1
ANNUAL REPORT AND ACCOUNTS
31 December 2022
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:
330+
Employees
700+
Current network of
specialist doctors
and clinical staff
200+
Clients
2m+
Reports and
exams in 2022
Contents:
Strategic report
02 Highlights
04 Chairman’s statement
06 Business model and services
07
Divisional KPIs
08
ESG
17 Future Tech
18
CEO report
22
Financial review
24
Risks and uncertainties
Governance
28 Our directors
30
Corporate governance report
34
Report of audit committee
36
Report of nomination committee
38
Report of clinical quality and
governance committee
40
Report of ESG committee
42
Report of remuneration committee
64
Directors’ report
68 Section 172 statement
1
69 Independent auditor’s report
Financials
79 Consolidated income statement
and consolidated statement of
comprehensive income
80
Consolidated statement of
financial position
81
Consolidated statement of
cash flows
82
Consolidated statement of
changes in equity
83
Notes to the financial statements
116 Company statement of
financial position
117
Company statement of
changes in equity
118
Notes to the financial statements
123 Key advisors
124 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 2022
1 The Section 172 report forms part of the 2022 strategic report which was approved by the Board on 5 April 2023
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Financial highlights
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02
Highlights
(1) Underlying operating profit is a non-IFRS measure and is calculated as operating profit before exceptional items, share-based payments, and one-off costs
including deal fees.
(2) Underlying Earnings per share is a non-IFRS measure and is calculated based on underlying operating profit less financing costs and taxation
• Delivered sales of £77.0 million representing 24% revenue
increase on 2021
– UK revenues increased by 15% to £54.0 million as a
result of continued strong performance from Acute
services including NightHawk (“NH”) and a full recovery
in Elective reporting capacity with record performance
in Q4 2022
– Medica Ireland extended the strong results reported in
the first half, with overall revenue of £12.5 million up by
30% compared to 2021
– RadMD performed ahead of expectations delivering
£10.4 million of revenue and closed the year with a
combined risk-adjusted pipeline and order book of over
$63 million up from $54m at the end of 2021
• Gross profit margin remained resilient at 48.3% although,
as expected, was lower than 2021 (50.7%) due to a large
number of contracts successfully renewed in year at current
market pricing, but gross profit margin remains ahead of
2019 (47.8%)
• Like-for-Like (LFL) revenues, excluding RadMD which was
acquired in 2021, increased by 17%
• Reported adjusted net operating profit of £13.6 million up
from £12. 1 million in 2021, with underlying net operating
margin at 17.7% compared to 19.5% in 2021
• Net cash at 31 December 2022 of £0.8 million
• Earlier in 2022, the Board declared an interim dividend of 0.93
pence per share and is now proposing a final dividend for 2022
of 1.88 pence per share which will, if approved, result in total
dividends for 2022 of 2.81 pence per share, up 5% on 2021
£77.0m
Revenue
£3 7. 2m
Gross profit
48.3%
Gross profit margin
£13.6m
Underlying operating profit
1
8.75p
Underlying earnings per share
2
£46.5m
£36.8m
£61.9m
2019
2020
2021
2022
£22.3m
£17.5m
£31.4m
2019
2020
2021
2022
47.8%
47.4%
50.7%
2019
2020
2021
2022
£11.3m
£5.0m
£12.1m
2019
2020
2021
2022
8.13p
3.47p
7.83 p
2019
2020
2021
2022
8.75p
£13.6m
48.3%
£3 7. 2 m
£77.0m
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Annual report for the year ended 31 December 2022
Operational
highlights
• Strong recovery in UK Elective volumes from September
onwards as radiologist availability returned to normal
levels (following a period of reduced capacity in Q2 and
Q3 primarily caused by annual leave accrued during the
pandemic). This resulted in a record month of reporting
in September 2022
• Continued growth in Acute services in the UK through
the year due to the positive impact of increased
volumes from existing clients extending the hours of
our NightHawk service and using more urgent and
same-day reporting during daytime hours, together
with the positive impact of new contracts commenced
during the year
• Reported a 16% increase in net rostered reporting hours
supported by adding new overseas reporting functionality
to our reporting platform in Q4, accelerating recruitment
of radiologists in other geographies
• Reached first major milestone of FutureTech programme
with launch of the new PACS in February delivering
experience and functionality improvements for
ourradiologists
• Record number of new reporting contracts won in Ireland
with the addition of six new hospital clients
– Medica Ireland now has contracts across all seven
hospital groups; and
– 5 additional hospitals added to our HSE Hospital
ultrasound waiting list management portfolio
– Now providing out-of-hours services at 15 of the
25HSE hospitals
• Medica Ireland supported ‘go-live’ at the new
Carrickmines clinic of VHI, Ireland’s largest healthcare
insurer in south Dublin; higher-than-expected demand
post-launch has required increased staff and hours
of service
• Medica Vision reduced significant post-pandemic
Diabetic Retinopathy screening backlog in Ireland to zero
patients by the end of the year which was a significant
achievement
• RadMD demonstrated strong conversion of pipeline and
backlog to revenue whilst bringing more diversification
into the pipeline, including sizeable clients with potential
for strong account growth in 2023 and subsequent years
03
Post-period
highlights
• New contract wins across the business underpinning
strong start to the year
• Completion of a small UK acquisition that delivers
radiologist training internationally; complements our
existing UK business and offers opportunities for our
network of reporters to continue their professional
development while also supporting potential new
international radiologist hires
• Completion of small bolt-on acquisition in the US
to provide expanded radiologist reader capacity
and medical expertise for RadMD to support
growth ambitions
• First new contract win for Medica’s Australian joint
venture, MedX, and growing pipeline of opportunities
for international teleradiology, particularly in the
Middle East.
Dr. Stuart Quin, Chief Executive Officer of Medica, commented:
“Against a market backdrop in which demand for Medica’s services is higher than ever, we are pleased to report a period
of double-digit growth underpinned by the expansion of our acute services, new contract wins, the continued strong
performance of Medica Ireland and RadMD, and the recovery of Elective capacity after some mid-year capacity constraints.
We are committed to continuing investment in our people and systems in 2023. With our new PACS system and changes
to our platform, we are in a strong position to onboard radiologists and deliver a best-in-class experience for our
reporters. Our recent UK acquisition reinforces our commitment to radiologist training and development globally. We
will also continue to evaluate business development opportunities that provide scale for our fast-growing US business,
as demonstrated early in 2023 through our bolt-on acquisition to provide additional radiologist reader capacity.
Following the progress we have made over the last year, Medica remains well-positioned for continued growth and
is on track to deliver on the strategic and financial targets we presented to the market in September 2021.”
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04
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Chairman’s statement
Good performance
characterised by
continued client
expansion and strong
growth from recent
acquisitions
I am pleased to report a positive
year of continued growth for Medica
Group resulting in annual revenue
increasing by 24% to £77.0 million with
a resilient gross profit margin of 48.3%
and underlying operating profit of
£13.6million, up 13% from 2021. As a
result, the board is pleased to announce
that it has declared a final dividend of
1.88pence per share reflecting the strong
performance of the business last year.
It has been a challenging time for clients
in the markets in which we operate. In
the UK, the impact of the pandemic was
still apparent, particularly in the first half
of 2022 when clients prioritised urgent
elective procedures and radiologists
were required to dedicate more time
to supporting their own hospitals. This
fact, combined with the overhang of
outstanding annual leave resulting
from the pandemic, meant that we saw
some periods of capacity constraint.
However, these market dynamics meant
that demand for our services increased
throughout 2022 and, aided by the
recruitment of more reporters in the
second half of the year and a resumption
in normal hours of reporting across our
existing network, Medica was able to
help service this demand. Whilst overall
Elective activity was reduced compared
with our initial projections for the year,
our NightHawk and broader acute service
performed consistently throughout the
year with annual revenue growth of 12%.
This strong performance meant that
overall Medica derived 62% of its total
UK revenue from acute reporting, up
from 47% in 2019 pre-pandemic. Elective
capacity recovered strongly in Q4 2022,
delivering a 20% increase year-on-year.
I am pleased that our acquisitions in
Ireland and the US performed very well
during the year. The Irish healthcare
market in many respects reflected the
same challenges as the UK, although our
breadth of services, including ultrasound
and X-ray scan and report, as well as
diabetic retinopathy screening services,
meant that we were able to grow revenue
at over 30% year-on-year, reflecting
the value of our diversification strategy.
Similarly, Medica’s clinical trial imaging
services business based in Pennsylvania
also expanded, taking on some notable
new clients, as well as supporting existing
clients with important new therapy
launches. RadMD continued to diversify
away from pure reader services into
end-to-end imaging core lab services
which will support an expansion of
gross margin. Further, RadMD closed
the year with a strong risk-adjusted
pipeline and order book that underpins
75% of 2023 revenue. The pipeline is also
increasingly diversified with significant
new large biotech client wins, as well as
extensions to existing client relationships.
Leadership development and
strategy execution
During 2022, Medica focused on the
development of senior leadership roles
across the business. This included
internal promotions to Managing
Director for Sarah Burns and Kim
Scanlan in the UK and US respectively
and the appointment of Fiona Carr as
our first director of Human Resources.
We have also successfully nurtured our
own talent which has resulted in other
senior internal promotions across the
Company. I am proud that as we start
2023, four out of the nine roles in the
executive team are now held by women,
which is up from only one in 2019, which
I believe better represents the wider
business as well as bringing a diversity
of thinking to key decisions. As well
as HR, Medica has also invested in the
development of its senior medical team
with appointments in radiologist audit,
training and development and quality
and governance amongst the changes.
Medica continues to invest in its medical
expertise and our recent Care Quality
Commission inspection, which gave a
highly positive review of our services,
is testament to our continued focus
on quality. Furthermore, our recent
UK acquisition of a highly respected
radiologist training specialist in this
space is evidence of further commitment
to ensure that radiologists working for
Medica continue to feel valued and are
provided with essential skills that can
be taken back into their NHS day jobs.
“ I am pleased to announce a solid set of results
for the Company in 2022. We continue to
deliver on our strategy to diversify and
grow revenues across all of our service
lines and these efforts have contributed
to a strong start to the year. We remain
focused on investments in our systems and
efforts to grow our international network of
radiologists and radiographers to meet the
demands of our clients going forward”.
