
relating to such patient facing activities.

Static
Risk
In the UK and Ireland, primary insurance responsibilities remain with
sub-contracted radiologists, subject to certain exceptions where the
Group maintains primary cover. The Group also maintains comprehensive
secondary medical malpractice cover and at least annually reviews its
insurance requirements.
Whilst limited professional costs were incurred during the year
these were immaterial and within policy excess limits and the Group
successfully recovered certain costs from the radiologists holding
primary insurance cover.
The group has a comprehensive clinical quality and governance
framework and regularly reviews all issues and incidents brought to
its attention for swift resolution. Board oversight is maintained via the
Clinical Governance and Quality Committee (see ‘Clinical quality’ below)
www.medicagroupplc.com l stock code: MGP
36
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Risks and Uncertainties
continued
Compliance Risk
Description Change Commentary for 2021
Compliance and regulation
The Group and its clients operate in a
highly regulated landscape. This includes
operating and complying to the standards
and regulations set in each jurisdiction
operated in. These include the CQC, NHS,
HSE, the ICO and DPC (with particular note
to the UK & EU GDPR). Failure to comply
could lead to reputational and financial loss.

Static
Risk
The Group maintains internal processes, management systems,
certifications and accreditations to ensure it operates within compliance
of regulation. This includes
• QSI accredited status in the UK
• Registered manager for CQC purposes
• CHKS accredited status in Ireland
• Certified ISO 9001 quality management system in the UK & Ireland
• Internal data protection policy and process, with ICO registration in
relation to the ongoing requirements of UK and EU GDPR.
The Group successfully re-certified its UK quality management system
to ISO 9001 whilst the UK and Irish divisions successfully completed an
external survey to maintain CHKS accredited status in Ireland.
The Group continues to monitor the regulation landscape on an
ongoing basis.
Operational Risk
Description Change Commentary for 2021
Clinical quality
The Group’s radiology reporting in the UK
and Ireland forms an integral and essential
part of clinical management for patients.
Inaccurate reporting could lead to patient
harm and reputational damage to the Group.
This risk will always remain very high, due
to the inherent nature of the industry.

Static
Risk
Medica continues to maintain and strengthen its comprehensive clinical
governance, quality assurance and continuous improvement processes
including:
• Medical Advisory Board with oversight by the group medical director
and Clinical Governance and Quality Committee
• Ongoing management of clinical quality with regular auditing of
radiologists work
• Developing and implementing individual quality improvement plans
where necessary.
Technology and infrastructure
The Group’s service offerings are founded
on technology-driven workflow solutions.
A major failure or disruption would
result in reduced service levels and loss
of revenue. Enhancements in reporting
systems and workflows offer opportunity
to further develop the Group’s services
and reduce risk of failure and disruption.

Decreased
Risk
The Group continued the major investment in its technology systems
known as ‘FutureTech’ and is expected to deliver significant efficiency
and capability benefits in the short to medium term.
The new PACS system was successfully launched in February
2022 on schedule. Initial feedback from reporting radiologists was
overwhelmingly positive.
• Invest in in-house technology, software development and project
delivery capabilities
• The FutureTech investment programme is expected to further reduce
technology risk whilst enabling the Company to achieve its future
ambitions and to remain at the leading edge with its clients
• Maintain robust continuity plans and invest in its core data storage
and transmission architecture. The continuity plan was effective in
the initial response to the COVID-19 pandemic disruption and the
switch to home working
• The Group have launched a new master data project to develop an
updated framework to support the business to identify and meet its
information needs as it continues to scale.
Annual Report for the year ended 31 December 2021
37
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Operational Risk
Description Change Commentary for 2021
Cyber threats
The Group’s business could be significantly
disrupted, and security compromised if
a cyber incident (such as a successful
ransomware attack) results in the loss of
the confidentiality, integrity or availability
of the information it processes. A
successful cyber-attack could expose the
Group to significant loss of operations,
potential litigation, commercial,
financial, and reputational damage.

Increased
Risk
Cyber-attacks have continued to impact organisations globally and are
trending in an industry agnostic manner. The acquisitions in Ireland and
the US has increased the Group’s attack surface and presents increased
risk to its people, systems and services.
• The Group has developed a cyber roadmap to support the business in
its plans to further invest in cyber security defence
• The Group has maintained its headcount in its information security
team and the ISO 27001 certified security management system
• Recertification against the UK Government approved Cyber
Essentials was achieved in the year along with continued investment
in internet security technologies
• The information security team continues to deliver a security
awareness programme to all staff.
Reporter availability and capacity
The longer-term performance of the
Group depends on its ability to grow its
reporting capacity in each division in line
with growing client demand. Failure to do
so may result in reduced ability to provide
timely reports, in particular for critical
services such as NightHawk. Failure to
deliver a timely service could result in loss
of clients. In addition, if reporters are not
positively engaged and supported, the
Group could see a decrease in retention.

Static
Risk
Towards the end of the year, in the UK Medica refocused on expanding
reporter capacity having prioritised retention and re-engagement with its
existing reporters, as demand in Elective recovered strongly during the
year whilst NightHawk demand remained strong.
Throughout the year, Ireland continued to focus on recruiting
radiographers and sonographers for its managed services and reporting
radiologists and started to make use of the Group’s capacity in the UK for
suitable dual qualified radiologists.
In the US the focus remained on working with a selected group of
highly specialised reporting radiologists for clinical trials based both
domestically and internationally. In addition, the Group continued to
invest in increasing overseas reporting capacity, albeit this remains a
modest base, to add additional flexibility and capacity. This has been
enhanced by the Australian JV that was launched in February 2021.
People
The Group’s personnel are critical to
its continued performance. Loss of key
people, lack of people investment or
ineffective management may lead to failure
of the Group’s strategic objectives.

Static
Risk
The Group remains committed to the ongoing support and development
of its staff and leadership team including the new team acquired in
March 2021 with RadMD. Led by the Group’s Chief Executive Officer,
the business:
• Ensured its strategic objectives are cascaded down and clearly
communicated to the wider leadership and their teams
• Provided staff with appropriate incentives and employment packages
• Continued initiatives to embed the Group’s brand and values with all
staff and clearly communicate progress against its strategic goals
through regular companywide town hall meetings, online workshops,
annual performance appraisals and workforce engagement
• During the year, Jo Easton as non-executive responsible for
workforce engagement ran further workshops in the UK and Ireland
and communicated feedback to the Board.
www.medicagroupplc.com l stock code: MGP
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STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Our Directors
Roy Davis
Independent Chairman
Roy is the Company’s Chairman (having
joined at the IPO in 2017). He is also
Chairman of LungLifeAi plc, a lung
diagnostic company, Edinburgh Molecular
Imaging Ltd, a cancer theragnostic
imaging company, Foster & Freeman Ltd,
a leading forensic imaging manufacturer
and RAIR Health Ltd, an imageomics
company. Prior to these roles Roy served
as the chief executive officer of Optos
plc, a leading ophthalmology medical
device business, from 2008 until June
2016 when he stepped down following
the company’s acquisition by Nikon
Corporation. Before joining Optos, he
served from 2007 as chief executive
officer of Gyrus Group plc, a leading
medical device company, prior to its
acquisition by the Olympus Corporation
of Japan in 2008, having previously
served as chief operating officer of
Gyrus from 2003 and a non-executive
director since flotation in 1997. Prior
to this, Roy was CEO of NTERA, a
nanotechnology company, and before
that spent almost ten years with Arthur D
Little, the global management consulting
company, where he was vice president
and global head of its operations
management business. His early career
included experience in the connector,
oil and automotive sectors. Roy holds
a mechanical engineering degree from
the University of Southampton and an
MBA from the London Business School.
Dr. Stuart Quin
Chief Executive Officer
Dr. Stuart Quin joined Medica Group
in September 2019 from Synlab, the
international laboratory diagnostic
services provider, where he was
regional chief executive of Central
and Eastern Europe, Middle East and
Africa. Previously he was Synlab’s Group
chief commercial officer and chief
executive of its operations in UK and
Ireland. Stuart brings a track record of
delivering significant growth both in the
UK and internationally and has extensive
experience of working in partnership with
the NHS. During Stuart’s tenure in the
UK he expanded the business by winning
new diagnostic service contracts and
through the acquisition of four companies
that significantly diversified Synlab’s
service offering into drug and alcohol,
specialist food and veterinary testing.
Prior to joining Synlab, Stuart worked
in private equity as a Director at August
Equity and at 3i plc in Munich and London
where he focused on investing in fast-
growing healthcare businesses across
Europe and the US. Stuart also spent four
years at Accenture in the US, UK and
Japan as a Manager in the health and life
sciences strategy consulting practice.
Stuart holds a BSc (Hons) in Immunology
from the University of Edinburgh, a PhD
in Immunology from Imperial College,
London and an MBA from INSEAD.
Stuart is a member of the Investment
Committee of Alta Semper Capital,
a frontier markets private equity firm
focused on investing in consumer and
healthcare companies in Africa. He is a
Fellow of the Royal Society of Medicine
and the Royal Geographical Society.
Jo Easton
Independent Non-Executive
Director
Jo served as group director of HR for
De La Rue plc for six years until she
stepped down in March 2020. De La
Rue provides products and services
in the supply of Cash and Product
Authentication & Traceability and works
with governments and commercial
organisations across the world. During
this time, Jo was a member of the
executive leadership team focused on
driving growth and reshaping the business
involving a significant level of change and
including a number of disposals and an
acquisition. She was also the executive
arm of the Remuneration Committee.
Prior to joining De La Rue, Jo spent six
years at Associated British Foods plc
working in the Twinings business in an
international HR role with responsibilities
across the UK, Asia, and Europe.
Her previous experience includes HR
roles involving major change and business
transformation with Aviva plc and Zurich
Insurance and in telecommunications
at BT plc where Jo started her career.
Annual Report for the year ended 31 December 2021
39
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Richard Jones
Chief Financial Officer
Richard Jones joined Medica on 3August
2020. Richard has extensive experience
in the healthcare sector, both from his
more recent career as a CFO in two UK
quoted companies and from his prior
experience in healthcare Investment
Banking initially as a healthcare sector
analyst and then in corporate finance
latterly as head of healthcare at Investec.
Richard joined Medica from AIM
listed Mereo BioPharma Group PLC,
a clinical-stage biopharmaceutical
company focused on oncology and
rare diseases that dual listed in 2019
where he was CFO from January 2017.
Prior to Mereo, Richard was CFO and
company secretary of AIM listed Shield
Therapeutics plc from early 2011. At
Shield he had a leading role establishing
the finance and other operations and
guiding Shield through its 2016 IPO.
Richard is also a non-executive director
and head of the Audit Committee
at AIM listed Alliance Pharma PLC,
having joined the Board in January
2019. Richard qualified as a chartered
accountant with PwC in 1991.
Dr. Junaid Bajwa
Independent Non-Executive
Director
Junaid is a practising physician in the
NHS and currently occupies the roles
of chief medical scientist at Microsoft
Research, and as a non-executive
director at University College London
Hospitals NHS Foundation Trust.
He was previously the global lead
for strategic alliances and solutions
for the Global Digital Centre of
Excellence at Merck Sharp & Dohme
(Merck & Co), where he helped
shape their global digital strategy.
Junaid also has experience in the
academic world where he is a clinical
associate professor at University College
London (UCL) and a visiting scientist at
the Harvard School of Public Health. Over
the past 15 years, Junaid has worked
across primary care, secondary care, and
public health settings in addition to acting
as a payer, and policy maker within the
UK, where he specialised in informatics,
digital transformation, and leadership.
He has also acted as a consultant for
health care systems across the US,
Australia, New Zealand, Singapore,
the Middle East, and Europe.
Barbara Moorhouse
Senior Independent
Non-Executive Director
Barbara has extensive business and
management experience in the private,
public and regulated sectors.
In the private sector Barbara has held
a series of strategic, commercial and
finance roles, including being chief
finance officer for two international
listed IT companies – Kewill Systems
plc and Scala Business Solutions NV,
group finance director at Morgan
Sindall plc, and regulatory director at
South West Water. In the public sector,
she has been director general at the
Ministry of Justice and the Department
for Transport and chief operating
officer at Westminster City Council.
Barbara has been a trustee and chair of
the Audit Committee for Guy’s and St
Thomas’ Charity and a non-executive
director of the NHS West Hampshire
Clinical Commissioning Group.
Barbara is Chair of Agility Trains,
non-executive Director and Chair of
Remuneration Committee at Aptitude
Software Group PLC and non-executive
Director at Balfour Beatty PLC. She
is currently Chair of the Rail Safety
and Standards Board, from which
she is stepping down in May 2022.
www.medicagroupplc.com l stock code: MGP
40
Dear Shareholder
I am delighted to introduce
this section on governance,
which describes the
activities of the Board and
its Committees during 2021
and how we have ensured
governance continues to
be a pivotal part in the
strategic development
and day-to-day running of
this business.
Compliance with the
Corporate Governance
Code (the “Code”)
As a main market quoted company, our
governance framework is underpinned
by the Corporate Governance Code
(the ‘Code’) further details of which
can be found on our website at www.
medicagroupplc.com/investors/
corporate-governance. During the year
the Company complied fully with the
code with the exception of a small number
of areas. Areas of non-compliance are
explained in more detail on page85
and relate to remuneration matters that
have been addressed in the three-yearly
review of Remuneration policy which
was approved at the 2021 AGM as set
out on page51 of the Remuneration
Report with one additional proposed
change being put to shareholders
for approval at the forthcoming 2022
Annual General Meeting (“AGM”).
Changes to the Board
during the year and since
the year-end
During the year we have strengthened
the Board with the addition of Dr. Junaid
Bajwa as non-executive director and
Barbara Moorhouse as senior independent
director and chair of the Audit
Committee. I am confident the Board
will continue to provide the leadership
and oversight required to help the
Company in the next stage of its growth.
Our 2022 AGM
Our 2022 AGM will be held at 11.00am
on 27th June 2022. Shareholders are able
to attend but we advise all shareholders
to cast your votes online or by post
ahead of the meeting and it should be
noted that all voting will be conducted
on a poll. Further details of the 2022
AGM and the proposed resolutions will
be published in the AGM notice. Only
those votes received by proxy or cast
in person will count and, as such, if you
are not planning on attending in person
then you should cast your votes by post
or online for them to be validly counted.
Thank you for your continued
support and the Board would like to
thank all shareholders in advance
for your co-operation around the
arrangements for this year’s AGM.
Roy Davis
Chairman
11 April 2022
Corporate Governance Report
Key achievements in 2021
• Review and recommendation to the Board of approval of the Annual
Report for 2020
• Review and approval of the 2021 audit plan and fees proposed by
the auditors
• Review and recommendation to the Board of approval of the 2021
interim financial statements
• Appointment of two new non-executive directors to the Board
• Review of independence and effectiveness of auditors and
recommendation of their re-appointment for 2022
• Regular review of risk management, the risk register and
internal controls
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Annual Report for the year ended 31 December 2021
41
Our Corporate Governance Framework
Shareholders
Our shareholders delegate to the Board
collectively, the responsibility for the
long-term success of the Company within a
framework of good governance. The Board
seeks to understand the investor base
through regular dialogue and engagement.
The role of the Board
The Board is collectively responsible to
shareholders for the overall direction
of the Group. The Board’s primary aim
is to promote the long-term success of
the Group whilst ensuring the highest
standards of corporate governance.
The Board’s key responsibilities include:
• Overall leadership of the Group;
• Setting and reviewing strategic aims
and objectives of the Group;
• Oversight of the Group’s operations
including management, planning and
operating systems;
• Monitoring and management of key
business risks and internal controls;
• Approving annual budgets and
reviewing performance against aims
and objectives;
• Approval of significant financial
expenditure, including mergers and
acquisitions;
• Approval of structural changes to
the Group;
• Approval of Board membership
and other senior management
appointments or management
structural changes;
• Proposing and making dividend
payments to shareholders.
To assist the Board in their responsibilities,
there are five standing Committees
of the Board: the Audit Committee,
the Remuneration Committee, the
Nominations Committee, the Clinical
Governance & Quality Committee and
the Environmental Social & Governance
Committee. The terms of reference for the
Committees are available on the Medica
Group website at https://medicagroupplc.
com/investors/corporate-governance/.
The Role of the Chairman
The Chairman. Roy Davis, has primary
responsibility for leading the Board,
facilitating the effective contribution of
all members and ensuring that it operates
effectively and in the best interests of
shareholders. He maintains a regular
dialogue with the CEO to ensure the
business receives the support from the
Board necessary to progress the strategy.
Role of the CEO
The CEO, Stuart Quin, is responsible for
day-to-day running of the business and
implementing the group’s strategy.
The Audit Committee
The Audit Committee is responsible for
monitoring and reviewing the integrity
of the financial reporting process, risk
management and internal control, ensuring
compliance with UK reporting standards.
The Audit Committee’s report for 2021 is
set out on pages 44 to 45.
Remuneration Committee
The Remuneration Committee is responsible
for the development and implementation
of the Group’s remuneration framework
and policies for directors and to ensure
that these support the strategic aims of
the business while also complying with the
requirements of regulation.
The Remuneration Committee report for
2021 is set out on pages 50 to 70.
Nomination Committee
The Nomination Committee is responsible
for the structure of the Board, providing
advice on Board and senior management
appointments and succession planning
and monitoring the composition of the
Board and its Committees.
The Nomination Committee’s report for
2021 is set out on pages 46 to 47.
Clinical Governance &
Quality Committee
The Clinical Governance & Quality
Committee (CG&QC) was formed on
1March 2021 and is Chaired by Dr. Junaid
Bajwa. The Committee provides oversight
for clinical quality and governance at
Medica, ensuring that the Clinical service
is appropriately governed and is meeting
expected regulatory standards in relation
to the Responsible Officer regulation (2010
rev. 2013) and CQC. Furthermore, the
committee provides oversight for the wider
governance of clinical services, providing
reassurance to the Board that the service is
well-governed with effective policies.
Environmental, Social and
Governance Committee
In December 2020, the Board formally
established an ESG Committee to provide
a greater focus of the Company’s initiatives
and approach to ESG matters. The
Committee currently consists of all Board
members and is chaired by Dr. Junaid
Bajwa. Details of our approach to ESG
and activity during the year is set out on
pages14 to 22 of the Strategic Report.
Board composition and
independence
During the year, The Company regarded
Roy Davis, Steve Whittern (until his
resignation), Jo Easton, Dr. Junaid Bajwa
and Barbara Moorhouse as all having had
no prior association with the Group, as
“independent non-executive directors”
within the meaning of the UK Corporate
Governance Code, and free from any
business or other relationship that could
materially interfere with the exercise of
their independent judgement.
The senior independent director has an
important role on the Board in leading
on corporate governance issues and
being available to shareholders if they
have concerns which contact through
the normal channels of the chairman,
chief executive officer or other executive
directors has failed to resolve, or for
which such contact is inappropriate.
Steve Whittern was the Company’s
senior independent director (SID) until he
stepped down at the 2021 AGM. Barbara
Moorhouse assumed the role of SID when
she joined in July 2021.
Directors are subject to election or
re-election at each AGM. Barbara
Moorhouse will be standing for election
and all remaining directors will be
standing for re-election.
The Board also identifies and where
necessary manages conflicts of interest,
including those resulting from significant
shareholdings and ensures that the
influence of third parties does not
compromise or override independent
judgement. Details of our significant
shareholders are set out in the Directors
Report on Page 73.
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
www.medicagroupplc.com l stock code: MGP
42
Corporate Governance Report
continued
Board and Committee attendance
There were 15 Board meetings in 2021, including one meeting dedicated to the
consideration of the Group’s strategy. In addition to scheduled Board meetings, there is a
regular informal dialogue between all directors.
The attendance of Board members at Board and Committee meetings are shown below.
The attendance of executive directors at committee meetings was by invitation. The
company secretary is also secretary to each of the committees.
Board Audit Rem Nom Clinical ESG
Total meetings 15 4 4 3 2 1
Junaid Bajwa 10 4 2 2 2 1
Barbara Moorhouse 5 3 2 1 1
Roy Davis 15 4 4 3 2 1
Steve Whittern 8 1 2 2
Jo Easton 15 4 4 3 1 1
Stuart Quin 15
Stephen Davies 6
Richard Jones 15
(1) Steve Whittern attended all relevant Board and Committee meetings until his resignation at the AGM
in June 2021
(2) Dr. Junaid Bajwa attended all relevant Board and Committee meetings following his appointment on
1April 2021
(3) Barbara Moorhouse attended all relevant Board and Committee meetings following her appointment as
Senior non-executive director on 1July 2021
Strategy and direction
During 2021 the Board reviewed and
monitored the Group’s performance
against the core strategy outlined in
detail in the Group’s Annual Reports
and as communicated to shareholders
at the inaugural Capital Markets
Day held in September 2021.
In November 2021 the Board, together
with members of the senior management
team, held an off-site strategy meeting to
review and assess the business strategy
and the wider opportunities and risks
for the business. In December 2021,
the Board reviewed and approved the
budget for 2022 and in February 2022
approved the longer-term business plan.
Stakeholder engagement
The Group recognises the importance of
clear communication with shareholders.
Regular contact with institutional
investors, fund managers and analysts
is maintained by the chief executive
and the chief financial officer to
discuss information made public
by the Group. The Board receives
reports of these meetings and any
significant issues raised are discussed
by the Board. Where appropriate, or
if requested, such meetings could
include either or both of the chairman
or senior independent director.
The chairman and Chairs of each
Committee are also available to discuss
governance and strategy matters with
shareholders and the Chairman and Chair
of the remuneration Committee have
met with a number of major shareholders
during the course of the year.
The Board continued the process of
engagement with other stakeholders
through the work of Jo Easton,
the non-executive responsible
for workforce engagement.
Board evaluation
Each year, our Board evaluation process
discusses with Board members their
thoughts on succession and diversity when
reviewing Board culture and the Boards
effectiveness. Our process also considers
Board members other interests to ensure
each has sufficient time to perform their
duties. Following Corporate Governance
best practice, the 2022 evaluation process
was due to be externally conducted.
However, with two new non-executive
members joining the Board in the year we
decided to postpone this review until later
in 2022 when the Board has had more time
to work together. In the meantime, we have
been working hard to ensure the stability
and effectiveness of the new Board
and have conducted an annual internal
survey regarding Board effectiveness to
identify opportunities for improvement.
Risk management and
internal controls
The Board is responsible for
maintaining a sound system of
internal controls, including financial,
operational and compliance controls
and risk management, and reviews
the effectiveness of the system at
least annually in order to safeguard
shareholders’ investment and the
Company’s assets. The system is
designed to manage rather than
eliminate risk and can provide only
reasonable and not absolute assurance
against material misstatement or loss.
The Board confirms that there is
an ongoing process for identifying,
evaluating and managing the significant
risks faced by the Company and that
this process is regularly reviewed by
the Board. The Board has reviewed the
effectiveness of the system of internal
control and the process for identifying
and evaluating the significant risks
affecting the business, and the policies
and procedures by which these risks are
managed. Management are responsible
for the identification and evaluation of
significant risks applicable to their areas
of business, together with the design and
operation of suitable internal controls.
The principal risks and uncertainties
are included on pages 34 to 37
The Audit Committee reviews the
scope of audits, the half yearly and
annual financial statements (including
compliance with legal and regulatory
requirements) and reports to the
Board on financial issues raised by
the audit reports. Financial control is
exercised through an organisational
structure which has clear management
responsibilities with segregation of
duties, authorisation procedures and
appropriate information systems. The
system of annual budgeting with monthly
reporting and comparisons to budget is a
key control over the business and in the
preparation of consolidated accounts.
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Annual Report for the year ended 31 December 2021
43
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
www.medicagroupplc.com l stock code: MGP
44
Report of Audit Committee
Key achievements in 2021
• Appointment of a new Committee Chair
• Review and recommendation to the Board of approval of the Annual
Report for 2020
• Review and approval of the 2021 audit plan and fees proposed by
the auditors
• Review and recommendation to the Board of approval of the 2021
Interim Financial Statements
• Review of the accounting treatment of the acquisition of RadMD LLC
• Reorganisation of the group corporate structure to liquidate two inactive
legacy subsidiaries
• Review of independence and effectiveness of auditors and
recommendation of their
re-appointment for 2022
• Regular review of risk management, the risk register and
internal controls.
• Approval of a new financial system to be implemented across the
group in 2022
Background and scope
of the Committee’s
activities
The Audit Committee assists the Board in
discharging its responsibilities in relation
to financial reporting, risk management
and external and internal controls. The
ultimate responsibility for reviewing
and approving the Annual Report and
Accounts and the half-yearly reports
remains with the Board. The Audit
Committee gives due consideration to
laws and regulations, the provisions of
the UK Corporate Governance Code and
the requirements of the Listing Rules.
The Committee works with the full Board
to fulfil its oversight responsibilities.
Its primary functions are to:
• Monitor the integrity of the financial
statements and other information
provided to shareholders to ensure
they represent a clear and accurate
assessment of the Group’s position,
performance, strategy and prospects;
• Consider the financial statements
and recommend to the Board on
whether the Annual Report and
Accounts, taken as a whole, is fair,
balanced, understandable and
provides information necessary
for shareholders to assess the
performance, business model and
strategy of the Group;
• Review significant financial reporting
issues and judgements contained in
the financial statements;
• Review the systems of accounting,
internal control and risk management;
• Monitor and review the significant
risks identified by the Group as well
as the management and mitigation of
those risks;
• Make recommendations in relation
to the appointment of the external
auditors, including their remuneration
and the provision by them of any non-
audit services;
• Oversee and maintain an appropriate
relationship with the Group’s external
auditors and review the effectiveness,
independence and objectivity of the
external audit process;
• Monitor the arrangements by which
employees can, in confidence,
raise concerns about any possible
improprieties in financial and
other matters and consider
internal processes to comply
with UK legislation including the
UK Bribery Act and The Criminal
Finances Act 2017.
Dear Shareholder,
I am pleased to present my first report as Chair of the
Audit Committee. In addition to the focus on governance
matters outlined in this report, the Audit Committee pays
particular attention to:
1. Maintenance of appropriate financials controls to
manage both organic and inorganic growth;
2. Development of the finance organisation and
financial processes to support growth and align with
corporate change;
3. Monitoring the allocation of capital and return on
investment.
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Annual Report for the year ended 31 December 2021
45
Membership
and meetings
Since 1July 2021, The Audit Committee
has been chaired by Barbara Moorhouse,
following the departure of the previous
Chair, Steve Whittern from the Board
in June 2021. The Committee’s other
members are Roy Davis, Jo Easton
and Dr. Junaid Bajwa, who joined the
Committee on his appointment as an
non-executive director in April 2021. All of
the Committee members are considered
independent. The directors consider
that Barbara Moorhouse has recent and
relevant financial experience. The Audit
Committee typically meets three times
per year in the ordinary course based
around the Company’s reporting cycle
and otherwise as circumstances require.
The Committee met four times in
2021. The CEO attended three and
the CFO attended all the Committee
meetings in 2021 by invitation.
Principal activities
for the year
During 2021 the key activities of
the Committee were as follows:
1. Activities relating to the Group’s
regular reporting cycle
• Review and recommendation
to the Board of approval of the
2020 Annual Report including
the Financial Statements. As part
of this review the Committee
received reports from the external
auditors on their audit for 2020.
It also reviewed the Preliminary
Announcement made to the
London Stock Exchange and
reviewed and recommended for
approval by the Board the going
concern statement together with
the supporting forecasts and
assumptions.
• Review of the effectiveness and
independence of the external
auditors, Grant Thornton
following the 2020 audit and the
recommendation to the Board to
propose their re-appointment at
the 2021 Annual General Meeting.
• Approval of the 2021 audit plan
prepared by the external auditors.
• Approval of the audit fees for
2021. The Committee carefully
considered the proposals from
the auditors including a detailed
review of the proposed scope
of the audit of the expanded
group which now including both
RadMD and Medica Ireland. The
Committee approved the audit
fees as set out in Note6 which,
whilst representing a significant
uplift on 2020 reflect the
increased scope both in respect of
the acquisitions but also in respect
of other matters including a more
detailed review of management
estimates and judgements.
• Review and recommendation
to the Board for the approval
of the 2021 Interim Financial
Statements including the going
concern statement together with
the supporting forecasts and
assumptions.
2. Activities relating to the acquisition
of RadMD LLC in March 2021
Review and approval of the accounting
treatment for the acquisition
including detailed consideration
of the estimates and judgements
used in determining the accounting
treatment for the transaction, its
valuation of the initial and deferred
consideration and appropriate
disclosures in accordance with IFRS.
3. Non-audit services provided
by the external auditor
Non-audit services provided by the
Company’s auditor are kept under
review by the Committee. Non-audit
work is only awarded to the auditors
after due consideration of matters
of objectivity, independence, costs,
quality of service and efficiency. In
2021 the auditor undertook limited
non-audit services, as set out in
Note6 of the Financial Statements.
4. Effectiveness and independence
of external auditor
The Committee is also responsible
for advising the Board on the
appointment of the auditor and
assessing their independence.
Independence:
There are no contractual obligations
that restrict the Audit Committee’s
choice of external auditor. Grant
Thornton UK LLP has been external
auditor to Medica Group PLC since
2013. The Committee has considered
the latest guidance from the Financial
Reporting Council on auditor rotation.
The Committee has also considered
the tenure of the reporting audit
partner, Chris Smith who has been
audit partner since 1January 2018.
In addition, the report from Grant
Thornton UK LLP confirming their
independence and objectivity
was reviewed by the Committee
on 25October 2021.
The Committee is responsible for
regularly reviewing the effectiveness
and performance of the external
auditors and considering and agreeing
appropriate fees for the audit. At the
end of the 2020 audit, the Committee
reviewed and were satisfied with
the performance of the external
auditor and recommended their re-
appointment for 2021 to the Board.
Following the review of the auditor’s
activities as outlined above, the
Committee has recommended to
the Board that Grant Thornton LLP
are reappointed as external auditors
by shareholders for 2022 at the
2022 Annual General Meeting.
5. Committee feedback
from the auditors without
management present
The chair of the Committee
meets with the external auditors
without management present at
least twice a year. There were
no matters of concern raised
during these meetings in 2021.
6. Internal audit function
The Committee noted that the Group
had a well-developed clinical audit
function but concluded that there was
no immediate requirement for the
Group to have an internal financial
audit function, due to its current size
and complexity. The Committee will
consider the need for an internal
audit function on an annual basis.
7. New Financial system
During the year the Committee
considered proposals from the
Executive financial team to
implement a new group-wide
financial reporting system to replace
the disparate systems currently in
place in the three divisions and to
upgrade the functionality of core
financial reporting systems. The
Committee approved a new system
and implementation plan for 2022.
Barbara Moorhouse
Chair of the Audit Committee
11 April 2022
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
www.medicagroupplc.com l stock code: MGP
46
Report of Nomination Committee
As a growing business with an increasing
international footprint, it is critical that
we ensure we have the right people
to help us continue to deliver our
objectives in line with Group’s strategy.
This means the Committee must
remain focused on understanding its
framework for diversity alongside talent
and succession planning across the
business. Gender and ethnic diversity
forms part of the Committee’s discussions
when reviewing succession plans for
the Board and the Executive team.
Each year, our Board evaluation process
discusses with Board members their
thoughts on succession and diversity when
reviewing Board culture and the Board’s
effectiveness. This process was due to be
an externally conducted process in 2021
but with two new non-executive members
joining the Board in the year we decided
to postpone this review until later in 2022
when the Board has had more time to
work together. In the meantime, we have
been working hard to ensure the stability
and effectiveness of the new Board.
As part of our regular review, we consider
the skills on our Board to ensure we
identify any gaps. We talk about a range
of areas such as relevant experience,
gender, ethnicity, skills, and any specific
skills identified to strengthen and develop
the knowledge base on the Board. When
necessary, we also engage and work with
specialist recruitment consultants to help
identify talent and search for potential
candidates that meet our objective criteria.
We were delighted to announce in
June 2021 the appointment of Barbara
Moorhouse as Senior Independent
Non-Executive Director and Chair of
theAudit Committee replacing Steve
Whittern who stepped down at the
2021 AGM. On behalf of myself and
the Board I would like to thank Steve
for his contribution to the business
since our IPO. Barbara formally
joined the Board on 1July 2021.
The Committee also continued its broader
work on succession planning, diversity
and the mix of skills and experience
on the Board, which will remain a key
aspect of our focus in the year ahead.
Roy Davis
Chairman of Nominations Committee
11 April 2022
Introduction
The Nomination Committee’s role is to regularly review the structure, size and composition of the Board
to ensure the skills, knowledge and experience match the requirements of the business.
The primary functions of the Committee are:
• To review and make recommendations on any changes on the size, structure and composition of the Board;
• To provide a formal, rigorous and transparent procedure for identifying and nominating new directors to the Board;
• To review the succession planning for the Group as a whole and for key Board positions in particular; and
• To review and evaluate the performance of the Board.
The Committee has recognised the requirement of the new UK Corporate Governance Code 2018 (the ‘Code’) in its decision-making.
Dear Shareholder,
On behalf of the Nomination Committee (the ‘Committee’),
I am pleased to introduce the Nomination Committee report
in which we set out the Committee’s responsibilities and
report on the activities of the Committee during the year.
Key achievements in 2021
• Recruitment of Barbara Moorhouse as a replacement senior non-
executive director following Steve Whittern’s resignation from the Board
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Membership
and meetings
In line with the provisions of the UK
Corporate Governance Code 2018 the
Nomination Committee is made up of the
non-executive directors of the Company.
