Results for the year ended 31 December 2015

Watchstone Group plc
(“Watchstone” or the “Company” or the “Group”)

Watchstone (AIM:WTG.L) today announces its results for the year ended 31 December 2015, a period of radical change for the Group.

Financial summary:

  • Underlying* business revenues steady at £58.3m (2014: £56.5m)
  • Underlying EBITDA loss of £16.1m (2014: loss of £16.8m)
  • Disposal of the Professional Services Division generated a profit of £494.3m
  • Impairment of goodwill and other intangible and non-cash assets – total charge of £113.5m (2014: £129.1m). Further details of the impairments can be found in notes 6 and 7 to the financial information in this announcement
  • Total profit after tax £274.9m (2014: loss of £374.5m)
  • Group net assets (excluding contingent liabilities) of £137.1m representing approximately 297 pence per share following capital return of £411.9m
  • Group cash at 31 December 2015 of £103.2m including £97.6m in the Company. Group cashof £93.1m (unaudited) as at 20 May 2016 including cash in the Company of £86.9m (unaudited) with a further £50.0m (unaudited) in escrow.

* Underlying includes ptHealth, Hubio, Ingenie, BAS, Maine Finance and Central

Operational highlights:

  • Disposal of the Professional Services Division for £645m plus deferred contingent consideration completed in May 2015
  • Court approved capital return of 90 pence per ordinary share completed in December 2015
  • New Group CEO and Board in place which has brought stability and started to rebuild investor confidence
  • Substantial work completed and on-going to simplify the Group, reduce the Group’s losses and build the platform to deliver the best possible shareholder value from all the Group’s operational and other assets
  • Clear strategy and plan for all Group businesses – energetically pursuing opportunities and robustly dealing with challenges

Current trading (unaudited):

  • Overall trading is in line with expectations with some good momentum in ptHealth, ingenie and BAS
  • ptHealth has had a solid start to the year
    • Unaudited revenue of £6.6m in Q1 2016 (an increase of 4.4% vs. Q1 2015 (excluding exchange rate fluctuations) from a reduced number of clinics)
    • Average revenue per clinic up 12% in Q1 2016 compared to the same period in 2015 o Assessment and treatment numbers have increased by 11% and 7% respectively during the same period
    • Launch of InnoCare as a spin out of ptHealth
  • ingenie performing strongly in Q1 2016
    • Gross Written Premium up 23% to £20.7m in Q1 2016 (Q1 2015: £16.8m)
    • Policies written up 19% to 10,706 in Q1 2016 (Q1 2015: 8,985)
    • Approximately 39,700 policies in force at 31 March 2016 (31 March 2015: 34,515)
  • Hubio stable but historic growth expectations proven to be unrealistic- business being reshaped in line with market opportunities
    • Unaudited Q1 2016 revenue of £4.3m (Q1 2015: £4.1m)
    • Active devices as at 30 April 2016 was 38,631, 77% more than at 30 April 2015 this was largely recovering from technical issues with a large customer in the US
  • BAS is now cash generative whilst work continues to improve Maine Finance and
    • Unaudited BAS revenues for Q1 2016 of £0.8m, an increase of 21% on the same period in 2015 and the business is now cash generative
    • Unaudited Q1 2016 total revenue for Maine Finance and was £0.4m (Q1 2015: £0.5m)

Indro Mukerjee, Group Chief Executive Officer said: “Even taking the legacy, non-operational matters to one side, the Group I joined in September 2015 was disproportionately complex and needed operational improvement. At the same time, I have found a number of good examples of advanced technology capabilities; capable people; and healthy market positions across our operating companies. I believe we have made strong progress towards our key objectives in the last three quarters and there is demonstrable momentum in our ptHealth/InnoCare, ingenie and BAS businesses with a strong determination to continue to set Hubio and Maine Finance/QSM on paths to maximise their potential.”

Richard Rose, Non-executive Chairman said: “I am very pleased with the significant progress the Group has made over the course of the last twelve months. The new Board has successfully refocused the Group’s strategic priorities while drawing a line under the past by working tirelessly to deliver the highest standards of corporate governance. The sale of our legal services business and the significant return of value to investors marked the start of rebuilding shareholder confidence and we are confident of continuing to deliver value. Watchstone now has solid foundations on which to build further and the Board and the management team are committed to maximising the potential of the remaining businesses.”

The Annual Report and Accounts for the year ended 31 December 2015, Notice of the Annual General Meeting (“AGM”) and a Form of Proxy will be posted to registered shareholders.

The AGM is to be held at 10.00am on 30 June 2016 at Plaza Suites 1 – 3, 200 Westminster Bridge Road, London SE1 7UT. Following the AGM, there will be a product demonstration and showcase from the Group’s companies.

These results have been extracted from the Annual Report and Accounts for the year ended 31 December 2015, a full version of which is available at

Click here for the full RNS announcement (25 pages)