Roy Davis
Chairman
Annual report for the year ended 31 December 2022
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
In 2022, we also made progress with
our respective technology platforms
across the business. This included
ongoing developments in our FutureTech
programme in the UK which is focused
on developing an enhanced reporting
environment for our radiologists and
radiographers including those reporting
from overseas in India, Australia, New
Zealand and beyond. We also made
progress in Ireland working with the
Health Service Executive to improve
access to scans and in the US, with our
first image upload platform ready for beta
testing. Since 2019 we have recognised
the need to invest in technology to
support our operations and to offer
greater functionality for our radiologists,
be they reporting urgent cases overnight
or clinical trial images during the daytime.
Medica remains well positioned
for growth in 2023
The outlook for our business remains
strong with ongoing demand
underpinning continued double-digit
growth in the medium term. Therefore,
our focus continues to be on meeting this
demand by increasing reporting capacity
and enabling greater productivity for
radiologists, radiographers and other
specialist doctors who choose to
work with Medica. To do this, we will
continue to expand the reach of our
reporting network, as well as continue
to accelerate recruitment of radiologist
consultants in the UK and Ireland.
We are already starting to grow our
international reporting presence by
expanding into India to provide capacity
for both our teleradiology and clinical
trial reading businesses and to support
MedX, our joint venture in Australia.
As we look to the remainder of 2023
and beyond, we continue to evaluate
options for both new avenues of organic
growth and M&A in support of our
strategy including two small acquisitions
completed already this year. Our focus
remains on growing international scale
in our US clinical trials business, RadMD,
as well as looking at new areas of
telemedicine such as digital pathology
into which we can expand. In this respect,
I am hopeful that 2023 will continue
to be an exciting year for Medica and I
would personally like to thank all of our
talented team across Medica, including
over 700 radiologists with whom we
work regularly, as well as our partners,
board and investors for their ongoing
support for the business strategy.
Roy Davis
Chairman
5 April 2023
05
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STRATEGIC REPORT
GOVERNANCE
FINANCIALS
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, clinical trial reading
teleophthalmology and managed
imaging services.
Teleradiology is the secure electronic
transmission of radiological patient
images, including plain film X-rays (PF),
computerised tomography (CT) scans and
magnetic resonance imaging (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,
cardiologists, 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.
Clinical trials imaging services 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.
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 Retina
Screen 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 DEXA 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. In
2022 we were delighted to renew our
contract with VHI, one of Ireland’s largest
private healthcare insurers, extending
a successful partnership for well
over a decade.
Supporting radiology
departments under
increasing pressure
Pressure on radiology departments is
increasing year on year. This, together
with our investment in quality and
expansion of our panel of daytime
reporters, has increased volume of rapid
turnaround reports during core hours
Monday to Friday 9-5. Through our
SameDay service we provide reports
in under four hours to provide urgent
subspeciality reports and assist with
hospital patient flow (including bed
management).
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
GOVERNANCE
FINANCIALS
Annual report for the year ended 31 December 2022
07
Revenue:
£54m
UK financial metrics
Gross profit margin:
47.5%
Underlying operating profit:
£10.8m
Increase in total capacity:
16%
UK operational metrics:
NightHawk SLA adherence:
92%
Increase in total exams reported
vs. 2021:
34%
Divisional KPIs
Revenue:
£12.5m
Ireland financial metrics
Gross profit margin:
46.7%
Underlying operating profit:
£2.1m
Increase in total exams reported
vs. 2021:
38%
Ireland operational metrics:
Increase in number of registered
diabetic opthalmology patients:
25%
Revenue:
£10.4m
USA financial metrics
Gross profit margin:
54.2%
Underlying operating profit:
£0.8m
Repeat business:
25%
USA operational metrics:
Increase in number of
active studies:
12%
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STRATEGIC REPORT
GOVERNANCE
FINANCIALS
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 in 2021, our framework and approach
to ESG was 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 40.
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 continue to report against the SASB standard for healthcare
delivery. Medica considers this to be the most appropriate internationally
recognised ESG reporting standard for healthcare companies such as Medica.
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 to 31 December 2022.
ESG
08
Annual report for the year ended 31 December 2022
09
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
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
Actions taken in 2022
• Reporting on diversity and inclusion within
the wider business
• Plan in place that focuses on improving our
reporter experience through the delivery of
our future tech programme
• Reviewed the United Nations Sustainable
Development Goals (SDGs) reviewed and
aligned to our ESG strategy
• Provided our staff with training on the risks
of modern slavery
• Carried out an employee salary review
against the National Living Wage in Ireland
Targets for 2023
• Conduct staff survey across the wider
business and assess engagement and areas
for improvement
• Report on Diversity and Inclusion
metrics and ensure consistent inclusion
of D&I metrics as part of Medica’s
recruitment approach
• Review of Cyber Security strategy and
action plan
• Gain Cyber Essentials Plus accreditation
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
Achievements in 2022
• Introduced further green travel initiatives
including incentivising employees to use
other modes of transport to the office
for example by introducing a ‘cycle to
work’ scheme
• Introduced accredited recycling of
redundant IT equipment
• Increased the reporter engagement
programme across the Group with more
regular engagement to manage rosters and
development
Targets for 2023
• Begin developing Medica’s net zero strategy • Review and align the client survey
programme across the Group
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STRATEGIC REPORT
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FINANCIALS
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 of 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.
In October 2022 we introduced Equal Opportunity questionnaires
into our recruitment process. Up to that point there was no
mechanism in place to ensure that equal opportunities were
offered, discrimination was prevented and under-represented
groups were supported. Our aim is to create a culture of diversity
and inclusivity and also to understand our workforce better.
Ultimately, our plan is that this will help us to target specific groups
through our recruitment advertising, and also train hiring managers
how to sift applications and conduct interviews fairly and without
bias, and provide reasonable adjustments for disabled applicants.
Our employees in numbers
2022
Total no. of employees
1
413
Employee growth year on year + 26%
Split by gender Female – 65%
Male – 35%
Percentage with a permanent contract 98%
Total no. of full-time employees 212
Total no. of part time employees 191
1.
Total number of people employed (headcount)
Our reporters in numbers
2022
Reporters by gender diversity Female – 22%
Male – 72%
Other – 6%
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 31
Percentage of women on the WMT 45%
Number from an ethnically diverse background 1
Engaging with our team and communicating
our strategy
An engaged team of employees and reporters is vital to our current
and future success. We hold 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. In Q1 2023, we also held the first Medica Company
Day in the UK which gave the teams the opportunity to meet the
executive team, hear first-hand about our evolving strategy and
how they can get more involved. It was also an opportunity to be
able to ask questions directly to management. 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 conduct 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
employees on a number of topics and better understand how
our people strategy is performing. Topics discussed included
retention, workplace pressures, leadership communication,
understanding of Medica’s longer term strategy and for RadMD,
the acquisition and integration experience. A formal review
of the output and feedback was undertaken by the Board.
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.
During 2022 we continued to review and improve our staff benefits
across the group. To support our staff with the growing cost
of living we made a one-off payment in July to all group staff,
excluding the executive team. Following further review later in
the year an additional salary increase of 2.5% was awarded to all
group staff, below the executive team which was over and above
the annual pay uplift in April. These payments were made with the
assurance that salaries would be kept under review into 2023.
Annual report for the year ended 31 December 2022
11
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In the UK we introduced a cycle to work scheme, which was
already in place in Ireland. We also appointed an external Pension
Advisor in the UK, to provide staff with expert advice on their
pension arrangements. In the US we have appointed an external HR
consultant to support our colleagues on all HR related matters.
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 2022, our colleagues and the leadership nominated individuals
who embodied Medica’s values and we celebrated their success
with the annual virtual ‘Medica Awards’ event in the UK and Ireland.
Developing and growing our talent
We have continued to develop and grow our in-
house talent as we have done in previous years and
build on the ethos of growing our own talent.
In 2022, in the UK, we have established links with the local education
authority to start building relationships with schools and become
local Industry Champions. In 2023 we will have a programme
of Work Experience students in the office, for a week at a time,
giving our staff and the students many learning opportunities.
The groundwork was carried out in 2022 to launch a
Leadership Development Programme in 2023 enabling all
managers and team leaders across the group to develop
their leadership skills and support their teams effectively.
To further enhance our commitment to clinical excellence,
we developed a ‘Training Blueprint’, for 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 2022 we continued with our 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, such as ITIL, AAT, leadership
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
14%
Number of training hours per employee 6
Sustaining the wellbeing, health and safety of
our people
This year we continued our focus on wellness by running a
series of wellbeing training sessions across the entire group.
We started with Mental Health Awareness training;
providing staff with a better understanding of mental
health and how it impacts their colleagues. Also educating
staff to recognise the signals in themselves and others.
We followed on with financial wellbeing training across the
group and pension seminars for UK staff. In addition to this
we have appointed a pension advisor in the UK to support
our staff and review the current pension arrangements.
The social committees across the group continue to setup a
social committee with members joining across the organisation
to arrange social events inside and outside of the workplace.
We continue to offer all staff in the UK, Ireland and US,
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
medical 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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12
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ESG
continued
In 2022 we implemented support for busy
radiologists working on night shifts to
report urgent exams. We have reduced
the number of interruptions doctors
receive to take so-called justification calls
– in other words authorisation to give a
patient ionising radiation – whilst working
on our NightHawk service by providing
additional support. This not only reduces
interruption allowing reports to be finalised
faster, but it also enables our specialist
radiologists to increase the throughput
of reports without having to be disturbed
to answer calls from hospital clients.
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 that 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 2022
as we have done in previous years,
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 2022
13
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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 24 to 27.
We would also refer you to our Corporate
Governance report on pages 30 to 33.
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 2023, we shall
continue 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 & head of risk
management 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.
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 and
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.
In 2022, we deployed 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 2022. In 2022 we
took steps to improve our recycling of
computer equipment. Medica is working
with a WEEE certified provider to recycle
hundreds of devices – workstations,
servers, screens, routers – anything that
cannot be re-furbished and re-deployed.
In 2022, 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 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 and our disclosures as required
under LR 9.8.6R(8) and LR 14.3.27R r and consistent with the TCFD’s recommendations and recommended disclosures 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 twice during 2022 . 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 seekout opportunities to positively impact in this area. Our actions
and impact is outlined in the ‘Minimising our environmental impact’ section on page 13.
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 24 to 27.
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 five years. The Group employs more than 400 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 9.
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 15.