Roy Davis is the chair of the Committee
and the other members during the year
were, Jo Easton, Dr. Junaid Bajwa, Barbara
Moorhouse and Steve Whittern until his
retirement from the Board at the 2021 AGM.
Only the members of the Nomination
Committee have the right to attend
meetings. Executive directors, other Board
members and advisers may be invited to
contribute on specific agenda items as
appropriate. The company secretary acts
as secretary to the Nomination Committee.
The Nomination Committee updates the
Board following its meetings and invites
contributions and views from the Board.
The Nomination Committee meets once
a year in the ordinary course of business
and more frequently as circumstances
require. During 2021 the Committee met
formally three times and all members
attended. In addition to the formal
Nomination Committee meetings, ad hoc
meetings and calls were held during the
year between members of the Nomination
Committee, and at times with contributions
from other members of the Board.
Role and responsibilities
The Nomination Committee’s main
priorities are to ensure that the Group
has the best possible leadership and to
plan for both executive and non-executive
director succession. Its key focus is
therefore on the composition of the
Board, for which appointments will be
made on merit against objective criteria.
The Nomination Committee advises the
Board on these appointments, oversees
the recruitment processes, and also
considers retirements and resignations
from the Board and its other committees.
The Nomination Committee regularly
examines succession planning based on
the Board’s balance of experience, overall
diversity and the leadership skills required
to deliver the Company’s strategy.
Process for Board
appointments
When considering a Board appointment,
the Nomination Committee draw up a
specification for the relevant position,
taking into consideration the specific
role as well as the balance of skills,
knowledge and experience of its existing
Board members, the diversity of the Board
and the independence of continuing
Board members, together with the
ongoing requirements and strategic
development of the Group. Care is taken
to ensure that proposed appointees have
sufficient time to devote to the role and
that there are no conflicts of interest.
The Nomination Committee utilises the
services of an executive search firm to
identify appropriate candidates, ensuring
that the search firm appointed does not
have any other conflicts with the Group.
In addition, the Nomination Committee
will only use those firms that have
adopted the Voluntary Code of Conduct
addressing gender diversity and best
practice in search assignments. A long
list of potential appointees is reviewed,
followed by the shortlisting of candidates
for interview based upon the objective
criteria identified in the specification.
Committee members interview the
shortlisted candidates together with other
directors as appropriate and identify a
preferred candidate. Following these
meetings, and subject to satisfactory
references, the Nomination Committee
make a formal recommendation to
the Board on the appointment.
Board induction
and training
All Board members undertook relevant
training on their responsibilities and duties
as directors as part of their induction and
onboarding to the company. Updates on
changes in corporate governance as well as
additional training is provided as required.
Diversity policy
The Company makes all Board
appointments on individual merit, while
recognising the benefits of Board diversity.
Our diversity policy aims to ensure that
weconsider diversity in its broadest
sense. A diverse Board has members
with different skills, backgrounds,
regional and industry experiences,
races, genders and other qualities.
Activities in 2021
The Committee reviewed the composition
of the Board and the processes
surrounding succession planning. The
Committee concluded that the current
Board size and structure was suitable for
the business as it continues to develop.
The Committee’s main task was to recruit a
new non-executive director and Chair of the
Audit Committee to replace Steve Whittern
who stepped down at the 2021 AGM.
The search process for a replacement
was conducted by Ridgeway Partners,
who have no other connection to the
Group or to individual directors. We were
delighted to appoint Barbara Moorhouse
who joined the Board on 1July 2021 and
will stand for election at the upcoming
AGM in May 2022. Barbara was the
outstanding candidate for the role bringing
extensive financial, fast-growing industry
and non-executive experience to the
Board. As part of her role, Barbara will
also become the Senior Independent
non-executive director of the Board.
Performance evaluation
Given the changes to the makeup of the
Board during the year we decided to
undertake an internal Board evaluation
and postpone the external evaluation
until later in 2022 when the new
members of the Board will have been
in post for a reasonable period.
The Committee completed the
performance evaluation which was
designed to bring about debate on
relevant issues and assist in identifying
potential areas of improvement in the
Board’s processes as well as ensuring the
Board operates efficiently and effectively.
The themes covered by the internal
evaluation included:
• The role of directors and the board
• Performance of the Non-
executive directors
• Performance of the
Executive directors
• Board meeting effectiveness
• Performance and effectiveness of
Committees
• Effectiveness of monitoring
performance
• Leadership and culture
• Corporate governance
• Induction training and process
Several improvement opportunities
were identified for implementation and
the internal evaluation concluded that
the Board, its committees and each of
its directors continue to be effective.
Re-election of Directors
The Committee met in early 2022 to
review the continuation in office and
potential reappointment of all members
of the Board. Following this review, the
Committee recommended to the Board
that all current and new directors be
appointed or reappointed, and these
directors will seek election or re-election
at the annual general meeting.
Roy Davis
Chairman of Nomination Committee
11 April 2022
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Dear Shareholder
I am pleased to introduce to you the inaugural report of the
Clinical Quality and Governance Committee (CQ&GC). The
committee was established to provide oversight of all the
clinical aspects of governance and quality within Medica,
further emphasising the importance we place on putting patient
outcomes at the heart of our work. It was felt that it was critical
to establish this committee, especially at a time of growth and
global expansion, to ensure we have a focal point to undertake
a comprehensive review of all Medica’s clinical and quality
activities to assure the Board that our services are well governed
with effective policies.
Key achievements in 2021
• Inaugural meeting convened
• Terms of reference and
membership agreed
• Agreed agenda and areas of interest
• NHS England appraisal
and revalidation return
successfully submitted
CQ&GC Membership
The committee is chaired by Non-Executive
Board Member Dr. Junaid Bajwa, with
RoyDavis attending as a member. The
Committee is supported by the Group's
senior management team.
Meeting frequency
The group typically meets on on a
biannual basis in April and September and
additionally as required. In 2021 the
Committee met once for its inaugural
meeting and all committee members
attended.
Committee terms of reference
The purpose of the committee is to provide
oversight and reassurance of the clinical
governance processes and governance
management within Medica to the board.
As part of that assurance review, the
committee ensures that the governance,
quality, and risk teams are working to
maintain standards outlined across:
• The Medica Clinical
Governance Framework
• The Medical Practitioners
Assurance Framework
• Medica Practicing Privileges policy
• Quality Standard for Imaging
(QSI) standards
• CQC Inspection Framework –
Independent hospitals: teleradiology
• ISO 9001
• ISO 27001
• Cyber Essentials
• CHKS
• HIQA
• EPA
The role of the chair is to challenge and
critique the processes in a continued
journey of evolution in excellence. The
team will bring ideas for development
and harmonisation through the business.
The committee standing agenda
for discussion includes:
• PLC Board feedback on committee
reports and activity
• Medical Advisory Board report –
themes and actions
• Clinical Governance Committee
report – themes and actions
• Equality and Diversity – GMC
and medico-political landscape,
employment landscape
• GMC appraisals and NHSE appraisal
annual report
• Risk register review
• Clinical Incident Report Tracker –
trend analysis and action
• CQC Regulation 18 Notification
Tracker - review
• Legal tracker and update of
notable cases
• Standards
Planned Committee activity in
2022 and beyond
The committee plans to receive a report
and representation from RadMD, our US
usiness to provide Board assurance of the
governance oversight applicable to the
activities of clinical trials and research
reporting. The diversity of experience
in the Group opens huge opportunities
for learning and sharing of global best
practice in governance and quality.
The committee are keen to see positive
engagement with Medica’s reporting
community in the coming year.
Engaging, retaining and investing in
high quality radiologists and reporting
radiographers are seen as essential
areas for Medica’s success. This will
involve a multi-faceted approach which
the committee wish to assist with.
Equality, diversity, and inclusion (EDI)
are key topics in current employment
and clinical arenas that this group are
delighted to engage with. We look
forward to assisting the Environmental,
Social and Corporate Governance
(ESG) Committee in developing key EDI
metrics, developing our diverse and
inclusive workforce and delivering against
these aspirations in the year ahead.
Through 2022 and beyond the committee
plans to ensure that new evolutions
of quality standards such as QSI are
incorporated into our routine processes.
The committee members are tasked with
ensuring communication of any changes
in standards to the group allowing wider
consideration of requirements and impact.
This will facilitate efficient incorporation
of the changes into the business.
Summary
The CQ&GC brings together key
stakeholders from across the Group to
provide a forum for open discussion
of standards, governance, and quality.
The aim is to provide assurance of
the expected high quality in clinical
and governance for the Board.
Dr. Junaid Bajwa
Chair
11 April 2022
Report of Clinical Quality
and Governance Committee
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Dear Shareholder,
“ Our focus as we look
forward, is to ensure that
our ESG strategy closely
aligns to our Group mission
and values”
This year we have continued to make good
progress to enhance our understanding,
and our approach to ESG impacts.
The management team continue to
recognise the importance of the Group’s
ESG activities and how they underpin
the continued success of the business.
I am pleased to report that following
a detailed review and assessment
during the year, the team have further
enhanced the Group’s ESG framework.
We held committee meetings throughout
the year and after each one, I reported
to the Board on the key issues that
were discussed. Informal discussions
were also regularly held between
Committee members and key business
stakeholders during the year as and
when required. We also reviewed global
best practice in this area and considered
how to implement this for Medica
Our focus as we look forward, is to
ensure that our ESG strategy closely
aligns to our Group mission and values.
Further details on our progress can be
found in the ESG at Medica section of
the Strategic Report on pages 14 to 22.
In order to achieve this we must strive to
ensure that clear objectives and metrics
are in place to measure and manage
our ESG performance. I look forward to
reporting on these developments in 2022.
Dr. Junaid Bajwa
Chair of the ESG Committee
11 April 2022
Key achievements in 2021
• Developing an updated ESG strategy and framework based on our four key pillars
of People and Community, Responsible Operations, Environmental Impact and
Customer Centricity
• Setting out ten commitments related to our ESG impact as set out in the ESG
report on page 15
• Reporting on gender diversity within our Management Team and Board of
Directors.
Areas of focus for 2022
• Collecting data on diversity and inclusion within the wider business, increasing
representation and strengthening inclusion across our organisation
• Increasing our reporter engagement programme across the Group
• Reviewing the business against the United Nations Sustainable
Development Goals.
Report of ESG Committee
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Report of the Remuneration Committee
Dear Shareholder,
As Chair of the
Remuneration Committee,
I am pleased to present the
Director’s Remuneration
Report, approved by the
Board for the year ended
31December 2021.
The report covers the annual report
on remuneration which sets out the
remuneration paid to directors in 2021
including bonus payments and long-term
incentives and how our Remuneration
Policy will be applied in 2022.
We will be inviting shareholders to
vote on two resolutions at the AGM on
27June 2022, an advisory vote on the
Annual Report on Remuneration as set
out on pages 50 to 70 detailing Director’s
remuneration for the year ending
31December 2021 and a vote to increase
the Performance Share Plan (PSP) limits
in line with the new policy approved
by shareholders at the 2021 AGM.
Corporate performance
and stakeholder
experience in 2021
Medica has once again demonstrated the
resilience of its business model in 2021.
Despite starting the year with further
lockdowns in the UK and Ireland, no
staff were furloughed and there were no
redundancies as a result of COVID-19
enabling the team to work closely
with clients to help support the return
to pre-pandemic levels of diagnostic
reporting, as well as helping hospitals and
clinics to start to get on top of priority
cases that had been postponed due to
the ongoing COVID-19 pandemic.
This, combined with the positive
impact of the acquisitions of Global
Diagnostics Ireland (now rebranded as
Medica Ireland) in November 2020 and
RadMD in March 2021, resulted in a
strong recovery year for Medica Group
with annual revenue increasing by 68%
to £61.9m, an improvement in gross
profit margin to 50.7% and operating
profit of £12.1m up 141% from 2020.
As the trend of remote working continued,
Medica took the opportunity to introduce
a formal home working policy and
wellness strategy providing employees
with greater flexibility to manage their
work remotely and access to support on
mental health and wellness-related issues.
The Board were also pleased that
although the two acquisitions were
completed largely off-market during a
period of uncertainty in terms of current
trading due to the impact of COVID-19,
they both delivered strong operating
performances in 2021 and they were
quickly integrated into the group.
The Committee has taken overall
performance into consideration when
determining remuneration matters for 2021.
Remuneration Outcomes
and awards made in 2021
For 2021, the annual bonus was based
on revenue, profit, free cash and
operational measures with a bonus
opportunity for Dr. Stuart Quin and
Richard Jones of up to 125% of basic
salary following the implementation of
the revised Remuneration Policy in 2021.
Dr. Stephen Davies bonus opportunity
for the period up to his retirement
remained at 100% of basic salary.
All four components of the annual
bonus were weighted equally at 25%.
For Dr. Stuart Quin and Richard Jones,
the financial objectives were adjusted
upwards to maintain an equivalent level
of stretch following completion of the
acquisition of the US based RadMD
business in March 2021. The target
thresholds for all measures were met
with certain measures reaching their
maximum target as set out below. The
Committee used the formulaic outcome,
did not apply any discretion and approved
a total bonus for 2021 (including the
Deferred Bonus element) of 81.7% of their
maximum opportunity which equates
to 102.1% of basic salary for Dr. Stuart
Quin and Richard Jones. For Dr. Stephen
Davies who retired at the end of May
2021, the Committee approved a bonus
based on targets which excluded the
RadMD acquisition, pro-rated for the
five-month period up to retirement.
In accordance with the revised
Remuneration Policy, 40% of the total
bonus awarded to Dr. Stuart Quin and
Richard Jones will be deferred in Medica
Shares under the Deferred Bonus Plan to
be issued in 2022. This is an increase in
deferral under the revised Remuneration
Policy compared with a 25% deferral in
prior years. As Dr. Stephen Davies retired
in May 2021 the Committee determined
that his bonus would not be subject to
deferral and would be paid wholly in cash.
Awards under the 2018 PSP were subject
to a three-year performance period and
were based on EPS growth and growth
in absolute TSR weighted equally at
50%. Threshold performance was not
met for either measure and therefore
no part of this award will vest.
In 2021 the Committee granted PSP
awards to Dr. Stuart Quin of 319,606
and to Richard Jones of 225,604 shares
respectively representing 150% of salary
and a total of 1,243,969 2021 PSP awards
were made to employees across the
Group including executive directors.
Both awards were made under the
terms of the revised policy and were
based on EPS and absolute TSR, the
targets for the award made in 2021 are
set out in the 2020 Annual report.
Key achievements in 2021
• Approval of remuneration of the executive directors
• Approval of the leaving arrangements for Dr. Stephen Davies on retirement
• Completion and implementation of the revised Directors’ Remuneration
Policy following the triennial review and the shareholder vote in favour at
the 2021 AGM
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Response to voting at
the 2021 AGM
In 2021 the Committee completed its
triennial review of the Remuneration
Policy having consulted with shareholders
in late 2020 and early 2021.
I am delighted that shareholders almost
universally approved the new policy
with a vote of 96% in favour at the 2021
AGM. The Committee believes the
revised policy sets out a fair and balanced
framework for rewarding executives
and aligning them to the interests of
shareholders and other stakeholders.
There was a substantial minority vote
representing 33% of shareholders who
voted against approval of the 2021
Remuneration Report. The Committee
engaged with shareholders after the
AGM to explore the key reasons for the
significant vote against this resolution
which was primarily due to the leaving
arrangements for the outgoing CFO.
Shareholders understood the additional
context provided and, as it was a legacy
matter, the Committee determined
that no follow up action was necessary
on this point, however the Committee
will continue to engage regularly with
shareholders on executive remuneration.
UK Corporate
Governance Code
The Committee has reviewed the
provisions of the Code and, in its
Remuneration Policy review, agreed to
make changes to ensure that executive
pensions are aligned with the wider
workforce by 2023. In addition, under the
approved policy, and in line with current
best practice, minimum shareholding
guidelines and post-employment
shareholding periods are now in place.
Therefore, our revised Remuneration
Policy will be fully compliant with the
Code during the next three-year period.
Looking ahead to 2022
For 2022, base salaries will be increased
by 3.5% for Executive Directors to
align with the average increase for the
wider UK workforce. Company pension
contributions will remain unchanged
from 2021 levels and will remain so
during 2022 after which, contributions
will be aligned to those of the wider UK
workforce from 2023. For both Executive
Directors the maximum 2022 annual
bonus opportunity will be 125% of base
salary and the maximum 2022 Long-Term
Incentive Plan (LTIP) opportunity (under
the PSP plan) will be 125% of base salary.
Details of the proposed targets for 2022
PSP awards are set out on page68 of
the remuneration report. The Committee
has taken care, to set challenging and
stretching targets that carefully align the
interests of the shareholders and executive
directors towards delivering the strategic
plan for the Group and thereby creating
strong value creation for shareholders
over the next three years and beyond.
Medica is a high growth business with
strong ambitions to expand in the future
therefore the Committee will keep
under review the Executive Directors
remuneration in the context of the growth in
the size and scale of the organisation. To the
extent the size and scope of the Executive
roles significantly alter, the Committee
may consider amending remuneration
which could include a base salary increase
in excess of that of the wider workforce.
We hope that our shareholders will support
the Remuneration Report at the 2022 AGM.
Ongoing dialogue with shareholders
and other stakeholders is valued, and as
always, we welcome your feedback on
this Directors’ Remuneration Report.
Jo Easton
Chair of the Remuneration Committee
11 April 2022
Key committee activities in 2021
Triennial Remuneration Policy review • Completed the consultation with shareholders and implemented the revised
Remuneration Policy following approval by shareholders at the 2021 AGM
• Updated the 2021 Directors Remuneration Report for the disclosures in respect of
the new policy
Director’s remuneration
• Reviewed the 2021 Remuneration Report prior to its approval at the 2022 AGM
• Agreed director’s remuneration for 2022
• Agreed the retirement arrangements for Dr. Stephen Davies for salary, bonus and
share options held at the date of retirement
Executive remuneration
• Approved the 2021 LTIP awards under the Company’s PSP for executives and 2021
PSP and the Company Share Option Plan (CSOP) awards for other staff
• Approved the DBP awards for executives representing a 25% element of total bonus
held back.
• Approved the group annual bonus targets for 2022
Governance
• Reviewed COVID-19 related market trends in relation to executive remuneration
• Reviewed the Remuneration Committee Terms of Reference
• Reviewed market trends and latest developments in governance
• Consulted with shareholders in respect of the minority vote against the 2020
Remuneration Report at the 2021 AGM and published the results of the consultation
in December 2021
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Report of the Remuneration Committee
continued
2022 approved Remuneration Policy for executive directors
This section of the report sets out the main elements of the Policy approved by shareholders at the 2021 AGM. The Policy will remain in
effect for three years from the 2021 AGM subject to any proposed amendments by the Committee. The table below also sets out how
the main elements of the policy link to the strategy and how each element will operate in practice.
During 2021 and early 2022 the Committee considered the effectiveness of LTIP and CSOP awards for the retention of key employees
below the level of executive management. After careful consideration the Committee approved the introduction of a new award
which is fully compliant with the rules of the existing PSP scheme and allows for the grant of nil-cost options to employees other than
executive directors and members of the wider executive management team with the only performance condition being continued
employment to the normal vesting date. Further details of the Restricted Stock Units (RSU) scheme are set out below. It is intended the
first grant of options under this new scheme will be made in late April or early May 2022.
The Committee do not intend to grant any further awards under the CSOP.
Element Purpose and link to strategy Operation Opportunity Performance measures
Base salary
Set at levels to attract and
retain talented executive
directors with the skills
and experience to deliver
Medica’s strategy.
Base salaries and the
implied total package
informed but not led
by market practice and
competitive by reference to
companies of a similar size
and complexity.
Base salaries will be reviewed by the Committee annually and benchmarked
periodically against relevant competitor companies.
The executive directors’ salary is positioned to reflect each individual’s
professional experience and level of responsibility in their role.
In deciding base salary levels, the Committee considers personal performance
including the individual’s contribution to the achievement of Medica’s strategic
objectives. The Committee will also consider employment conditions and salary
levels across Medica, and prevailing market conditions.
Base salary increases for the executive directors will normally be aligned with
those of the wider workforce but may be made above this level in exceptional
circumstances such as a material change in responsibilities, size or complexity of
the role, or if a director was intentionally appointed on a below-market salary.
The Committee will consider increasing salaries over time subject to strong
personal and company performance and considering levels of salaries in
the market.
There is no maximum salary payable to executive directors. Salaries will
be set on a case-by-case basis to reflect the role and the experience and
qualifications of the individual.
Base salaries for the year under review and the following year, as well as the
rationale for any increases, will be disclosed in the relevant year’s Directors’
Report on Remuneration in the Annual Report.
Not applicable.
Pension
To provide an appropriate
level of post-retirement
benefit for executive
directors.
Executive directors may receive a contribution to a personal pension plan, a cash
allowance in lieu, or a combination thereof equivalent to that received by the
wider UK workforce.
Salary is the only element of remuneration that is pensionable.
Newly appointed executive directors will receive a contribution to a personal
pension plan, a cash allowance, or a combination thereof equivalent to that of
the wider UK workforce at the date of appointment.
Details of the pension contributions made to executive directors during
the year are disclosed in the Directors’ Report on Remuneration in the
Annual Report.
Not applicable.
Other
benefits
To provide market
competitive non-cash
benefits to attract and retain
talented executive directors.
Medica provides death in service and private medical insurance benefits to its
executive directors.
Medica may provide benefits in kind where the Remuneration Committee
considers appropriate. Executive directors may also be provided certain other
benefits to take account of individual circumstances such as, but not limited
to, payment of tax, financial, and/or legal adviser fees, relocation expenses and
housing allowance (including associated interest, penalties or fees plus, in certain
circumstances or where the Committee consider it appropriate, any tax incurred
on such benefits).
Executive directors may also be offered any other future benefits made available
to all senior employees. This may include participation in any Share Incentive Plan
that is offered to all employees (or all employees who meet certain qualifying
criteria) on the same terms.
There is no maximum value of annual benefits which will be market
competitive and will take into account individual circumstances. It is not
anticipated that the costs of benefits provided will increase significantly in
the financial years over which this Policy will apply, although the Committee
retains discretion to approve non-material increases in cost. In addition,
the Committee retains discretion to approve a higher cost in exceptional
circumstances (e.g. to facilitate recruitment, relocation, expatriation, etc.) or
in circumstances where factors outside Medica’s control have changed (e.g.
market increases in insurance costs).
Benefits in respect of the year under review are disclosed in the Directors’
Report on Remuneration in the Annual Report.
Not applicable.
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2022 approved Remuneration Policy for executive directors
This section of the report sets out the main elements of the Policy approved by shareholders at the 2021 AGM. The Policy will remain in
effect for three years from the 2021 AGM subject to any proposed amendments by the Committee. The table below also sets out how
the main elements of the policy link to the strategy and how each element will operate in practice.
During 2021 and early 2022 the Committee considered the effectiveness of LTIP and CSOP awards for the retention of key employees
below the level of executive management. After careful consideration the Committee approved the introduction of a new award
which is fully compliant with the rules of the existing PSP scheme and allows for the grant of nil-cost options to employees other than
executive directors and members of the wider executive management team with the only performance condition being continued
employment to the normal vesting date. Further details of the Restricted Stock Units (RSU) scheme are set out below. It is intended the
first grant of options under this new scheme will be made in late April or early May 2022.
The Committee do not intend to grant any further awards under the CSOP.
Element Purpose and link to strategy Operation Opportunity Performance measures
Base salary
Set at levels to attract and
retain talented executive
directors with the skills
and experience to deliver
Medica’s strategy.
Base salaries and the
implied total package
informed but not led
by market practice and
competitive by reference to
companies of a similar size
and complexity.
Base salaries will be reviewed by the Committee annually and benchmarked
periodically against relevant competitor companies.
The executive directors’ salary is positioned to reflect each individual’s
professional experience and level of responsibility in their role.
In deciding base salary levels, the Committee considers personal performance
including the individual’s contribution to the achievement of Medica’s strategic
objectives. The Committee will also consider employment conditions and salary
levels across Medica, and prevailing market conditions.
Base salary increases for the executive directors will normally be aligned with
those of the wider workforce but may be made above this level in exceptional
circumstances such as a material change in responsibilities, size or complexity of
the role, or if a director was intentionally appointed on a below-market salary.
The Committee will consider increasing salaries over time subject to strong
personal and company performance and considering levels of salaries in
the market.
There is no maximum salary payable to executive directors. Salaries will
be set on a case-by-case basis to reflect the role and the experience and
qualifications of the individual.
Base salaries for the year under review and the following year, as well as the
rationale for any increases, will be disclosed in the relevant year’s Directors’
Report on Remuneration in the Annual Report.
Not applicable.
Pension
To provide an appropriate
level of post-retirement
benefit for executive
directors.
Executive directors may receive a contribution to a personal pension plan, a cash
allowance in lieu, or a combination thereof equivalent to that received by the
wider UK workforce.
Salary is the only element of remuneration that is pensionable.
Newly appointed executive directors will receive a contribution to a personal
pension plan, a cash allowance, or a combination thereof equivalent to that of
the wider UK workforce at the date of appointment.
Details of the pension contributions made to executive directors during
the year are disclosed in the Directors’ Report on Remuneration in the
Annual Report.
Not applicable.
Other
benefits
To provide market
competitive non-cash
benefits to attract and retain
talented executive directors.
Medica provides death in service and private medical insurance benefits to its
executive directors.
Medica may provide benefits in kind where the Remuneration Committee
considers appropriate. Executive directors may also be provided certain other
benefits to take account of individual circumstances such as, but not limited
to, payment of tax, financial, and/or legal adviser fees, relocation expenses and
housing allowance (including associated interest, penalties or fees plus, in certain
circumstances or where the Committee consider it appropriate, any tax incurred
on such benefits).
Executive directors may also be offered any other future benefits made available
to all senior employees. This may include participation in any Share Incentive Plan
that is offered to all employees (or all employees who meet certain qualifying
criteria) on the same terms.
There is no maximum value of annual benefits which will be market
competitive and will take into account individual circumstances. It is not
anticipated that the costs of benefits provided will increase significantly in
the financial years over which this Policy will apply, although the Committee
retains discretion to approve non-material increases in cost. In addition,
the Committee retains discretion to approve a higher cost in exceptional
circumstances (e.g. to facilitate recruitment, relocation, expatriation, etc.) or
in circumstances where factors outside Medica’s control have changed (e.g.
market increases in insurance costs).
Benefits in respect of the year under review are disclosed in the Directors’
Report on Remuneration in the Annual Report.
Not applicable.
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Report of the Remuneration Committee
continued
Element Purpose and link to strategy Operation Opportunity Performance measures
Annual
Bonus
To incentivise executive
directors to deliver strong
financial and non-financial
performance on an
annual basis and reward
the delivery of Medica’s
strategic aims that will
underpin the longer-term
health and growth of
the business.
Deferral into shares
enhances alignment with
shareholders and aids
retention of executive
directors.
Performance measures, targets and weightings are set by the Committee at the
start of the year. After the end of the financial year, the Committee determines the
level of bonus to be paid, taking into account the extent to which these targets
have been achieved.
To the extent that the performance criteria have been met, at least 40% of the
annual bonus awards will be deferred into awards in shares in Medica under the
Deferred Bonus Plan (“DBP”). The remainder of the bonus will be paid in cash.
Awards under the DBP are not subject to further performance conditions and vest
after 2 years, broadly subject to continued employment.
Dividend equivalents may be awarded in respect of DBP awards (as set out in the
Notes to the Policy Table).
Malus and clawback provisions apply to the annual bonus and DBP awards in
certain circumstances (as set out in the Notes to the Policy Table).
The Committee may exercise discretion and make either upward or downward
adjustments to the formulaic outcome to either short term or long-term bonus
pay-outs in the event that there is misalignment with shareholder interests or
strategy (as set out in the Notes to the Policy Table).
The normal maximum annual bonus opportunity is 125% of base salary.
The pay-out for on-target performance is up to 50% of maximum; below
threshold performance on any of the financial or strategic functional measures
results in nil pay-out.
The current maximum bonus opportunities for each of the executive directors
are disclosed in the Directors’ Report on Remuneration in the Annual Report.
Bonuses are based on achievement against
Company financial performance targets and
strategic functional targets over the financial year.
Malus and clawback provisions apply to the annual
bonus and DBP awards in certain circumstances
Further details, including the performance
targets, will be disclosed retrospectively in the
relevant Directors’ Report on Remuneration in the
Annual Report.
Performance
Share
Plan (“PSP”)
To align the interests of
executive directors and
shareholders in growing the
value of Medica over the
long-term.
Executive directors are eligible to receive annual awards of an option to acquire
shares in Medica for nil consideration.
Prior to awards being granted each year, the performance conditions and targets
are agreed and set to ensure they remain appropriately stretching and aligned to
Medica’s strategy.
Awards granted under the PSP to executive directors will normally have a
performance period of not less than three years and a minimum normal vesting
period of three years. They will normally be subject to an additional holding period
of two years after the normal vesting period.
Dividend equivalents may be awarded in respect of PSP awards (as set out in the
Notes to the Policy Table).
PSP awards granted to executive directors will be subject to malus and clawback
provisions, as set out in the Notes to the Policy Table.
The Committee may also exercise discretion and make either upward or downward
adjustments to the formulaic outcome to either short term or long-term bonus
pay-outs in the event that there is misalignment with shareholder interests or
strategy (as set out in the Notes to the Policy Table).
The normal maximum annual PSP opportunity is 150% of base salary.
The Committee may determine not to make awards at this maximum level each
year and anticipates that awards made will not normally exceed 125% of base
salary after 2021.
The Committee has discretion to award up to 200% of base salary in
exceptional circumstances.
Further details of the PSP awards granted to each of the executive directors
will be disclosed in the relevant Directors’ Remuneration Report in the
Annual Report.
Vesting of the PSP is subject to continued
employment during the normal vesting period and
the achievement of performance conditions aligned
with Medica’s strategic plan and shareholder
value creation. PSP awards granted in 2021 will be
based on a combination of EPS growth and Total
Shareholder Return.
Regular reviews of the performance conditions
and targets are undertaken to ensure alignment
with the strategy and shareholder interest. The
Committee retains discretion to make changes
to the measures and their weightings to ensure
continued alignment with strategic goals and
shareholder interests.
Further details, including the performance
targets attached to PSP awards in respect of each
year, will be disclosed in the relevant Directors’.
Remuneration Report in the Annual Report.
Restricted
Stock Units
(“RSU”)
under the
PSP
To provide a key
retention incentive for
junior management and
key employees
Employees other than directors and executive management are eligible to receive
annual awards of an option to acquire shares in Medica for nil consideration
RSU Awards granted under the PSP will normally have a performance period of not
less than three years and a minimum normal vesting period of three years.
Dividend equivalents may be awarded in respect of RSU awards.
Awards will be made based on seniority and at the discretion of the
Committee and will typically be limited to a value at grant of up to 1/3 of the
individual’s annual basic salary.
Total RSU’s granted each year under the PSP will be disclosed in the Annual
Report and Accounts.
Total RSU awards under the PSP will typically be limited to less than 1% of the
issued share capital of the Company in any one year
Vesting of the PSP is subject to continued
employment during the normal vesting period
Save-As-
You-Earn
(SAYE) plan
To align the interests of
employees and shareholders
by encouraging all
employees to buy and own
Medica shares
Executive directors are entitled to participate in Medica’s all-employee SAYE plan
on identical terms as other eligible employees. All employees, including executive
directors, may make monthly savings over a period of three or five years (or
other period set out in the relevant legislation). Each employee who participates
is also granted an option to acquire shares at a price that is not less than 80%
of the market value of the shares on the date that invitations to participate are
issued. The number of Shares subject to each option will be the number of shares
which have an aggregate option exercise price as near to, but not exceeding, the
projected proceeds of the SAYE savings contract (i.e. the accumulated savings
plus any bonus/interest payable).
The operation of the SAYE plan will be in line with the legislative requirements that
apply to plans of this type. Executive directors will not receive any preferential
terms compared to the wider employee group.
Employees are limited to saving a maximum in line with the maximum monthly
savings limit imposed by the Committee (which will not exceed the limits
imposed by legislation, currently £500 per month) at the time they are invited
to participate.
Not applicable.
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Annual Report for the year ended 31 December 2021
55
Element Purpose and link to strategy Operation Opportunity Performance measures
Annual
Bonus
To incentivise executive
directors to deliver strong
financial and non-financial
performance on an
annual basis and reward
the delivery of Medica’s
strategic aims that will
underpin the longer-term
health and growth of
the business.
Deferral into shares
enhances alignment with
shareholders and aids
retention of executive
directors.
Performance measures, targets and weightings are set by the Committee at the
start of the year. After the end of the financial year, the Committee determines the
level of bonus to be paid, taking into account the extent to which these targets
have been achieved.
To the extent that the performance criteria have been met, at least 40% of the
annual bonus awards will be deferred into awards in shares in Medica under the
Deferred Bonus Plan (“DBP”). The remainder of the bonus will be paid in cash.
Awards under the DBP are not subject to further performance conditions and vest
after 2 years, broadly subject to continued employment.
Dividend equivalents may be awarded in respect of DBP awards (as set out in the
Notes to the Policy Table).
Malus and clawback provisions apply to the annual bonus and DBP awards in
certain circumstances (as set out in the Notes to the Policy Table).
The Committee may exercise discretion and make either upward or downward
adjustments to the formulaic outcome to either short term or long-term bonus
pay-outs in the event that there is misalignment with shareholder interests or
strategy (as set out in the Notes to the Policy Table).
The normal maximum annual bonus opportunity is 125% of base salary.
The pay-out for on-target performance is up to 50% of maximum; below
threshold performance on any of the financial or strategic functional measures
results in nil pay-out.