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 2022
15
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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 1January to 31December 2022) 2022 2021 2020
Scope 1 in tCO
2
e 0 0 0
Scope 2 (location based) in tCO
2
e
Purchased electricity 8.2 8.9 10.3
Total Scope 2 8.2 8.9 10.3
Total Scope 1 and 2 in tCO
2
e 8.2 8.9 10.3
Intensity Ratio
tCO
2
e per £m Revenue 0.1 0.1 0.3
Scope 2 emissions in metric tonnes CO
2
e
(Market based)
Purchased electricity 0 0 No data
Total Scope 2 – Market based 0 0 No data
Scope 3 emissions in metric tonnes CO
2
e
Business travel in employee owned vehicles 17.8 8 13.3 No data
Total Scope 3 17.8 8 13.3 No data
Total Energy Consumption used to calculate scope 1
& 2 emissions (kWh)
Electricity 39,041 42,029 44,263
Total 39,041 42,029 44,263
Scope
As per previous years reports and for
the 2022 report, the scope includes
our UK operations only . For 2022, 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 Scope3
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
2022 UK Government GHG Conversion
Factors for Company Reporting.
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 Group’s oversight utilises regular
reporting from clinical committees in the
UK and Ireland and is consolidated by
the Medical Advisory Board, led by our
Group Medical Director, Dr. Robert Lavis.
The Clinical Governance 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 Group’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 GMC 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 92%
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
In H2 2021 and in 2022, Medica was proud to renew over 65% of its NightHawk contracts
for urgent reporting with its NHS customers, with the remaining 35% expected to renew
over the coming years. This is testament to the ongoing positive relationship between
Medica and its clients. Additionally, Medica is working closely with clients to help to
prioritise and respond to as many requests for Elective reporting as possible given
capacity constraints. Medica prides itself in close collaboration with clients to manage
expectations and deliver against them.
Care Quality Commission inspection: Medica UK was routinely inspected by the CQC
in July 2022. The report rated Medica “Good” overall with a “Good” rating for the
categories “Responsive” and “Safe” and “Outstanding” for the category “Well led”.
CHKS inspection: Medica Ireland was routinely inspected by CHKS in Ireland. The report
was similarly positive and Medica retained its CHKS accreditation.
In 2022 RadMD continued to strengthen its quality and compliance performance by
conducting over 50 internal process audits for the second year in a row. Additionally,
RadMD is routinely audited by our sponsors as an outside and independent check on
our adherence to industry and regulatory best practices. RadMD hosted seven sponsor
audits in 2022 with no critical or major findings reported.
Annual report for the year ended 31 December 2022
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The Future Tech
programme had a very
strong start in 2022. On
the 7th February, Medica
deployed the central plank
of its Future Tech strategy
with the deployment of
the new Sectra PACS
(Picture Archiving and
Communication System).
The system provides
enhanced reporting
capabilities across the
entire reporting cohort and
increased scalability for the
core business.
As part of the upgrade, we also integrated
our intracranial haemorrhage AI tool (qER
from Qure.ai) into the platform allowing
our NightHawk reporters to continue to
provide their excellent patient care.
We further built upon the PACS
deployment, enhancing our shared
worklist capability such that reporters
who wanted to provide more capacity
were able to do so without any manual
intervention by our service delivery team.
On the technical side of the programme,
we have enabled the PACS to be
deployed to reporters over a Virtual
Desktop Infrastructure (VDI), making
our deployment much more ‘nimble’.
This is not our standard deployment,
but another tool in the box moving us
towards a ‘report from anywhere’ model.
Throughout the rest of the year
analysis and design work has continued
our digital telepathology solution
and our new reporting platform in
preparation for launch in 2023.
Future Tech
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CEO report
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In 2022, Medica’s clients
faced the challenge of
dealing with substantial
backlogs in elective
procedures and the
resumption of clinical trial
testing. I am pleased that
we have been able to play
a vital role in supporting
them throughout this time
and deliver a strong period
of double-digit growth
while continuing to execute
against our strategy.
Waiting lists for diagnosis requiring
imaging in the UK and Ireland remain at
all-time highs and we expect demand will
continue to grow for our services over the
medium term as governments continue to
fund investment into scanning capacity.
Given Medica’s scale and having the
largest network of radiologists in the UK,
I am proud that during 2022, as during
the pandemic, we continued to work in
close collaboration with our clients to
be as responsive as we can to deliver
high quality, fast and reliable reporting
services.
Continued progress against our
strategic goals
As set out below, during 2022, we
continued to deliver against our core
strategic objectives focused on our
technology, people and service offering.
1. Be the trusted, go-to partner
for healthcare providers with
a reputation for reliability
and transparency to enhance
patient outcomes
Acute services (UK) – Most service
procurement exercises were deferred
in 2020 and early 2021 until after the
pandemic had abated. During 2022,
Medica successfully renewed many of
its existing NightHawk contracts, as
well as winning a net positive number
of new contracts. Combined with the
renewal success in 2021, this means
that Medica managed to successfully
renew over 60% of NightHawk
contracts renewed by value in the
18 months prior to period end, with
the balance expected to renew in
future years as they reach the end of
their existing term. Since contracts
typically run for three years with the
option of a two-year extension, this
provides strong revenue visibility and
growth potential.
Medica has increasingly benefited
from the high demand for acute
services not only during the night,
but also during the day. As busy
radiologists are required to do
more complex and time-consuming
procedures during the daytime in their
hospitals, Medica is being trusted by
clients to fulfil more urgent requests
during normal daytime hours, as well
as many hospitals asking Medica
to extend the hours classified as
NightHawk. These dynamics together
drove revenue growth at over 1%
month-on-month throughout 2022
which is expected to continue in 2023
and beyond as demand builds and
both the complexity and number of
scans per patient continue to grow.
In terms of performance, Medica
continued to provide a reliable, safe
and trusted service, delivering against
our Service Level Agreement (SLA)
of exams reported within 60 minutes
at 92% of urgent exams within SLA
against a target of 90% and continuing
to focus on delivering reports within
30 minutes and suspected stroke
reports within 20 minutes. To continue
to offer high service quality as our
offering grows, Medica’s strategy is to
expand the reach of our recruitment
network to support sub-specialist
reporting 24/7 from countries where
there is a time-zone benefit, as well
as continue to recruit radiologist
consultants in the UK. To this end,
Medica has started to report using
UK General Medical Council certified
radiologists based in India. Our new
systems have supported this change
and we expect that we will expand to
other jurisdictions in 2023, Medica
reported a 16% increase in rostered
reporting hours year-on-year which
is our measure of total radiologist
capacity growth.
Acute services (Ireland) – Medica
expanded the number of clients using
its out-of-hours, NightHawk reporting
services, from seven to 15 over the
course of 2022 which is up from five
clients when Medica acquired the
company in 2020. Not only did Medica
expand the number of clients, but it
also expanded the hours of operation
at many of the existing clients. This
underlines Medica’s investment thesis
at the time of acquisition where we
expected the Irish market opportunity
“ We are committed to continuing investment in
our people and systems in 2023. With our new
PACS system and changes to our platform, we
are in a strong position to onboard radiologists
and deliver a best-in-class experience for our
reporters. Our recent UK acquisition reinforces our
commitment to radiologist training and development
globally. We will also continue to evaluate business
development opportunities that provide scale for
our fast-growing US business, as demonstrated early
in 2023 through our bolt-on acquisition to provide
additional radiologist reader capacity.”
Dr Stuart Quin
Chief Executive Officer
Annual report for the year ended 31 December 2022
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to grow rapidly and shift towards
a greater demand for out-of-hours
urgent reporting of CT scans in
particular. Medica is now present in
all seven hospital clusters across the
Republic of Ireland which positions us
well for continued expansion. During
2022, Medica Ireland doubled the
number of radiologists reporting to
support this growth and we have built
a strong pipeline to continue to build
our capacity into 2023 and beyond.
Elective services (UK) – as the NHS
prioritises the reduction in waiting
time lists, demand for Elective
radiology reporting services remains
high with continued unmet demand
across the market. The level of
outsourcing of reporting is correlated
with NHS scanning capacity and
hence Medica works closely with
clients to plan capacity needs on a
weekly basis, As described above,
our strategy is to expand recruitment
of new radiologists, radiographers
and specialist doctors in the UK
and internationally as well as help
reporters to improve their productivity
by improving our technology platform.
Elective and screening services
(Ireland) – Medica Ireland continued
its expansion across the HSE with
the addition of six new hospital
clients including 5 additional
hospitals added to our HSE Hospital
ultrasound waiting list management
portfolio. Medica continues to be
well positioned in the Irish market as
the go-to provider of teleradiology
services having expanded the number
of hospitals to which it is providing
services from 19 in 2020 to 33 in 2022.
Alongside close partnership with the
HSE, Medica is also proud to have
supported Ireland’s largest healthcare
insurer, VHI, with the launch of its
flagship clinic in Carrickmines in south
Dublin. This contract grew ahead of
expectations in 2022 which required
Medica to accelerate the recruitment
of radiographers and sonographers to
support the demand.
Medica Vision, our diabetic
retinopathy screening service was
proud to report that by the end of
2022, had zero backlog remaining
post Covid. We are pleased with
this impressive result which sets the
Company apart from other providers
across the UK and Ireland.
Clinical trial imaging services (US
and International) – Medica’s clinical
trial business recorded another
strong year of growth in 2022 with
revenues of £10.4 million for the first
full year post-acquisition. Importantly,
underpinning sustainable strong
growth were new contract wins with
a number of sizeable new pharma
and biotech companies, as well as
a continued shift from providing
radiologist reader services towards
full imaging contract research services
(2022 represented 70% of sales up
from 65% in 2021). Following a period
of investment post-acquisition,
operating margins are not yet at
target levels, however strong revenue
growth is expected to be delivered in
the medium term. RadMD reported
strong conversion of its signed order
book to revenue and a combined risk-
adjusted pipeline and order book of
over $63 million at 31 December 2022.
This means that RadMD started 2023
with a revenue underpin of over 75%
for the year.
MedX joint venture – international
teleradiology reporting – In 2022,
Medica’s joint venture with Integral
Diagnostics Pty (IDX), an Australian
listed leader in radiology clinics and
teleradiology services, focused on
international business development,
leveraging the expertise of both
parent teleradiology companies.
MedX was successful in winning its
first out-of-hours contract and is
now exploring strategic partnerships
in the Middle East and more widely
overseas. As Medica expands
its focus on reporting, training
and development of radiologists
outside the UK, this will also help to
develop our network of international
radiologists for MedX.
2. Invest in our people and
systems to build an engaged
and motivated team
People development and engaged
team – Medica continues to invest
in its people and grow the size of its
operational and clinical team in the
UK, Ireland and US to support growth.
In 2022, we established an HR team
in-house comprising an experienced
Director of HR and two managers to
support payroll and HR processes
across the Group.
Our focus remains on ‘growing our
own’ staff. Examples of this include
on-the-job training for sonographers
and radiographers in Ireland which
we are looking to expand in 2023 and
clear career path management for our
operations and clinical governance
teams in the UK. In the US, RadMD
made a series of internal promotions
in the project management and
operations teams, as well as hiring in
some experts to bolster our clinical
expertise.
In terms of the development of
our team, we continue to invest in
resources to support our reporting
radiologists, radiographers and
specialist doctors to ensure that they
can be as productive as possible
during the time that they spend with
us. This has seen us increase the
size of our Reporter Relationship
Management team to support
rostering of shifts and to manage
ongoing relationships with reporters.
Medica was quick to address the
increased cost of living pressures
incurred by our employees by
delivering a second annual pay
increase of an average of 2.5%
in October 2022, in addition to
an average of 3.0% in April 2022.
Further, Medica issued a one-off
payment to all staff in July 2022
which proportionally benefited
those on lower incomes. Neither
the October salary increase, nor the
one-off payment applied to senior
management. This helped to continue
to ensure that we have an engaged
and motivated team during what was
a tough inflationary environment.
Medica continues to proactively and
regularly benchmark salaries and
to make annual adjustments where
necessary.
Medica also introduced a new
restricted stock unit scheme which
rewarded eligible employees with a
simple option incentive that vested
after three years of employment.
These will be awarded annually
and are a meaningful incentive and
retention mechanism for employees.
Systems investment – 2022 marked
a significant step forward in the
development of our new reporting
system in the UK. Our FutureTech
programme delivered on its first major
milestone of a new Picture Archiving
and Communication System (PACS)
which was launched in February.
Throughout 2022, we continued to
make changes to our systems to
support radiologist productivity. This
also included the development of a
new application to enable Medica
reporters overseas to improve the
speed and access to data to at least an
equivalent level to colleagues based
and reporting in the UK. This will
enable Medica to increase overseas
reporting capacity which will deliver
not only additional revenue growth
but will also be margin enhancing as
radiologists reporting from overseas
will spend more time reporting during
daytime hours, rather than during the
night-time when a premium fee rate
needs to be paid.
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CEO report
continued
The next phase of FutureTech will
be to further improve the reporting
environment for radiologists by
streamlining workflows and aiming to
increase the productivity of reporting
during sessions.
During 2022, Medica invested in
a new image transfer platform for
its clinical trials business, RadMD.
This proprietary platform has been
developed in house and is expected
to deliver a bespoke environment
for clients to upload and transfer
imaging data to RadMD, as well as
a more cost-effective solution for
the Company.
Finally, Medica invested in the first
phase of a new Enterprise Resource
Planning (ERP) system which was
delivered on time and on budget
in Q4 2022. The initial focus is to
improve financial reporting across
the three business lines with
additional functionality planned for
2023 and 2024.
3. Be the company of choice
for specialist doctors and
clinicians wanting to expand
their expertise in telemedicine
Clinical governance, training and
development
Medica was proud to have
successfully passed a Care Quality
Commission inspection and continued
to be rated overall “Good” with two
areas where we scored “Outstanding”
including clinical governance and
leadership of the service. Medica
continues to lead the way in the
market in terms of offering a
consistently high quality and reliable
service to clients and we have made
progress in many areas during 2022.
Medica continued to invest in its
seminar series in 2022 which provided
regular in-depth expert lectures on
topics relevant to radiology reporting.
Additionally, Medica has focused
on making clinical improvements
to our service including reducing
interruptions to reporting during
NightHawk shifts by up to 50% by
improved management of so-called
justification calls which a hospital
needs to make to a radiologist
where a protocol is not in place
before embarking on administering
ionising radiation to patients with
acute conditions. Not only does
this increase quality by reducing
interruptions to reporting, but it also
thereby increases the number of
cases that a radiologist can report
on an hourly basis. This project, led
by our Medical Director Dr. Robert
Lavis, has not only delivered quality
improvements, but also enabled
Medica to take on additional hospitals
without having to increase the
number of radiologists due to the
productivity gains delivered.
In 2022, Medica recruited a new
clinical lead and radiologists in
India, as well as radiologists in
Australia and New Zealand. As the
Company increases its focus on
international reporting, Medica was
excited to welcome the acquisition
of Jane Chandler Associates
(JCA) in January 2023. JCA is an
internationally recognised provider
of radiologist training courses
that meet international continuing
professional development and training
qualifications. Whilst the majority of
courses are still provided in the UK
for UK-certified radiologists, over the
past few years, JCA has expanded to
offer courses to radiologists based in
Asia. Medica’s strategy is to support
the continued growth and expansion
of the business into new markets
which will both accelerate revenue
growth, and offer exciting training and
development opportunities for our
international network of radiologists in
Medica UK, Ireland and RadMD in the
US, as well as our joint venture, MedX.
Improvement in radiologist
enrolment and onboarding
During 2022, Medica focused
on improving the time taken to
onboard a radiologist from initial
interview through to deployment of a
workstation at their home and training
to be ready to start reporting by over
50%. This has the combined benefit of
reducing the time before the reporter
starts receiving work from us, but
also providing Medica with additional
reporting capacity sooner.
4. Deliver profitable, diversified
growth underpinned by our
commitment to ESG with
focus on market-leading
clinical governance
In 2022 Medica delivered total
revenue growth of 24%, with 30%
coming from non-UK operations.
This translated into a 13% increase in
underlying operating profits despite
continued investment to support
future growth. Progress against
financial targets is summarised in
thefinancial review.
Commitment to ESG
In 2021, Medica significantly revised its
approach to measuring and reporting
ESG metrics. Our framework focuses on
four key areas of our business that benefit
from our commitment to ESG. These areas
are aligned to the SASB (Sustainability
Accounting Standards Board) international
standards for healthcare companies.
1. People and community
2. Responsible operations
3. Environmental impact
4. Customer centricity
A detailed ESG report will be provided in
our annual report. In summary, Medica
has made good progress introducing
further green travel initiatives including
incentivising employees to use other
modes of transport to the office, for
example by introducing a ‘cycle to work’
scheme, and has also improved recycling
of redundant IT equipment. Further,
Medica has taken steps to start to report
on diversity and inclusion within the
wider business. Further, the business
has focused on improving our reporter
experience through the delivery of our
future techFT programme.
Diversified growth
opportunities
Telepathology reporting
Medica is well-placed to take advantage
of the growth in reporting digital
pathology cases. Histology and cytology
specimens embedded in glass slides can
be digitised to create an image that can
be reported remotely by pathologists
in much the same way as Medica’s core
teleradiology business transfers digital
radiology images to radiologists. 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
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
thehospital.
Annual report for the year ended 31 December 2022
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“ Following the progress we have made over the last year, Medica
remains well-positioned for continued growth and is on track to
deliver on the strategic and financial targets we presented to the
market in September 2021.”
Medica is planning to launch a digital
pathology reporting service in the second
half of 2023. This will require integration
of pathology reporting applications into
our current PACS reporting system.
Additionally, Medica is in the process of
building a network of pathologists to be
able to remotely report the images in the
same way that we currently provide this
service for radiology. It is expected that
Medica will be able to build on its existing
network of clients to grow this exciting
new business line.
Expansion of imaging contract
research services
Further expansion of Medica’s RadMD
clinical trial business which provides
medical imaging services for pharma and
biotech clients, will continue to be an area
of focus in 2023. 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. The fast growth of the
business will 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 2023. Already this year, we
have acquired a reader services business
called VoxelMetrix that has worked with
Medica for many years. This brings not
only an established network of clinical
trial readers, but also a leading radiologist
expert in clinical trials who will support
the ongoing growth and development of
RadMD’s services.
Post-period update and outlook
In the UK, 2023 has started well with new
contract wins and service deployments.
Whilst 2021/22 saw over 60% of our
NightHawk contract pipeline being
renewed, there are still contracts that
will be renewed this year, as well as
opportunities to win new contracts, and
to extend the provision of services under
both new and existing contracts.
In Ireland, we have launched two new
hospital contracts for out-of-hours
reporting already this year and we
continue to expand services within our
existing network of hospitals
In the US, RadMD continues to focus on
winning new contracts for oncology trials,
as well as new therapy areas. RadMD has
a risk-adjusted pipeline and signed order
book of over $63m which is expected to
convert to revenue over the coming three
years. This visibility underpins over 75% of
anticipated revenue for 2023. Meanwhile,
the team continues to focus on developing
new client relationships in the US, Europe
and Asia, as well as winning additional
contracts from existing clients.
Medica has already completed two small
acquisitions this year in the UK and US
strengthening our commitment to training
and development of radiologists and also
boosting our reading capacity for clinical
trials. Medica will continue to evaluate
opportunities to expand its range of
services, particularly in the US to support
out clinical trials business RadMD.
The focus for 2023 remains to increase
the capacity for reporting in both our UK
and Ireland businesses. To do this, we
need to continue to expand the number
of radiologists working for Medica as well
as ensuring that the time radiologists,
radiographers and specialist doctors
choose to work with us is as seamless
and productive as possible. To this end,
we continue to focus on the development
of our FutureTech platform in the UK and
to enhance our systems to improve the
overall reporting experience. Further,
our focus on international recruitment
across Europe, India, Australasia and
other regions will help to build capacity,
particularly for our NightHawk reporting
service. Medica will also 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
potentialacquisitions.
Medica holds the leading position in the
market and is ideally placed to support
our clients to reduce backlogs, as well
as capitalise on the growth in funding for
clinical trials. Medica has made significant
progress since 2019 to diversify its service
offering and to invest in its team and I
am excited for us to continue building on
these foundations to ensure that Medica
remains a trusted, go-to partner across
our services and geographies. I would
like to thank all our employees for their
continued support for our ambitious
growth strategy and continue to be
excited by the opportunities that lie ahead
for Medica Group.
Dr. Stuart Quin
Chief Executive Officer
5 April 2023
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Financial review
Progress against our strategic financial goals
Strategic financial target¹ Medium term Target Actual 2022
Revenue growth rate
UK 12%-14% 15%
Ireland >15% 30%
US² >15% 63%
Target Margins
Gross Profit Margin >45% 48%
Underlying Net Operating Profit margin 20% 18%
Return on Capital Employed
3
Group >20% 20%
Ireland >15% 20%
US >15% 14%
Group Operating Cash conversion >80% 64%
¹ Non-GAAP unaudited operational performance measures as set out in the CMD presentation in September 2021
² YoY comparison including periods pre-acquisition
³
Defined as underlying operating profit (excluding PLC costs) divided by total assets less current liabilities
and long-tern debt.
Revenue
Overall revenue increased 24% to
£77.0m in 2022 from £61.9m in 2021.