The current maximum bonus opportunities for each of the executive directors
are disclosed in the Directors’ Report on Remuneration in the Annual Report.
Bonuses are based on achievement against
Company financial performance targets and
strategic functional targets over the financial year.
Malus and clawback provisions apply to the annual
bonus and DBP awards in certain circumstances
Further details, including the performance
targets, will be disclosed retrospectively in the
relevant Directors’ Report on Remuneration in the
Annual Report.
Performance
Share
Plan (“PSP”)
To align the interests of
executive directors and
shareholders in growing the
value of Medica over the
long-term.
Executive directors are eligible to receive annual awards of an option to acquire
shares in Medica for nil consideration.
Prior to awards being granted each year, the performance conditions and targets
are agreed and set to ensure they remain appropriately stretching and aligned to
Medica’s strategy.
Awards granted under the PSP to executive directors will normally have a
performance period of not less than three years and a minimum normal vesting
period of three years. They will normally be subject to an additional holding period
of two years after the normal vesting period.
Dividend equivalents may be awarded in respect of PSP awards (as set out in the
Notes to the Policy Table).
PSP awards granted to executive directors will be subject to malus and clawback
provisions, as set out in the Notes to the Policy Table.
The Committee may also exercise discretion and make either upward or downward
adjustments to the formulaic outcome to either short term or long-term bonus
pay-outs in the event that there is misalignment with shareholder interests or
strategy (as set out in the Notes to the Policy Table).
The normal maximum annual PSP opportunity is 150% of base salary.
The Committee may determine not to make awards at this maximum level each
year and anticipates that awards made will not normally exceed 125% of base
salary after 2021.
The Committee has discretion to award up to 200% of base salary in
exceptional circumstances.
Further details of the PSP awards granted to each of the executive directors
will be disclosed in the relevant Directors’ Remuneration Report in the
Annual Report.
Vesting of the PSP is subject to continued
employment during the normal vesting period and
the achievement of performance conditions aligned
with Medica’s strategic plan and shareholder
value creation. PSP awards granted in 2021 will be
based on a combination of EPS growth and Total
Shareholder Return.
Regular reviews of the performance conditions
and targets are undertaken to ensure alignment
with the strategy and shareholder interest. The
Committee retains discretion to make changes
to the measures and their weightings to ensure
continued alignment with strategic goals and
shareholder interests.
Further details, including the performance
targets attached to PSP awards in respect of each
year, will be disclosed in the relevant Directors’.
Remuneration Report in the Annual Report.
Restricted
Stock Units
(“RSU”)
under the
PSP
To provide a key
retention incentive for
junior management and
key employees
Employees other than directors and executive management are eligible to receive
annual awards of an option to acquire shares in Medica for nil consideration
RSU Awards granted under the PSP will normally have a performance period of not
less than three years and a minimum normal vesting period of three years.
Dividend equivalents may be awarded in respect of RSU awards.
Awards will be made based on seniority and at the discretion of the
Committee and will typically be limited to a value at grant of up to 1/3 of the
individual’s annual basic salary.
Total RSU’s granted each year under the PSP will be disclosed in the Annual
Report and Accounts.
Total RSU awards under the PSP will typically be limited to less than 1% of the
issued share capital of the Company in any one year
Vesting of the PSP is subject to continued
employment during the normal vesting period
Save-As-
You-Earn
(SAYE) plan
To align the interests of
employees and shareholders
by encouraging all
employees to buy and own
Medica shares
Executive directors are entitled to participate in Medica’s all-employee SAYE plan
on identical terms as other eligible employees. All employees, including executive
directors, may make monthly savings over a period of three or five years (or
other period set out in the relevant legislation). Each employee who participates
is also granted an option to acquire shares at a price that is not less than 80%
of the market value of the shares on the date that invitations to participate are
issued. The number of Shares subject to each option will be the number of shares
which have an aggregate option exercise price as near to, but not exceeding, the
projected proceeds of the SAYE savings contract (i.e. the accumulated savings
plus any bonus/interest payable).
The operation of the SAYE plan will be in line with the legislative requirements that
apply to plans of this type. Executive directors will not receive any preferential
terms compared to the wider employee group.
Employees are limited to saving a maximum in line with the maximum monthly
savings limit imposed by the Committee (which will not exceed the limits
imposed by legislation, currently £500 per month) at the time they are invited
to participate.
Not applicable.
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56
Report of the Remuneration Committee
continued
Notes to the Policy Table
Approach to target setting and
performance measure selection.
The Committee carefully considers the
selection of performance measures
at the start of each performance
cycle, taking into consideration
Medica’s strategic objectives and
the macroeconomic environment.
Annual bonus measures are selected to
align with Medica’s short-term objectives
and are based on “stretch” targets above
the annually approved group budget.
Measures may change from year to year
(subject to the Policy), and the rationale
for any changes to the bonus measures
selected will therefore be disclosed in
the relevant Directors’ Remuneration
Report in the Annual Report.
PSP performance measures are selected
to ensure they reward delivery of Medica’s
strategy and growth and create value for
shareholders over a multi-year period and
are intended to align executive directors’
interests with those of shareholders.
The performance measures applicable
to the PSP awards to be granted in 2022
will be based on EPS growth and Total
Shareholder Return weighted equally
at 50% over a three-year period. The
Committee considers these measures
align executive incentives to Medica’s
strategy and shareholder interests.
PSP awards are expected to be
granted in April or early May 2022.
The PSP award to be granted to
Stuart Quin and Richard Jones will be
equivalent to 125%% of base salary.
Targets are set to be stretching
but achievable over the three-year
performance period. EPS targets are
set taking account of multiple relevant
reference points, including internal
forecasts, external expectations for
future performance at both Medica
and its closest sector peers, and
typical performance ranges for those
measures at other FTSE companies
of comparable size and complexity.
The Committee may also make
discretionary adjustments, up and down,
to the formulaic outcome of short- and
long-term incentive plans if there is a lack
of alignment with the Group’s strategic
goals or shareholder interests. Any use
of discretion will be carefully considered
by the Committee and fully disclosed
in the relevant Directors’ Remuneration
Report in the Annual Report.
Until an award in shares under the DBP
or PSP has been exercised and the
shares which are subject to the relevant
award have been issued or transferred
to the award holder, the award holder
has no entitlement to dividends or other
distributions payable by reference to
a record date preceding the date of
such issue or transfer. The Committee
can, however, determine that dividend
equivalents will be awarded. If dividend
equivalents are awarded, whenever a
dividend or other distribution is paid by
Medica in respect of its shares and the
vesting date of the DBP or PSP award
(including any additional holding period
that applies to the PSP award) has not
passed, the number of shares which
are subject to the DBP or PSP award
will be increased to reflect the value
of the dividend. The Committee can
determine that dividend equivalents
will be paid in either shares or in cash.
Malus and clawback provisions
apply to DBP and PSP awards:
• If the Award Holder has engaged in
misconduct which, in the sole opinion
of the Committee, would or could
justify the Award Holder’s summary
dismissal;
• there has been a material
misstatement and/or significant
downward revision in the financial
results of the Company announced to
the public and/or its audited accounts
in respect of any Financial Year;
• an error was made in assessing or
calculating the extent to which any
condition imposed on the Award has
been satisfied which has resulted
either directly or indirectly in the
number of Shares in respect of
which the Award was or is capable of
exercise, being greater than it would
have been but for such error; and
• any other circumstances exist that
in the sole opinion of the Committee
have (or would have if made public)
a sufficiently significant impact on
the reputation of any member of
the Group or the business in which
the Award Holder is employed to
justify Malus and Clawback applying.
For the avoidance of doubt, such
circumstances need not relate to any
Financial Year during which the Award
Holder held an Award under the Plan.
Share ownership guidelines
The Committee recognises the
importance of aligning executive
directors’ and shareholders’ interests
through significant shareholdings in
Medica. Medica’s shareholding policy
is 125% of base salary for executive
directors. The executive directors will
have five years in which to build up the
required ordinary shareholding after
commencing employment.
Post-employment shareholding guidelines
will require executive directors to hold
100% of their in-employment shareholding
guideline, or shareholding at cessation
if lower, for a period of two years
post-cessation.
Details of the executive directors’ current
personal shareholdings are provided
on page69.
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57
Pay-for-performance: scenario analysis
The charts below provide an estimate of the potential future reward opportunities for the executive directors, and the potential split
between the different elements of remuneration under three different performance scenarios: “Maximum”, “On-target” and “Minimum”.
Potential reward opportunities are based on the forward-looking policy applied to 2022 base salaries and incentive opportunities.
Notethat the PSP awards granted to executive directors will not normally vest until the third anniversary of the date of grant and will
then be subject to an additional two-year holding period before the awards can be exercised.
Minimum On-Target Maximum Maximum with
share price
growth
Minimum On-Target Maximum Maximum with
share price
growth
Stuart Quin Richard Jones
Fixed remuneration Annual bonus PSP Total
£0k
£400k
£800k
£1,200k
£1,600k
£2,000k
£400
£645
£1,378
£1,644
£269
£441
£959
£1,147
100%
62% 29%2 4%
100% 61% 28%2 3%
17%
21%
32%
39%
49%
27%
18%
21%
33%
39%
27%
49%
In developing these scenarios the following assumptions have been made
Minimum
• Base pay that is applicable in 2022
• Benefits as included in the single figure table for 2021
• Pension based on % contribution of salary for 2022
Target
• Annual bonus is 62.5% of base salary (representing 50% of maximum award)
• PSP share award vesting at 37.5% of base salary (representing 25% of the face value of the PSP award)
Maximum
• Annual bonus is 125% of base salary (representing 100% of maximum award)
• PSP share award vesting at 150% for 2021 and 125% thereafter (representing 100% of the face value of the PSP award)
Share price appreciation
• The potential impact of share price appreciation on PSP award values is illustrated assuming a 50% increase on the share price at grant
Executive director service contracts
In accordance with general market practice, each of the executive directors has a rolling service contract. The executive directors’
service contracts (copies of which are available to view at Medica’s registered office) are each terminable on 12 months’ notice from
either party. This practice will also apply for any new Executive directors. The following table shows the date of the service contract for
each executive director:
Executive director Position Date of appointment Date of service agreement
Dr. Stuart Quin CEO 1September 2019 1September 2019
Richard Jones CFO 3August 2020 1August 2020
Exit payments policy
Medica’s policy on termination payments is to consider the circumstances on a case-by-case basis, taking into account the relevant
contractual terms in the executive’s service contract and the circumstances of termination. executive directors’ contracts provide
for the payment of a pre-determined sum in the event of termination of employment in certain circumstances (but excluding
circumstances where Medica is entitled to dismiss without compensation), comprising base salary, pension allowance and benefits in
respect of the unexpired portion of the notice period. Termination payments may take the form of payments in lieu of notice.
If the employment is terminated by Medica, the Committee retains the discretion to settle any other amount the Committee considers
reasonable to the executive director including in settlement of claims, in respect of reasonable legal fees incurred in connection with
the termination and fees for outplacement services and relocation costs.
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Report of the Remuneration Committee
continued
In additional to contractual provisions, the table below summarises how awards under each discretionary incentive plan are typically
treated in specific circumstances, with (where relevant) the final treatment remaining subject to the Committee’s discretion as provided
under the rules of the plan. In the event of termination, any outstanding options granted under the SAYE scheme and any awards made
under a share Incentive plan that may be established by Medica will be treated in accordance with the rules of the scheme, which do
not include discretion.
Disclosure in relation to any departing executive director, including details of any remuneration payment made to him after he ceases
will be made in the relevant Annual Report on Remuneration.
Treatment of awards on cessation of employment/change of control.
Reason for cessation Calculation of vesting/payment
Timing of vesting/
payment
Annual
bonus
Death or other
circumstance as the
Committee determines
The bonus will remain payable on the normal payment date,
subject to the performance targets having been met and
pro-rated for the proportion of the performance year worked
(unless the Committee waives pro-rating). The bonus is paid
wholly in cash (i.e. not subject to deferral) unless the Committee
determines otherwise.
At the usual
payment date.
All other reasons No bonus will be paid for the financial year. Bonus lapses if
employment ceases at any time prior to the payment date.
Not applicable.
Change of control The Committee may determine the extent to which applicable
performance targets have been met as at the date of the change
of control, and calculate the bonus accordingly, pro-rated for the
proportion of the performance year which has elapsed before the
change of control event. The Committee has discretion to waive
performance conditions and pro-rating. The bonus is paid wholly
in cash (i.e. not subject to deferral).
On change
of control.
Deferred
Bonus Plan
Death The Committee may in its absolute discretion, permit exercise of
awards within the twelve-month period immediately following
death. Awards will be pro-rated for the proportion of the vesting
period worked (unless the Committee waives pro-rating).
On death.
Ill health, injury,
disability, redundancy,
or sale of the employing
company or business
Awards may be retained and exercised during the six months
following the vesting date (or if later six months after the date
of cessation). The Committee may, however, in its absolute
discretion permit awards to be exercised within such period
following cessation of employment as the Committee determines.
Awards will be pro-rated for the proportion of the vesting period
worked (unless the Committee waives pro-rating).
At the normal
vesting date
unless discretion
is exercised (and
then on cessation of
employment).
All other reasons
(including resignation
or dismissal for cause)
Awards normally lapse on cessation of employment or if
earlier when the employee gives or is given notice to cease
employment, unless the Committee determines within three
months of cessation of employment to permit the holder to keep
his awards and exercise them on such terms and within such
period following the vesting date as the Committee determines.
The Committee can determine the extent to which the award
will vest.
Not applicable,
unless discretion is
exercised (and then
not earlier than the
normal vesting date).
Change of control DBP Awards may be exercised for a six-month period following
such event or immediately prior to such event. Awards will not be
subject to pro-rating.
On change
of control.
Performance
Share Plan
Death The Committee may in its absolute discretion, permit exercise of
awards within the twelve-month period immediately following
death. Awards will be pro-rated for the proportion of the normal
vesting period (not including any additional holding period)
worked, unless the Committee waives pro-rating.
On death.
Ill health, injury,
disability, redundancy,
or sale of the employing
company or business
Awards may be retained and exercised during the six months
following the normal vesting date (not including any additional
holding period), or if later six months after the date of cessation.
The Committee may, however, in its absolute discretion permit
awards to be exercised within such period following cessation
of employment as the Committee determines. Awards will be
pro-rated for the proportion of the normal vesting period (not
including any additional holding period) worked, unless the
Committee waives pro-rating.
At the normal
vesting date
unless discretion
is exercised (and
then on cessation of
employment).
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59
Reason for cessation Calculation of vesting/payment
Timing of vesting/
payment
All other reasons
(including resignation
or dismissal for cause)
Awards normally lapse on cessation of employment or if earlier
when the employee gives or is given notice to cease employment,
unless the Committee determines within three months of
cessation of employment to permit the holder to keep his
awards and exercise them on such terms and within such period
following the later of the normal vesting date (not including any
additional holding period) or cessation of employment, as the
Committee determines. The Committee can determine the extent
to which the award will vest.
Not applicable,
unless discretion is
exercised (and then
not earlier than the
normal vesting date).
Change of control Awards may be exercised for a six-month period following
such event or immediately prior to such event to the extent
that performance conditions have been met and pro-rated for
the proportion of the normal vesting period (not including any
additional holding period) that has elapsed as at the change
of control event. The Committee has discretion to waive
performance conditions and pro-rating.
On change
of control.
Company
Share Option
Plan
Death Options can be exercised within the twelve-month period
immediately following death (to the extent that any performance
conditions have been satisfied and pro-rated for the proportion
of the vesting period worked). The Committee has discretion to
waive performance conditions and pro-rating.
On death.
Injury, disability,
redundancy, retirement,
or sale of the employing
company or business
Options can be exercised within the six months following the
date of cessation (to the extent that any performance conditions
have been satisfied) and pro-rated for the proportion of the
vesting period worked. The Committee has discretion to waive
performance conditions and pro-rating.
On cessation of
employment.
All other reasons
(including resignation
or dismissal for cause)
Options normally lapse on cessation of employment or if earlier
when the employee gives or is given notice to cease employment,
unless the Committee determines within three months of
cessation of employment to permit the holder to keep his options
and exercise them on such terms and within such period as the
Committee determines. The Committee can determine the extent
to which the award will vest.
Not applicable,
unless discretion
is exercised (and
then not earlier
than cessation of
employment).
Change of control Awards may be exercised for a six-month period following such
event to the extent that performance conditions have been met
and pro-rated for the proportion of the vesting period that has
elapsed as at the change of control event. The Committee has
discretion to waive performance conditions and pro-rating. If
the change of control event would stop the option qualifying for
CSOP tax relief, options can only be exercised within 20 days
after the takeover event.
On change
of control.
Approach to remuneration on recruitment
External appointments
In cases of hiring or appointing a new executive director from outside Medica, the Committee may make use of all existing components
of remuneration set out in the policy table, up to the disclosed maximum opportunities (where applicable). When determining
the remuneration package for a new executive director, the Committee will take into account all relevant factors based on the
circumstances at that time to ensure that arrangements are in the best interests of Medica and its shareholders. This may include
factors such as the experience and skills of the individual, internal comparisons and relevant market data. The Committee may also
make an award in respect of a new appointment to ‘buy out’ incentive arrangements forfeited on leaving a previous employer, i.e.
over and above the maximum limits on incentive opportunities set out in the policy table. In doing so, the Committee will consider
relevant factors, including any performance conditions attached to these awards, the likelihood of those conditions being met, and the
time over which they would have vested. The intention is that the expected value of any buy-out award would be no higher than the
expected value of the forfeited arrangements, and that the structure will replicate (as far as reasonably possible) that of the awards
being forfeited. The Committee may consider it appropriate to structure ‘buy-out’ awards differently from the structure described
in the policy table, exercising the discretion available under UKLA listing Rule 9.4.2R where necessary to make a one-off award to
an executive director in this context. The Committee may also permit Medica to indemnify a new appointment as executive director
for any claims that may be made against him by a previous employer in connection with a breach of restrictive covenants or similar
restrictions that the new appointment may have breached by taking up employment with Medica.
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Report of the Remuneration Committee
continued
Internal promotion
Where a new executive director is appointed by way of internal promotion, the policy will be consistent with that for external
appointees, as detailed above (other than in relation to ‘buy-out’ awards). Any commitments made prior to an individual’s promotion
will continue to be honoured even if they would not otherwise be consistent with the policy prevailing when the commitment is
fulfilled, although Medica may, where appropriate, seek to revise an individual’s existing service contract on promotion to ensure it
aligns with other executive directors and good practice.
Disclosure on the remuneration structure of any new executive director, including details of any ‘buy-out’ awards, will be
disclosed in the RNS notification made at the time of appointment and in the Annual Report on Remuneration for the year in which
recruitment occurred.
External appointments held by executive directors
Executive directors may accept up to one external appointment subject to approval by the Board, there being no conflicts of interest
and the appointment not leading to deterioration in the individual’s performance.
Executive directors may retain the fees paid for such roles. details of external appointments and the associated fees received will be
included in the Annual Report on Remuneration.
Consideration of conditions elsewhere in Medica
The Committee seeks to promote and maintain good relations with employees as part of its broader employee engagement strategy,
considers pay practices across Medica and is mindful of the salary increases applying across the rest of the business in relevant
markets when considering any increases to salaries for executive directors. However, the committee does not currently consult with
employees on its executive remuneration policy.
Consideration of shareholder views
The Committee will take into consideration all shareholder views received during the year and at the Annual General Meeting each
year, as well as guidance from shareholder representative bodies more broadly, in shaping Medica’s implementation of its policy,
as well as any future changes to policy. It is the committee’s intention to consult with major shareholders in advance of making any
material changes to remuneration arrangements.
Remuneration policy for the non-executive directors
Details of the Policy on fees paid to our non-executive directors are set out in the table below:
Purpose and link
to strategy Operation Opportunity
Performance
measures
Non-executive
director fees
To attract and retain
non-executive directors
of the highest calibre
with broad commercial
and other experience
relevant to Medica.
The fees of the Chairman are determined by
the Committee. The fees paid to non-executive
directors are determined by the Chairman and
executive directors.
Fee levels are reviewed annually taking into
account external advice on best practice and
competitive levels, in particular at other FTSE
companies of comparable size and complexity.
Time commitment, committee participation
and chairing are also taken into account when
reviewing fees.
Chairman and non-executive director fees are
paid in cash.
The Committee reimburses the chairman
and non-executive directors for reasonable
expenses in performing their duties and may
settle any tax incurred in relation to these
expenses. For any non-executive director that
is based overseas, Medica will meet travel and
accommodation expenditure as required to
fulfil their non-executive duties.
The fees paid to the chairman and non-
executive directors are disclosed in the Annual
Report on Remuneration.
Current fees are set
out on Page69:
Fee increases will
be applied taking
into account the
outcome of the
annual review.
Level of any fees
to be reviewed by
the Board.
n/a
Non-executive directors are not eligible to join Medica’s pension, incentives or share schemes or to participate in any of Medica’s other
benefit arrangements.
In recruiting the new non-executive directors in 2021, the Committee used the Policy set out above.
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Non-executive director letters of appointment
None of the non-executive directors has a service contract with Medica. They do have letters of appointment for an initial period
of three years, subject to retirement and re-election at the initial and each subsequent AGM and continuing thereafter subject
to termination upon at least three months’ notice (six months’ notice in respect of Gordon Roy Davis). The dates relating to the
appointments of the chairman and non-executive directors are as follows:
Director Role Date of appointment Date of letter of appointment
Gordon Roy Davis Independent Chairman 1March 2017 15March 2017
Joanne Mary Easton Non-Executive Director 22April 2019 2April 2019
Dr. Junaid Bajwa Non-Executive Director 1April 2021 2March 2021
Barbara Moorhouse Non-Executive Director 1August 2021 1June 2021
Annual Report on Remuneration
This section of the report provides details of how our policy was implemented during the period ending 31December 2021.
Single total figure of remuneration for executive directors (Audited)
The table below sets out a single figure for total remuneration received by each executive director for the year ended 31December
2021 and the prior year.
£’000
Base
salary
1
Taxable
Benefits
2
Annual
bonus PSP
Pension
benefit Other Total
Total
fixed
Total
variable
Dr. Stuart Quin
2021 £343 £9 £210 £0 £31 £nil £594 £383 £210
2020 restated
4
£340 £8 £82 £0 £34 £nil £464 £382 £82
Richard Jones
2021 £242 £3 £148 £0 £15 £8
3
£415 £259 £156
2020 restated
4
£100 £1 £24 £0 £6 £nil £131 £107 £24
Former Directors
Base
salary
1
Taxable
Benefits
2
Annual
bonus PSP
Pension
benefit Other Total
Total
fixed
Total
variable
Anthony Lee
2021 £0 £0 £0 £2 £0 £0 £2 £0 £2
2020 restated
4
£63 £0 £0 £53 £4 £0 £120 £67 £53
Dr. Stephen Davies
2021 £83 £0 £61 £118 £5 £nil £268 £88 £179
2020 restated
4
£200 £0 £48 £0 £12 £nil £260 £212 £48
1. Anthony Lee resigned as a director on 31May 2020. Dr. Stephen Davies resigned as a director on 31May 2021. Richard Jones salary for 2020 shown from
commencement date of 3August 2020
2. Medica provides death in service benefit and group income protection and private medical insurance benefits to its executive directors.
3. The Committee approved the payment to Richard Jones of a tax-free relocation allowance of £7,500 in 2021 in order to facilitate a relocation closer to Medica’s
operating base.
4. The amounts disclosed are after the restatement for correction of the errors disclosed in note 2.5.
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Report of the Remuneration Committee
continued
Incentive outcomes for the year ended 31December 2021 (Audited)
Bonus awards for 2021
2021
Maximum
Opportunity
Bonus
outcome
(% of max)
Salary
earned
for the
financial
year to
31December
2021
Bonus
Payable
in Cash
Bonus
deferred
into
shares
Total
Bonus
Stuart Quin 125% of salary 82% £343 £210 £140 £350
Richard Jones 125% of salary 82% £242 £148 £99 £247
Stephen Davies 100% of salary 74% £83 £61 £0 £61
Anthony Lee nil nil nil nil nil nil
2020 restated
1
Maximum
Opportunity
Bonus
outcome
(% of max)
Salary
earned
for the
financial
year to
31December
2020
Bonus
Payable
in Cash
Bonus
deferred
into
shares
Total
Bonus
Stuart Quin 100% of salary 32% £340 £82 £27 £110
Richard Jones 100% of salary 32% £100 £24 £8 £32
Stephen Davies 100% of salary 32% £200 £48 £16 £65
Anthony Lee 100% of salary 0% £63 nil nil nil
1. The amounts disclosed are after the restatement for correction of the errors disclosed in note 2.5.
Disclosure of 2021 Annual Bonus targets
The executive directors’ bonuses for the year ended 31December 2021 were based on a potential payment of up to 125% of base
salary for maximum achievement of financial and operational targets. Executive directors were awarded bonuses of 81.7% of maximum
opportunity. The table below shows the outcome.
For the financial targets, 75% of the available 100% of annual bonus was based on three financial targets each worth 25% at
maximum as per the table below. The remaining 25% of the available 100% of annual bonus was based on the achievement of
operational measures.
Bonus outturn Weighting Threshold Target Maximum
Actual
performance
Bonus
received
(% of max
opportunity)
Revenue 25% £55.9m £62.2m £71.5m £61.9m 11.5%
Adjusted net operating profit 25% £9.9m £11.0m £12.6m £12.1m 20.6%
Free cash 25% £3.5m £3.9m £4.5m £9.9m 25.0%
Sub-total for financial measures 75% 57.2%
Sub-total operational measures 25% See table below 24.5%
Total 100% 81.7%
Following a review of achievements against the financial targets, the Committee concluded that Dr. Stuart Quin, and Richard Jones
should receive a payment of 5 7.2% of the maximum bonus opportunity of 75% of the total bonus opportunity.
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The remaining 25% of the available bonus opportunity was based on the achievement of jointly owned operational measures as follows:
Operational Measures Commentary Outcomes
NH Contract wins Medica continued to actively tender for new business and to negotiate
extensions and re-tenders of certain existing NightHawk contracts with a
net increase in NH contract wins and renewals during the year in line with
expectations
Met
ESG measures relating to
service quality
Changes to process and systems contributed to the improvements in
SLA achievement across both NightHawk and Elective service lines. SLA
performance was slightly below target for NightHawk and Elective as
Medica worked with its clients to bring capacity back onstream during 2021
as demand returned to pre-pandemic levels.
Partially met
Integration of
Irish acquisition
All key integration milestones were achieved on time and to plan including
the re-branding of the Irish acquisition to Medica Ireland
Met
Following a review of achievements against the operational targets, the Committee concluded that Dr. Stuart Quin and Richard Jones
should receive a payment of 24.5% of the maximum bonus opportunity of 25% for operational measures.
In accordance with the directors’ remuneration policy approved in 2021, 40% of the total bonus awarded to Dr. Stuart Quin and Richard
Jones will be deferred in Medica shares under the Deferred Bonus Plan (DBP) to be granted during 2022. Awards under the DBP are
not subject to further performance conditions and vest after two years, subject to continued employment. Dividend equivalents will be
awarded in respect of the DBP awards on vesting.
Deferred Bonus Plan (“DBP”)
Date of grant Vehicle
Number
awarded
Share
Price at
award
date
2
Total
Value of
Award
Vesting
date
Expiry
date
Dr. Stuart Quin 15-Apr-20 DBP – nil cost share options 2,564 110.5 £2,833 14-Apr-22 15-Apr-30
26-May-21 DBP – nil cost share options 17,03 5 161.2 £27,455 26-May-23 26-May-31
Richard Jones 26-May-21 DBP – nil cost share options 5,010 161.2 £8,075 26-May-23 26-May-31
Dr. Stephen Davies
3
26-May-21 DBP – nil cost share options 10,202 158.3 £16,150 26-May-23 26-Nov-23
15-Apr-20 DBP – nil cost share options 4,525 110.5 £5,000 14-Apr-22 14-Oct-22
1. The awards are structured as nil cost options, for which no exercise price is payable.
2. The award value of the awards has been calculated using the share price at the date of award
3. Dr. Stephen Davies resigned on 31May 2021, the expiry date is 6 months after options vest
PSP vesting in 2021
A summary of the performance conditions for the 2018 awards is included below:
Measure Weighting Targets Performance measurement period
Absolute TSR
(share price plus rolled
up dividends)
50% 0% vesting below 8% growth per annum
12.5% vesting for 8% growth per annum
50% vesting for 16% growth per annum
Straight-line vesting between these points
Three-month average at the
end of the three year
performance period
Growth in Adjusted
Earnings per Share
50% 0% vesting below 10% growth per annum
12.5% vesting for 10% growth per annum
50% vesting for 30% growth per annum
Straight-line vesting between these points
Cumulative
three years
Threshold performance was not met for either measure and therefore no part of this award vested in 2021.
PSP awards granted in 2021
On 28May 2021 executive directors were granted awards under the PSP, comprising a grant of options to acquire shares at nil cost.
Following the 2021 AGM additional awards were made under the PSP on 22June 2021.
Awards granted to Dr. Stuart Quin and Richard Jones under the PSP were granted in respect of shares with a market value equal to
150% of base salary, determined using the average closing price of Medica’s shares for the three dealing days immediately preceding
28May 2021 (161.2pence).
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Report of the Remuneration Committee
continued
A summary of the performance conditions for the 2021 awards is included below and was previously disclosed in the 2021 Annual
Report and Accounts:
Measure Weighting Targets Performance measurement period
Absolute TSR
CAGR over three years to
31December 2023
50% 0% vesting below 17% cumulative growth per annum
25% vesting for 17% CAGR growth
50% vesting for 19% CAGR
75% vesting for 22% CAGR
100% vesting for 26% CAGR
Straight-line vesting between these points
Three-month average at the
end of the three year
performance period
Cumulative Growth
in Adjusted Earnings per
Share over the three-year
period to 31December 2023
50% 0% vesting below 27pence per share
25% vesting at 27pence per share
50% vesting at 28pence per share
75% vesting at 30 pence per share
100% vesting at 32pence per share
Straight-line vesting between these points
Cumulative
three years
Vesting of awards is subject to overall Committee
discretion to reduce or eliminate the awards if
deemed necessary
LTIP awards 2021 (with 2020 comparative) for executive directors
2021
Director Date of grant Vehicle
Number
awarded
Exercise
Price
1
Face
value
2
Vesting
date
3
Expiry
date
Dr. Stuart Quin 28-May-21 PSP – nil cost
share options
213,071 Nil £343 28-May-24 28-May-31
22-Jun-21 PSP – nil cost
share options
106,535 Nil £172 22-Jun-24 22-Jun-31
Richard Jones 28-May-21 PSP – nil cost
share options
150,403 Nil £242 26-May-24 28-May-31
22-Jun-21 PSP – nil cost
share options
75,201 Nil £121 22-Jun-24 22-Jun-31
2021
Director Date of grant Vehicle
Number
awarded
Exercise
Price
1
Face
value
2
Vesting
date
3
Expiry
date
Dr. Stuart Quin 15-Apr-20 PSP – nil cost
share options
615,385 £680 15-Apr-23 15-Apr-30
Dr. Stuart Quin 16-Sep-19 PSP – nil cost
share options
533,682 £733 16-Sep-22 16-Sep-29
Dr. Stephen Davies 15-Apr-20 PSP – nil cost
share options
180,995 £200 15-Apr-23 15-Apr-30
Dr. Stephen Davies 25-Apr-19 PSP – nil cost
share options
193,236 £300 25-Apr-22 25-Apr-29
Richard Jones 10-Nov-20 PSP – nil cost
share options
443,077 £480 10-Nov-23 10-Nov-30
Anthony Lee 25-Apr-19 PSP – nil cost
share options
135,265 £210 25-Apr-22 25-Apr-29
1. The awards are performance share awards, for which no exercise price is payable.
2. The face value of the awards has been calculated using the share price at the date of grant, being the average closing share price for a Share as derived from the
Official List for the three consecutive Dealing Days immediately preceding 26May 2021 (161.2p). This assumes that the performance targets are met in full. Actual
value at vesting will depend on the extent to which the awards vest, the share price at the date of vesting, and any dividend equivalents payable on vested shares.
3. There will be a two-year holding period following the vesting data after which PSP options are available for exercise
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Single total figure of remuneration for non-executive directors (Audited)
The table below sets out a single figure for total remuneration received by each non-executive director for the year ended 31December
2021 and the prior year:
Director 2021 2020
Gordon Roy Davis £100 £100
Stephen Lee Whittern
1
£37 £60
Dr. Mike Bewick £0 £32
Joanne Mary Easton £50 £50
Barbara Moorhouse
2
£30 –
Dr. Junaid Bajwa
3
£37 –
1. Stephen Wittern Resigned on 16June 2021
2. Barbara Moorehouse was appointed on 1July 2021
3. Dr. Junai Bajwa was appointed on 1April 2021
Percentage change in Remuneration
The table below shows the percentage change in remuneration for the role of chief executive between 2021 and 2020 (and the
table encompasses part year figures for the departing and new chief executive), and other directors compared to the average for all
employees of Medica Group PLC:
2021 2020
4
Salary/fees Benefits Annual Bonus Salary/fees Benefits Annual Bonus
Executive Directors
Chief Executive Officer 1% -3% 155% 34% 225% 627%
Chief Financial Officer 48% 62% 513% 17% n/a 73%
Non-Executive Directors
Gordon Roy Davis 0% – – 0% – –
Stephen Lee Whittern
1
-39% – – 0% – –
Dr Mike Bewick -100% – – -36% – –
Joanne Mary Easton 0% – – 44% – –
Barbara Moorhouse
2
N/A – – N/A – –
Dr Junaid Bajwa
3
N/A – – N/A – –
Average of other Medica employees 41% 0% 5%
1. Resigned in June 2021
2. Appointed July 2021
3. Appointed April 2021
4. The amounts disclosed are after the restatement for correction of the error disclosed in Note 2.5
CEO Pay Ratio
The table below sets out the ratio between the pay of the chief executive and that of the Company’s employees
1
.