Excluding the impact of acquisitions
on 2022 and 2021, on a like-for-like
basis, revenues increased 17%.
UK
Acute services including NightHawk and
day-time urgent reporting services, as
well as SameDay reporting increased
revenues by 12% to £33.3m in 2022
from £29.8m in 2021. Elective reporting
services, which had been more severely
impacted than NightHawk and for longer
due to the impact of COVID and in-year
capacity constraints, 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 by 20% to
£20.7m in 2022 from £17.3m in 2021.
Ireland
Revenues increased 30% to £12.5m in
2022 from £9.7m in 2021 as a result
of the positive impact of a number of
new contract wins together with strong
growth from the existing business. ROCE
at 20% for the year continued to track
above our 15% target for acquisitions.
US
RadMD, based in the US and focused
on imaging services for clinical trials,
was acquired in March 2021. Total
revenue in 2022 was £10.4m, up 100%
compared to the nine-month period
in 2021 and over 63% on a like for like
basis assuming it had been owned for
the whole of 2021. The strong growth
in the year was attributed to a strong
conversion of a larger pipeline into signed
contracts and sustained conversion of
the orderbook to recognised revenue.
Gross Profit and Gross Profit
Margin (GPM)
Gross Profit is stated after the cost of
reporters, internal audit costs required
to deliver contractual commitments and
other cost of sales such as framework
costs in the UK. In 2022, Gross Profit
increased by £5.8m or 18% to £37.2m in
2022 from £31.4m in 2021. As expected,
particularly following the large number
of UK contract renewals together
with the impact of a change in mix
from Ireland and the US, overall GPM
reduced by 2.4 ppts to 48.3% in 2022.
Underlying operating profit
For 2022, consistent with prior years
we have reported underlying operating
profits that consider the impact of
non-underlying items to provide a
representative depiction of underlying
activity. Underlying operating profits
increased to £13.6m in 2022 from
£12.1m in 2021. Underlying profit margin
reduced from 19.5% to 17.7 % due to the
impact of the increased mix of US and
Ireland at lower margins and continued
investment to support future growth.
Non-underlying costs
Non-underlying costs before tax
decreased by £0.4m to £3.5m in 2022
from £3.9m in 2021. These costs included
£2.4m (2021: £2.2m) relating to the
amortisation of acquired intangible
assets, £1.8m (2021: £0.8m) relating to
share-based payments, £0.3m relating
to implementation of accounting
system, £0.2m relating to alignment of
depreciation policies on implementation
of new accounting software system
and £0.3m (2021: £0.6m) relating to
one off legal and professional costs.
“ 2022 saw a strong recovery in our core UK
business and very strong growth from our
Irish and US businesses acquired in 2020
and 2021 respectively”.
Richard Jones
Chief Financial Officer
Annual report for the year ended 31 December 2022
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STRATEGIC REPORT
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In addition, non-underlying costs
included finance costs of £0.2m
(2021: £0.6m) relating to a fair
value adjustment on contingent
consideration and finance income of
£1.1m relating to foreign exchange
gains on acquisition related loans.
The income tax credit on total non-
underlying costs was £0.8m (2021 £0.2m).
Net finance expense
Finance costs net of finance income
were £0.6m for the year (2021: £0.5m).
During the year, an additional £4.4m of
the revolving credit facility was drawn
down to fund deferred consideration
payments made in respect of a previous
acquisition. The interest costs for the
year of £0.6m represent interest on
drawn down balances together with non-
utilisation fees on undrawn amounts.
Profit before Tax
Underlying profit before tax increased
by £1.4m to £12.9m in 2022 from
£11.5m in 2021 reflecting the increase
in revenues and gross profit, offset by
the increase in operating costs. Total
profit before tax, after taking account
of non-underlying and exceptional
items increased by £1.3m to £8.6m in
2022 from £7.3m in 2021 (23.1%).
Taxation
The Group has incurred a tax charge of
£1.4m in the year ended 31 December
2022 (2021 £1.9m), with tax on
underlying profits of £2.2m (2021:
£2.1m). The effective rate of tax for
2022 is 16.7% with the effective tax
rate on underlying profits of 17.0%.
Earnings per share
Underlying basic earnings per share
(EPS) increased by 12% to 8.75 pence
per share in 2022 from 7.83 pence per
share in 2021, reflecting the increase in
profits. Basic EPS, after taking account
of non-underlying and exceptional
costs increased by 29% to 5.88 pence
in 2022 from 4.56 pence in 2021.
Dividends
In 2022, an interim dividend of 0.93 pence
per share was declared in September
2022 and paid in November 2022. In line
with our progressive dividend policy, the
directors are proposing a final dividend
for 2022 of 1.88 pence per share. The
final dividend will be paid on 21 July
2023 to shareholders on the register
on 23 June 2023 subject to approval
by shareholders at the 2023 Annual
General Meeting (AGM). The total
dividends for 2022 of 2.81 pence per share
represent an increase of 5% over 2021.
Capex
Total capex was £3.2m in 2022 compared
to £2.7m in 2021. This included: intangible
capex of £1.1m (2021: £0.8m), tangible
capex on infrastructure and equipment
for contracted radiologists of £1.8m
(2021: £1.4m) and right-of-use asset
additions of £0.2m (2021 £0.5m).
Cash and debt at
31December 2022
Operating cash generation in 2022
reduced to £8.7m in 2022 from £9.7m
in 2021 after taking account of an
increase in debtors in December
2022 which reversed in early 2023.
Operating cash conversion therefore
reduced to 64% compared to 81% in
2021 albeit cash generation is expected
to return to normal levels in 2023.
After taking account of net deferred
consideration payments relating to
the acquisitions of Global Diagnostics
Ireland and RadMD of £5.8m,
gross cash at 31December 2022
was £11.0m (2021 £9.6m) and net
cash was £0.8m (2021 £3.9m).
Joint venture
During the year £0.2m was invested
into Med-IDX Pty (MedX), the 50/50
JV with Integral Diagnostics Pty.
Post balance sheet events
On 5th January 2023, the Company
issued and allotted 200,000 shares of
0.2 pence each in the capital of the
Company to the to the trustee of the
Company’s Employee Benefit Trust and
these shares will be used to satisfy future
awards and options vesting in the Medica
Group PLC Performance Share Plan 2017.
Following admission, the Company had
122,633,635 ordinary shares in issue.
On 27 January 2023, RadMD LLC, a
Delaware limited liability company that
is a subsidiary of the Company, acquired
the assets of VoxelMetrics LLC, a North
Carolina Limited Liability company
engaged in the management of radiology
readers for clinical trials. The acquisition
expands the network of radiology
readers across the US, further increasing
reporting capacity to support our clients.
The initial consideration paid for the
assets of VoxelMetrics LLC was $2.6m.
At the date the financial statements
were authorised for issue, all information
in respect of the acquisition was not
available and therefore disclosures
required under IFRS 3 will be made in
subsequent financial statements.
On 3 February 2023, the Company
acquired the entire issued share capital
of JCA Seminars Limited, an international
radiologist training company based
in the UK. This acquisition diversifies
the offering to our customers whilst
increasing the value of the service offered.
The initial consideration paid was £1.4m.
At the date the financial statements
were authorised for issue, all information
in respect of the acquisition was not
available and therefore disclosures
required under IFRS 3 will be made in
subsequent financial statements.
Richard Jones
Chief Financial Officer
5 April 2023
www.medicagroupplc.com l stock code: MGP
24
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 following a period
of integration of its US and
Irish businesses last year.
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 summary is
based on detailed risk reports prepared
by each relevant team and co-ordinated
and summarised at group level by our
designated head of enterprise risk
management. 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, Ireland, and US divisions, and is
underpinned using 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
is 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 and
for the foreseeable future. Further details
on this topic can be found in the TCFD
section of our ESG report on page 14.
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
in 2020 and the US in 2021, 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 2022
25
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Strategic risk
Description Change Commentary for 2022
Acquisitions and integrations
There is a risk that acquired companies
are more complicated to manage
or integrate fully into the group or
introduce new risks to the group.
Decreased
risk
Integration activities for both our Irish and US companies acquired were
completed in 2022. This included the successful introduction of a single
group financial system during the year to replace three separate systems
and also allow for proper consolidated management reporting on a
regular basis.
Both divisions positively contributed to our overall group performance
and continued to grow in line with our expectations.
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:
• The new PACs platform was was successfully launched as planned
in Q1 2022.
• The UK continued to utilise its successfully launched AI tool to aid
the identification of potential brain bleed in urgent reporting of
suspected stroke patients, the first such tool launched in the UK.
Financial risk
Description Change Commentary for 2022
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 to five 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.
Decreased
risk
During 2022 Medica successfully re-tendered a large 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, whilst reducing slightly from the prior year, remained in line
with its historic average.
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 finished 2022 in a strong position well aligned
with financial expectations and significant contract wins with new
pharmaceutical and biotech clients.
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.
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
26
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Risks and uncertainties
continued
Compliance risk
Description Change Commentary for 2022
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 maintained certification for 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 2022
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.
Decreased
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
• Medica successfully completed its first Care Quality Commission
(CQC) inspection in Q2 2022
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.
Static
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 2022
27
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Operational risk
Description Change Commentary for 2022
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.
Static
risk
Cyber-attacks have continued to impact organisations globally and are
trending in an industry agnostic manner. The acquisitions in Ireland and
the US have increased the Group’s attack surface and presents increased
risk to its people, systems and services.
• The Group is implementing the cyber roadmap developed in
2021 to support the business in its plans to further invest in cyber
security defence
• The Group has added a new data protection officer in Q3 2022 in its
information security team and has maintained its headcount in the
ISO 27001 certified security management system
• Certification against the UK Government approved Cyber Essentials
was maintained in the year along with continued investment in
internet security technologies
• The Group has implemented Multi-factor Authentication (MFA) in
UK and Ireland (already extant in the US) to reduce the potential for
unauthorized access to Medica systems and deter cyber-attacks
• 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
In 2022 Medica UK refocused on expanding reporter capacity and
reported a 16% increase in new capacity over the year. Having also noted
a reduction in availability of existing capacity during Q2 and Q3 2022,
capacity availability returned to normal levels by Q4 2022.
During the year, a client protocol programme and human factor training
were completed by the NightHawk administrative and executive teams
respectively.
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, and investigating targeted acquisitions of specialty
reader groups to enhance RadMD’s capabilities. In addition, the Group
continued to invest in increasing overseas reporting capacity, albeit this
remains a modest base, to add additional flexibility and capacity.