Year Method
25th
percentile
ratio
Median
ratio
75th
percentile
ratio
2021 Option A 24.1:1 17.4:1 11.8:1
2020 Option A 18.4:1 15.7:1 8.7:1
2019 Option A 16.4:1 12.4:1 7.6:1
1 The CEO Pay Ratio is based on like for like comparison of total pay (salary, bonus and benefits). Values are grossed up for part time employees and to a full year for
new joiners in the year.
2 Option A was used (ranking employees by their year-end annual pay, benefits and annual bonus) because it is the most transparent method available.
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Report of the Remuneration Committee
continued
The salary and total pay for employee measured (highest to lowest) at the 25th, median and 75th percentile used to calculate the above
ratios were:
2021 2020 2019
Salary Total pay Salary Total pay Salary Total pay
25th percentile
1
£43 £48 £42 £45 £37 £41
Median £29 £32 £23 £25 £23 £25
75th percentile £21 £23 £20 £21 £17 £19
1. Measured highest to lowest
2. Total Pay = Salary + Bonus + Benefits
• The increase in the pay ratio from 2019 to 2020 reflects the hiring of the new CEO in September 2019.
• The increase in the pay ratio from 2020 to 2021 reflects the impact of bonus awards in 2020 which were at a higher percentage of
salary of the CEO relative to the wider workforce.
• There was no change to the Company’s general policy on pay and in 2021 no staff were placed on furlough and the Company did
not take advantage of any other COVID-19 related government schemes.
• The median pay reflects the workforce of a smaller number of senior management and a larger junior management and junior
operational staff to support the operational nature of the business. It is worth noting that a vast majority of Medica's clinical staff
are self-employed and therefore not included in the values above.
Relative importance of spend on pay
There were no share buybacks implemented or other significant distributions, payments or other uses of profit or cashflow in the 2021
financial year which the directors consider relevant in assisting an understanding of the relative importance of spend on pay. Total staff
costs – disclosed in the notes to the financial statements – were £11,283 in 2021 (2020: £7,336).
2021 2020 Change YOY
Distributions to shareholders (£’000) 3,167 945 2,222
Total employee pay (£’000) 14,591 7336 7,256
Total employee pay as a % of distribution to shareholders 4.6x 7. 8x
Leaving arrangements for Dr. Stephen Davies (Audited)
On 18January 2021 the company announced that Dr. Stephen Davies decided to retire and to step down from his position as Group
medical director and as an executive director on the Board effective 31May 2021. The Committee approved the following arrangements
• Base salary to be paid until retirement date on 31May 2021
• Under the plan rules and in accordance with the treatment of good leavers, awards will vest at their normal time subject to
performance achieved and pro-rated for time served during the performance period
• Exercise period for vested shares to be within 6 months of leaving and for unvested shares within 6 months of vesting
• In respect of DBP options, under the plan rules and in accordance with the treatment of good leavers, awards will vest at their
normal time.
• Bonus in respect of the period from 1stJanuary to 31May 2021 to be paid in cash with no deferred component.
• A new consulting contract was agreed to take effect from 1June 2021 on an “as required” basis
All payments made to Dr. Stephen Davies were in line with the Company’s shareholder approved remuneration policy in place at the
time and the terms of his service agreement.
Payments for loss of office (Audited)
There were no payments made for loss of office during the year
External appointments
Richard Jones, CFO holds an external appointment as non-executive director and audit chair of Alliance Pharma PLC.
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Review of past performance
This graph shows Medica’s Total Shareholder Return (TSR) compared to the FTSE Small Cap index. The comparison is made between
the date of Listing (21March 2017) and 31December 2021. The FTSE Small Cap index was chosen as the comparator because Medica is
part of this group and it is the most comparable group of peer companies.
Historical TSR performance
Growth in the value of a hypothetical holding since listing on 21 march 2017 to 31 December 2021
200
180
160
140
120
100
80
60
40
20
0
Mar 17 Dec 17
Dec 21
Dec 20
SmallCap
Dec 18
Medica Group
Value of £100 invested on 21 March 2017
Dec 19
Single total figure for remuneration
The table below details the CEO’s single total figure of remuneration and incentive outcomes over the same period. The Total
remuneration includes base salary, annual performance bonus and other benefits. The annual bonus percentage is relating to that year’s
performance and is also shown below.
2017 2018 2019 2020 2021
Dr. Stuart Quin (From 1September 2019)
Total remuneration (£’000) n/a n /a £139 £464 £594
Annual Bonus (% of maximum) n/a n /a 10% 32% 82%
LTIP vesting (% of maximum) n/a n /a n /a n /a n/a
John Graham (Retired 30August 2019)
Total remuneration (£’000) £205 £224 £143 n /a n/a
Annual Bonus (% of maximum) 0% 5% n /a n /a n /a
LTIP vesting (% of maximum) n/a n /a n /a n /a n/a
Implementation of remuneration policy for 2022
This section of the report provides details of how our Policy will be implemented in 2022
Base salary
Executive directors have been awarded an annual increase in basic pay of 3.5% from April 2022 in line with the wider workforce as
shown below:
£’000
1April 2022
base salary
1April 2021
base salary
Change vs
April 2021
Dr. Stuart Quin £355 £343 3.5%
Richard Jones £251 £242 3.5%
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Report of the Remuneration Committee
continued
Pension
Dr. Stuart Quin receives pension contributions of 10% of his salary. Richard Jones receives pension contributions of 6% of his salary.
The pension contributions of the current executive directors will remain unchanged in 2021 and reduce from 1January 2023 to align
with those of the wider UK workforce which is currently 4%.
Annual Bonus
For 2022, the executive directors will have a maximum bonus opportunity of 125% of salary.
No more than 60% of any annual bonus will be payable in cash and the balance will be made in the form of a DBP award over Shares,
which will then vest after a period of not less than two years, broadly subject to continued employment. Cash bonuses will be subject
to clawback provisions as will DBP awards, as set out in the rules of the annual bonus plan and DBP. The level of deferral and period for
deferral may change in relation to future financial years.
The annual bonus for 2022 will be based 75% on achievement of Company financial targets and 25% on achievement of functional
targets. The financial targets are attributed in equal part to revenue, adjusted operating profit and free cash.
The pay-out for on-target performance is up to 50% of maximum; below threshold performance on any of the financial or strategic
functional measures results in nil pay-out.
The functional targets are directly aligned to the Company’s Corporate and ESG strategy and KPIs and include measures of ESG
performance relating to service quality and represent 25% of the maximum annual bonus.
There will be Committee discretion to adjust the formula driven outturn to ensure that the bonus payments also reflect performance
more broadly and the experience of other stakeholders in the business.
The financial target range is deemed to be commercially sensitive and has not been disclosed prospectively. However, full retrospective
disclosure of the targets and performance against them will be provided in next year’s remuneration report. Targets have been
disclosed for the 2017, 2018, 2019, 2020 and 2021 awards.
Performance Share Plan
In 2022, the executive directors will receive nil cost options under the Medica Group PSP, with face values of 125% of salary following
publication of the 2021 preliminary results. The 2022 PSP awards will vest after three years, subject to the following performance
measures and will be subject to a further two year holding period following the end of the normal vesting period:
Measure Weighting Targets Performance measurement period
Absolute TSR
CAGR over three years to
31December 2024
50% 0% vesting below 17% cumulative growth per annum
25% vesting for 17% CAGR growth
50% vesting for 19% CAGR
75% vesting for 22% CAGR
100% vesting for 26% CAGR
Straight-line vesting between these points
Three-month average at the
end of the three-year
performance period
Cumulative Growth in
Adjusted Earnings per
Share over the three-year
period to 31December
2024
50% 0% vesting below 35pence per share
25% vesting at 35pence per share
50% vesting at 36pence per share
100% vesting at 40pence per share Straight-line vesting
between these points
Cumulative
three years
Vesting of awards is subject to overall Committee
discretion to reduce or eliminate the awards if
deemed necessary
The performance target ranges have been set at stretching levels taking into account both internal and external forecasts. The
maximum vesting level represents very stretching performance.
In line with our Policy, PSP awards will also be subject to Medica’s malus and clawback provisions.
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Annual Report for the year ended 31 December 2021
69
Implementation of Non-Executive remuneration policy for 2022
The current fees payable to the non-executive directors are set out below and no changes to non-Executive remuneration for 2022 have
been proposed:
Role Fee Number Appointed
Chairman £100,000 1
Senior independent non-executive director £60,000 1
Independent non-executive director £50,000 2
Director’s Interests (Audited)
Director’s Interests in shares as at 31/12/21
The table below sets out details of the current shareholdings of each director (and any relevant connected persons) as at 31December
2021 and, for executive directors, compares this to their shareholding guideline as set out below. The executive directors are subject to
shareholding guidelines of 125% of salary.
Shares Options
Beneficial
ownership
2021 – Owned
outright or
vested
Beneficial
ownership
2020 – Owned
outright or
vested
Unvested
deferred
bonus awards
not subject to
performance
Vested PSP
awards but
not exercised
Unvested
PSP awards
subject to
performance
Beneficial
ownership
2021 – Owned
outright or
vested
Shareholding
as at
31 Dec 2021
(% salary)
Shareholding
guideline
(% salary)
Dr. Stuart Quin 117,580 67,042 19,599 nil 1,149,067 137,179 65% 125%
Richard Jones 25,126 18,260 5,010 nil 443,077 30,136 20% 125%
Gordon Roy Davis 132,726 112,037 nil – – 132,726 – –
Jo Easton 37,812 19,047 nil – – 37,812 – –
Barbara Moorhouse nil nil nil nil
Dr. Junaid Bajwa 17241 nil nil 17,241
1. Current holding measured by reference to the shareholding at 31December 2021, multiplied by the share price of 162.4p on that date expressed as a percentage of
base salary on that date.
2. Shareholding guidelines are for the five year period following commencement of employment.
Governance
Summary of shareholder voting at the 2021 AGM
Votes for % Votes against % Total votes Withheld
Remuneration Report 64,930,339 67% 31,973,143 33% 96,903,482 1,001
Remuneration Policy 93,185,664 96% 3,716,319 4% 96,901,983
The results of the AGM were published on the Company’s website after the meeting.
The Remuneration Committee
The Committee is responsible for assisting the Board in determining its responsibilities in relation to remuneration, including making
recommendations to the Board on Medica’s policy on executive remuneration (including setting the over-arching principles, parameters
and governance framework of Medica’s remuneration policy) and determining the individual remuneration and benefits packages of
each of the executive directors, the company secretary and the senior management team. In carrying out its duties the Committee
ensures compliance with the UK Corporate Governance Code in relation to remuneration wherever possible.
Details of the Remuneration Committee’s terms of reference can be found on our website at https://medicagroupplc.com/investors/
corporate-governance/.
STRATEGIC REPORT
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FINANCIALS
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70
Remuneration Committee membership
Jo Easton Committee Chair (since May 2020*)
Roy Davis Non-Executive Chairman (independent)
Dr. Junaid Bajwa Non-Executive Director (Since 1April 2021)
Barbara Moorhouse
Non-Executive Director (Since 1August 2021)
Meetings in 2021
The Committee met 4 times during the year. The attendance at the meetings by Committee members was as follows:
Total meetings 4
Junaid Bajwa
1
2
Barbara Moorhouse
1
2
Roy Davis 4
Steve Whittern
2
2
Jo Easton 4
1. Appointed during the year
2. Resigned during the year
The CEO and CFO also attended a number of the Committee meetings during the year by invitation. The Committee’s independent
advisor also attended meetings during the year by invitation.
Advisers
Willis Towers Watson supported Medica on remuneration matters throughout 2021 as its independent adviser. This included advice
on the proposed changes to the Remuneration Policy, measures and target setting for incentive plans, executive remuneration levels,
developments in corporate governance and the preparation of the Director’s Remuneration Report.
Willis Towers Watson are members of the Remuneration Consultants’ Group and, as such, voluntarily operate under the Code
of Conduct in relation to executive remuneration consulting in the UK (www.remunerationconsultantsgroup.com). Willis Towers
Watson do not have any other connection with Medica and are considered to be independent by the Committee. Total fees paid to
Willis Towers Watson totalled £52k, (excluding expenses and VAT) for the year to 31December 2021 in their capacity as advisers to
theCommittee.
Jo Easton
Chair of the Remuneration Committee
11 April 2022
Report of the Remuneration Committee
continued
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Annual Report for the year ended 31 December 2021
71
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
www.medicagroupplc.com l stock code: MGP
72
The directors are pleased
to present their report
to shareholders and
the audited financial
statements for Medica
Group PLC and its
subsidiaries for the year
ended 31 December 2021.
The company registration
number of Medica Group
PLC is 08497963. The
company is listed on
the main market of the
London Stock Exchange
under the ticker
symbol MGP.
The Group’s principal
activity is the provision of
teleradiology reporting
and is the leading
independent provider in
both the UK and Ireland.
In Ireland, Medica also
offers managed services
and diabetic retinopathy
screening. Through its
US subsidiary, Medica
provides high quality,
complex imaging services
for international clinical
The Group’s business
activities, together with
the factors likely to affect
its future development,
performance and
position are set out in
the chairman’s and chief
executive’s reports on
pages 4 to 5, and 6 to 11.
Directors’ responsibilities
statement
The directors are responsible for
preparing the Annual Report and the
financial statements in accordance with
applicable law and regulations.
Company law requires the directors to
prepare Group and Parent Company
financial statements for each
financial year.
The directors have prepared the
consolidated financial statements of
the Group in accordance with UK-
adopted international accounting
standards and are additionally required
under the Listing Rules of the Financial
Conduct Authority to prepare the Group
financial statements in accordance
with UK-adopted international financial
reportingstandards.
The directors prepared the Parent
Company financial statements in
accordance with United Kingdom
Generally Accepted Accounting Practice
(United Kingdom Accounting Standards
and applicable law), including Financial
Reporting Standard 101 ‘Reduced
Disclosure Framework’ (FRS 101).
Under company law the directors must not
approve the financial statements unless
they are satisfied that they give a true
and fair view of the state of affairs of the
Group and the Company and of the profit
or loss of the Group for that period.
In preparing each of the Group and
Company financial statements, the
directors are required to:
• select suitable accounting policies and
then apply them consistently.
• make judgements and accounting
estimates that are reasonable
and prudent.
• for the Group financial statements,
state whether they have been
prepared in accordance with
international accounting standards
in conformity with the requirements
of the Companies Act 2006 and
UK-adopted international accounting
standards, subject to any material
departures disclosed and explained in
the financial statements.
• for the Parent Company financial
statements, state whether applicable
UK accounting standards have been
followed, subject to any material
departures disclosed and explained in
the company financial statements.
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
Group and the Company will continue
in business.
• prepare a Strategic Report, Director’s
Report, Director’s Remuneration
Report and Corporate Governance
Statement under applicable law and
regulation.
The directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Group’s
and the Company’s transactions and
disclose with reasonable accuracy at any
time the financial position of the Group
and the Company and enable them to
ensure that the financial statements and
the remuneration report comply with
the Companies Act 2006 and, as regards
the Group financial statements, Article
4 of the IAS Regulation. They are also
responsible for safeguarding the assets
of the Group and the Company and
hence for taking reasonable steps for the
prevention and detection of fraud and
other irregularities.
The directors holding office at 11 April
2022 confirm that:
• so far as each director is aware,
there is no relevant audit information
of which the Company’s auditor is
unaware; and
• the directors have taken all the
steps that they ought to have
taken as directors in order to make
themselves aware of any relevant
audit information and to establish that
the Company’s auditor is aware of that
information.
The directors are responsible for
preparing the Annual Report in
accordance with applicable law and
regulations. Having taken advice from the
Audit Committee, the directors consider
the Annual Report and the financial
statements, taken as a whole, provides
the information necessary to assess
the Company’s performance, business
model and strategy and is fair, balanced,
andunderstandable.
The directors are responsible for the
maintenance and integrity of the
corporate and financial information
included on the Company’s website.
Legislation in the United Kingdom
governing the preparation and
dissemination of financial statements
may differ from legislation in
otherjurisdictions.
Directors’ report
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Annual Report for the year ended 31 December 2021
73
To the best of their knowledge the
director’s confirm:
• the Group financial statements,
prepared in accordance with UK-
adopted international accounting
standards give a true and fair view of
the assets, liabilities, financial position
and profit or loss of the Company
and the undertakings included in the
consolidation taken as a whole;
• the Parent Company financial
statements, prepared in accordance
with applicable accounting standards
including Financial Reporting
Standard 101, ‘Reduced Disclosure
Framework’ (FRS 101) and the
Companies Act 2006, give a true
and fair view of the assets, liabilities,
financial position and profit or loss of
the Company; and
• the Annual Report, including the
Strategic Report, the Director’s
Report, the Director’s Remuneration
Report and the Corporate Governance
Statement includes a fair review of
the development and performance
of the business and the position of
the Company, and the undertakings
included in the consolidation taken as
a whole, together with a description
of the principal risks and uncertainties
that they face.
Engagement with suppliers
and customers
The directors have considered the need to
continue to foster business relationships
with suppliers and customers throughout
the year. There have been no significant
decisions that have changed the
relationships with suppliers or customers,
and the strategic plan has had input from
our reporters as we engage with them to
improve workflow, and from clients as we
engage with them to continue to focus on
turnaround times and quality. Medica’s
operational teams are in contact with clients
and reporters every day. In addition, we
have a dedicated account management
team that discuss performance with clients
and hold regular review meetings. Our
service delivery team include a dedicated
reporter team that adopt a similar approach
with our reporters. Our other key suppliers
are technology, and this is managed through
regular dialogue with our technical team.
Information relevant to our strategy on
engagement with suppliers and customers
are detailed in the CEO report in the
strategic report on pages 6 to 11.
Principal and emerging risks and
uncertainties
The principal and emerging corporate risks
and uncertainties are set out on pages 34
to 37 of the strategic report. The principal
financial risks faced by the Group are
liquidity, credit, and interest rate risks
details of which are set out in note 28 to
the financial statements on page 119.
Results and dividends
The results for 2021 are set out in the
financial statements on pages 91 to 124.
An interim dividend of 0.89 pence (2020:
0.85 pence) per Ordinary share was paid to
shareholders on 7 October 2020. The Board
are recommending a final dividend for 2021
of 1.9 pence (2020: 1.7 pence) per Ordinary
share taking the total dividends for the year
to 2.68pence (2020: 2.55 pence).
Review of the period
A comprehensive analysis of the Group’s
progress and development is set out in the
strategic report on pages 2 to 37 including
detailed commentary on the position of the
group as at 31 December 2021. This analysis
includes comments on the position of the
Group at the end of the financial period.
Significant events after the
balance sheet date
As set out in Note 32 on page 123 there
were no significant events after the
balance sheet date.
Capital structure
As set out in Note 25 on page 117, the
Company’s share capital is divided into
122,428,836 ordinary shares of £0.002
each with voting rights.
Subsidiaries and branches
Details of the group structure including
its subsidiaries are set out in Note 36
on page128. Medica Group PLC is the
ultimate holding company.
Significant shareholdings
As at 31 December 2021 and 30 March 2022, this being the latest practical date prior to publication of the Annual Report, the directors
were aware of the following interests in 3% or more of the voting rights of the issued Ordinary Share capital. These shareholdings are
as notified to the Company through a TR-1.
As at 31 December 2021 As at 31 March 2022
Number of
Ordinary Shares
in issue held
Percentage
of Ordinary
Shares in issue
Number of
Ordinary Shares
in issue held
Percentage
of Ordinary
Shares in issue
Aberforth Partners 18,456,981 15.1 14,636,452 12.0
Gresham House 14,506,275 11.9 15,246,224 12.5
Liontrust Asset Mgt 13,411,121 11.0 13,441,121 11.0
Artemis Investment Mgt 6,394,858 5.2 9,368,423 7.7
Premier Milton Investors 6,138,376 5.0 6,272,876 5.1
BGF Investments 5,074,894 4.1 5,074,894 4.2
GVQ Investment Mgt 4,697,013 3.8 5,502,013 4.5
Revera Asset Mgt 3,960,000 3.2 2,760,000 2.3
Aberdeen Standard Life 3,756,006 3.1 3,943,013 3.2
Royal London Asset management 3,630,209 3.0 4,619,789 3.8
Tellworth Investments – – 4,556,219 3.7
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
www.medicagroupplc.com l stock code: MGP
74
Directors’ report
continued
Related party transactions
On 23 March 2021 a total of 10,727,666
Placing Shares were placed by Investec
Bank plc and Liberum Capital Limited at
a price of 145 pence per Placing Share
amounting to £15,555k of gross proceeds.
In conjunction with the Placing, all the
directors of the Company, Dr. Junaid
Bajwa (a non-executive director from
1 April 2021) and certain members of
the senior management team agreed
to subscribe for 383,444 new Ordinary
Shares at the Placing Price which amounts
to gross subscription proceeds for the
Company of £556k in aggregate.
CO
2
Emissions
The Group’s CO
2
emissions are disclosed
on pages 19 to 21 of the ESG report.
Directors’ insurance
The Group maintains appropriate
insurance cover in respect of any legal
action against its directors including
in respect of the prospectus issued for
the initial public offering. In addition, as
contemplated in the Company’s Articles
of Association by resolution of the Board
on 16 December 2020, the Company
agreed to enter into deeds of indemnity
with the Directors in relation to certain
specific liabilities incurred by them in the
performance of their duties as directors
of the Company. The Deeds were entered
into in January 2021.
Corporate governance
The Directors’ Statement on corporate
governance is set out on page 40 and
forms part of this report.
Viability statement
The directors have assessed the viability
of the group considering the strategic
plan and preparing the financial forecasts
over a five-year period to December 2026,
so that 57 months remain at the time of
approval of this year’s annual report.
Given the recent recovery, and relaxation
of all pandemic related restrictions in
the UK, it is expected that there will be
minimal impact because of a future wave
of COVID-19. Hospitals, transport, and
other infrastructure have learned from
the previous waves and impact and the
vaccination programmes across the UK
and Europe give reason for us to believe
that a full lockdown as seen in 2020 is
highly unlikely to be repeated.
The forecasts prepared over the five-year
period reflect the continuing delivery
of the group’s strategy including the
consideration of:
• Ongoing COVID-19 recovery, which
is largely now considered back to
pre-pandemic levels, with the key UK
Elective business driver returning to
radiologist capacity management and
recruitment.
• Underlying growth in demand for both
elective and out of hours radiology
reporting services as diagnostic
procedures continue to be more
prevalent, as modality and complexity
continues to increase, and health
services continue to implement
initiatives to tackle the material
backlog in diagnostic procedures. This
is considered in the ongoing growth
expectations in the base volumes for
NightHawk and Elective services,
as well as the forecasted impact of
contract renewals, pricing impacts
and potential contract losses.
• The availability of GMC registered
radiologists to the health services in
the UK and Ireland which is forecast
to continue to decline thus increasing
the need for further outsourcing to
specialist tele-reporting providers.
• The continued growth in clinical trials
and the image reporting requirements
associated with such trials,
particularly in Oncology where image
analysis forms an integral part of the
study endpoint analysis.
• Inflationary impact on operating
costs (as well as foreign exchange
conversion on reporting of RadMD &
Ireland subsidiaries).
• Future potential ROCE from the
FutureTech programme in the form of
revenue and cost synergies and the
impact of depreciation on operating
profit from the capital investment.
Over and above the baseline forecasts
there are additional opportunities for
enhanced growth:
• the NHS initiatives on addressing
the patient elective care backlog
because of COVID-19 is something
which the group are planning to
take advantage of, particularly in
terms of the Community Diagnostic
Centres initiative which is expected
to generate increased throughput and
therefore demand on our services.
The group will address this through
capacity management which is the
primary driver of UK elective volumes
outside of pandemic impacts.
• Telepathology also remains a strategic
objective for the group, expecting
to deliver healthy revenues and
operating profit over the five-year
period as a new workstream.
The impact from additional potential
volume from Community Diagnostic
Centres and Pathology as a new
workstream are not included in this
baseline forecast and are therefore likely
to be a credible upside over the five-
year period.
Based on the assessment of prospects
and viability above, the directors confirm
that they have a reasonable expectation
that the group will be able to continue in
operation and meet its liabilities as they
fall due over the five-year period ending 31
December 2026.
Going concern assessment
The directors have prepared cashflow
forecasts for a period of 21 months from
the date of approval of these financial
statements (the forecast period). These
indicate that the Group will have sufficient
funds to meet its liabilities as they fall
due, and will continue to comply with
its loan covenants, throughout the
forecast period.
The financials across the forecast period
have been prepared from a bottom-
up baseline approach and considered
realistic downside scenarios including:
• Impacts to volumes and therefore to
revenues and profits from a further
“wave” of COVID-19 particularly in the
UK and Ireland
• Loss of certain material contracts
• Further material Inflationary pressure
on operating costs more than current
expectations
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Annual Report for the year ended 31 December 2021
75
Under these downside scenarios,
individually and cumulatively and,
excluding any potential mitigating
actions that could be taken, management
conclude that the Group will have
sufficient funds to continue to meet its
liabilities as they fall due for at least 21
months from the date of approval of the
financial statements and the Board have
therefore determined it is appropriate
to adopt the going concern basis in
preparing the financial statements.
Future outlook
The outlook for the Group for 2022 and
beyond is set out in the CEO review on
pages 6 to 11.
Annual General Meeting
Medica’s Annual General Meeting is
scheduled to take place on 27 June 2022.
Directors
The directors who served during the year
were as follows:
Roy Davis
Steve Whittern
(Resigned 16 June 2021)
Jo Easton
Dr. Stuart Quin
Dr. Stephen Davies
(Resigned 31 May 2021)
Richard Jones
Dr. Junaid Bajwa
(Appointed 1 April 2021)
Barbara Moorhouse
(Appointed 1 July 2021)
Six of the above directors are male, two
are female.
Strategic Report
The Group has chosen in accordance with
Companies Act 2006, s. 414C(11) to set
out in the Group’s Strategic Report and/
or in the financial statements information
required by Large and Medium-sized
Companies and Groups (Accounts and
Reports) Regulations 2008, Sch. 7 to be
contained in the Directors’ Report. It has
done so in respect of:
• an indication of financial risk
management objectives and policies
required by paragraph 6(1)(a);
• an indication of exposure to price risk,
credit risk, liquidity risk and cash flow
risk required by paragraph 6(1)(b);
• details of any events affecting
the Company and Group since
the reporting date as required by
paragraph 7(1)(a);
• an indication of likely future
developments in the business of the
Group required by paragraph 7(1)(b);
• an indication of activities of the
Group in the field of research
and development required by
paragraph 7(1)(c);
• an indication of the existence
of branches outside of the
United Kingdom required by
paragraph 7(1)(d);
• a statement describing the Group’s
policy regarding the hiring, continuing
employment and training, career
development and promotion of
disabled persons required by
paragraph 10(3);
• the statements relating to
employee engagement required by
paragraph 11(1);
• a statement summarising how the
directors have had regard for the
need to foster the Group’s business
relationships with suppliers,
customers and others, and the
effect of that regard, including on
the principal decisions taken by the
company during the financial year
required by paragraph 11B(1);
• the various disclosures relating to the
structure, restrictions over, holdings
of, and agreements relating to the
Company’s share capital required by
paragraphs 13(2) and 14;
• the disclosures relating to carbon
dioxide emissions required by
paragraphs 15, to 18.
Employee Benefit Trust
The Company operates an Employee
Benefit Trust (EBT) to facilitate its share-
based payment schemes detailed in note
29 of the financial statements. When
an employee chooses to exercise their
options, the EBT purchases shares of the
Company to issue to the employee. During
the year, the EBT purchased no Ordinary
shares of 0.2p each (2020: 168,536
Ordinary shares of 0.2p each), of which
41,936 (2020: 113,568) were still held at
the reporting date.
Auditors
The auditors Grant Thornton UK LLP
will be proposed for reappointment
in accordance with section 485 of the
Companies Act 2006.
This report was approved by the Board on
11 April 2022 and signed on its behalf by
Richard Jones
Chief Financial Officer
11 April 2022
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
www.medicagroupplc.com l stock code: MGP
76
The directors of Medica Group PLC (the
“Company”) are aware of their duty under
section 172 of the Companies Act 2006
to act in the way they consider, in good
faith, would be most likely to promote the
success of the Company and in doing so
have regard (amongst other matters) to:
• the likely consequences of any
decision in the long term;
• the interests of the Company’s
employees;
• the need to foster the Company’s
business relationships with suppliers,
customers and others;
• the impact of the Company’s
operations on the community and the
environment;
• the desirability of the Company
to maintain a reputation for high
standards of business conduct; and
• the need to act fairly between
shareholders of the Company.
The Company is listed on the London
Stock Exchange (under the Ticker
symbol MGP) and is the parent of various
subsidiary undertakings (together,
“Medica”).
We work tirelessly to make a positive
impact. Whilst we are a business run
for the benefit of our shareholders, we
are committed to acting ethically, with
integrity, and with consideration to the
communities and environment where we
operate as set out more fully in our ESG
report on pages 14 to 22. The directors
fully believe the Company’s success
depends on this.
Long term decisions and actions
The directors are committed to
developing and maintaining a governance
framework that is appropriate to the
business and supports effective decision
making coupled with robust oversight of
risks and internal controls.
The directors monitor the performance
of the Company and its subsidiaries to
ensure they are meeting the requirements
of the wider business. This requires a
long-term view so that the directors can
structure the business in a manner that
enables it to most efficiently respond to
changes in the market-place and return
value to Medica’s shareholders.
The directors consider the possible
long-term consequences of any material
proposed course of action, including
safety and financial impacts and
reputation with all stakeholders.
For more details of how the business
develops and evaluates its strategy, please
see pages 6-12.
The interests of our employees
For details of how the directors have
considered the impact of their decisions
on our employees, please refer to the
'people and community' section of the
ESG report on pages 16 to 18.
We understand that a work life balance is
important to our employees, and that they
each have personal and family demands
on their time. That is why we have flexible
working arrangements and working from
home options for the vast majority of our
staff. More information on this can be
found in the ESG report on pages 14 to 22.
The Board continued the process of
engagement with our employees through
the work of Jo Easton, Non-Executive
Director responsible for workforce
engagement. During 2021, we conducted
employee engagement workshops and
considered feedback and actions resulting
from the consultation. Following these
workshops, we have developed and
implemented a revised homeworking
policy post-lockdown and have increased
the frequency of all-company town
hall meetings.
Relationships with suppliers
and customers
At Medica, we truly believe that the
services we provide to our clients will
benefit their patients. In the case of
our emergency reporting service called
NightHawk our response times can
make the difference between a hospital
being able to provide appropriate
lifesaving treatment or not. The managing
director of our recently acquired Irish
subsidiary, Global Diagnostics Ireland,
Caroline Byrne, highlights the significant
difference we can make to our clients
in her interview on page 28, “average
time between examination and report
for all A&E cases fell from 20 days to 45
minutes with urgent cases reported within
15 minutes. The hospital also noted the
cost of running the radiology department
fell by 29% whilst the hours of consultant
radiologist support more than doubled (45
to 96 hours per week).”
Medica have been accepted onto the
bidding framework in the UK for the
Community Diagnostic Centre initiative
to create additional diagnostic capacity
to tackle the backlog of patients requiring
diagnosis following delays due to the
COVID-19 pandemic and we continue to
work with cuistomers to increase their
capacity to diagnose patients needing
Elective Treatment by providing vital
Elective reporting services.
Impact on the community and
the environment
Medica is mindful of its impact on the
environment and seeks to minimise this
whenever possible. More information
on this is available in the 'climate
change' section of the ESG report on
pages 19 to 21.
We are proud of our work and how it can
ultimately help to save lives. We are keen
to add something back to the community
and have partnered up with a charity,
RefuAid, to support refugee doctors.
More detail on these areas can be found in
category 5 ‘Social impact & responsibility’
of the ESG report on page 18.
Business Conduct
Our Group’s core business model relies on
us to continually “do well by doing good”.
Medica’s aim is to offer the highest quality
service to our doctors, customers and in
turn, their patients. By doing this we will
positively impact people and the Group
will continue to grow.
The directors are committed to
maximising long-term shareholder value
while supporting management in the
operations of the business, observing
ethical standards and adhering to all
applicable laws.
The conduct of the Board of directors
is monitored in accordance with the
UK Corporate Governance Code. This
is discussed in detail in the Corporate
Governance Report on pages 40 to 42.
We provide various channels (local and
global) for employees to obtain answers to
questions or to report potential or actual
violations of law, regulation, or policy
freely and without fear of retaliation.
Acting fairly between members
All shareholders of Medica are
welcome to hear details of our investor
presentations and other market updates
via recordings on our website and can
also anonymously contact members of
the Board directly, which gives all our
shareholders equal ability to have their
voices heard.
Our AGM is a key opportunity for our
shareholders to have their voices heard
and we encourage shareholders to
participate in proceedings formally or
share their views with Board members
informally after the meeting. The details
of our AGM are outlined on Page 40.
Section 172 statement
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Opinion
Our opinion on the financial statements is unmodified
We have audited the financial statements of Medica Group Plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year
ended 31 December 2021, which comprise the Consolidated income statement and consolidated statement of comprehensive
income, the Consolidated statement of financial position, the Consolidated statement of cash flows, the Consolidated statement
of changes in equity, the Company statement of financial position, the Company statement of changes in equity and notes to the
financial statements, including a summary of significant accounting policies. The financial reporting framework that has been
applied in the preparation of the group financial statements is applicable law and UK-adopted international accounting standards.