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. 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
• Provided staff with a one-off cost of living allowance, weighted
towards junior staff and also introduced an additional in-year pay rise
across all levels below senior management to counter inflationary
cost pressure experienced by staff during the year
• 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 the 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
28
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
fastgrowing 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 currently works in an advisory role
as chief people officer with Reliance
Cyber, a specialist cyber security
business providing managed services
and consulting advice. Jo previously
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 and
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. 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 2022
29
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 senior
independent 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 is chair of Agility Trains Group,
non-executive director and chair of
remuneration committee at Aptitude
Software Group PLC, non-executive
director at Balfour Beatty PLC non-
executive director at Dwr Cymru/
Welsh Water.
www.medicagroupplc.com l stock code: MGP
30
Dear Shareholder,
I am delighted to introduce
this section on governance,
which describes the
activities of the board and
its committees during 2022
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 which are
explained in more detail on Page 76.
Board effectiveness
During the year I was pleased that the
board changes implemented in 2021
resulted in an effective board with
the two new non-executive board
members Dr. Junaid Bajwa and Barbara
Moorhouse contributing effectively
to strategic oversight and governance
as well as strong management of the
respective ESG and audit sub-committees
which they chaired since joining the
Company. I am confident the board will
continue to provide the leadership and
oversight required to help the Company
achieve its strategic objectives.
Our 2023 AGM
Our 2023 AGM will be held at 11.00am on
30th June 2023. 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 2023
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
Corporate governance report
Key achievements in 2022
• Strategic business review and re-validation of the Company’s longer-
term objectives
• Approval of the 2022 annual report and the 2022 interim financial
statements
• Approval of the final dividend for 2021 and the interim dividend for 2022.
• Review and approval of strategic internal project(s)
• Appraisal of a number of M&A opportunities
• Review of key risks, including a detailed review of cyber and
related IT risks
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Annual report for the year ended 31 December 2022
31
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 committee is chaired by Barbara
Moorhouse.
The audit committee’s report for 2022 is set
out on pages 34 to 35.
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 committee
is chaired by Jo Easton.
The remuneration committee report for
2022 is set out on pages 42 to 63.
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 is chaired by Roy Davis
The nomination committee’s report for
2022 is set out on pages 36 to 37.
Clinical governance & quality
committee (“CG&QC”)
The CG&QC 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.
The CG&QC Committee report is set out
on page 38.
Environmental, social and
governance committee
The environmental, social & governance
(ESG) committee provides advisory
oversight for the key matters detailed in
the scope below that relate to and impact
upon the Group. It will assist the board in
defining Medica’s ESG strategy and ensure
the Group is meeting relevant regulatory
and legal requirements.
The committee is chaired by
Dr.Junaid Bajwa.
Details of our approach to ESG and activity
during the year is set out on pages 8 to
16 of the strategic report and the ESG
committeee report is set out on page 40.
Board composition and
independence
During the year, The Company regarded
Roy Davis, 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 (SID)
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. Barbara
Moorhouse is our SID.
Directors are subject to election or re-
election at each AGM. All
directors will be
standing for re-election at the 2023 AGM.
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 65.
STRATEGIC REPORT
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32
Corporate governance report
continued
Board and committee attendance
There were 14 Board meetings in 2022, 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 14 6 5 3 2 1
Roy Davis 14 6 5 3 2 1
Jo Easton 14 6 5 3 0 1
Junaid Bajwa 12 6 5 3 2 1
Barbara Moorhouse 13 6 3 2 0 1
Stuart Quin 14
Richard Jones 14
Strategy and direction
During 2022 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 and in subsequent
regular updates to shareholders
via a regulated news service (RNS)
and published on our website.
In June 2022 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 2022, the
board reviewed and approved the budget
for 2023 and in February 2023 approved
the longer-term business plan (LRP).
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 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 has 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 2021 we
decided to postpone this review until later
in 2023 when the Board has had more
time to work together. In the meantime,
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 24 to 27.
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.
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Annual report for the year ended 31 December 2022
33
STRATEGIC REPORT
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FINANCIALS
Compliance with the UK Corporate Governance Code 2018 (“The Code”)
As a main market company, we seek to fully comply with the principles of the Code. In any areas where we are
not compliant, we disclose the nature of non-compliance together with our rationale for non-compliance.
During 2022 we did not comply with the Code in the following areas:
Code ref Principle Details and reason for non-compliance
21 There should be a formal and rigorous annual evaluation
of the performance of the board, its committees, the chair
and individual directors. The chair should consider having a
regular externally facilitated board evaluation. In FTSE 350
companies this should happen at least every three years.
The external evaluator should be identified in the annual
report and a statement made about any other connection it
has with the Company or individual directors.
The board carries out annual appraisals of it’s own
performance. Whilst not a FTSE 350 company, the board
considers external facilitation an important and effective
part of board evaluation but decided to defer an externally
facilitated evaluation of its performance until the second
half of 2023 to allow a reasonable period of time since the
changes to the board in 2021.
38 Only basic salary should be pensionable. The pension
contribution rates for executive directors, or payments in
lieu, should be aligned with those available to the workforce.
The pension consequences and associated costs of basic
salary increases and any other changes in pensionable
remuneration, or contribution rates, particularly for
directors close to retirement, should be carefully considered
when compared with workforce arrangements.
The new remuneration policy was approved by shareholders
at the 2021 AGM with an additional variation approved
at the 2022 AGM. The new policy provides that from
1st January 2023 pensions for executive directors will
be aligned with the wider workforce. For 2022 existing
contractual pension provisions were applied as set out in the
remuneration report.
www.medicagroupplc.com l stock code: MGP
34
Report of audit committee
Key achievements in 2022
• Financial systems and risk
– Oversight of the implementation of a new unified financial system
across the group in 2022
– Regular review of risk management, the risk register and internal
controls including cyber and IT security
• Financial reporting
– Review and recommendation to the board of approval of the annual
report for 2021
– Review and recommendation to the board of approval of the 2022
interim financial statements
• Auditor
– Review of independence and effectiveness of auditors and
recommendation of their re-appointment for 2023
– Review and approval of the 2022 audit plan and fees proposed by
the auditors
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 report of the work of audit
committee in 2022. 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
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FINANCIALS
Annual report for the year ended 31 December 2022
35
Membership
and meetings
The audit committee is chaired by Barbara
Moorhouse, the Committee’s other
members are Roy Davis, Jo Easton and
Dr. Junaid Bajwa. 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 at least three times per
year in the ordinary course based around
the Company’s reporting cycle and
otherwise as circumstances require.
The committee met six times in 2022.
The CEO and CFO attended all the
committee meetings in 2022 by invitation.
Principal activities
for the year
During 2022 the key activities of
the committee were as follows:
1. New financial system
• During the year the committee
oversaw the introduction of a
unified group-wide financial
system and this was implemented
during the year to replace the
disparate systems previously in
place in the three divisions and to
upgrade the functionality of core
financial reporting systems.
• During 2023 the committee plan to
have oversight to enhancements
to the new system to include full
purchase to pay functionality
within system, the development
of full in-system CRM capabilities
and the development of additional
ERP modules.
2. Activities relating to the Group’s
regular reporting cycle
• Review and recommendation
to the board of approval of the
2021 Annual Report including the
Financial Statements. As part
of this review the committee
received reports from the external
auditors on their audit for 2021.
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 2021 audit and the
recommendation to the board to
propose their re-appointment at
the 2022 annual general meeting.
• Approval of the 2022 audit plan
prepared by the external auditors.
• Approval of the audit fees for
2022. 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 to the
financial statements on page 94
which, reflect the increased scope
over the prior year.
• Review and recommendation
to the board for the approval
of the 2022 interim financial
statements including the going
concern statement together with
the supporting forecasts and
assumptions.
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 on page 94.
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 1January 2018.
The report from Grant Thornton UK
LLP confirming their independence
and objectivity was reviewed by
the committee on 28March 2023.
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 2021 audit, the committee
reviewed and were satisfied with
the performance of the external
auditor and recommended their re-
appointment for 2022 to the board.
The committee intend to conduct
a tender process for the 2023 audit
in line with FRC recommendations
ahead of the AGM in June 2023
and will therefore provide its
recommendation to shareholders
prior to the meeting. Grant Thornton
have indicated their willingness to
participate in the tender process.
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 2022.
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.
Barbara Moorhouse
Chair of the Audit Committee
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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
2021 we initially decided to postpone this
review until later in 2022 when the board
has had more time to work together.
Following a further review in 2022, the
committee decided to further postpone
the external review until later in 2023.
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.
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
5 April 2023
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’),
Iam 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 2022
• The committee met to consider all aspects of management succession
planning including incentivisation and the need for suitable skills to
implement the Company’s long term plans.
• The committee initiated an internal board evaluation survey and
considered its findings and recommended actions to improve board
effectiveness.
STRATEGIC REPORT
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Annual report for the year ended 31 December 2022
37
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 and Barbara Moorhouse.
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 at
least once a year in the ordinary course
of business and more frequently as
circumstances require. During 2022
the committee met formally three
times and all members attended.
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
During the year the board undertook
refresher training in respect of corporate
governance and listed company rules
and guidelines with input from the
Company’s external advisors.
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 2022
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.
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 2023 when the new
members of the board will have been
in post for a reasonable period.
In the meantime, the committee completed
an internal 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 2023 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 2023 annual general meeting.
Roy Davis
Chairman of Nomination Committee
5 April 2023
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38
Dear Shareholder,
I am pleased to introduce to you the second 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 2022
• Successful HIQA inspection in Cork
• Successful CHKS review of UK
support of the Ireland business with
excellent feedback
• Successful UK CQC inspection –
rated ‘Good’
• Successful UK QSI inspection
• Cyber Essentials
accreditation secured
• Deep dive into understanding the
experience of reporters (and how
this might be improved)
• NHS England appraisal and
revalidation return
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. Dr
Robert Lavis, group medical director and
Dr Stuart Quin, CEO are invited.
Meeting frequency
The group typically meets on a
biannual basis in April and October and
additionally as required. In 2022 the
committee met twice, 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 (Care Quality Commission)
Inspection Framework – Independent
hospitals: teleradiology
• CHKS
• HIQA (Health Information and Quality
Authority)
• EPA (Environmental
Protection Agency)
• ISO 9001
• ISO 27001
Cyber essentials
The role of the chair is to challenge and
critique the processes in a continued
journey of evolution in excellence. The
team 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
2023 and beyond
2022 has seen a significant focus on the
experience of Medica reporters. The
committee has received reports from
all areas of the business as changes are
instituted and are assured of ongoing
high-quality assurance. The clinical
quality and governance group focussed
on reporter experience in their Autumn
meeting to review all initiatives and this
was fed back to the committee. The
committee noted a commitment to make
the onboarding of reporters as seamless
as possible and workstreams aimed at
simplifying the reporting workflow.