The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable
law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (United
Kingdom Generally Accepted Accounting Practice).
In our opinion:
• the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at
31December 2021 and of the group’s profit for the year then ended;
• the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
• the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted
Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit of the financial statements’
section of our report. We are independent of the group and the parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We are responsible for concluding on the appropriateness of the directors’ use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the group’s and the parent company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future
events or conditions may cause the group or the parent company to cease to continue as a going concern.
Our evaluation of the directors’ assessment of the group’s and the parent company’s ability to continue to adopt the going concern
basis of accounting included:
• agreeing cash balances as at 31 December 2021 to supporting evidence and agreeing of cash position subsequent to the year-end
to supporting evidence, and comparing to forecasts;
• assessing the accuracy of forecasting by comparing management’s forecast for the current period and two previous periods to
current year performance;
• assessing compliance with loan covenants at year end with supporting evidence and during the forecast period;
• checking the inputs into management’s forecasts and projections with reference to the board approved forecasts, and related
sensitivity analysis for the 21 month period from date of approval of financial statements;
• challenging the reasonableness of key assumptions used in preparing the cashflow forecasts and projections;
• considered the appropriateness of management’s scenario analysis, and applied our own additional sensitivities to consider the
impact on the model;
• consideration of post balance sheet events and checking if any of these events have an impact on cashflow forecasts and
projections; and
• considered the appropriateness and completeness of disclosures in the financial statements
In our evaluation of the directors’ conclusions, we considered the inherent risks associated with the group’s and the parent company’s
business model including effects arising from Covid-19, we assessed and challenged the reasonableness of estimates made by the
directors and the related disclosures and analysed how those risks might affect the group’s and the parent company’s financial
resources or ability to continue operations over the going concern period.
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Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the group’s and the parent company’s ability to continue as a going concern
for a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
In relation to the group’s and the parent company’s reporting on how they have applied the UK Corporate Governance Code, we
have nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the
directors considered it appropriate to adopt the going concern basis of accounting.
The responsibilities of the directors with respect to going concern are described in the ‘Responsibilities of directors for the financial
statements’ section of this report.
Our approach to the audit
Overview of our audit approach
Overall materiality:
Group: £0.38 million which represents circa 5% of the group’s PBT.
Parent company: £0.30 million, which represents circa 0.5% of the parent company’s total assets.
Key audit matters were identified as:
• Improper revenue recognition (same as previous year)
• Business combination accounting (same as previous year)
These are both consistent with the prior year.
Our auditor’s report for the year ended 31 December 2020 included Going Concern as
a key audit matter that has not been reported as a key audit matter in our current year’s
audit report. The exclusion of going concern from our current year’s report reflects our
risk assessment, wherein the group’s performance over previous year and during Covid-19,
combined with decreased uncertainty surrounding the impact of Covid-19 has informed a
lower risk assessment relating to these matters.
We performed an audit of the financial information of the parent company and Medica Reporting
Limited using component materiality (full-scope). We performed specific audit procedures of
the financial information of Rad MD LLC, Medica IT Services Limited and Medica US Inc using
group materiality. Component auditors performed specific audit procedures using component
materiality for Global Diagnostics (Ireland) Limited (Medica Ireland), and Global Retinopathy
Screening Limited. We performed analytical procedures on the financial information on the
remaining four components in the Group during the year.
Key audit
matters
Scoping
Materiality
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements of the current period and include the
most significant assessed risks of material misstatement (whether or not due to fraud) that
we identified. These matters included those that had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Independent Auditor’s Report continued
TO THE MEMBERS OF MEDICA GROUP PLC
Audit
response
Description
Disclosures
Our results
KAM
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In the graph below, we have presented the key audit matters, significant risks and other risk relevant to the audit.
High
Improper revenue
recognition
Potential
Going Concern
Business combination– acquired
intangibles andcontingent
consideration
statement
impact
Management override
controls
Payables and
accruals
Trade
receivables
Sharebased
Low
payments
Low
Revenuerecognition –
occurrence of revenue
recognised in theyear
HighExtent of management judgement
financial
Key audit matter Significant risk Other risk
Key Audit Matter – Group How our scope addressed the matter – Group
Improper Revenue Recognition
We identified manual adjustments to revenue as one of the most
significant assessed risks of material misstatement due to fraud.
We focused our work on the manual adjustments made to
invoicing following clinical internal audit review, manual
adjustments to pricing and manual journals posted directly to
revenue, as these provide the greatest potential for material
misstatement through override of controls. Our assessment is
that the remainder of the Group’s revenue transactions are non-
complex, with no judgement applied over the amount recorded.
In responding to the key audit matter, we performed the following
audit procedures:
• Assessed the design and implementation of relevant controls,
using walkthroughs to obtain an understanding of the key
business processes and internal controls, including around the
maintenance and extraction of exam data and the associated
billing processes across the group;
• Considered the appropriateness of the group’s revenue
recognition policy in accordance with International Financial
reporting Standard 15: ‘Revenue from Contracts with
Customers’;
• Manual adjustments to revenue in all components subject
to either a full scope audit or specified audit procedures
approach were considered for appropriate business rationale,
and traced to supporting documentation
• Performed data analytics to identify unusual account
combinations, with further substantive testing performed
on any unusual transactions, tracing to supporting
documentation;
• With the support of our internal IT audit team, we interrogated
Medica Reporting Limited's IT system, identifying manual
adjustments and obtaining supporting evidence for any
changes made;
• Considered changes made to pricing arrangements made
during the period in Medica Reporting Limited, and agreed
correct application of pricing agreements to revenue
recognised
• Identified credit notes within revenue for significant reversals
during the year and subsequent to the reporting date and
obtained supporting evidence for any significant reversals.
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Independent Auditor’s Report continued
TO THE MEMBERS OF MEDICA GROUP PLC
Key Audit Matter – Group How our scope addressed the matter – Group
Relevant disclosures in the Annual Report and
Accounts 2021
• The Group’s accounting policy on revenue recognition is
shown in note 3.2 to the financial statements on pages 93
to 95 and related disclosures are included in note 5 to the
financial statements on page 102.
Our results
Our audit testing did not identify any material deficiencies or
misstatements in relation to manual adjustments to revenue.
Business Combination (Acquired Intangibles and
Contingent Consideration
We identified business combinations as one of the most
significant assessed risks of material misstatement due to error.
During the period on 27 March 2021, the Group acquired 100%
of RadMD LLC. This business combination has had a material
impact on the financial statements, resulting in the recognition
of goodwill and intangible assets upon consolidation of these
entities.
Goodwill of £6.82m and other identifiable intangible assets of
£7.31m were recognised on the date of the acquisition to reflect
the provisional fair value of the acquired assets and liabilities. The
other identifiable intangible assets were valued using discounted
cash flow forecasts, which require judgement by the Directors
around key assumptions such as revenue growth, discount rates,
and long-term growth rates.
On initial recognition, the assets and liabilities acquired in a
business combination are included in the consolidated statement
of financial position at their fair values, which are also used as the
basis for subsequent measurement in accordance with the Group’s
accounting policies.
Determining the fair value of certain assets and liabilities requires
judgement to be exercised by the Directors. The financial impact
of the acquisition was significant and there was judgement and
estimation uncertainty required to measure the fair value of
intangible assets acquired.
In responding to the key audit matter, we performed the following
audit procedures:
• Documented an understanding of management’s process
for evaluating the valuation of goodwill and intangibles and
assessed the design effectiveness of relevant controls around
the acquisition process;
• Assessed whether the accounting policies adopted by the
directors were in accordance with the requirements of IFRS 3
‘Business Combinations’;
• Considered the appropriateness of management’s acquisition
accounting calculations, verifying key inputs to the acquisition
agreement and completion accounts;
• Considered the appropriateness and completeness of
management’s adjustments to the acquisition balance sheet;
• Used an auditor’s expert to consider the work of
management’s valuation expert and to evaluate and
challenge the assumptions used in the valuation of intangible
assets acquired
• Obtained an understanding of the basis for contingent
consideration and assessed management’s material
assumptions and calculations used in estimating its fair value,
including the profitability of RadMD LLC in accordance with
its pre-acquisition accounting policies; and
• Assessed whether the treatment of contingent consideration
as consideration rather than remuneration was appropriate
given that the previous owners continued to be employed by
RadMD LLC.
Relevant disclosures in the Annual Report and
Accounts 2021
• The Group’s accounting policy on business combinations is
shown in note 3.5 within to the financial statements on page
95 related disclosures are included in note 19 to the financial
statements on pages 112 to 113.
Key observations
Based on our audit work, we found that the assumptions and
judgements used in management’s measurement of acquired
intangibles and contingent consideration were reasonable and
that the associated amounts recognised were materially accurate.
We found no material errors in the underlying calculations.
Management’s treatment of contingent consideration as
consideration rather than remuneration is an area of judgement
and has been disclosed as such in note 19. As part of our audit
work, we noted that should the previous owners leave they are
entitled to receive contingent consideration in full; this along with
the nature of the other contractual terms, supports management’s
treatment of contingent consideration as consideration rather
than remuneration.
No key audit matters were identified in respect of the parent company.
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Our application of materiality
We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified misstatements
on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion in the auditor’s report.
Materiality was determined as follows:
Materiality measure Group Parent company
Materiality for financial
statements as a whole
We define materiality as the magnitude of misstatement in the financial statements that, individually or
in the aggregate, could reasonably be expected to influence the economic decisions of the users of these
financial statements. We use materiality in determining the nature, timing and extent of our audit work.
Materiality threshold £0.38 million which is circa 5% of the group’s PBT. £0.30 million which represents circa 0.5% of the
parent company’s total assets.
Significant judgements
made by auditor in
determining materiality
As a trading company a performance-related
benchmark – and in this case profit before tax – is
considered the most appropriate benchmark given
this is a key measure used by the Directors to report to
investors on the financial performance of the Group. In
the prior year a three-year average of profit before tax
was used due to the impact of Covid-19. As the impact
of Covid-19 has lessened, using the current year’s profit
before tax was considered more appropriate.
The chosen percentage applied to the benchmark
is consistent with the previous year and in line with
industry practice. We did not believe a reduction
to the percentage was necessary based on
consideration of other risk factors.
Materiality for the current year is higher than the
level that we determined for the year ended 2020
to reflect increased performance after the initial
impact of Covid 19.
We determined our materiality based on
total assets, which is more applicable than a
performance-related measure as the company is a
holding Company for the Group.
The chosen percentage applied to the benchmark
is consistent with the previous year and in line with
industry practice. We did not believe a reduction
to the percentage was necessary based on
consideration of other risk factors.
Materiality for the current year is higher than the
level that we determined for the year ended 31
December 2020 given an increase in the parent’s
total assets following a group reorganization
in the year.
Performance materiality
used to drive the extent
of our testing
We set performance materiality at an amount less than materiality for the financial statements as a whole
to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality for the financial statements as a whole.
Performance
materiality threshold
£0.28 million which is 75% of financial statement
materiality
£0.23 million which is 75% of financial statement
materiality
Significant judgements
made by auditor in
determining performance
materiality
The determination of performance materiality
involves the exercise of professional judgement. In
determining performance materiality, we made the
following significant judgments:
• Our risk assessment – based on the results of
our risk assessment procedures;
• Our experience with auditing the financial
statement of the group in previous years
– based on the identification of few
misstatements and management's attitude to
correcting misstatements identified; and
• The number of components within the group
and the extent of audit procedures planned and
performed at these components.
In determining performance materiality, along
with those significant judgements made at group
level, we considered the requirement that the
parent company performance materiality should
be incrementally below the group’s performance
materiality.
Specific materiality We determine specific materiality for one or more particular classes of transactions, account balances or disclosures
for which misstatements of lesser amounts than materiality for the financial statements as a whole could reasonably
be expected to influence the economic decisions of users taken on the basis of the financial statements.
Specific materiality We determined a lower level of specific materiality
for the following areas:
• Related party transactions, including Directors
remuneration and related disclosures
We determined a lower level of specific materiality
for the following areas:
• Related party transactions, including Directors
remuneration and related disclosures
Communication of
misstatements to the
audit committee
We determine a threshold for reporting unadjusted differences to the audit committee.
Threshold for
communication
£18,900 and misstatements below that threshold that,
in our view, warrant reporting on qualitative grounds.
£15,120 and misstatements below that threshold that, in
our view, warrant reporting on qualitative grounds.
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Independent Auditor’s Report continued
TO THE MEMBERS OF MEDICA GROUP PLC
The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for potential
uncorrected misstatements.
Overall materiality – Group Overall materiality – Parent company
Profit before tax
£7.3m
PM
£0.28m,
75%
TFPUM
£0.1m,
25%
FSM,
£0.38m,
5%
Total Assets
£63.3m
PM
£0.23m,
75%
TFPUM
£0.07m,
25%
FSM,
£0.30m,
0.5%
FSM: Financial statements materiality, PM: Performance materiality, TFPUM: Tolerance for potential uncorrected misstatements
An overview of the scope of our audit
The consolidated Group, including the Parent Company and Medica Reporting Ltd, were subject to statutory audit under a
comprehensive audit approach in the UK.
Having assessed the significance of the Group’s components by reference to the percentage of Group revenue, profit before tax,
total assets and other relevant benchmarks represented by the individual components, no other components were assessed as being
individually significant to the Group. Both Global Diagnostics (Ireland) Limited and Global Retinopathy Screening Limited were
assessed as being not significant but material and under our instruction, specified audit procedures on these components were
performed by the component auditor Grant Thornton Ireland. Medica US Inc, RadMD LLC and Medica IT Services Limited were
also deemed not significant but material, with audit work performed by the Group audit team in the UK. None of the Group’s other
components – Medica Reporting Services Ltd, Medica Reporting Finance Ltd, Medica Australia Pty Ltd, MED-IDX Pty Ltd, were
assessed as being individually significant or material to the Group as a whole. Our audit approach was a risk-based approach founded
on a thorough understanding of the Group’s business, its environment and risk profile, and in particular included:
• performing an evaluation of the design effectiveness of controls over key financial statement risks identified as part of our risk
assessment process
• gaining an understanding of the financial reporting and accounts production process;
• undertaking substantive testing on significant classes of transactions, account balances and disclosures, the extent of which was
based on various factors such as our overall assessment of the control environment, the effectiveness of controls over individual
systems and the management of specific risks;
• key audit matters were identified within the group as part of our risk assessment procedures. Disclosures as to how the key audit
matters identified have been addressed can be found within the key audit matter section of our audit report;
• performing substantive procedures over 100% of Group’s revenue, 97% of Group’s profit before tax and 100% of Group’s total
assets; and
• performing specific audit procedures over not significant but material components: Global Diagnostics (Ireland) Limited, Global
Retinopathy Screening Limited, Medica US Inc, RadMD LLC and Medica IT Services Limited
• performing analytical reviews over neither significant nor material components of the Group: Medica Reporting Services Limited,
Medica Reporting Finance Limited and Medica Australia Pty Ltd, and MED-IDX Pty Ltd.
The scope of the current year audit has remained consistent with that of the prior year, with the exception that Rad MD LLC was
acquired on 27th March 2021 and was therefore not present in the previous year audit, and Global Diagnostics (Ireland) Limited and
Global Retinopathy Screening Limited (acquired during 2020) which due to the timing of those acquisitions were subject to analytical
review in the prior year and are now subject to specific audit procedures.
This, together with additional procedures performed at the Group level, gave us the evidence we needed for our opinion on the Group
financial statements as a whole.
Audit approach
No. of
components
% coverage
total assets
% coverage
revenue
% coverage
PBT
Full-scope audit 2 63 76 80
Specified audit procedures 5 37 24 17
Analytical procedures 4 0 0 3
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Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report
and accounts, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are
required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
Our opinions on other matters prescribed by the Companies Act 2006 are unmodified
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial statements are
prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matter on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of
the audit, we have not identified material misstatements in:
• the strategic report or the directors’ report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you
if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received
from branches not visited by us; or
• the parent company financial statements and the part of the directors’ remuneration report to be audited are not in agreement with
the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
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Independent Auditor’s Report continued
TO THE MEMBERS OF MEDICA GROUP PLC
Corporate governance statement
The Listing Rules require us to review the directors' statement in relation to going concern, longer-term viability and that part of
the Corporate Governance Statement relating to the group’s compliance with the provisions of the UK Corporate Governance Code
specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the group financial statements or our knowledge obtained during the audit:
• the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the going
concern basis of accounting in preparing the group financial statements and the directors’ identification of any material
uncertainties to the group’s ability to continue to do so over a period of at least twelve months from the date of approval of the
financial statements;
• the directors’ explanation in the annual report and accounts as to how they have assessed the prospects of the group, over what
period they have done so and why they consider that period to be appropriate, and their statement as to whether they have a
reasonable expectation that the group will be able to continue in operation and meet its liabilities as they fall due over the period of
their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions;
• the directors’ statement that they consider the annual report and financial statements taken as a whole is fair, balanced and
understandable and provides the information necessary for shareholders to assess the group’s performance, business model and
strategy;
• the directors’ confirmation in the annual report that they have carried out a robust assessment of the principal and emerging risks
facing the group and the disclosures in the annual report that describe the principal risks, procedures to identify emerging risks
and an explanation of how they are being managed or mitigated;
• the section of the annual report that describes the review of the effectiveness of group’s risk management and internal control
systems, covering all material controls, including financial, operational and compliance controls; and
• the section of the annual report describing the work of the audit committee, including significant issues that the audit committee
considered relating to the group financial statements and how these issues were addressed.
Responsibilities of directors for the financial statements
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financialstatements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s
website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. Owing to the inherent
limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may not be detected, even
though the audit is properly planned and performed in accordance with the ISAs (UK).
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
• We enquired of management, the finance team and the Board of Directors about the Group’s and Company’s policies and procedures
relating to the identification, evaluation and compliance with laws and regulations and the detection and response to the risks of fraud
and the establishment of internal controls to mitigate risks related to fraud or non-compliance with laws and regulations;
• We obtained an understanding of the legal and regulatory frameworks applicable to the Company and the Group and sector
in which they operate. We determined that the following laws and regulations were most significant: UK-adopted international
accounting standards, FRS 101 ‘Reduced Disclosure Framework’ (UK GAAP) (for the Company), Companies Act 2006, UK Corporate
governance code, Listing Rules, and relevant UK taxation laws.
• We enquired of management and the Board of Directors whether they were aware of any instances of non-compliance with laws
and regulations and whether they had any knowledge of actual, suspected or alleged fraud;
• We understood how the Group is complying with those legal and regulatory frameworks by making inquiries to the management,
those responsible for legal and compliance procedures and the company secretary. We corroborated our inquiries through our
review of Board minutes and papers provided to the Audit Committee.
• We assessed the susceptibility of the Company’s and Group’s financial statements to material misstatement, including how fraud
might occur. Audit procedures performed by the Group engagement team included:
– Team communications in respect of potential non-compliance with laws and regulations and fraud which included the
evaluation of the risk of management override of controls, principally in relation to the management adjustments to revenue;
– Enquiring of management, the finance team and the Board about the risks of fraud at the Group and Company and the
controls implemented to address those risks. Assessing the design and implementation of controls relevant to the audit
that management has in place to prevent and detect fraud, including updating our understanding of the internal controls
over journal entries, including those related to the posting of non-standard entries used to record non-recurring, unusual
transactions or other non-routine adjustments;
– Making specific inquiries of each member of the finance team to ascertain whether they had been subject to undue pressure or
had been asked to make any unusual postings or modifications to reports used in financial reporting;
– Identifying and testing journal entries selected based on risk profiling;
– Running specific keyword searches (including to related parties and of those previously connected to related entities) over the
journal entry population to identify descriptions that could indicate fraudulent activity or management override of controls. In
addition, journal entries by user were evaluated to identify types of entries posted that were not in line with expectations of their
role. Unusual entries noted from these searches were agreed to supporting documentation to verify the validity of the posting;
– Planning specific procedures responding to the risk of fraudulent recognition of revenue;
– We also assessed the disclosures within the annual report including principal risks;
– Challenging assumptions and judgements made by management in its significant accounting estimates;
– Identifying and testing related party transactions;
– Assessing the extent of compliance with the relevant laws and regulations as part of our procedures on the related financial
statement item; and
• In assessing the potential risks of material misstatement, we obtained an understanding of the Group’s and Company’s operations,
including the nature of income sources and of its objectives and strategies in order to understand the classes of transactions,
account balances, expected financial statement disclosures and business risks that may result in risks of material misstatement;
• These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The
risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting
irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion,
deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations
is from events and transactions reflected in the financial statements, the less likely we would become aware of it;
• The engagement partner assessed the appropriateness of the collective competence and capabilities of the engagement team
included consideration of the engagement team’s understanding of, and practical experience with, audit engagements of a similar
nature and complexity.
• For components at which audit procedures were performed, we requested component auditors to report to us instances of non-
compliance with laws and regulations that gave rise to a risk of material misstatement of the group financial statements.
• No such matters were identified by the component auditors.
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Independent Auditor’s Report continued
TO THE MEMBERS OF MEDICA GROUP PLC
Other matters which we are required to address
We were appointed by the board of directors on 6 August 2013 to audit the financial statements for the year ending 31 December 2013
and subsequent financial periods.
The period of total uninterrupted engagement including previous renewals and reappointments of the firm is 9 years, covering the
periods ending 31 December 2013 to 31 December 2021.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent company and we remain
independent of the group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit committee.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to
them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we
have formed.
Christopher Smith BA (Hons) ACA
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
11 April 2022
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31December 2021
£000
31December 2020
£000
Note
Underlying
£’000
Non-
Underlying
(Note 7)
£’000
Total
£’000
Underlying
£’000
Non-
Underlying
(Note 7)
£’000
Total
£’000
Revenue 61,913 – 61,91 3 3 6,814 – 36,814
Cost of sales (3 0, 5 1 9) – (3 0, 51 9) (19,362) – (19,362)
Gross profit 31,394 – 31,394 17 , 452 – 17 ,452
Administration expenses (1 9,31 6) (3,540) (22,856) (12, 449) (2,309) (14,7 58)
Operating profit before exceptional items 6 1 2,078 (3,540) 8,538 5, 003 (2,309) 2,694
Exceptional items 7 – – – – (324) (324)
Operating profit 12,078 (3,540) 8,538 5, 003 (2,633) 2,3 70
Finance income 8 – – – 73 – 73
Finance costs 9 (5 50) (593) (1, 143) (339) (30) (369)
Share of results of joint ventures 18 (56) – (56) – – –
Profit before tax 11 ,47 2 (4, 133) 7 ,339 4,737 (2,663) 2,07 4
Income tax expense 10 (2,0 7 9) 207 (1,87 2) (876) 147 (729)
Profit for the year attributable
to equity shareholders 9,393 (3,9 26) 5 ,4 6 7 3,8 61
(2,516) 1,345
Basic profit per ordinary share (pence) 11 4.56 1.21
Diluted profit per ordinary share (pence) 11 4.50 1.2 1
Statement of Comprehensive Income
Profit for the year 5,4 6 7 1,345
Other comprehensive income
Items that will be reclassified
subsequently to profit or loss
Foreign exchange translation differences (124) –
Total comprehensive income for the year 5,343 1,345
The notes and accounting policies on pages 91 to 100 form an integral part of these financial statements.
Consolidated income statement and consolidated
statement of comprehensive income
FOR THE YEAR ENDED 31 DECEMBER 2021
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Note
31December
2021
£000
31December
2020
£000
ASSETS
Non-current assets
Goodwill 14 30 ,357 2 3, 47 3
Other intangible assets 15 22,399 17 , 150
Property, plant and equipment 16 4,521 4, 146
Deferred tax 24 186 163
Investments 18 – –
5 7, 4 6 3 44,932
Current assets
Trade and other receivables 20 14,271 8,333
Cash and cash equivalents 21 9,6 1 6 13,934
23,887 22,267
Total assets 81,350 67 , 199
LIABILITIES
Current liabilities
Trade and other payables 22 (9,57 6) (5,803)
Borrowings 23 (5 ,7 39) (5,881)
Lease liabilities 17 (28 0) (299)
Contingent consideration 23 (5,335) (1, 753)
Current tax (88 0) (387)
(2 1, 81 0) (14, 123)
Net current assets 2,077 8, 144
Total assets less current liabilities 59 ,540 53,07 6
Non-current liabilities
Borrowings 23 – (11,960)
Lease liabilities 17 (814) (475)
Contingent consideration 23 (1,553) (1,778)
Deferred tax 24 (2,270) (2, 410)
(4 ,6 37) (16,623)
Net assets 54,903 36, 453
EQUITY
Issued capital 25 245 223
Share premium 25 30 ,324 14,721
Foreign exchange reserve
(12 2) 2
Retained earnings 25 2 4,456 21,507
Total equity 54,903 36, 453
The notes and accounting policies on pages 91 to 100 form an integral part of these financial statements.
The financial statements on pages 87 to 100 were authorised for issue by the Board of Directors on 11 April 2022 and were signed on its
behalf by:
Stuart Quin Richard Jones
Director Director
Consolidated statement of financial position
COMPANY REGISTRATION 08497963
Annual Report for the year ended 31 December 2021
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31December
2021
£000
31December
2020
£000
Operating activities
Profit for the year 5,4 6 7 1,345
Add back taxation 1,872 729
Profit before tax 7 ,339 2,07 4
Adjustments for:
Depreciation 1,6 7 2 1, 449
Amortisation 2,81 6 1, 429
Loss on disposal of tangible and intangible assets 55 219
Share based payments 682 210
Social security costs of share-based payment charge 78 –
Foreign exchange (59 0) –
Finance income – (73)
Finance costs 1, 143 3 75
Share of results of joint ventures 56 –
Changes in:
(Increase)/decrease in trade and other receivables (4 ,7 2 5) 4,201
Decrease in trade and other payables 2,811 56
Tax paid (1, 614) (1,299)
Cash inflow from operating activities 9,7 2 3 8,641
Investing activities
Purchase of subsidiary net of cash acquired (11, 429) (13,813)
Purchase of property, plant and equipment (1, 31 0) (1,475)
Purchase of software intangibles (76 3) (533)
Interest received – 73
Cash outflow from investing activities (13,502) (15, 7 48)
Cash flows from financing activities
Repayment of lease liability (407) (152)
Proceeds from borrowings 11,592 5,963
Repayment of borrowings (23,522) (54)
Issue of ordinary share capital 16, 162 1
Costs to issue ordinary share capital (537) –
Dividends paid to ordinary shareholders (3 ,1 6 7) (945)
Interest paid (424) (345)
Net cash (outflow)/inflow from financing activities (303) 4, 468
Net change in cash and cash equivalents (4,082) (2,639)
Movement in net cash
Cash and cash equivalents, beginning of period 13,9 34 16,57 6
Decrease in cash and cash equivalents (4,082) (2,639)
Foreign exchange on cash and cash equivalents (236) (3)
Cash and cash equivalents, end of period 9,6 1 6 13,934
The notes and accounting policies on pages 91 to 100 form an integral part of these financial statements.
Consolidated statement of cash flows
FOR THE YEAR ENDED 31 DECEMBER 2021
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Note
Issued
capital
£’000
Share
premium
£’000
Translation
reserve
£’000
Retained
earnings
£’000
Total equity
£’000
At 1January 2020 222 14,721 – 20,897 35, 842
Issue of share capital 1 – – – 1
Dividends paid 12 – – – (945) (945)
Share based payments – – – 210 21 0
Transactions with owners 1 – – (735) (734)
Profit for the year – – – 1,345 1,345
Other comprehensive income
Foreign exchange translation differences – – – – –
Total comprehensive income for the year – – – 1,345 1,345
At 31December 2020 223 14,721 2 21,507 36,453
Issue of share capital 22 15, 603 – – 15,625
Dividends paid 12 – – – (3, 167) (3, 167)
Share based payments – – – 682 682
Deferred tax on share based payments – – – (33) (33)
Transactions with owners 22 1 5 ,60 3 – (2,518) 1 3 ,1 0 7
Profit for the year – – – 5 ,4 6 7 5,4 6 7
Other comprehensive income
Foreign exchange translation differences – – (124)
– (1 24)
Total comprehensive income for the year – – (124) 5,4 6 7 5,343
At 31December 2021 245 30,324 (122) 24, 456 54 ,903
The notes and accounting policies on pages 91 to 100 form an integral part of these financial statements.
Consolidated statement of changes in equity
FOR THE YEAR ENDED 31 DECEMBER 2021
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1 Medica Group PLC
Medica Group PLC (“the Company”) was incorporated in England and Wales on 22April 2013 under the Companies Act 2006
(registration number 08497963) and is domiciled in the United Kingdom. Its registered office and principal place of business is One
Priory Square, Priory Street, Hastings, East Sussex, TN34 1EA.
The consolidated financial statements of the Group for the year ended 31December 2021 (including comparatives) comprise the
Company and its subsidiaries (together referred to as “the Group”). The Group’s principal activity is the provision of teleradiology
reporting and is the leading independent provider in both the UK and Ireland. The Group’s business activities, together with the factors
likely to affect its future development, performance and position are set out in the chairman’s and chief executive’s reports on pages4
to 5, and 6 to 11. In addition, Note 28 to the financial statements includes the Group’s objectives, policies and processes for managing
its capital; its financial risk management objectives; details of its financial instruments and its exposure to credit risk and liquidity risk.
2 Basis of preparation
2.1. Basis of preparation
The Consolidated financial statements of Medica Group PLC and its subsidiary undertakings (together “the Group”) for the 12 months
ended 31December 2021 have been prepared by the directors of Medica Group PLC.
The consolidated financial statements of the Group have been prepared in accordance with UK-adopted International
Accounting Standards
The preparation of consolidated financial statements in accordance with UK-adopted International Accounting Standards requires
the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying
the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the consolidated financial statements are disclosed in Note 4 to the financial statements.
The consolidated financial statements are presented in £ (Sterling), the presentational and functional currency of the Company,
rounded to the nearest £’000.
2.2. Going concern
The Directors have prepared cashflow forecasts for a period of 21 months from the date of approval of these financial statements (the
forecast period). These indicate that the Group will have sufficient funds to meet its liabilities as they fall due, and will continue to
comply with its loan covenants, throughout the forecast period.
The forecasts have been prepared by reference to the 2022 approved budget and detailed bottom-up forecasts for the following
financial year which have considered realistic downside scenarios including:
• Impacts to volumes and therefore to revenues and profits from a further “wave” of Covid-19 particularly in the UK and Ireland
• Loss of certain material contracts
• Further material inflationary pressure on operating costs above current expectations
Under these downside scenarios, individually and cumulatively, and excluding any potential mitigating actions that could be taken,
management conclude that the Group will have sufficient funds to continue to meet its liabilities as they fall due for at least 21 months
from the date of approval of the financial statements and the Board have therefore determined it is appropriate to adopt the going
concern basis in preparing the financial statements.
Notes to the financial statements
FOR THE YEAR ENDED 31 DECEMBER 2021
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2.3. Standards in issue which have not yet been adopted
There are no new standards or amendments in issue but not yet effective that are either applicable to the financial statements of the
Group or that would have any material impact the financial statements of the Group.
2.4. Adoption of new standards
• Amendment to IFRS 16 Leases Covid-19 – Related Rent Concessions beyond 30June 2021 (effective 1April 2021).
• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform (effective 1January 2021).
The adoption of these standards has not had a material impact on the financial statements.
2.5. Correction of prior period misstatements
During the year the following restatements have been made to the prior year comparatives. None of these had an impact on the income
statement or net assets and were presentational in nature only.
(i) The dilutive effect of share options in the prior year shown in note 11 has been restated from 180,772 to 336,254 as correctly
calculated in line with IAS 33. The impact did not change the diluted EPS measures.
(ii) The average number of employees disclosed in note 13 have been restated following the change in categories presented in the
current year. They have also been corrected to include 33 operational staff in Medica Vision Ireland which were omitted in error in
the prior year.
(iii) Directors’ emoluments disclosed in note 13 have been restated due to a mathematical error in the prior year resulting in the totals
being incorrect. This resulted in a decrease in the base salary and bonus of £157k and £21k respectively and inclusion of amounts
related to performance share plans of £53k. There was also an increase in the highest paid directors’ emoluments and pension of
£17k and £5k respectively.
Additionally, the single total figure of remuneration for executive directors table and incentive outcomes for the year ended
31December 2020 table have been restated for clerical and mathematical errors. This resulted in the following restatements.
Stuart Quin, a reduction of £12k in bonus to 82k reducing total remuneration and total variable remuneration to £464k and £82k
respectively.
Richard Jones, a reduction of £4k in bonus to 24k reducing total remuneration and total variable remuneration to £131k and £24k
respectively.
Steven Davies, a reduction of £7k in bonus to 48k and a reduction in PSP of £85k to £nil reducing total remuneration and total
variable remuneration to £260k and £48k, respectively.
Tony Lee, a reduction of £6k in PSP to £53k reducing total variable income to £53k, a reduction of £157k due to casting errors
reducing total fixed remuneration to £67k and a reduction in total remuneration of £163k to £120k.
(iv) Key management salary including bonus and social security costs in note 13 were restated to reallocate £21k of employers’ national
insurance incorrectly included in the salary and bonus to social security costs.
(v) Note 29 share-based payments has been restated to include detailed information on all share-based payment schemes following
more comprehensive disclosure in the current year. The number of PSP options and movements stated in the prior year have also
been restated due to clerical and mathematical clerical errors identified on a detailed review of the schemes in the current year.