The CQC UK inspection highlighted
two areas for improvement – extending
safeguarding awareness and training to all
staff, not just clinical staff and improving
adherence to non-clinical staff appraisal
schedules. Relevant teams have moved
swiftly to extend safeguarding training
to all members of staff, to rewrite the
safeguarding policy to include all office
and home based staff and to establish
monitoring of compliance. The HR team
are developing new schemes to ensure
non clinical staff appraisals are completed
on time and recorded. We are looking to
digitise the appraisal form, thus making
it more accessible to all staff. We are
considering methods of incentivising staff
to have the appraisal process completed
in a timely fashion.
Report of clinical quality
and governance committee
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Annual report for the year ended 31 December 2022
39
Given the large number of global
regulatory, assurance and quality
standards that the Medica teams are
involved in managing and preparing,
a review of these will take place in
2023 with the development of a quality
assurance framework and a subsequent
presentation to board members.
The committee were pleased to hear of
initiatives to reduce potential clinical risk
from interruptions to reporters during
acute reporting sessions, encouraging a
safer working environment. In addition,
some aspects of the internal audit
service have been focussed on areas of
higher perceived risk such as complex
trauma scans. This aligns with a drive
to continually improve patient care and
reporting quality.
The appointment of internal paralegal
capacity in late 2022 has given further
assurance to the management of
medicolegal proceedings against
reporters. A large workstream for 2023
will be embedding the quality standards
of Medica and Medica radiology services
into the realm of digital pathology.
Further in-depth reviews for 2023
will include:
• People – engagement,
rewards, feedback
• Global Medica – collaboration across
business entities, regulations, learning
and development
• Risk – update, review, themes,
challenges, solutions
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 ongoing assurance
of the expected high quality in clinical
and governance for the board.
Dr. Junaid Bajwa
Chair
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STRATEGIC REPORT
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Dear Shareholder,
Medica has had another
busy year and I am pleased
to report that we have made
good progress against our
ESG goals during 2022. This is
explained in detail on pages 8
to 16 of this annual report. Our
ESG sub-committee met twice
in 2022; once to review and
approve the ESG approach for
2022 and secondly to evaluate
interim progress against the
goals that were established
earlier in the year.
Taking each in turn, Medica has taken
active steps to improve its metrics
associated with environmental impact.
This included a review of our travel to
work policy and Medica has signed up to a
‘cycle to work’ scheme alongside a review
of office parking to incentivise employees
to take alternative means of transport
other than driving to work. Additionally,
Medica has rolled out a solution to ensure
that all used IT equipment is now recycled
by a WEEE certified provider to recycle
hundreds of devices – workstations,
servers, screens, routers – anything
that cannot be re-furbished and re-
deployed. This was one area where the
sub-committee noted it could make
an improvement and I am pleased to
report that this has been achieved.
In terms of social measures, the
committee has worked with management
to review the framework for radiologist
engagement. This has helped radiologists
to better manage schedules and ensure
radiologists are able to deliver feedback
to Medica about their experience.
Similarly, a Medica staff survey has
been designed for 2023 which will
endeavour to solicit feedback on their
experience of working with Medica.
Finally, in terms of governance, alongside
my role as chair of the sub-committee for
clinical governance and quality, we have
also reviewed Medica’s recent inspection
by the Care Quality Commission
in the UK where the Company was
rated as “Good” on two dimensions of
the service and rated “Outstanding”
for leadership. Additionally, Medica
was pleased to have passed a CHKS
inspection in Ireland earlier in 2022.
We continue to make good progress with
our ESG approach and I look forward to
continuing to focus on improvements
we can make as a business in 2023.
Dr. Junaid Bajwa
Chair of the ESG Committee
5 April 2023
Key achievements in 2022
• Improved reporting and monitoring of performance against ESG strategy and
framework set out last year
• Improvement in gender diversity across group with increased proportion of
females in leadership positions compared to 2021
• Aligned our ESG approach with United Nations sustainable development goals
• Improvement in travel initiatives to incentivise fewer car trips to the office, good
adoption of a cycle-to-work scheme
• Commitment and action to recycle used IT equipment using an accredited
service provider
Areas of focus for 2023
• Embedding diversity and inclusion metrics into our recruitment processes
and reporting against metrics with the aim of increasing representation and
strengthen inclusion across our organisation
• Conduct a staff survey to increase engagement and gather organisational
feedback on areas where performance improvement can be made, as well as
where the organisation is performing well
• Improve customer engagement and assess actions where improvement
can be made
Report of ESG committee
41
Annual report for the year ended 31 December 2022
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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
31December 2022.
The report covers the annual report
on remuneration which sets out the
remuneration paid to directors in 2022
including bonus payments and long-term
incentives and how our remuneration
policy will be applied in 2023.
We will be inviting shareholders to an
advisory vote on the remuneration report
at the AGM on 30 June 2023 set out
on pages 42 to 63 detailing director's
remuneration for the performance
period ending 31December 2022.
Corporate performance
and stakeholder
experience in 2022
Medica had a positive year of continued
growth in 2022 resulting in annual revenue
increasing by 24% with a resilient gross
and net profit margin reflecting the strong
performance of the business last year. This
was despite a challenging time for clients
in the markets in which we operate. In
the UK, the impact of the pandemic was
still apparent particularly in the first half
of 2022 when clients prioritised urgent
elective procedures and radiologists
were required to dedicate more time to
supporting their own hospitals. Demand
for our services increased throughout
2022 and Medica was able to capitalise on
this demand by recruiting more reporters
during the second half of the year.
Medica’s recent acquisitions in Ireland
and the US also performed very well
during the year. The Irish healthcare
market in many respects reflected the
same challenges as the UK, although our
breadth of services including ultrasound
and X-ray scan and report, as well as
diabetic retinopathy screening services
meant that we were able to grow revenue
at over 30% year-on-year gross margin
in Ireland. Similarly, Medica’s clinical trial
imaging services business in the US also
expanded taking on some notable new
clients, as well as supporting existing clients
with important new therapy launches.
Remuneration and the
wider workforce
With exceptionally high levels of inflation in
the UK and more widely disproportionately
affecting those lower paid, Medica took
a number of steps to support employees
with the rising cost of living during 2022.
In addition to the normal annual salary
increase in April 2022, all employees
across the Group other than the executive
team received both a non-consolidated
payment equivalent to £625 in July 2022
and a further salary increase of 2.5% in
October 2022 to help with additional
costs caused by rising inflation.
As well as the extra financial support, the
focus on wellbeing also continued during
2022 with training for all staff on mental
health awareness and financial wellbeing.
The committee has taken overall
performance into consideration when
determining remuneration matters for 2022.
Remuneration outcomes
and awards made in 2022
For 2022, Dr Stuart Quin and Richard Jones
were eligible to receive an annual bonus
of up to 125% of base salary following the
implementation of the revised Remuneration
Policy in 2021. The performance targets for
the annual bonus were based on revenue,
profit, free cash and operational measures.
All four components of the annual
bonus were weighted equally at 25%.
The target thresholds were met for the
profit and revenue measures resulting in
a bonus payment of 5% of the maximum
opportunity for financial measures. The
operational measures were set at the start
of the year to align with Medica’s key
strategic objectives for 2022. In July 2022,
the board determined to place increasing
importance on building overseas capacity,
particularly in India, in line with the strategic
direction of the Company. In response to
this, the committee agreed to adjust one
of the functional targets to include this
important activity. Based on the revised
targets, two of the three functional targets
were achieved resulting in a payment
of 13.3% of maximum opportunity. The
committee approved a total bonus payment
to executive directors for 2022 (including
the deferred bonus element) of c.18% of
their total maximum opportunity which
equates to just under 23% of basic salary.
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 2023.
Key achievements in 2022
• Approval of remuneration of the executive directors for 2022 and looking
ahead to 2023
• Approval of 2022 incentive awards and their performance conditions
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Annual report for the year ended 31 December 2022
43
Awards under the 2019 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. The committee takes a
measured and cautious approach to the
application of discretion. In considering the
performance of the Company as a whole
over the three-year performance period, the
committee determined that the outcome
did not represent an accurate reflection
of the strategic progress made during the
period in question; nor did it appropriately
reflect the strength of Medica’s relative
TSR performance which was at the
upper quartile of the FTSE 250 small cap.
Major shareholders were consulted on
the use of discretion and subsequently
confirmed their support to allow the award
to vest at 50%, 25% of which would be
subject to the normal holding period of
three-years and the remaining 25% to be
subject to an extended holding period of
four-years. Further details are set out on
page 44 of the remuneration report.
In 2022 the committee granted PSP
awards to Dr. Stuart Quin of 269,257
and to Richard Jones of 190,064 shares
respectively representing 125% of salary.
These 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 2022 are set out in the 2021
annual report. A further 677,771 PSP awards
were made to the wider management
team with the same performance
conditions as executive directors. In
addition, a total of 1,021,988 other 2022
PSP awards were made to employees
across the Group excluding executive
directors with limited performance
conditions applicable to these awards.
Response to voting at
the 2022 AGM
At the 2022 AGM, 99.7% of shareholders
voted (as an advisory vote) in favour of
the director’s remuneration report for
2021, which included remuneration and
performance share awards for 2022.
In addition, 99.2% of shareholders voted
in favour of a revision to the rules of the
performance share plan to align these rules
with the remuneration policy approved
by shareholders at the 2021 AGM.
UK Corporate
Governance Code
As part of the review of the remuneration
policy, approved by shareholders in 2021,
the committee committed to making
changes to align executive pensions
with those of the wider UK workforce.
These changes came into effect from
1st January 2023 thereby ensuring
full compliance with the Code.
Looking ahead to 2023
For 2023, base salaries will be increased
by 4.0% for executive and non-executive
Directors to align with the average increase
for the wider workforce. Company pension
contributions for executive directors
will reduce to 4% of salary in line with
the wider workforce. For both executive
directors the maximum 2023 annual
bonus opportunity will be 125% of base
salary and the maximum 2023 Long-Term
Incentive Plan (LTIP) opportunity (under
the PSP plan) will be 125% of base salary.