The table below shows the changes.
Year end
2020
Restated
Year end
2020 Change
1 January 2,793,335 2,836,168 (42,833)
Granted 2,038,282 1,751,933 286,349
Exercised (48,179) (168,536) 120,357
Forfeited (369,774) (887,656) 517,882
Lapsed (364,287) – (364,287)
31 December 4,049,377 3,531,909 517,468
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
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3 Summary of accounting policies
These accounting policies have been used throughout all periods presented in the financial statements, except where the Group has
applied certain accounting policies and exemptions upon transition to IFRS.
3.1. Basis of consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiary undertakings drawn up to
31December 2021. All subsidiaries have the same reporting date and use accounting policies consistent with those of the Parent
Company. Medica Group PLC (“the Group”) controls an entity when the Group is exposed to, or has rights to, variable returns from
its involvement with the subsidiary and has the ability to affect those returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group.
Unrealised gains and losses on transactions between Group companies are eliminated. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
3.2. Revenue
The Group recognises revenue in accordance with the requirement of IFRS 15 and in the five-step model set out within the standard.
STEP 1 Identifying the contract with the customer
The Group accounts for contracts with customers within the scope of IFRS 15 only when all of the following criteria are met:
1. The Group and the customer have approved the outline contract (in writing, orally or in accordance with other customary business
practices) and are committed to perform their respective obligations;
2. The Group can identify each party’s rights regarding the services to be transferred;
3. For Reader Revenue services, the Group receives an order or request to deliver a radiology report; or for iCRO contracts, the Group
receives a work order for an ongoing and specific services;
4. The Group can identify the payment terms for services to be transferred;
5. The contract has commercial substance (i.e. the risk, timing or amount of the Group’s future cash flows is expected to change as a
result of the contract); and
6. It is probable that the Group will collect the consideration to which it will be entitled in exchange for the services that will be
transferred to the customer. In evaluating whether collectability of an amount of consideration is probable, the Group considers
only the customer’s ability and intention to pay that amount of consideration when it is due.
STEP 2 Identifying the performance obligations
At contract inception, the Group assesses the services promised within the contract and identifies as a performance obligation each
promise to transfer to the customer either:
a. A good or service (or a bundle of services) that is distinct; or
b. A series of distinct services that are substantially the same and that have the same pattern of transfer to the customer.
Reader Revenue
In the UK and Ireland the only identifiable performance obligation is the delivery of a radiology report which diagnoses a patient using
images provided by the client into the client’s Radiology Information System (RIS) by a suitable radiologist in an agreed timescale
based upon an order received from the customer under the agreed contract. In the US the only identifiable performance obligation is
the delivery of a radiology report in either the client’s radiology information system or via image transfer, by a suitable radiologist in an
agreed timescale based upon an order received from the customer under the contract. This is a teleradiology service.
In the UK, the Group’s customers are responsible for producing the image for the radiologist’s review and the Group is responsible
for arranging for the review by the radiologist. In Ireland, some contracts are ‘fully managed’ and the Group provides the staff and/or
the equipment required to produce the image. In management’s view, these additional services are not separable from the overriding
performance obligation discussed above.
iCRO Revenue
These contracts involve supporting our customers in completing various clinical trials by assisting with the reviewing of images as well
as providing practical support including training to our customers, just as we do for our Reader Revenue services.
The iCRO contracts are more complex and detailed in nature and cover more elements of the clinical trial imaging management than
reader services. The typical length of an iCRO contract is approximately three years.
Within the contracts, there are several distinct performance obligations which reflect the nature of the particular clinical trial, how
advanced the trial is, and the number of patients and imaging sites. These include study start up, project management, reader training,
independent image reviews, technical imaging services, study reporting, study close out and end of study imagine transfer.
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STEP 3 Determining the transaction price
Reader Revenue
Each contract has a detailed schedule of prices for each different type of radiology report. The pricing is based on the type of images
diagnosed, the complexity of the report and the nature of the report (for example whether it is emergency or elective).
Some contracts are subject to minimum usage over a given period of time, providing Medica with a minimum expected revenue stream
for those contracts.
iCRO Revenue
Each contract has a detailed schedule of prices for each promise within the contract. The fees for the various promises have a mix of
charging models, including unit costs (for example: per hour, per scan reviewed, etc), monthly costs billed each month for a specified
period, or fixed costs billed on the delivery of an item.
Each work order sets out a budget, setting out the expected consideration under the contract and setting out the expected value of any
variable items.
There are performance obligations set out in the work orders which are only completed at the option of the customer. The budgets
allocated against these performance obligations are equal to the stand-alone selling price of each option, and therefore no substantive
rights are created as a result of Medica providing these options.
On that basis, the total transaction price is considered to be the total budgeted costs excluding any optional items.
STEP 4 Allocating the transaction price to the separate performance obligations
Reader Revenue
There is only one performance obligation and accordingly the transaction price is allocated to the delivery of the individual report.
iCRO Revenue
The detailed budget included in each work order sets out the expected costs of each promise within the contract. The total of the
budgeted costs for the promises included within each performance obligation are considered by Medica to equal the stand-alone
selling price of that performance obligation.
STEP 5 Recognising revenue when performance obligations are satisfied
Reader Revenue
Reader Revenue is recognised when the performance obligation is satisfied, which in the UK is when the report is delivered to the
client’s Radiology Information System (RIS) and in Ireland is when the report is delivered to the clients National Integrated Medical
Imaging System (NIMIS). In the US Reader Revenue is recognised when the report is uploaded to either the client or specified third
party system. Each transaction is recognised as a separate chargeable event. Control passes to the customer once the report is
submitted, at which point Group becomes entitled to consideration for the services provided. The client is charged for services
provided at the end of the month.
iCRO Revenue
Medica uses the output method for determining appropriate revenue recognition for these contracts. As such, items billed per unit
eg independent image reviews, are recognised as that unit is delivered to the customer. Revenue from monthly cost items egproject
management, is recognised over the month in question, and fixed document items are recognised at a point in time when the
document is delivered to the client.
There are certain exceptions to this for example for startup and closeout costs. These are performance obligations which are generally
present in iCRO contracts.
Startup is key to the process and there are many inputs to make sure the study is set up accurately and effectively. The Group typically
invoices start-up costs at the end of the first month of the contract. However, this phase of work typically extends over additional
months and total start up revenues are therefore collectively recognised over that period of time. Closeout costs include items such
as final study reporting including quality control and final data transfer that culminate the work of the study. The group typically
invoices close out costs at the end of the month after the delivery of these elements. However, the performance obligation is typically
recognised over the period of the close out activity.
All revenue recognised in the income statement is from contracts with customers and no other revenue has been recognised. No
provision for expected credit losses have been recognised on any receivables or contract assets arising from a contract with a customer
as past experience indicates that expected losses are immaterial reflecting the nature of the customer base.
A disaggregation of revenue in the UK is shown in Note 5 as part of the segmental analysis. There are no other relevant categories of
revenue other than reporting modalities which are monitored by the directors.
Timing differences, Accrued and Deferred Revenue
UK
In the UK, due to the nature of the Group’s contractual relationship with customers and the nature of the services provided, there are
no timing differences between revenue recognised in the income statement and trade receivables being recognised in the statement of
financial position.
Ireland
In Ireland there are different arrangements around billing for work performed by the Group. In some cases, customers pay in advance
for a specified number of reviewed images in a specified time period. As in the UK, revenue is recognised at the point each image
is reviewed. Timing differences in respect of the dates of invoicing and payment with the dates of the scan reviews creates timing
differences which appear in accrued or deferred revenue as appropriate.
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
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USA
In the USA there can be some timing differences between the recognition of revenue and the trade receivables being recognised.
Typically, these relate to deposits and start up received in advance of work being completed, as well as work completed to date on
fixed-rate deliverables under iCRO contracts which were not fully completed, delivered to the customer and billed at the reporting
date. These differences result in a liability of deferred revenue recognised on the statement of financial position in trade and
other payables.
There have been no significant judgements regarding the timing of transactions or price.
Transaction Price
Transaction price is set out in individual contractual agreements and there is a range of prices based on the types of service offered.
There are no variable pricing considerations for Reader Revenue contracts. The iCRO contracts contain items which are billed at hourly
rates specified in the contracts. Strictly, this would typically be classed as variable pricing, however, due to the terms of the contract
(discussed above), revenue is recognised as the time is spent.
No assets were recognised from costs to obtain or fulfil a contract with any customer.
Contract modifications
Contract modifications which either create new or change existing rights and obligations are accounted as a separate contract if the
scope of the contract increases because of the addition of promised goods or services that are distinct and the price of the contract
increases by an amount of consideration that reflects the Group’s stand-alone selling prices of the additional promised services. Where
modifications are not accounted for as a separate contract the Group accounts for the remaining promised services as if it were a part
of the existing contract and the effect that the contract modification has on the transaction price is recognised as an adjustment to
revenue at the date of the contract modification.
3.3. Interest income/Interest expense
Interest income and expenses are reported on an accrual basis using the effective interest method.
3.4. Segment reporting
IFRS 8 requires operating segments to be identified on the same basis as is used internally for the review of performance and allocation
of resources by the CEO (chief operating decision maker – CODM).
The Board has reviewed the Group and all revenues are functional activities of teleradiology reporting and these activities take place on
an integrated basis. Following the acquisition of GDI and RadMD LLC, the CEO reviews the financial information for the Irish entities as
a separate segment and the two new US entities as a separate segment from the rest of the Group.
3.5. Business combinations
Business combinations are dealt with by the acquisition method. The acquisition method involves the recognition at fair value of all
identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether or not
they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition, the assets and liabilities of
the subsidiary are included in the consolidated statement of financial position at their provisional fair values which are then finalised
within a 12 month period and, which are also used as the basis for subsequent measurement in accordance with the Group accounting
policies. Goodwill is stated after separating out identifiable intangible assets.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective
date of acquisition, or up to the effective date of disposal, as applicable.
Where the settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present
value using a probability weighted expected value approach. Contingent consideration is classified either as equity or as a financial
liability and is recognised at fair value on the acquisition date. Amounts classified as a financial liability are subsequently re-measured
to fair value in accordance with IFRS 9 (Financial Instruments), with changes in fair value recognised in the consolidated statement of
comprehensive income as a finance cost.
Directly attributable acquisition costs are expensed as incurred within the consolidated statement of comprehensive income as non-
underlying administrative expenses.
3.6. Joint ventures
Investments in associates and joint ventures are accounted for using the equity method.
The carrying amount of the investment in joint ventures is increased or decreased to recognise the Group’s share of the profit or loss
and other comprehensive income of the joint venture, adjusted where necessary to ensure consistency with the accounting policies of
the Group.
Unrealised gains and losses on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s
interest in those entities. Where unrealised losses are eliminated, the underlying asset is also tested for impairment.
3.7. Leasing
The right of use asset is initially measured at the amount of the lease liability plus any lease payments made at or before the
commencement date (less any lease incentives received), plus any initial direct costs incurred in agreeing the lease, plus an estimate of
future dismantling, removal and restoration costs. Subsequent to the initial measurement the right of use asset is accounted for using
the cost model set out in IAS 16 Property, Plant and Equipment, which is based on depreciating the asset over the estimated useful
economic life. Assets are depreciated on a straight-line basis over the term of the lease.
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In connection with the Group’s right of use assets as at 31December 2021 there were no lease payments that had been made prior to
the commencement of the lease, nor any lease incentives, nor has the Group made any structural or other changes to any right of use
assets that would require material costs in respect of dismantling, removal or restoration.
The initial recognition of the lease liability has been based on discounting the cashflows associated with the lease using the rate
implicit in the lease agreement, or where this is not readily available, the Group’s incremental borrowing rate. After initial measurement
the Group charges the lease liability with the interest cost to unwind the discount factor and reduces the liability by the amount of
contractual payments made annually.
In reviewing the leases, the directors took into consideration those which were long term leases, those which were short term leases,
the underlying asset value and the lease and non-lease components.
Leases of low value assets and short-term leases with a term of twelve months or less, have continued to be recognised as an operating
expense and it was determined that all of these short term leases (mostly for reporting centres) had termination clauses of three
months or less and therefore could be readily terminated if required.
The directors have set a guideline of £5,000 or less lease value as the threshold for determining the value of a potential lease asset. All
the short-term leases are therefore also considered low value assets and have been excluded from right of use assets.
Low value and short-term leases
Where the Group is a lessee, payments on low value and short-term operating lease agreements are recognised as an expense on
a straight-line basis over the lease term. Associated costs, such as maintenance and insurance, are expensed as incurred. Benefits
received and receivable as an incentive to enter an operating lease are also spread on a straight-line basis over the lease term.
3.8. Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment. Depreciation is calculated to
write down the cost less estimated residual value of all property, plant and equipment by equal annual instalments over their expected
useful lives less estimated residual values, using the straight-line method. The rates generally applicable are:
Computer equipment – 20% to 33% per annum
Leasehold improvements – Over the life of the lease term
Medical equipment – 20% per annum
Right-of-use assets – Over the life of the lease term
The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference
between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
The assets’ residual value and useful lives are reviewed, and adjusted if required, at each reporting date. The carrying amount of an
asset is written down to its recoverable amount if the carrying amount is greater than its estimated recoverable amount.
3.9. Impairment of property, plant and equipment
At each balance sheet date, the Group reviews the carrying amounts of its property, plant and equipment to determine whether there
is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount
of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future
cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of
the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years.
A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant assets are carried at a revalued amount,
in which case the reversal of the impairment loss is treated as a revaluation increase.
3.10. Goodwill and other intangible assets
An intangible asset, which is an identifiable non-monetary asset without physical substance, is recognised to the extent that it is
probable that the expected future economic benefits attributable to the asset will flow to the Group and that its cost can be measured
reliably. The asset is deemed to be identifiable when it is separable or when it arises from contractual or other legal rights.
Intangible assets acquired as part of a business combination, are shown at fair value at the date of the acquisition less accumulated
amortisation. Amortisation is charged on a straight-line basis through the profit or loss. The rates applicable, which represent the
directors’ best estimate of the useful economic life, are:
• Customer relationships – 5 – 15 years
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
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• Software and technology – 10 years for assets purchased as part of the acquisition of Medica Reporting Limited in 2013, software
licences purchased since then are amortised over their term
• Brands – 15 – 20 years.
Internal development costs
Expenditure on the research phase of projects to develop new projects is recognised as an expense as incurred.
Costs that are directly attributable to a project’s development phase are recognised as intangible assets, provided they meet the
following recognition requirements:
• the development costs can be measured reliably
• the project is technically and commercially feasible
• the Group intends to and has sufficient resources to complete the project
• the Group has the ability to use or sell the software
• the software will generate probable future economic benefits.
Development costs not meeting these criteria for capitalisation are expensed as incurred.
Directly attributable costs include employee costs incurred on software development along with an appropriate portion of relevant
overheads and borrowing costs.
Internally generated assets recognised on the balance sheet are amortised from the date at which an individual project is complete or
live and amortised over the useful economic life of the project.
3.11. Impairment of intangible assets
Goodwill
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised
but tested annually for impairment. Impairment losses in respect of goodwill cannot be subsequently reversed.
At each balance sheet date, the Group performs an annual impairment review of goodwill and any intangible assets with an indefinite
useful economic life. The recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of
the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
An impairment loss is reversed if the asset’s or cash-generating unit’s recoverable amount exceeds its carrying amount.
Other intangible assets
Other intangible assets are not tested for impairment annually, only when there is an objective indicator of impairment. Where an
impairment indicator is identified, an impairment test is carried out by comparing the carrying of the assets with its recoverable
amount. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount is reduced to its
recoverable amount. An impairment loss is recognised immediately in profit or loss.
3.12. Taxation
Tax expenses recognised in profit or loss comprise the sum of the tax currently payable and deferred tax not recognised in other
comprehensive income or directly in equity.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of
comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit and are accounted for using the liability method. Deferred tax
liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally recognised for all
deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible
temporary differences can be recognised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill
or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither
the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries except where
the Group can control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in
the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only
recognised to the extent that it is probable that there will be sufficient taxable profits against which to recognise the benefits of the
temporary differences and they are expected to reverse in the foreseeable future.
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The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are
measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset recognised based on
tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax
liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting
date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax
assets and liabilities on a net basis.
3.13. Cash and cash equivalents
Cash and cash equivalents comprise cash on hand.
3.14. Financial instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial
instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at fair value through profit or
loss which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities is described below.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial
asset and substantially all the risks and rewards are transferred.
Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled or expires. An exchange
between an existing borrower and lender of debt instruments with substantially different terms shall be accounted for as an
extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, substantial modification of
the terms of an existing financial liability shall be accounted for as an extinguishment of the original liability and the recognition of a
financial liability. A substantial modification of terms occurs when the discounted present value of the cash flows under the new terms
is at least 10% different from the discounted present value of the remaining cash flows of the original facility.
The only types of financial assets held by the Group are loans and receivables.
Financial assets at amortised cost
Financial assets at amortised cost are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. After initial recognition, these are measured at amortised cost using the effective interest method, less provision for
impairment. Discounting is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and
most other receivables fall into this category of financial instruments.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance
for all receivables. The Group’s customers are mostly state-owned entities such as hospitals, as such credit loss is not significant.
The expected loss rates are based on the payment profile of sales over 36 months before 31December 2021 or 1January 2021
respectively. The Group then considers future expected credit losses due to any other expected circumstances in addition to applying
historical loss rates.
Classification and subsequent measurement of financial liabilities
The Group’s financial liabilities include borrowings, trade and other payables and lease liabilities. Financial liabilities are measured
subsequently at amortised cost using the effective interest method.
3.15. Equity, reserves and dividend payments
Share capital represents the nominal value of shares that have been issued.
Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares
are deducted from share premium, net of any related income tax benefits.
Retained earnings include all current and prior period retained profits or losses.
Dividend distributions payable to equity shareholders are included in ‘other liabilities’ when the dividends have been approved in a
general meeting prior to the reporting date.
3.16. Exceptional items
Exceptional items are items that are unusual because of their size, nature or incidence and which the directors consider should be
disclosed separately to enable a full understanding of the Group’s results.
3.17. Non-underlying items
The Group has applied an income statement format which seeks to highlight significant items within Group results for the year such as
one-off acquisition costs, and other non-operating costs such as the amortisation of acquired intangibles and share-based payments.
The Group exercises judgement in assessing the particular items which, by virtue of their scale and nature should be disclosed in
the income statement and related notes as non-underlying items. The Group believes that such a presentation is useful for the users
of the financial statements in helping to provide a balanced view of, and relevant information on, the Group’s underlying financial
performance. Details are included in note 33.
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
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3.18. Employee benefits
Short-term employee benefits and contributions to defined contribution plans are recognised as an expense in the period in which they
are incurred.
3.19. Share-based payments
Medica operates several equity-settled share-based payment arrangements, under which the Group receive services from employees
in consideration for equity instruments (share options and shares) of the group. Information relating to these schemes is set out
in note 29.
Equity-settled share-based payments are measured at fair value at the date of grant. Fair value is measured using either the Binomial
options pricing model or Monte Carlo simulations, whichever is more appropriate to the share-based payment arrangement. Market-
based performance criteria and non-vesting conditions (for example, the requirement for employees to make contributions to the share
purchase programme) are reflected in this measurement of fair value. The fair value determined at the grant date is recognised as an
expense on a straight-line basis over the vesting period, based on the group’s estimate of the options or shares that will eventually vest
and adjusted for the effect of non-market-based vesting conditions. Non-market-based vesting conditions are included in assumptions
about the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication the
number of share options expected to vest differs from previous estimates. Any adjustment to cumulative share-based compensation
resulting from a revision is recognised in the current period.
Service and performance conditions are vesting conditions. Any other conditions are non-vesting conditions which have to be taken
into account to determine the fair value of equity instruments granted. In the case that an award or option does not vest because
of a failure to meet a non-vesting condition that is within the control of either counterparty, this is accounted for as a cancellation.
Cancellations are treated as accelerated vesting and all remaining future charges are immediately recognised in the income statement.
As the requirement to save under an employee save as you earn arrangement is a non-vesting condition, employee cancellations, other
than through a termination of service, are treated as an accelerated vesting. No adjustment is made to total equity for awards that
lapse or are forfeited after the vesting date.
When the options are exercised, shares are either transferred to the employee from the employee benefit trust or by issuing new
shares. Any proceeds received, net of any directly attributable transaction costs, are allocated to share capital up to the nominal
(orpar) value of the shares issued with any excess being recorded as share premium.
The award by the Company of share-based compensation awards over its equity instruments to the employees of subsidiary
undertakings in the Group is treated as a capital contribution only if it is left unsettled. The fair value of employee services received,
measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary
undertakings, with a corresponding credit to equity.
A deferred tax asset is recognised on share options based on the intrinsic value of the options, which is calculated as the difference
between the fair value of the shares under option at the reporting date and exercise price of the share options. The deferred tax asset is
utilised when the share options are exercised or released when share options lapse.
3.20. Foreign currency translation
Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency of the respective Group entity, using the exchange rates
prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of
such transactions and from the remeasurement of monetary items denominated in foreign currency at period-end exchange rates are
recognised in profit or loss.
Monetary assets and liabilities are translated into the functional currency of the concerned entity of the Group using the exchange
rates at the reporting date. Gains and losses arising from changes in exchange rates after the date of the transaction are recognised in
profit or loss.
Non-monetary items are not retranslated at the period-end. They are measured at historical cost (translated using the exchange rates
at the transaction date), except for non-monetary items measured at fair value which are translated using the exchange rates at the
date when fair value was determined.
Foreign operations
In the Group’s financial statements, all assets, liabilities and transactions of Group entities with a functional currency other than the £
(Sterling) are translated into £ upon consolidation. The functional currencies of entities within the Group have remained unchanged
during the reporting period.
On consolidation, assets and liabilities have been translated into £ at the closing rate at the reporting date. Goodwill and fair value
adjustments arising on the acquisition of a foreign entity have been treated as assets and liabilities of the foreign entity and translated
into £ at the closing rate. Income and expenses have been translated into £ at the average rate over the reporting period. Exchange
differences are charged or credited to other comprehensive income and recognised in the currency translation reserve in equity. On
disposal of a foreign operation, the related cumulative translation differences recognised in equity are reclassified to profit or loss and
are recognised as part of the gain or loss on disposal.
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4 Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements under IFRS requires the Group to make estimates and assumptions that affect the application
of policies and reported amounts. Estimates and judgements are continually evaluated and are based on historical experience and
other factors including expectations of future events that are believed to be reasonable under the circumstances. Actual results may
differ from these estimates. The estimates and assumptions which have a risk of causing a material adjustment to the carrying amount
of assets and liabilities are discussed below.
4.1. Key judgements
There are no significant or material key judgements made by management in applying the accounting policies of the Group.
4.2. Sources of estimation uncertainty
The following are estimates made by management in measuring the assets, liabilities, income, and expenses.
Fair value of contingent consideration on business combinations
Under the terms of the acquisition of RadMD LLC, contingent cash consideration of up to $5.4m and $0.3m is payable based on certain
pre-determined EBITDA levels achieved by RadMD LLC for the years ended 31 December 2021 and 2022 respectively. In relation to the
acquisition of GDI in the prior year, up to €4m contingent consideration is payable in tranches during 2022 and 2023 subject to the
realisation of future events including the successful commencement and renewal of contracts. In accordance with IFRS 9 ‘Financial
Liabilities’ the fair value of contingent cash consideration was assessed based on applying a time value of money discount to the
probability weighted expected future values under the various possible outcomes. See note 23.5 for further details.
Carrying value of goodwill and other intangible assets
The carrying value of goodwill for Medica Vision Ireland is supported by its estimated recoverable amount which is dependent on
the successful retender for the diabetic retinopathy screening contract, currently expected in 2022 to commence in early 2023. If the
contract was lost or the outcome of the re-tender was a material reduction in overall value there would be an impairment of up to
£1,709k to goodwill and £3,492k to intangible assets. See notes 14 and 23.5 for further details.
The useful life of acquired intangible assets
The Group recognises the intangible assets acquired as part of business combinations at fair value at the date of acquisition. These fair
values were determined by experts engaged by management and based upon management’s and the directors’ judgement and includes
assumptions on the timing and amount of future incremental cash flows generated by the assets and selection of an appropriate
discount rate. Furthermore, management have estimated the expected useful lives of intangible assets and charged amortisation on
these assets accordingly. At the reporting date no impairments to other intangible assets were recognised in the year.
The directors considered the estimates of the useful economic life of intangible assets acquired in May 2013 as part of the purchase
of Medica Reporting Limited, November 2020 as part of the purchase of Global Diagnostics (Ireland) Limited and Global Retinopathy
Screening Limited and March 2021 as part of the purchase of RadMD LLC.
Brand
The directors considered the strength of the Medica brand in the teleradiology and wider healthcare sector. They also considered the
strength of the RadMD brand in the iCRO sector following the acquisition in March 2021. In their judgement, the directors consider that
the brands are expected to continue to be used for the foreseeable future and have therefore estimated a useful life of 20 years and
15years respectively.
Customer relationships
In assessing the useful economic life of customer relationships, the directors considered the importance of long-term relationships.
In their judgement the directors consider that given the limited number of NHS Trusts and HSE clients and the fact that most of the
revenue came from long standing, government funded clients that the useful economic life for customer relationships is estimated
between 10 – 15 years. In the US there is a customer contract backlog and large key customers with long standing relationships that
have multiple phase trails over a number of years for which the useful economic life of the customer relationships is estimated at 5 and
15 years respectively.
Software and technology
In assessing the useful economic life of the technology purchased the directors judgement was that the technology was core to the
business and whilst requiring ongoing investment was not expected to fundamentally change for a considerable period. Therefore, the
directors have estimated the useful economic life as 10 years for software and technology.
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
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The table below sets out the carrying amounts of the separately identifiable intangible assets acquired in previous acquisitions,
together with the estimated useful lives assessed by the directors and the resultant amortisation charges recognised in the year.
Intangible asset
Directors’ estimate
of useful
economic life
(years)
Carrying amount
as at
31December
2021
£000
Amortisation charge
for the year ended
31December
2021
£000
Customer relationships – May 2013 acquisition 15 2,724 431
Customer relationships – November 2020 acquisitions 15 9,619 842
Customer relationships – March 2021 acquisition 5 – 15 6,272 479
Software and technology* 10 433 324
Brand – May 2013 acquisition 20 1,316 115
Brand – March 2021 acquisition 15 679 35
21,043 2,226
* excludes software and technology assets that do not relate to the 2013 acquisition.
The Group’s reported profit is sensitive to changes in the estimated useful economic lives of the acquisition intangibles, owing to the
amortisation charges for the year which are calculated by reference to the estimated useful lives. The table below demonstrates the
impact on reported profits before tax of applying different values to the estimated useful lives.
Intangible asset
Directors’ estimate
of useful
economic life
(years)
-50% change in
estimate
(years)
Decrease in reported
profit for the
year ended
31December
2021
£000
+50% change
in estimate
(years)
Increase in reported
profit for the
year ended
31December
2021
£000
Customer relationships – May 2013
acquisition 15 7.5 (431) 22.5 144
Customer relationships – November
2020 acquisitions 15 7.5 (842) 22.5 281
Customer relationships – March 2021
acquisition 5 – 15 2.5 – 7.5 (479) 7.5 – 22.5 160
Software and technology* 10 5 (324) 15 108
Brand – May 2013 acquisition 20 10 (115) 30 38
Brand – March 2021 acquisition 15 7.5 (35) 22.5 12
(2,226) 743
* excludes software and technology assets that do not relate to the 2013 acquisition.
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5 Segment reporting
Management prepare and monitor financial information for the Group’s three key geographies, UK, Ireland and the US. This financial
information is reviewed and used by the Chief Operational Decision Maker (considered to be the CEO) in managing the operating
activities of the Group.
In the UK, Medica generates revenues via two key service lines, Nighthawk (urgent and quick turnaround services) and Elective. In
Ireland revenues are generated from tele-radiology, managed services, and a contract with the National Screening Service to deliver
Ophthalmology services. In the US revenues are generated from providing radiology reporting to Pharma customers directly as
full service iCRO services and indirectly via Contract Research Organisations (CRO’s) as reader only services. These activities are
collectively referred to as imaging core lab services.
UK
£000
Ireland
£000
USA
£000
31December
2021
£000
UK
£000
Ireland
£000
USA
£000
31December
2020
£000
UK NightHawk 29,762 – – 29,762 22,987 – – 22,987
UK Elective 17,292 – – 17,292 12,511 – – 12,511
Ireland – 9,665 9,665 – 1,316 – 1,316
Imaging core labs – – 5,194 5,194 – – – –
Revenue 4 7,05 4 9,665 5,194 61,913 35,498 1,316 – 36,814
Cost of sales (23,436) (4,758) (2,325) (30,519) (18,751) (611) – (19,362)
Gross profit 23,618 4,907 2,869 31,394 16,747 705 – 17,452
Operating expenses (13,750) (3,375) (2,191) (19,316) (11,958) (491) – (12,449)
Operating profit 9,868 1,532 678 12,078 4,789 214 – 5,003
Finance income – – – – 73 – – 73
Finance costs (261) (283) (6) (550) (309) (30) – (339)
Share of results of joint ventures (56) –
– (56) – – – –
Profit before tax 9,551 1,249 672 11,472 4,553 184 – 4,737
Tax (1,625) (268) (186) (2,079) (830) (46) – (876)
Underlying profit for the period 7, 9 26 981 486 9,393 3,723 138 – 3,861
Non-underlying loss for the period (3,926) (2,516)
Profit for the period 5,467 1,345
UK
£000
Ireland
£000
USA
£000
31December
2021
£000
UK
£000
Ireland
£000
USA
£000
31December
2020
£000
Non-current assets (excluding
deferred tax) 25,314 1 7, 88 5 14,078 57,277 26,214 18,555 – 44,769
Additions to non-current assets 1,907 164 10,457 12,528 2,008 18,744 – 20,752
Total assets less current liabilities 36,651 11,061 11,828 59,540 40,853 12,224 – 53,077
Net assets 35,354 7,924 11,625 54,903 27,540 8,915 – 36,455
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
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6 Operating profit
The operating profit and the profit before taxation are stated after:
2021
£000
2020
£000
Fees payable to the Company’s auditor for the audit
of the Company’s annual accounts 225 99
Fees payable to the Company’s auditor for the audit
of subsidiaries 57 –
Total audit fees 282 99
Audit related services:
Interim review 18 14
Total audit related services 18 14
Other assurance services:
Covenant compliance services 3 3
Total non-audit fees 21 17
Total fees paid to Company’s auditor 303 116
Operating lease rentals – short term and low
value leases 90 51
Depreciation: property, plant and equipment – owned 1,241 1,259
Depreciation: property, plant and equipment – leased 431 190
Amortisation of intangible fixed assets on acquisition 2,225 1,010
Amortisation of intangible fixed assets on other assets 591 419
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts include £47k of over-runs in connection with
the prior year audit.
Analysis of expenses by nature
The breakdown by nature of cost of sales and operating expenses is as follows:
2021
£000
2020
£000
Amortisation of intangible assets (note 15) 2,816 1,429
Depreciation of property, plant and equipment (note 16) 1,672 1,449
Loss on disposal of tangible and intangible assets 55 219
Operating lease rentals – short term and low
value leases 90 51
Staff costs (note 13) 12,341 7,337
Auditors remuneration 302 116
Self-employed clinical specialists 27,506 18,795
IT related costs 2,009 1,287
Other non-underlying items (see note 7) 555 870
Other expenses 6,029 2,567
Total cost of sales and operating expenses 53,375 34,120
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7 Non-underlying items
2021
£000
2020
£000
Write off of property, plant and equipment and other
intangible assets – 219
Amortisation of acquired intangible assets 2,225 1,010
Foreign exchange gain on contingent consideration (173) –
Acquisition costs incurred 173 792
Share based payment charge 682 210
Social security costs on share based payment charge 78 –
One-off Legal and professional fees 555 78
Total non-underlying costs included within
operating expenses 3,540 2,309
Costs incurred in respect of board succession
and review – 324
Total non-underlying costs included within operating
expenses and exceptional items 3,540 2,633
Acquisition finance costs incurred – 30
Fair value adjustment on contingent consideration 593 –
Total non-underlying costs before tax 4,133 2,663
Income tax (207) (147)
Total non-underlying items after taxation 3,926 2,516
8 Finance income
2021
£000
2020
£000
Interest on cash and cash equivalents – 73
9 Finance costs
2021
£000
2020
£000
Loan interest and fees 497 321
Finance costs on lease liability 53 18
Finance costs associated with the acquisition of GDI – 30
Fair value adjustment on contingent consideration 593 –
1,143 369
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
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10 Tax expense
Major components of tax expense:
2021
£000
2020
£000
Current tax:
UK current tax expense 1,860 659
Adjustments in respect of prior years (24) 2
Foreign current tax expense 331 39
Total current tax 2,167 700
Deferred tax:
Originations and reversal of temporary differences (594) (142)
Adjustments in respect of prior years 13 60
Effect of rate change 286 111
Total deferred tax (295) 29
Tax expense on ordinary activities 1,872 729
Reconciliation of tax expense:
UK corporation tax is assessed on the profit on ordinary activities for the year and is the same as (2020: same as) the standard rate of
corporation tax is as follows:
• UK 19% (2020: 19%)
• Ireland 12.5% (2020: 12.5%)
• USA (Federal & state) 26.7% (2020: N/A)
Changes to UK corporation tax rates were substantively enacted by the Finance Bill 2021 on 24May 2021. These included an increase of
the corporation tax rate to 25% from 1April 2023. As this change was substantively enacted at the balance sheet date, deferred tax is
recognised at a rate of 25% in the current year (2020: 19%).
The charge for the year can be reconciled to the loss per the income statement as follows:
Reconciliation of effective tax rate:
2021
£000
2020
£000
Profit on ordinary activities before tax 7,339 2,074
Income tax using the Company’s domestic tax rate 19%
(2020: 19%) 1,394 394
Effect of:
Expenses not deductible for tax purposes 297 164
Prior year adjustment – current tax (24) 2
Prior year adjustment – deferred tax 13 60
Effect of tax rate change – deferred tax 286 111
Deferred tax not recognised (41) –
Impact of difference in overseas tax rates (53) (2)
Total tax charge for period 1,872 729
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11 Earnings per share
Both the basic and diluted profit per share have been calculated using the profit after tax attributable to shareholders of Medica Group
PLC as the numerator. The calculation of the basic profit per share is based on the profit attributable to ordinary shareholders divided
by the weighted average number of shares in issue during the year.
2021
£000
2020
£000
Profit for the year attributable to ordinary shareholders 5,467 1,345
Effects of exceptional items net of tax (see note 7) – 262
Profit for the year before exceptional items attributable
to ordinary shareholders 5,467 1,607
Effects of non-underlying items net of tax (see note 7) 3,926 2,254
Underlying profit for the period attributable to ordinary
shareholders 9,393 3,861
Weighted average number of ordinary shares 119,912,604 111,211,038
Dilutive effect of share options 1,656,675 336,254
1
Weighted average number of ordinary shares 121,569,279 111,547,292
Basic profit per ordinary share (pence) 4.56p 1.21p
Diluted profit per ordinary share (pence) 4.50p 1.21p
Underlying basic profit per ordinary share (pence) 7.8 3 p 3.47p
Underlying diluted profit per ordinary share (pence) 7.7 3 p 3.46p
1 The amount disclosed is after the restatement for correction of the error disclosed in note 2.5.
As at 31December 2021 the directors assessed the potentially dilutive effect of contingently issuable shares, which comprise share
options awarded under the Performance Share Plan (PSP), options under the Deferred Bonus Plan (DBP), options under the Company
Share Option Plan (CSOP) and options under the Save as You Earn plan (SAYE).
As at the end of the year there were 5,841,660 (2020: 4,617,310) options outstanding of which 1,656,675 (2020: 336,254
1
) were
considered dilutive. The calculation of diluted earnings per share above takes into consideration the Group’s performance against the
targets within the Performance Share Plan to 31December 2021.
12 Dividends
2021
pence
per share
2020
pence
per share
2021
£000
2020
£000
Interim 2021 dividend paid (2020 interim dividend) 0.89 0.85 1,088 945
Final 2020 dividend paid (2019 final dividend: Nil¹) 1.7 nil¹ 2,079 –
3,167 945
¹ In light of the uncertainty surrounding the impact of COVID-19 the Board chose not to propose a final dividend for FY19.
A final dividend for 2021 of £2.2m (1.79p per share) is proposed by the Directors and will be paid on 22July 2022 to shareholders on the
register as at 24June 2022.
During the year ended 31December 2021, dividends totalling £51k (2020: £15k) were paid to persons discharging management
responsibilities including Directors.
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
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13 Directors and employees
The average number of persons (including directors) employed by the Group during the years were:
2021
Number
2020
Restated
1
Number
Clinical governance and quality assurance 14 10
Commercial 10 8
IT 33 31
Operations 227 198
Senior leadership team 7 7
Support functions 15 13
306 267
1 The numbers disclosed are after the restatement for correction of the error disclosed in note 2.5.
The aggregate cost of these employees was:
2021
£000
2020
£000
Wages and salaries 10,282 6,022
Social security costs 916 616
Pension contributions 461 490
11,659 7,1 28
Share based payments charge 682 209
12,341 7,337
Directors’ emoluments paid during the period and included in the above figures were:
2021
£000
2020
Restated
1
£000
Base salary 922 945
Benefits 12 9
Bonus 419 155
Pension 51 55
Performance share plan 120 53
Other 8 –
Total Emoluments 1,532 1,217
1 The amounts disclosed are after the restatement for correction of the error disclosed in note 2.5.
The highest paid director received emoluments totalling £594k (2020 restated1: £464k). The value of the Company’s contribution paid
to a defined contribution pension scheme in respect of the highest paid director amounted to £31k (2020 restated1: £34k).
During the year retirement benefits accrued to three directors (2020: four) in respect of defined contribution pension schemes.
There were no payments for loss of office in lieu of notice during the year (2020: £70k).
Key management of the Group are the two executive members of Medica Group PLC’s Board of Directors, four non-executive directors
and five senior managers (2020: three executive directors, three non-executive directors and four senior managers). Key management
personnel remuneration includes the following expenses:
2021
£000
2020
Restated
1
£000
Salaries including bonuses 2,552 1,760
Social security costs 290 213
Pensions 87 78
Share based payments charge 419 167
Key management personnel compensation 3,348 2,218
1 The amounts disclosed are after the restatement for correction of the error disclosed in note 2.5.
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14 Goodwill
UK
£000
Ireland
£000
USA
£000
Total
£000
Cost
At 31December 2019
1
15,948 – – 15,948
Additions
2
– 7,525 – 7,525
At 31December 2020 15,948 7,525 – 23,473
Additions (see note 19)
3
– – 6,817 6,817
Foreign exchange – (76) 143 67
At 31December 2021 15,948 7,449 6,960 30,357
1. UK Cash Generating Unit – acquisition of Medica Reporting Limited in 2013
2. Ireland Cash Generating Units – acquisition of Global Diagnostics Ireland and Medica Vision Ireland in November 2020. Goodwill on acquisition based on the
consideration paid for each business was £5,816k and £1,709k respectively.
3. US Cash Generating Unit – acquisition of RadMD LLC in March 2021
Goodwill is not amortised but tested annually for impairment. In previous years a top-down methodology was used to compare the
total value of the group by reference to the market capitalisation plus debt (or less cash) to determine a current Enterprise Value (EV)
and this was then allocated on a hierarchical basis to the two CGU’s at 31December 2020 (UK and Ireland).
Due to the more complex nature of the group at 31December 2021 a bottom up valuation methodology was adopted using a discounted
cash flow (DCF) approach based on the future expected cashflows of each identified CGU based on the smallest identifiable unit where
separate cashflows could be identified.
The CGUs were as follows:
• The UK trading business representing UK tele-radiology
• Medical Diagnostics Ireland (MDI) representing tele-radiology and managed services
• Medical Vision Ireland (MV) being the unit managing the Irish diabetic retinopathy screening contract
• The US business covering imaging core lab services (tele-radiology) to pharma and CRO clients
The recoverable amount of each CGU mentioned above was based on value in use which was calculated using DCF methodology with
the following key inputs:
• WACC of 8.5% (UK), 13.8% (MDI and MV),11.4% (US) which was determined to represent the best input for each CGU individually
• Baseline forecasts for FY 2022 and FY 2023 consistent with the forecast model utilised in the going concern review (i.e., the
scenario deemed most likely).
• Additional forecasts to FY 2026 based on the board approved 5-year forecast plan
• Managements key assumptions in the forecasts which have been derived from past experience, market data and management’s
expectations of future growth rates in the business are:
Revenue drivers
– Ongoing Covid-19 recovery to pre-pandemic levels
– Underlying growth in demand for both elective and out of hours services to tackle the material backlog in diagnostic
procedures
– Expected contract renewals, expected pricing changes and potential contract wins and losses
– Continued decline in availability of GMC registered radiologists
– Continued growth in clinical trials and imaging reporting requirements associated with such trials (see Delivery: RadMD
on page 30)
– Growth from NightHawk service development in Ireland (see Delivery: Ireland on page 28)
Cost drivers
– Inflationary impact on operating costs including employee costs
• Terminal Value calculated using the average of two methodologies:
– EV/EBITDA Multiples at exit based on multiples for each CGU at entry for recently acquired CGU’s and based on an assessment
of comparator companies in respect of the UK business.
– Growth perpetuity model using a 2.25% growth rate.
The recoverable amount of each CGU is then compared to the carrying amount of each CGU, including goodwill and acquired
intangible assets allocated to each unit to consider indication of impairment. There is sufficient headroom in all CGU’s therefore no
indicators of impairment have been identified.
The estimate of the recoverable amount for Medica Vision Ireland is dependent on the successful re-tender for the diabetic retinopathy
screening contract which is currently expected in 2022 to commence in early 2023. If the contract was lost or the outcome of
the re-tender was a material reduction in overall value there would be an impairment of up to £1,709k to goodwill and £3,492k to
intangible assets. See note 23.5 for further details. There would also be a credit to the income statement for the release of contingent
consideration up to a maximum undiscounted amount of €1,600k (£1,572k) which had a fair value of £1,222k at year end (note 23.5).
Management is not currently aware of any other reasonably possible changes to key assumptions that would cause the carrying
amount of any of CGUs to exceed their recoverable amounts
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
STRATEGIC REPORT
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Annual Report for the year ended 31 December 2021
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15 Intangible assets
Customer
relationships
£000
Software
and
technology
£000
Brand
£000
Total
£000
Cost
At 31December 2019 6,461 6,220 2,317 14,998
Additions – 533 – 533
Transfer from tangible assets – 395 – 395
Disposals – (501) – (501)
Acquisitions through business combinations 10,708 – – 10,708
At 31December 2020 1 7,16 9 6,647 2,317 26,133
Additions – 763 – 763
Disposals – (97) – (97)
Acquisitions through business combinations 6,612 – 699 7,311
Foreign exchange 29 – 15 44
At 31December 2021 23,810 7, 3 1 3 3,031 34,154
Amortisation
At 31December 2019 2,874 3,969 771 7,614
Recategorisation from tangible assets – 296 – 296
Charge for the year 571 743 115 1,429
Eliminated in respect of disposals – (356) – (356)
At 31December 2020 3,445 4,652 886 8,983
Charge for the year 1,752 914 150 2,816
Eliminated in respect of disposals – (42) – (42)
Foreign exchange (2) – – (2)
At 31December 2021 5,195 5,524 1,036 11,755
Net book value
At 31December 2021 18,615 1,789 1,995 22,399
At 31December 2020 13,724 1,995 1,431 17,150
At 31December 2019 3,587 2,251 1,546 7,384
At 31December 2021 £493,000 (2020: £108,000) of development costs have been capitalised as internally generated software and
technology intangibles. These have not been shown separately as they are not deemed to be material
to the financial statements.
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16 Property, plant and equipment
Leasehold
property – right
of use
asset
£000
Leasehold
improvements
£000
Computer
equipment
£000
Medical
equipment
£000
Total
£000
Cost
At 31December 2019 719 – 8,020 – 8,739
Additions – business combinations 335 43 305 1,153 1,836
Additions – separately acquired – – 1,475 – 1,475
Transfer to intangible assets – – (395) – (395)
Disposals – – (1,382) – (1,382)
Foreign exchange (1) – (1) (3) (5)
At 31December 2020 1,053 43 8,022 1,150 10,268
Additions – business combinations (note 19) 185 – 96 – 281
Additions – separately acquired 543 – 1,286 74 1,903
Disposals – – (68) – (68)
Foreign exchange (34) (3) (23) (75) (135)
At 31December 2021 1,747 40 9,313 1,149 12,249
Depreciation and impairment
At 31December 2019 107 – 4,849 – 4,956
Additions – business combinations 224 40 254 807 1,325
Transfer to intangible assets – – (296) – (296)
Charge for the year 158 – 1,261 30 1,449
Disposals – –
(1,308) – (1,308)
Foreign exchange (1) – (1) (2) (4)
At 31December 2020 488 40 4,759 835 6,122
Additions – business combinations (note 19) – – 96 – 96
Charge for the year 291 1 1,200 180 1,672
Disposals – – (65) – (65)
Foreign exchange (19) (3) (16) (59) (97)
At 31December 2021 760 38 5,974 956 7,7 2 8
Net book value
At 31December 2021 987 2 3,339 193 4,521
At 31December 2020 565 3 3,263 315 4,146
At 31December 2019 612 – 3,171 – 3,783
All depreciation charges are included within administrative expenses in the consolidated statement of comprehensive income.
2021
£000
2020
£000
Carrying amount of right-of-use assets included within:
Leasehold property 987 565
Medical equipment 96 269
Carrying value at 31December 1,083 834
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
Annual Report for the year ended 31 December 2021
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17 Lease liabilities
Under IFRS 16 Leases the Group undertakes assessments of all its leases.
The directors have determined that, based on current strategic business plans, the applicable lease term of the UK property lease is up
to the five year break clause. The directors will continue to review this annually and at any time if they are reasonably certain that the
extension of the lease will be required the lease liability and right of use asset will be revalued.
The acquired US businesses contain one property lease which ends in December 2027.
In calculating the present value of the lease liabilities and the right of use asset, where there was no implicit rate within lease the
directors applied the Group’s estimated incremental borrowing rate of 2.6% in the UK and 5.9% in Ireland.
The total cash outflow for leases amounted to £0.6m in 2021 (2020: £0.2m).
The Group has commitments in respect of short term lease agreements which are not recognised in the consolidated statement of
financial position. Management consider these lease agreements to be immaterial.
2021
£000
2020
£000
Lease liabilities fall due in:
Less than one year 280 299
Between one and five years 814 475
More than five years – –
Total lease liabilities 1,094 774
18 Investments in joint ventures
Investments £000
At 31December 2019 and 31December 2020 –
Transfer from investments in subsidiaries 56
Share of results from joint ventures (56)
At 31December 2021 –
During the year, Med-IDX Pty became a 50:50 joint venture with Integral Diagnostics Limited Pty and was transferred from investments
in subsidiaries to a joint venture measured using the equity method of accounting. As the Group has no legal or constructive
obligations to make payments on behalf of Med-IDX Pty no liability has been recognised.
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19 Business combinations
On 26March 2021 the company subscribed for 100% of the ordinary share capital of Medica US, Inc (“MUSI”), a newly incorporated
holding company registered in the United States of America, which subsequently acquired 100% of the ordinary share capital of RadMD
LLC. The company is incorporated in the United States of America and their principal activities are the provision of high value imaging
expertise services in the Clinical Trials market referred to as iCRO services. The acquisition opens opportunities for Medica to offer a
wider range of telemedicine services, expand its customer base to include pharmaceutical, biotech and medical device companies, and
provides foundations for Medica in the US market.
Total cash consideration payable is up to USD $21.7m (circa £15.6m), subject to customary working capital and other adjustments
at completion of which $16.3m (£11.8m) was payable at completion. On 17July 2021 completion accounts were agreed resulting in a
working capital adjustment of $97k which is receivable from the vendors. This has reduced the consideration by $97k with an offsetting
reduction in the net assets acquired of $97k. Further working capital adjustments of $25k were identified subsequently which are due
to the vendors. The total of $72k (£53k) will be netted off against contingent consideration payable in June 2022.
The exchange rate used on the date of acquisition was £1/$1.3778. Set out below are the provisional fair values of the assets and
liabilities acquired.
Fair value
$000
Fair value
£000
Intangible assets 10,073 7,311
Property, plant and equipment 255 185
Trade and other receivables 1,644 1,194
Cash and cash equivalents 476 345
Total assets 12,448 9,035
Trade and other payables (1,335) (969)
Lease liabilities (255) (185)
Total liabilities (1,590) (1,154)
Net assets 10,858 7,8 8 1
Goodwill 9,392 6,817
Total consideration 20,250 14,698
Satisfied by:
Cash 16,222 11,774
Contingent consideration 4,028 2,924
Total 20,250 14,698
Goodwill
Goodwill arising on the business combination represents the excess of the acquisition cost over the fair value of the Group’s share of
the identifiable net assets of the subsidiary at the acquisition date. Goodwill includes intangible assets that do not qualify for separate
recognition such as the value of the workforce at the date of acquisition, and encompass the future economic benefit expected to arise
from the acquisition including new customer relationships and synergies realised by the group.
Intangible assets
In accordance with IFRS 3 ‘Business Combinations’, the Group measured the identifiable assets acquired at their acquisition-date fair
values recognising $10.1 million (£7.3 million) of intangible assets other than goodwill.
The valuation was undertaken using “income approaches” being ‘excess from earnings’ and ‘relief from royalties.’ The key estimates
which underly this valuation in addition to management’s estimate of future revenue, profits and cash generation are:
Required rate of return 11.4%
Long term revenue growth rate 2.0%
EBITDA margin for FY 24 onwards 16%
Royalty rate 1.0%
Corporation tax rate 31.0%
Acquired receivables
The fair value of acquired trade receivables of $1,604k (£1,164k) is materially the same as the gross contractual receivable less the best
estimate of contractual cash flows not expected to be collected.
Contingent consideration
If certain pre-determined adjusted EBITDA levels were achieved by RadMD LLC for the year ended 31December 2021, additional
consideration of up to $5,448k is payable in the first half of 2022. At, 31December 2021, a potential undiscounted amount of $4,920
(£3,350k) additional consideration is expected to be paid, subject to agreement with the vendors. See note 23.5 for further details
The Securities Purchase Agreement “SPA” was amended in relation to the 2022 earnout clause giving rise to additional consideration
payable up to a maximum of $330k if certain pre-determined 2022 EBITDA levels are achieved by RadMD LLC. See note 23.5 for
further details.
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
Annual Report for the year ended 31 December 2021
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Contingent consideration is not dependant on the continued employment of the vendors and therefore it has been recognised as
consideration and not remuneration.
Revenue and profit contribution
From the date of the acquisition to 31December 2021 RadMD LLC contributed £5,194k and £856k to the Group’s revenues and
underlying profit before tax, respectively. If the acquisition had occurred on 1January 2021 revenues would have been £6,363k and
underlying profit before tax would have been £682k. In determining these amounts management have assumed that the deferred
revenue fair value adjustment on conversion to IFRS of £194k arising on acquisition would have been the same had the acquisition
occurred on 1January 2021.
Acquisition-related costs
Costs related to the acquisition of RadMD amounted to £365k and have been expensed recognised within non-underlying operating
costs (see note 7). These costs relate to financial and tax due diligence £170k, legal costs £146k and other tax and accounting
services £50k.
Global Diagnostics Ireland Limited
On 2November 2020 the company acquired Global Diagnostics Ireland Limited. Set out in note 23.5 are movements in the contingent
consideration since 31December 2020. Other than the movement in contingent consideration there have been no changes to the fair
values of the assets and liabilities acquired which were disclosed at 31December 2020 on a provisional basis which have now been
finalised.
20 Trade and other receivables
2021
£000
2020
£000
Trade receivables 10,822 6,371
Other receivables 1,266 880
Prepayments 1,415 759
Accrued revenue 768 323
14,271 8,333
All trade receivable amounts are short term. The carrying value is considered a fair approximation of their fair value. Since the Group’s
revenue is derived primarily from public sector clients including NHS Trusts in the UK and HSE clients in Ireland and multinational
pharma businesses in the US, management considers that all the above financial assets are of good credit quality and no changes in
credit quality have been experienced since initial recognition.
The Group applies an expected credit loss model in estimating a provision for future credit losses. At 31December 2021 and
31December 2020 the Group determined that any such provision was not material to the Group based on historical analysis of
credit losses.
21 Cash and cash equivalents
Cash and cash equivalents consisted of the following:
2021
£000
2020
£000
Cash at bank in hand:
Commercial current accounts 9,616 13,934
9,616 13,934
22 Trade and other payables
2021
£000
2020
£000
Trade payables 3,985 2,227
Other taxation and social security 664 564
Accruals 4,002 2,488
Deferred income 799 346
Other short-term payables 126 178
9,576 5,803
All amounts are short term and the directors consider that the carrying value of trade and other payables are a reasonable
approximation of fair value. The contractual maturity of all amounts above are within one year of the balance sheet date.
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23 Borrowings
23.1. Borrowings due in less than one year
2021
£000
2020
£000
Revolving Credit Facility (RCF) 5,739 5,881
5,739 5,881
On 23April 2021, the previous Revolving Credit Facility balance of was repaid in full. After recognition of a foreign exchange translation
gain of £0.3m, the amount repaid was £5.6m.
On 5May 2021, the term debt of £12m was also repaid in full as part of a refinance of the Group’s debt facilities with £12m of a new
£30m RCF drawn down on the same date. The RCF facility is recognised net of arrangement fees of £0.4m. The new facility has a
three-year term, extendable by up to two years, a margin above SONIA on drawn funds in the range of 2% to 3% depending on leverage
and non-utilisation fees of 35%. Repayment of loans are due at the end of each interest period of up to six months. At the end of the
year the interest period was three months, and the loan was repayable in February 2022. New loans can be drawn down on submission
of a utilisation request. Security has been granted to the new banking syndicate of three banks comprising Lloyds, Nat West and
Silicon Valley Bank over the UK companies and limited security over non-UK entities. Additionally, the group has access to an unutilised
accordion facility up to £22.5m.
The RCF requires interest and leverage covenants to be met under the terms of the Group’s facility agreement, and these requirements
have been met as at all covenant testing dates during the year.
23.2. Borrowings due in more than one year
2021
£000
2020
£000
Bank loans – 11,960
– 11,960
Long term borrowings carried a market rate of interest being LIBOR plus a margin as determined by the lender. On this basis the
carrying amount equated to the present value of future cashflows discounted at a market rate of interest and therefore, the directors
considered that the carrying amount of the bank loans to have been a reasonable approximation of fair value.
23.3. Maturity of the Group’s non-derivative financial liabilities (including interest payments where
applicable) and contingent consideration
2021
Contingent
consideration
£000
Trade payables
and accruals
£000
Lease
liability
£000
RCF and
bank loans
£000
Total
£000
Maturity:
Due within one year 5,489 8,113 280 5,739 19,621
Due between 2-5 years 1,731 – 814 – 2,545
Total 7,220 8,113 1,094 5,739 22,166
2020
Maturity:
Due within one year 1,797 4,893 299 5,881 12,870
Due between 2-5 years 1,797 – 475 11,960 14,232
Total 3,594 4,893 774 17,841 27,1 0 2
The above amounts reflect the undiscounted contractual cash flows, which may differ from the carrying values of the liabilities at the
reporting date. The maturity analysis above assumes that interest rates remain as they were at 31December 2021 (or 31December
2020). The contractual undiscounted cashflows of the Group’s non-derivative financial liabilities are not significantly different to their
carrying amounts.
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
Annual Report for the year ended 31 December 2021
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23.4 Reconciliation of liabilities arising from financing activities
Financing activities
RCF
£000
Long term bank
borrowings
£000
Lease
liability
£000
Total
£000
At 1January 2021 5,881 11,960 774 18,615
Additions – business combination (note 19) – – 185 185
Additions – – 577 577
Cash flows:
– Draw down of RCF 11,592 – – 11,592
– Repayments (11,734) (11,788) (407) (23,929)
(142) (11,788) (407) (12,337)
Non-cash:
– Foreign exchange – (172) (35) (207)
– (172) (35) (207)
At 31December 2021 5,739 – 1,094 6,833
Financing activities
RCF
£000
Long term bank
borrowings
£000
Lease
liability
£000
Total
£000
At 1January 2020 – 11,936 507 12,443
Additions – business combination – – 420 420
Cash flows:
– Draw down of RCF 5,963 – – 5,963
– Repayments (54) – (152) (206)
5,909 – (152) 5,757
Non-cash:
– Amortisation of arrangement fees – 24 – 24
– Foreign exchange (4) – (1) (5)
(4) 24 (1) (5)
At 31December 2020 5,905 11,960 774 18,639
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23.5 Contingent consideration
Global
Diagnostics
Ireland Limited
£000
RadMD
LLC
£000
Total
£000
As at 1January 2020 – – –
Acquired on acquisition 3,540 – 3,540
Foreign exchange (9) – (9)
As at 31December 2020 3,531 – 3,531
Acquired on acquisition – 2,924 2,924
Fair value adjustment (71) 664 593
Foreign exchange (230) 70 (160)
As at 31December 2021 3,230 3,658 6,888
Amounts due in less than one year 1,866 3,469 5,335
Amounts due in more than one year 1,364 189 1,553
Global Diagnostics Ireland Limited
During the year, the NSS extended a contract held by MVI by a further 12 months and confirmed the retender of the contract in 2022
triggering a review of the probability weighted expected future values under the various possible outcome of the future contract
events. This resulted in a decrease of £147k in the fair value estimate of contingent consideration. This was offset by an increase of
£76k due to the fair value movement in relation to the unwinding of the time value of money.
Other movements during the period relate to a decrease in the liability relating to foreign exchange revaluation from Euros to
GBP of £230k.
As at 31December, £1,866k of the contingent consideration is payable during 2022 and therefore disclosed under current liabilities
on the statement of financial position. £1,650k of the balance, net of transaction bonuses of £23k was paid in March 2022 on
commencement of the VHI contract discussed in the Delivery: Ireland section of the strategic report. Total amounts due in more
than one year of £1,364k are payable in the first half of 2023 and are disclosed under non-current liabilities on the statement of
financial position.
RadMD LLC
On 26March 2021, the Group acquired RadMD LLC recognising fair value contingent consideration of £2,924k. See note 19. Since
acquisition there has been an increase in the fair value estimate of contingent consideration of £664k. £217k of this is due to a higher
expected adjusted 2021 EBITDA than originally estimated resulting in a higher-than-expected payment subject to agreement with the
vendors. £185k relates to a change in the SPA resulting in additional contingent consideration based on 2022 EBITDA. £262k of the
movement relates to the fair value movement in relation to the unwinding of the time value of money. As the events occurred after the
acquisition date a charge has been recognised in the income statement and not taken to goodwill.
Other movements include an increase in the liability relating to foreign exchange revaluation from USD to GBP of £70k recognised in
the foreign exchange reserve.
£3,469k of contingent consideration is due to be settled in the first half of 2022 and is disclosed under
current liabilities on the
statement of financial position. £189k is due to be settled in the first half of 2023 and disclosed under non-current liabilities on the
statement of financial position.
24 Deferred taxation assets and liabilities
Deferred tax included in the statement of financial position is as follows:
2021
£000
2020
£000
Depreciation in excess of capital allowances 6 60
Deferred tax on share based payments (145) (163)
Deferred tax on intangible assets 2,264 2,350
Deferred tax on losses (41) –
2,084 2,247
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
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Reconciliation of movement in deferred tax
Depreciation in
excess of capital
allowances
£000
Share based
payments
£000
Intangible
assets
£000
Losses
£000
Total
£000
As at 1January 2020 (62) (119) 1,061 – 880
Recognised in the income statement 122 (44) (49) – 29
Acquired on business combination – – 1,338 – 1,338
As at 31December 2020 60 (163) 2,350 – 2,247
Recognised in the income statement (54) 18 (218) (41) (295)
Foreign exchange – – 132 – 132
As at 31December 2021 6 (145) 2,264 (41) 2,084
Immediately before the acquisition, RadMD LLC was owned 100% by RadMD Holdings, Inc, and thus was treated as a disregarded
entity. Since Medica US, Inc. acquired 100% of the membership interests of RadMD LLC, the transaction was treated as a deemed
taxable asset acquisition for U.S. federal income tax purposes. As such, Medica US Inc. received a cost basis in the acquired assets of
RadMD LLC equal to the consideration transferred, plus liabilities assumed.
25 Equity
Ordinary share capital issued and fully paid
At 31December 2021
£000
At 31December 2020
£000
122,428,836 (2020: 111,279,650) ordinary shares of
£0.002 each 245 223
Total ordinary share capital of the Company 245 223
Issue of share capital during the year
On 23March 2021, 11,111,110 ordinary shares of 0.2p each were issued for cash at £1.45 per share.
The below shares were issued on the exercise of SAYE options:
• On 6July 2021, 36,477 ordinary shares of 0.2p each were issued for cash at par value.
• On 7October 2021, 1,066 ordinary shares of 0.2p each were issued for cash at par value.
• On 30December 2021, 533 ordinary shares of 0.2p each were issued for cash at par value.
Rights attributable to issued shares
Any profits which the Company determines to distribute in any financial year shall be paid on the ordinary shares. Every holder of an
ordinary share and ordinary share is entitled to one vote and has one vote for every share for which they are a holder.
On a return of capital on liquidation, capital reduction or otherwise, the surplus assets of the Company remaining after the payment of
its liabilities shall be applied in distributing the balance of such assets amongst the holders of the ordinary shares.
Voting rights
The holders of ordinary shares are entitled to receive notice of and attend and vote at any general meeting of the Company.
Share premium
£15,552k was recognised in share premium on the issue of ordinary shares during the period, net of £537k of transaction costs. £51k
was recognised in share premium on the issue on ordinary shares for the exercise of SAYE options.
Retained profit
Retained earnings include current and prior period retained profit and losses and the cumulative amount of exchange differences
recognised through other comprehensive income.
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Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
26 Undertakings included in the financial statements
The consolidated financial statements include:
Class of share held
Country of
incorporation Proportion held Nature of business
Medica Reporting Limited Ordinary England & Wales 100% Teleradiology reporting
Medica IT Services Limited Ordinary England & Wales 100% IT services
Global Diagnostics Ireland Limited Ordinary Ireland 100% Teleradiology and
managed services
Global Retinopathy Screening Limited Ordinary Ireland 100% Diabetic
retinopathy screening
Medica US, Inc. Ordinary United States
of America
100% Holding company
RadMD Inc Ordinary United States
of America
100% Imaging core labs
Medica Australia Pty Limited Ordinary Australia 100% Teleradiology reporting
MED-IDX Pty Limited Ordinary Australia 50% Teleradiology reporting
All UK subsidiaries have the same registered address as the Group being: 6th Floor One Priory Square, Priory Street,
Hastings, TN34 1EA.
Medica Australia Pty Limited’s registered address is: c/o KPMG, Level 38, Tower 3, 300 Barangaroo Avenue, Sydney NSW 2000,
Australia.
Med-IDX trades as MedX and has a registered address at Level 9, 45 William Street, Melbourne VIC 3000, Australia.
The Irish subsidiaries’ registered address is: Floor 1 Block 14, Rockfield Medical Campus, Balally, Dublin 16, Ireland.
The United States of America subsidiaries’ registered address is: 251 Little Falls Drive, Wilmington, DE 19808
On the 11October 2021 Medica Reporting Services Limited and Medica Reporting Finance Limited entered liquidation.
Subsidiary audit exemption under parent guarantee:
For the year ended 31December 2021, Medica Reporting Limited (Registered number 05026045) and Medica IT Services Limited
(Registered number 13014281) are exempt from the requirements of the Companies Act 2006 relating to the audit of individual accounts
by virtue of section 479A of the Companies Act 2006.
27 Financial instruments
Categories of financial instruments
At 31December 2021
£000
At 31December 2020
£000
Financial assets measured at amortised cost
Trade receivables 12,856 7, 5 74
Cash and bank balances 9,616 13,934
22,472 21,508
Financial liabilities measured at amortised cost
Trade and other payables (8,113) (4,119)
Lease liabilities (1,094) (774)
Borrowings (5,739) (17,841)
(14,946) (22,734)
Financial liabilities measured at fair value
through profit and loss
Contingent consideration (6,888) (3,531)
A description of the Group’s financial instrument risks, including risk management objectives and policies, is given in Note 28.
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27.1. Fair value measurement of financial instruments
The methods used to measure financial assets and liabilities reported at fair value are described below.
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of fair
value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement as follows
Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities.
Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The level of the fair value hierarchy which the measurement of the contingent consideration represents is a Level 3 valuation, as
defined in IFRS 13: Fair Value Measurement, whereby inputs are not based on observable market data.
28 Financial instruments risk
28.1. Risk management objectives and policies
The Group is exposed to various risks in relation to financial instruments. The Group’s financial assets and liabilities by category
are summarised in Note 27. The Group’s financial instruments comprise cash and liquid resources and various items, such as trade
receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to raise
finance for the Group’s operations. The principal financial risks faced by the Group are liquidity, credit and interest rate risks. The
Group has an exposure to transactional currency risk with its Irish, US and Australian subsidiaries as well as payment of some amounts
in Euros and USD. It also has reporting currency risk with its Irish, US and Australian subsidiaries.
The Group’s risk management is coordinated at its headquarters, in close cooperation with the Board of Directors, and focuses on
actively securing the Group’s short to medium-term cash flows by minimising the exposure to volatile financial markets. Long-term
financial investments are managed to generate lasting returns.
The Group does not actively engage in the trading of financial assets for speculative purposes, nor does it write options. The most
significant financial risks to which the Group is exposed are described below.
Credit risk
The Group’s principal financial assets are cash and cash equivalents and trade and other receivables. The Group has no significant
credit risk. The maximum exposure to credit risk is that shown within the balance sheet. All amounts are short term and management
consider the amounts to be of good credit quality.
Liquidity/funding risk
The Group’s funding strategy is to ensure a mix of funding sources offering flexibility and cost effectiveness to match the requirements
of the Group. Operating subsidiaries are financed by retained profits. The Group manages liquidity risk by maintaining adequate
reserves and agreed committed banking facilities. For a summary of non-derivative financial liabilities that have contractual maturities
(including interest payment where applicable) please see Note 23.3.
Interest rate risk
The Group holds the majority of its cash and cash equivalents in corporate current accounts. The Group also utilises its Revolving
Credit Facility (RCF). At 31December 2021, £6m of the total facility was drawn. Interest under the RCF is charged at the relevant
reference rate (RFR), which for amounts drawn down in GBP this is SONIA, plus a variable margin depending on leverage. For 2021 the
average margin was 2%. As this is a variable rate depending both on the RFR and group leverage the total interest rate payable can and
does vary. The maximum margin payable on the RCF would be 3%.
Foreign currency risk
The Group has cash, intercompany and contingent consideration balances held in non-functional currencies which exposes the Group
to USD and EUR currency exchange rates. There is an immaterial exposure to transactional exchange differences as all subsidiaries
trade in their local currencies with a small number of transactions in other currencies. The Group’s exposure is reduced by a natural
hedge through its subsidiaries which operate in the US and Europe. Management monitors foreign currency payment requirements
and where needed, can draw down on the RCF in foreign currencies to mitigate the exposure. The Group does not currently have a
requirement to hedge against currency risk but management continue to monitor the need to undertake such activity as the Group
becomes more international.
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Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
Foreign currency denominated financial assets and liabilities which expose the Group to currency risk are disclosed below. The
amounts shown are those reported to key management translated into CU at the closing rate.
USD
$000
EUR
€000
31 December 2021
Financial assets 12,147 1,536
Financial liabilities – (5,171)
Total Exposure 12,147 (3,636)
31 December 2020
Financial assets – 397
Financial liabilities – (3,062)
Total Exposure – (2,665)
Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, to provide returns
for shareholders and benefits for other stakeholders and to maintain a capital structure that optimises the cost of capital.
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the
return to stakeholders through the optimisation of the debt and equity balance.
The capital structure of the Group consists of debt, which includes loans, other borrowings in Notes 23; cash and cash equivalents as
disclosed in the statement of financial position and Note 21; and equity attributable to equity holders of the parent, comprising issued
capital, reserves and retained earnings as disclosed in the consolidated statement of changes in equity.
The gearing ratios at the end of the reporting periods were as follows:
2021
£000
2020
£000
Debt due within one year 5,739 5,881
Debt due in more than one year - 11,960
Cash and bank balances (9,616) (13,934)
Net (cash)/debt (3,877) 3,907
Total equity 54,903 36,453
Total capital 51,026 40,360
Net (cash)/debt to total capital (8%) 10%
Debt is defined as long and short-term borrowings. Equity includes all capital and reserves of the Group that are managed as capital.
Sensitivity analysis
Interest rate
The £5.9m of RCF is at variable interest rate of SONIA plus a variable margin which was 2% throughout the period and therefore
represents a potential risk that the fair value of the Group’s future cash flows may fluctuate because of changes in market interest
rates. In the prior year, both the bank loan and RCF, which were repaid in the current year were at variable interest rates of LIBOR plus
1.75% and LIBOR plus 3% respectively and subject to the same risk.
At 31December 2021, if the total interest payable on the all the facilities had been 1% higher with all other variables held constant, post-
tax profit for the year and total equity would have been reduced by £99k (2020: £145k), arising as a result of higher interest expense on
variable borrowings.
Foreign currency
The following illustrates the sensitivity of profit and equity in relating to the Group’s financial assets and financial liabilities and the
USD/CU exchange rate and EUR/CU exchange rate ‘all other things being equal’. It assumes a +/- 10% change of the CU/USD exchange
rate for the year ended on 31 December 2021 (2020: n/a). A +/- 5% change is considered for the CU/EUR exchange rate (2020: 5%).
Both percentages have been determined based on the fluctuations in exchange rates in the year. The sensitivity analysis is based on
the Group’s foreign currency financial instruments held at each reporting date.
A +/- 10% (2020: n/a) change of the CU/USD exchange rate would have an impact on profit and equity of +/- £899k (2020: n/a).
A +/- 5% change of the CU/EUR exchange rate would have an impact on profit and equity of +/- £153k (2020: +/- £120k)
Annual Report for the year ended 31 December 2021
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29 Share-based payments
Under the Group’s share-based incentive scheme the following expense was charged.
2021
£000
2020
£000
Performance Share Plan 510 179
Company Share Option Plan 42 8
Save As You Earn Plan 94 18
Deferred Bonus Plan 36 5
682 210
Employers NI on share-based payments 78 -
TOTAL 760 210
All share-based payment schemes are related to equity settled awards only. £78k (2020: nil) was charged to the income statement in
relation to employers NI on share option plans and included in accruals on the statement of financial position.
Summary of the number of options and movements in the year.
PSP DBP CSOP SAYE TOTAL
1January 2021 4,049,377 12,993 229,919 325,021 4,617,310
Granted 1,796,591 32,065 161,304 118,213 2,108,173
Exercised (66,518) (2,737) – (38,076) (107,331)
Forfeited (171,068) – (18,356) (7,695) (197,119)
Cancelled – – – (3,866) (3,866)
Lapsed (575,507) – – – (575,507)
31December 2021 5,032,875 42,321 372,867 393,597 5,841,660
PSP
Restated
1
DBP CSOP SAYE TOTAL
1January 2020 2,793,335 9,526 83,733 122,524 3,009,118
Granted 2,038,282 10,256 171,950 298,620 2,519,108
Exercised (48,179) (6,789) – – (54,968)
Forfeited (369,774) – (25,764) (20,533) (416,071)
Cancelled – – – (62,531) (62,531)
Lapsed (364,287) – – (13,059) (377,346)
31December 2020 4,049,377 12,993 229,919 325,021 4,617,310
1 The numbers disclosed are after the restatement for correction of the error disclosed in note 2.5.
Performance share plan
For scheme participants, the performance share plan is a nil-cost share award with an effective exercise price of £nil. Half the award
is based on Earnings per share (EPS) targets and half is based on Total Shareholder Return (TSR) targets. The performance and vesting
period are three years and there is an additional holding period one year for employees and of two years for key management and
executives. Accordingly, the vesting period is deemed to be four and five years respectively. Further information is set out in the report
of the Remuneration Committee on pages 50 to 70.
Year end
2021
Year end
2020
Restated
1
1January 4,049,377 2,793,335
Granted 1,796,591 2,038,282
Exercised (66,518) (48,179)
Forfeited (171,068) (369,774)
Lapsed (575,507) (364,287)
31December 5,032,875 4,049,377
1 The numbers disclosed are after the restatement for correction of the error disclosed in note 2.5.
The remaining weighted average contractual life of options is 3.3 years (2020: 3.5 years).
Options exercised in the year at a weighted average share price of £1.68 (2020: £1.10).
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Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
Options forfeited during the year were due to the participants leaving before the vesting date of the options.
Options that lapsed in the year did not meet the performance conditions and related to the 2018 awards.
The Group engaged external consultants to calculate the fair value of the awards at the date of grant. The valuation model used to
calculate the fair value of the awards was a binomial model for both the non-market-based awards and for the market-based awards.
PSP
2021
PSP
2020
Share price at date of grant £1.70 £1.10
Exercise price – –
Expected volatility 56% 57%
Expected life 5 years 5 years
Risk free rate 0.35% 0.08%
Average fair value of award per share £1.15 £0.74
CSOP
All employees, including Executive Directors, are eligible to receive annual awards of an option to acquire shares in Medica for an
amount that is not less than the market value of the Medica shares at the date of grant. Awards granted under the CSOP will normally
have a vesting period of not less than three years. Awards may, but do not need to be, subject to performance conditions and targets.
Further information is set out in the report of the Remuneration Committee on pages 50 to 70.
Details of scheme, issued at market value representing exercise price.
Year end
2021
Year end
2020
1January 229,919 83,733
Granted 161,304 171,950
Forfeited (18,356) (25,764)
31December 372,867 229,919
The remaining weighted average contractual life of options is 1.6 years (2020: 2.1 years).
Options that were forfeited during the year due to participants leaving the business before the vesting date. No options were exercised
or lapsed during the year.
The Group engaged external consultants to calculate the fair value of the awards at the date of grant. The valuation model used to
calculate the fair value of the awards was a binomial model.
CSOP
2021
CSOP
2020
Share price at date of grant £1.62 £1.10
Exercise price – –
Expected volatility 62% 58%
Expected life 3 years 3 years
Risk free rate 0.33% 0.12%
Expected dividend yield 1.5% 2.5%
Average fair value of award per share £0.85 £0.52
DBP
The deferred bonus plan applies to executive directors and key management. Under the plan, 25%-40% of the annual bonus is deferred
into awards in shares in Medica. Awards under plan are not subject to further performance conditions and vest after two years, broadly
subject to continued employment. Further information is set out in the report of the Remuneration Committee on pages 50 to 70.
Year end
2021
Year end
2020
1January 12,993 9,526
Granted 32,065 10,256
Exercised (2,737) (6,789)
31December 42,321 12,993
The remaining weighted average contractual life of options is 1.1 years (2020: 1.1 years).
Shares were exercised at a weighted average price of 1.54 (2020: £1.37). No shares were forfeited or lapsed during the year.
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These schemes were valued using the share price at the grant date adjusted for the number of options expected to vest based on the
estimated forfeiture rates.
SAYE scheme
The SAYE scheme is an all-employee HMRC approved tax-advantaged share scheme. The scheme involves employees saving a set
amount from their salary for a period of three years. At the end of the three years the employee is offered an opportunity to purchase
the shares granted based on the amount saved at an option price set at a discount to the market price of a share at the grant date.
The exercise price for awards granted in 2017 was £1.86, in 2018 was £1.35, in 2019 was £1.35, in 2020 was £1.00 and in 2021 was £1.46.
Further information is set out in the report of the Remuneration Committee on pages 50 to 70.
Year end
2021
Year end
2020
1January 325,021 122,524
Granted 118,213 298,620
Exercised (38,076) –
Forfeited ( 7, 6 9 5) (20,533)
Cancelled (3,866) (62,531)
Lapsed – (13,059)
31December 393,597 325,021
The remaining weighted average contractual life of options is 1.7 years (2020: 2.1 years).
Options that were exercised during the year were exercised at a weighted average exercise price of £1.35.
Options forfeited were due to participants leaving the company and cancellations were due to participants who stopped making the
required contributions to the plans.
No options lapsed during the year. In the prior year, lapsed options related to those granted in 2017 which were below water on the
exercise date.
The Group engaged external consultants to calculate the fair value of the awards at the date of grant. The valuation model used to
calculate the fair value of the awards was a binomial model.
SAYE
2021
SAYE
2020
Share price at date of grant £1.62 £1.27
Exercise price – £nil
Expected volatility 62% 58%
Expected life 3 years 3 years
Risk free rate 0.37% 0.04%
Expected dividend yield 1.5% 2.0%
Average fair value of award per share £0.88 £0.68
30 Transactions with Directors and other related parties
Key management personnel (which the Group defines as the Board of Directors and senior managers) remuneration and dividends paid
to Directors are disclosed in Notes 12 and 13.
On 23March 2021 a total of 10,727,666 Placing Shares were placed by Investec Bank plc and Liberum Capital Limited at a price of 145
pence per Placing Share amounting to £15,555k of gross proceeds. In conjunction with the Placing, all the directors of the Company,
Junaid Bajwa (a non-executive director from 1April 2021) and certain members of the senior management team agreed to subscribe
for 383,444 new Ordinary Shares at the Placing Price which amounts to gross subscription proceeds for the Company of £556k in
aggregate.
31 Controlling party
There is no overall controlling party of the Group following the admission of the Company’s ordinary shares onto the premium listing
segment of the Official List and to trading on the London Stock Exchange’s Main Market for listed securities on 21March 2017.
32 Post balance sheet events
At the signing date there were no significant post balance sheet events to report.
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33 Reconciliation of non-IFRS financial KPIs
The Group uses several key performance indicators to monitor the performance of its business. This note reconciles these key
performance indicators to individual lines in the financial statements.
In the directors’ view it is important to consider the underlying performance of the business during the year. Therefore, the directors
have used certain Alternative Performance Measures (APMs) which are not IFRS-compliant metrics. The APMs are consistent with
those established within the IPO prospectus and the prior year annual report. It is the directors’ intention to monitor and reassess the
appropriateness of the APMs in future years.
At 31December 2021
£000
At 31December 2020
£000
Reconciliation of underlying operating profit
Operating profit before exceptional items 8,538 2,694
Adjustments for:
Effects of amortisation of acquired intangibles 2,225 1,010
Effects of shared based payments 682 210
Social security costs on share based payment charge 78 –
Write off of property, plant and equipment and other
intangible assets – 219
Foreign exchange adjustment on contingent
consideration (173) –
Acquisition costs incurred 173 792
One-off legal and professional fees 555 78
Underlying operating profit 12,078 5,003
Underlying operating profit margin 19.5% 13.6%
Reconciliation of underlying profit before tax
Profit for the year 5,467 1,345
Adjustments for:
Non-underlying profits or losses net of tax (see note 7) 3,926 2,516
Underlying profit after tax 9,393 3,861
Income tax charge on underlying expenses 2,079 876
Underlying profit before tax 11,472 4,737
Reconciliation of net debt
Cash and equivalents 9,616 13,934
Borrowings due within one year (5,739) (5,881)
Borrowings due after one year – (11,960)
Net cash/(debt) 3,877 (3,907)
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
Annual Report for the year ended 31 December 2021
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Company statement of financial position
COMPANY REGISTRATION 08497963 AS AT 31 DECEMBER 2021
Note
31December 2021
£000
31December 2020
£000
Non-current assets
Investments 36 52,482 18,870
Debtors due after more than one year 38 8,808 –
61,290 18,870
Current assets
Debtors 38 224 19,802
Cash and cash equivalents 1,709 931
Deferred tax 144 163
2,077 20,896
Total assets 63,367 39,766
Creditors: amounts falling due within one year
Trade and other creditors 39 (13,098) (263)
Borrowings (5,739) (5,881)
Contingent consideration 40 (1,783) (877)
(20,620) (7,021)
Net current assets (18,543) 13,875
Total assets less current liabilities 42,747 32,745
Non-current liabilities
Borrowings 41 – (11,960)
Contingent consideration (670) (1,778)
(670) (13,738)
Net assets 42,077 19,007
Capital and reserves
Called up share capital 37 245 223
Share premium account 37 30,324 14,721
Profit and loss account 11,508 4,063
Total equity 42,077 19,007
Parent company profit and total
comprehensive income for the year 9,963 4,276
As permitted by s408 Companies Act 2006, the Company has not presented its own statement of comprehensive income and related
notes as it prepares group financial statements. The Company’s profit for the year is shown above.
The financial statements on pages 125 to 131 were approved and authorised for issue by the Board of Directors on 11 April 2022 and
were signed on its behalf by:
Stuart Quin Richard Jones
Director Director
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Share
capital
£000
Share
premium
£000
Retained
earnings
£000
Total
equity
£000
At 1January 2020 222 14,721 522 15,465
Issue of share capital 1 – – 1
Dividends paid to ordinary shareholders – – (945) (945)
Equity settled share based payments – – 210 210
Transactions with owner 1 – (735) (734)
Profit and total comprehensive income for the period – – 4,276 4,276
At 1January 2021 223 14,721 4,063 19,007
Issue of share capital 22 15,603 – 15,625
Dividends paid to ordinary shareholders – – (3,167) (3,167)
Equity settled share based payments – – 682 682
Deferred tax on share based payments – – (33) (33)
Transactions with owner 22 15,603 (2,518) 13,107
Profit and total comprehensive income for the period – – 9,963 9,963
At 31December 2021 245 30,324 11,508 42,077
Company statement of changes in equity
FOR THE YEAR ENDED 31 DECEMBER 2021
Annual Report for the year ended 31 December 2021
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34 Accounting policies
The financial statements have been prepared in accordance with applicable accounting standards including Financial Reporting
Standard 101, ‘Reduced Disclosure Framework’ (FRS 101) and the Companies Act 2006. The financial statements have been prepared on
a going concern basis under the historical cost convention, modified to include certain items at fair value. The financial statements are
prepared in Sterling, which is the functional currency of the Company.
Exemptions
The directors have taken advantage of the exemption available under section 408 of the Companies Act 2006 and not presented a
profit and loss account for the Company alone.
In preparing these financial statements the Company has taken advantage of all disclosure exemptions conferred by FRS 101. Therefore,
these Company financial statements do not include:
• A statement of cash flows and related notes
• The requirements of IAS 24 related party disclosures to disclose related party transactions entered in to between two or more
members of the Group as they are wholly owned within the group
• The effect of future accounting standards not adopted
• Disclosure of key management personnel compensation
• Disclosure in respect of financial instruments (other than disclosures required as a result of recording financial instruments at
fair value)
• Share based payment disclosures required under IFRS 2
Going concern
The Directors have prepared cashflow forecasts for a period of 21 months from the date of approval of these financial statements
(the forecast period). These indicate that the Group and the Company will have sufficient funds to meet its liabilities as they fall due,
and will continue to comply with its loan covenants, throughout the forecast period. These forecasts include an estimate of cashflow
receipts from subsidiary companies to repay interest and borrowings, settle intercompany liabilities and via dividends declared in
certain trading subsidiaries.
The forecasts have been prepared by reference to the 2022 approved budget and detailed bottom-up forecasts for the following
financial year which have considered realistic downside scenarios including:
• Impacts to volumes and therefore to revenues and profits from a further “wave” of Covid-19 particularly in the UK and Ireland
• Loss of certain material contracts
• Further material inflationary pressure on operating costs above current expectations
Under these downside scenarios, individually and cumulatively and, excluding any potential mitigating actions that could be taken,
management conclude that the Group and the Company will have sufficient funds to continue to meet its liabilities as they fall due for
at least 21 months from the date of approval of the financial statements and the Board have therefore determined it is appropriate to
adopt the going concern basis in preparing the financial statements.
Investments
Investments are recognised initially at fair value which is normally the transaction price excluding transaction costs. Subsequently, they
are measured at cost less impairment.
For the year ended 31December 2021, Medica Reporting Finance Limited (Registered number: 08497950) and Medica Reporting
Services Limited (Registered number: 08497952) are exempt from the requirements of the Companies Act 2006 relating to audit of
individual accounts by virtue of section 479A of the Companies Act 2006.
Financial instruments
See Note 3.14 of the Group accounts.
Foreign currency translation
See Note 3.20 of the Group accounts.
Intercompany assets and liabilities denominated in a foreign currency are translated into the functional currency of the Company using
the exchange rates at the reporting date. Gains and losses arising from changes in exchange rates after the date of the transaction are
recognised in profit or loss.
Share capital and reserves
Share capital represents the nominal value of shares that have been issued.
Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares
are deducted from share premium, net of any related income tax benefits.
Retained earnings include all current and prior period retained profits or losses. They also include charges related to share-based
employee remuneration.
Dividend distributions payable to equity shareholders are included in ‘other liabilities’ when the dividends have been approved in a
general meeting prior to the reporting date.
Notes to the financial statements
FOR THE YEAR ENDED 31 DECEMBER 2021
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Significant judgements and estimates
There are no significant or material key judgements made by management in applying the accounting policies of the Company. The
following are estimates made by management in measuring the assets, liabilities, income, and expenses.
Fair value of contingent consideration on business combination
Under the terms of the acquisition of GDI in the prior year, up to €4m (€3m by the Company) contingent consideration is payable
in tranches during 2022 and 2023 subject to the realisation of future events including the successful commencement and renewal
of contracts. In accordance with IFRS 9 ‘Financial Liabilities’ the fair value of contingent cash consideration was assessed based on
applying a time value of money discount to the probability weighted expected future values under the various possible outcomes. See
note 23.5 for further details.
Carrying value of investments
In assessing whether the Company’s investments are impaired management use a discounted cash flow model which includes forecast
cash flows and estimates of future growth to estimate their recoverable amount. Where their recoverable amount is below the carrying
value, an impairment is recognised in the income statement. See note 14 for details discounted cash flow approach.
35 Directors and employees
The directors were the only employees of the Company during the year. The disclosures in respect of key management personnel have
been provided in Note 13 of the Group financial statements.
36 Investments in subsidiaries and joint ventures
Investments
Subsidiary undertakings
£000
Joint ventures
£000
Total
£000
At 31December 2019 1,455 – 1,455
Additions 17,415 – 17,415
At 31December 2020 18,870 – 18,870
Additions 33,668 – 33,668
Transfers (56) 56 –
Share of results from joint ventures – (56) (56)
At 31December 2021 52,482 – 52,482
Additions for the prior year are made up of £17,359k in respect of the acquisition of Global Diagnostics (Ireland) Limited, and £56k in
respect of the incorporation of a new wholly-owned subsidiary undertaking, MED-IDX Pty Limited.
Additions in the current year are made up of £3,208k in respect of the setup & subsequent acquisition of Medica US, Inc. and RadMD
LLC, discussed further in note 19 in these group financial statements; £30,460k in respect of a group reorganisation, Medica Reporting
Limited becoming directly owned by the Company; and Med-IDX Pty became a 50:50 joint venture with Integral Diagnostics Limited
Pty and was transferred from investments in subsidiaries to an investment in joint ventures, applying the equity method of accounting.
As the Company has no legal or constructive obligations to make payments on behalf of Med-IDX Pty no liability has been recognised.
Subsidiary undertakings and joint ventures
Class of share held
Country of
incorporation Proportion held Nature of business
Medica Reporting Limited Ordinary England & Wales 100% Teleradiology reporting
Medica IT Services Limited Ordinary England & Wales 100% IT services
Global Diagnostics Ireland Limited Ordinary Ireland 100% Teleradiology and
managed services
Global Retinopathy Screening Limited Ordinary Ireland 100% Diabetic
retinopathy screening
Medica US, Inc. Ordinary United States
of America
100% Holding company
RadMD Inc Ordinary United States
of America
100% Imaging core labs
Medica Australia Pty Limited Ordinary Australia 100% Teleradiology reporting
MED-IDX Pty Limited Ordinary Australia 50% Teleradiology reporting
All UK subsidiaries have the same registered address as the Group being: 6th Floor One Priory Square, Priory Street,
Hastings, TN34 1EA.
Medica Australia Pty Limited’s registered address is: c/o KPMG, Level 38, Tower 3, 300 Barangaroo Avenue, Sydney NSW 2000,
Australia.
Med-IDX trades as MedX and has a registered address at Level 9, 45 William Street, Melbourne VIC 3000, Australia.
The Irish subsidiaries’ registered address is: Floor 1 Block 14, Rockfield Medical Campus, Balally, Dublin 16, Ireland.
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
Annual Report for the year ended 31 December 2021
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The United States of America subsidiaries’ registered address is: 251 Little Falls Drive, Wilmington, DE 19808
On the 11October 2021 Medica Reporting Services Limited and Medica Reporting Finance Limited entered liquidation.
Subsidiary audit exemption under parent guarantee:
For the year ended 31December 2021, Medica Reporting Limited (Registered number 05026045) and Medica IT Services Limited
(Registered number 13014281) are exempt from the requirements of the Companies Act 2006 relating to the audit of individual accounts
by virtue of section 479A of the Companies Act 2006.
37 Capital and reserves
Ordinary share capital issued and fully paid
At 31December 2021
£000
At 31December 2020
£000
122,428,836 (2020: 111,279,650) ordinary shares of
£0.002 each 245 223
Total ordinary share capital of the Company 245 223
Issue of share capital during the year
On 23March 2021, 11,111,110 ordinary shares of 0.2p each were issued for cash at £1.45 per share.
The following below shares were issued following the exercise of SAYE options:
On 6July 2021, 36,477 ordinary shares of 0.2p each were issued for cash at par value.
On 7October 2021, 1,066 ordinary shares of 0.2p each were issued for cash at par value.
On 30December 2021, 533 ordinary shares of 0.2p each were issued for cash at par value.
Rights attributable to issued shares
Any profits which the Company determines to distribute in any financial year shall be paid on the ordinary shares. Every holder of an
ordinary share and ordinary share is entitled to one vote and has one vote for every share for which they are a holder.
On a return of capital on liquidation, capital reduction or otherwise, the surplus assets of the Company remaining after the payment of
its liabilities shall be applied in distributing the balance of such assets amongst the holders of the ordinary shares.
Voting rights
The holders of ordinary shares are entitled to receive notice of and attend and vote at any general meeting of the Company.
Share premium
£15,552k was recognised in share premium on the issue of ordinary shares during the period, net of £537k of transaction costs. £51k
was recognised in share premium on the issue on ordinary shares for the exercise of SAYE options.
Retained profit
Retained earnings include current and prior period retained profit and losses.
Share based payments
The Company has share based payment schemes in issue. The accounting policy and disclosures are contained within the Group
accounts (Note 3.19 and Note 29). The share based payment charge which is determined based on share based payment schemes
issued by the parent company, are recharged to the Company’s subsidiaries through a capital contribution and an increase in the
investment in the subsidiary.
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Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2021
38 Debtors
At 31December 2021
£000
At 31December 2020
£000
Current
Other debtors 8 –
Amounts due from subsidiary undertakings 19 19,691
Prepayments 77 3
Corporation tax recoverable 120 –
VAT reclaimable – 108
224 19,802
Non-current
Amounts due from subsidiary undertakings 8,808 –
9,032 19,802
The current amounts due from subsidiaries can be called for repayment on demand by the Company or repaid at any time at the option
of the subsidiary.
The non-current debtor balance of £8.8m ($11.9m) is repayable in July 2026, interest is charged at the cumulative compounded risk-
free rate plus 3% per annum.
In the directors’ view the entire outstanding balances could be settled by the relevant subsidiary within one year of the balance sheet
date and as such the directors are satisfied that there are no allowances for expected credit losses required.
39 Trade and other creditors
2021
£000
2020
£000
Trade creditors 49 55
VAT payable 51 –
Corporation tax – 5
Accruals 1,180 203
Amounts due to subsidiary undertakings 11,776 –
Other short-term creditors 42 –
13,098 263
The creditor balance of £11.8m (2020: £nil) relates to amounts owed to subsidiaries. The balance can be called for repayment
on demand.
40 Contingent consideration
Global Diagnostics
Ireland Limited
£000
As at 1January 2020 -
Acquired on acquisition 2,662
Foreign exchange (7)
As at 31December 2020 2,655
Fair value adjustment (28)
Foreign exchange (174)
As at 31December 2021 2,453
Amounts due in less than one year 1,783
Amounts due in more than one year 670
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Global Diagnostics Ireland Limited
During the period, the NSS extended a contract held by MVI by a further 12 months and confirmed the retender of the contract in
2022 triggering a review of the probability weighted expected future values under the various possible outcome of the future contract
events. This resulted in a decrease of £28k in the fair value estimate of contingent consideration.
Other movements during the period relate to a decrease in the liability relating to foreign exchange revaluation from Euros to
GBP of £174k.
As at 31December, £1,783k of the contingent consideration is payable during 2022 and therefore disclosed under current liabilities
on the statement of financial position. Total amounts due in more than one year of £670k are payable in the first half of 2023 and are
disclosed under non-current liabilities on the statement of financial position.
41 Borrowings
Borrowings relate to the Group’s bank and other loans which are set out in Note 23.
42 Related parties
See Note 30 in of the Group financial statements for related parties’ information. The Parent company has taken advantage of the
exemption available under FRS 101 from the requirement to disclose related party transactions entered into between two or more
members of the same group where all subsidiaries are wholly owned.
43 Post balance sheet events
See Note 32 of the Group financial statements for post balance sheet events information.
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Key advisors
The Board of Directors G R Davis
B Moorhouse
J M Easton
Dr J Bajwa
Dr S J Quin
R Jones
Company Secretary R Jones
Registered office Medica Group PLC
6th Floor
One Priory Square
Priory Street
Hastings
East Sussex
TN34 1EA
Independent auditors Grant Thornton UK LLP
Chartered Accountants & Statutory Auditors
2nd Floor St Johns House
Haslett Avenue West
Crawley
West Sussex
RH10 1BG
Legal Advisors DLA Piper
Victoria Square House
Victoria Square
Birmingham
B2 4DL
Joint Brokers Numis Securities Ltd
45 Gresham Street
London
EC2V 7BF
Liberum Capital Limited
Ropemaker Place
Level 12
25 Ropemaker Street
London
EC2Y 9LY
Registrar Link Group
6th Floor, 65 Gresham Street
London
EC2V 7NQ
Registered Company number 08497963
medicagroupplc.com One Priory
Hastings
East Sussex
TN34 1EA
Contact t: 033 33 111 222
enquiries@medica.co.uk
Annual Report for the year ended 31 December 2021
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Glossary of terms
AI
When referring to Medica Reporting Ltd,
AI is augmented intelligence.
Artificial Intelligence is the creation of
machines to work and react like humans,
Augmented Intelligence is using those
same machines to complement/enhance
the human worker.
CAGR
“Compound Annual Growth Rate” is the
rate of return that would be required for
an investment to grow from its beginning
balance to its ending one.
CDP
“Climate Disclosure Project” is an
international non-profit organisation that
runs the global disclosure system for
investors, companies, cities and regions to
manage their environmental impacts.
CG&QC
“Clinical Governance and Quality
Committee”
CHKS
CHKS is the leading provider of healthcare
intelligence and quality improvement
services, that provide the healthcare
accreditation for Medica (Ireland).
CPD
“Continuing Professional Development”
CQC
“Care Quality Commission”, the
independent regulator of all health and
social care services in England.
CSOP
“Company Share Option Plan”, a tax-
advantaged discretionary share option
plan under which a company may
grant options to any employee or full-
time director.
CT
A “Computerised Tomography” scan
combines a series of X-ray images taken
from different angles and uses computer
processing to create cross-sectional
images (slices) of bones, blood vessels
and soft tissues of the body.
CTMS
“Clinical Trial Management System” is
the software system used to manage
clinical trials in clinical research. The
system maintains and manages planning,
performing and reporting functions.
DART (days away, restricted, or
transferred)
“Days Away, Restricted or Transferred”
DBP
“Deferred Bonus Plan”
DEXA/DXA
“Dual Energy X-Ray Absorptiometry”, also
known as a bone density scan, uses low
dose X-rays to see how dense the patient’s
bones are.
DR screening
Diabetic retinopathy is a complication
of diabetes, whereby high blood sugar
levels damage the back of the eye (retina).
There are four stages of DR and if not
treated, progresses to blindness. The
DR screening programme monitors a
patient with diabetes, as catching the
condition early can reduce the likelihood
of blindness by 96%.
EBT
“Employee Benefit Trust” is a trust under
which property (shares in the case of
Medica Group PLC) is held on behalf of
the employee.
EPS
“Earnings Per Share”
ESG
“Environment, Social and Governance”
FRS
“Financial Reporting Standard”
GDI
“Global Diagnostics Ireland” is the
previous trading name and current
registered name for Medica (Ireland).
GHG
“Greenhouse Gas”
GMC
“General Medical Council” is the public
body that maintains the official register
of medical professionals within the
United Kingdom.
GPM
“Gross Profit Margin”
HSE
The Health Service Executive, when
referring to Medica (Ireland), is the
publicly funded healthcare system in the
Republic of Ireland.
“Health and Safety Executive” when
referring to Medica Group PLC.
IMC
“Irish Medical Council” is the public body
that maintains the official register of
medical professionals within Ireland.
ISO
“International Organisation for
Standardisation”
JV
“Joint Venture” when referring to the joint
venture between Medica Group PLC and
Integral Diagnostics “MedX”
LTIP
“Long-Term Incentive Plan”
MDT
“Multi-Disciplinary Team” is the
cooperation between different specialised
healthcare professionals to meet the
needs of individuals with complex
care needs.
MRI
“Magnetic Resonance Imaging” uses
magnetic fields and radio waves to create
detailed images of the organs and tissues
of a patient.
NIMIS
“National Integrated Medical Imaging
System” when referring to Medica
(Ireland) is the computer-based system for
storing and examining radiological scans.
PACS
“Picture Archiving and Communication
System” is a high-speed system that
allows the secure transmission of
radiological images and reports between
clients and reporters.
PET-CT
“Positron Emission Tomography” –
“Computerised Tomography” scans use a
small amount of an injectable radioactive
tracer to detect diseased cells and is often
used in the early detection of cancer,
heart disease and brain disorders.
PF
“Plain Film” an X-ray taken without the use
of a contrast medium. See also “X-ray”
PPE
“Personal Protective Equipment”
PSP
“Performance Share Plan”
QSI
“The Quality Standard for Imaging” sets
out the best practice in imaging services.
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Radiographer
A healthcare professional that is
highly trained to use medical imaging
equipment.
Radiologist
A radiologist is a consultant/doctor
that specialises in reporting diagnostic/
radiological examinations.
RCF
“Revolving Credit Facility” is a form of
credit issued by a financial institution that
provides the borrower with the ability
to drawn down or withdraw, repay and
withdraw again.
Reporters
When referring to Medica Group PLC,
radiologists and reporting radiographers
are referred to collectively as ‘reporters’.
Reporting Radiographer
A radiographer trained to report on
imaging, most commonly for plain
film (X-ray).
ROCE
“Return on Capital Employed” is the
financial ratio that measures a company’s
profitability and the efficiency in which its
capital is employed.
RSU
“Restricted Stock Unit” refers to a form of
compensation issued by an employer to an
employee in the form of company shares.
SASB
“Sustainability Accounting
Standards Board”
SAYE
“Save as you earn” is the employee
savings-related share scheme, allowing
employees to buy shares with their
savings (deducted from their salary) for a
fixed price.
SECR
“Streamlined Energy and Carbon
Reporting”
SLA
“Service Level Agreement” when referring
to Medica Group PLC and all subsidiaries,
is the performance agreement between
the client and Medica Group PLC.
SMT
“Senior Management Team”
TCFD
“Task Force on Climate-Related Financial
Disclosures”
TRIT
“Total Recordable Incident Rate”
TSR
“Total Shareholder Return”
VDI
"Virtual Desktop Infrastructure" is used
to run applications/processes in a data
centre and display, rather than process,
the output on remote monitors.
WEEE
“Waste from Electrical and Electronic
Equipment”
Glossary of terms continued
medicagroupplc.com
MEDICA GROUP PLC
Sixth Floor
One Priory Square
Hastings
East Sussex
TN34 1EA
t: 033 33 111 222