Details of the proposed targets for 2023
PSP awards are set out on page 61 of
the remuneration report. Against an
uncertain external environment, with
challenging market conditions set to
continue, the committee has taken care,
to set appropriately stretching targets that
align the interests of the shareholders and
executive directors to deliver the strategic
plan for the Group and create value for
shareholders over the next three years and
beyond. During the last policy review, a
commitment was made to shareholders to
keep the introduction of a return measure
under review for the life of the policy. For
the 2023 PSP awards, a new ROCE measure
has been introduced to sit alongside the
existing EPS and TSR measures with
all three measures weighted equally.
Medica remains a high growth business
with strong ambitions to expand in
the future. Ensuring that executive
director remuneration incentivises and
rewards the delivery of sustainable
shareholder value is a key objective for
the committee in considering the extent
to which amendments to policy may be
proposed at the next vote in 2024.
We hope that our shareholders will support
the remuneration report at the 2023 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
5 April 2023
Key committee activities in 2022
Triennial Remuneration Policy review • Obtained approval from shareholders at the 2022 AGM for revised rules of the
performance share plan to align with the shareholder approved remuneration policy
Director’s remuneration
• Reviewed the 2022 remuneration report prior to its approval at the 2023 AGM
• Approved the 2022 annual bonus payments for executive directors
• Approved executive directors’ remuneration for 2022/23
• Agreed the discretionary terms in respect of the vesting of Dr Stuart Quin’s
2019 PSP award
Executive remuneration • Approved the 2022 group annual bonus targets
• Approved the 2022 awards under the Company’s PSP for executives and other staff
Governance • Reviewed the remuneration committee terms of reference
• Reviewed market trends and latest developments in governance
• Conducted a benchmarking exercise for executive and non-executive remuneration
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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 until the 2024 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 2022 and early 2023 the committee considered the effectiveness of PSP awards for the retention of key employees below the
level of executive management. In line with 2022, the committee again approved the issuance of awards (RSU awards) to staff below
executive director level issued under the PSP plan rules but with limited performance conditions. These awards will be issued in
April 2023.
The committee do not intend to grant any 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.
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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Annual report for the year ended 31 December 2022
45
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 until the 2024 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 2022 and early 2023 the committee considered the effectiveness of PSP awards for the retention of key employees below the
level of executive management. In line with 2022, the committee again approved the issuance of awards (RSU awards) to staff below
executive director level issued under the PSP plan rules but with limited performance conditions. These awards will be issued in
April 2023.
The committee do not intend to grant any 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.
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 two 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 2022 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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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 two 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 2022 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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48
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
macroeconomicenvironment.
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 2023
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 2023. 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
importanceof 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 62.
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Annual report for the year ended 31 December 2022
49
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 2023 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.
£0k
£400k
£800k
£1,200k
£1,600k
£2,000k
Maximum with
share price
growth
MaximumOn-targetMinimumMaximum with
share price
growth
MaximumOn-targetMinimum
Stuart Quin Richard Jones
Fixed remuneration Annual bonus PSP Total
£417k
£671k
£1,433k
£1,711k
£279k
£458k
£996k
£1,192k
100%
62% 29%24%
100%
61%
28%23%
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 2023
• Benefits as included in the single figure table for 2022
• Pension based on % contribution of salary for 2023
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
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Report of the remuneration committee
continued
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.
In addition 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 them after they
cease, 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
their 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.
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Annual report for the year ended 31 December 2022
51
Reason for cessation Calculation of vesting/payment
Timing of vesting/
payment
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).
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 their
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 their
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.
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52
Report of the remuneration committee
continued
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 them 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.
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.
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Annual report for the year ended 31 December 2022
53
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 58:
Fee increases of
4% in line with the
wider workforce will
be applied in 2023.
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.
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
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Report of the remuneration committee
continued
Annual report on remuneration
This section of the report provides details of how our policy was implemented during the period ending 31 December 2022.
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 31December
2022 and the prior year.
£’000
Base
salary
Taxable
benefits
1
Annual
bonus PSP
2
Pension
benefit Other Total
Total
fixed
Total
variable
Dr. Stuart Quin
2022 £352 £10 £49 £408 £31 £nil £851 £394 £457
2021 £343 £9 £210 £0 £31 £nil £594 £383 £210
Richard Jones
2022 £249 £2 £34 £0 £15 £3 £303 £269 £34
2021 £242 £3 £148 £0 £15 £8 £415 £259 £156
Former directors
Base
salary
Taxable
benefits
1
Annual
bonus PSP
2
Pension
benefit Other Total
Total
fixed
Total
variable
Dr. Stephen Davies
3
2021 £83 £0 £61 £118 £5 £nil £267 £88 £179
1. Medica provides death in service benefit and group income protection and private medical insurance benefits to its executive directors.
2. Value of PSP represents the number of nil cost options vesting multiplied by the share price at the date of vesting.
3. Dr Stephen Davies resigned as a Director on 31 May 2021.
Incentive outcomes for the year ended 31December 2022 (audited)
Bonus awards for 2022
2022
Maximum
opportunity
Bonus
outcome
(% of max)
Salary
earned
for the
financial
year to
31December
2022
Bonus
payable
in cash
Bonus
deferred
into
shares
Total
bonus
Stuart Quin 125% of salary 18% £352 £49 £32 £81
Richard Jones 125% of salary 18% £249 £34 £23 £57
2021
Maximum
opportunity
Bonus
outcome
(% of max)
Salary
earned
for the
financial
year to
31December
2021
Bonus
payable
in cash
Bonus
deferred
into
shares
Total
bonus
Stuart Quin 100% of salary 82% £343 £210 £140 £350
Richard Jones 100% of salary 82% £242 £148 £99 £247
Stephen Davies 100% of salary 74% £83 £61 £0 £61
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Annual report for the year ended 31 December 2022
55
Disclosure of 2022 annual bonus targets
The executive directors’ bonuses for the year ended 31 December 2022 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 18.3% 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% £73.4m £81.6m £86.1m £76.9m 4.3%
Adjusted net operating profit 25% £13.5m £15.0m £17.1m £13.6m 0.7%
Free cash 25% £6.9m £7.7m £8.9m £6.4m 0%
Sub-total for financial measures 75% 5.0%
Sub-total operational measures 25% See table below 13.3%
Total 100% 18.3%
Following a review of achievements against the financial targets, the committee concluded that Dr. Stuart Quin, and Richard Jones
should receive a payment relating to the financial targets of 5.0% of the maximum bonus opportunity representing 75% of the total
bonus opportunity.
The remaining 25% of the available bonus opportunity was based on the achievement of jointly owned operational measures as follows:
Operational Measures Commentary Outcomes
Next AI project launched
successfully according to
business plan by end FY22
Reprioritisation in July 2022 to focus resource and effort on developing an
Indian reporting solution as an alternative objective
Met
Launch of digital pathology
reporting service with
one new model client in
place in FY22
Decision made to focus resources on system developments aimed at
improving productivity and radiologist reporting experience
Not met
Finance ERP go-live
consistent with budget
timeline and investment
New financial ERP system went live in October 2022, unifying three
separate systems previously in place and allowing for monthly consolidation
at group level. Planning and budgeting module also went live in 2022 and
was used to prepare the 2023 budget
Met
In July 2022, the board agreed to place increasing importance on building overseas capacity and to re-direct resource and effort that
would otherwise have been focused on the design and implementation of the next AI project. These resources were redirected to the
development of an India reporting solution to provide long term and sustainable overseas capacity. The committee considered this
replacement target to be equal in terms of strategic importance and an appropriate inclusion with an equivalent level of stretch.
Following a review of achievements against the operational targets, the committee concluded that Dr. Stuart Quin and Richard Jones
should receive 13.3% of the maximum bonus opportunity of 25% for operational measures.
In total therefore the Committee concluded that Dr Stuart Quin and Richard Jones should receive a total bonus award for 2022
representing 18.3% of the maximum opportunity which equated to 22.8% of base salary for each.
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.
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Report of the remuneration committee
continued
Deferred bonus plan (“DBP”)
Date of grant Vehicle
Number
awarded
Share
Price at
grant/award
date
2
Total
value of
award
Vesting
date
Expiry
date
Dr. Stuart Quin 15-Apr-20 DBP – nil cost share options 2,624 110.5 £2,900 14-Apr-22 15-Apr-30
26-May-21 DBP – nil cost share options 17,0 35 161.2 £27,455 26-May-23 26-May-31
07-Nov-22 DBP – nil cost share options 87,409 160.5 £140,292 31-Mar-24 07-Nov-32
Richard Jones 26-May-21 DBP – nil cost share options 5,010 161.2 £8,075 26-May-23 26-May-31
07-Nov22 DBP – nil cost share options 61,700 160.5 £99,029 31-Mar-24 07-Nov-32
Dr. Stephen Davies
3
26-May-21 DBP – nil cost share options 10,202 158.3 £16,150 26-May-23 26-Nov-23
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 average closing share price for the three days immediately preceding the date of grant other than in
respect of 2022 awards with value based on date of award as the grant date in respect of these awards was delayed until the first available date options could be
awarded taking into account restrictions under MAR.
3. Dr. Stephen Davies resigned on 31 May 2021, the expiry date is 6 months after options vest.
PSP vesting in 2022
A summary of the performance conditions for the awards granted in 2018 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
The PSP award was granted in September 2019, at the point Dr Stuart Quin was appointed CEO. Subsequent PSP awards have been
granted in April, at the normal date of grant.
Threshold performance was not met for either measure with TSR growth at 7.97% narrowly missing the minimum threshold required
to achieve vesting. The committee noted that the performance period covered the period of the Covid-19 pandemic and the start of
the war in Ukraine, during which time external factors impacted equity markets and TSR performance of companies globally. Mindful
of the significant strategic progress made during the performance period in question, including the acquisitions of Medica Ireland and
RadMD and the joint venture in Australia together with the strong recovery in performance post-Covid, the committee determined
that with the support of major shareholders, it would be appropriate to exercise discretion and allow a proportion of the award to
vest. Major shareholders were consulted on the proposal to allow the award to vest at 50%, reflective of both the strategic progress
made and the growth in TSR relative to peers in the FTSE 250 small cap (a relative TSR measure would have resulted in the maximum
vesting for the TSR element of the award at 50%). Shareholders subsequently confirmed their support for the proposal on the basis
that an extended holding period would be applied to a proportion of the award. The committee concluded that the award made in 2019
would vest at 50%, 25% of which would be subject to an extended holding period of four years rather than the normal three years, to
encourage retention.
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57
PSP awards granted in 2022
On 7 November 2022 executive directors were granted annual awards under the PSP, comprising a grant of options to acquire shares at
nil cost These awards were approved in the normal annual grant period of 42 days following the preliminary results but grant date was
the first available date after taking account of restrictions under MAE.
Awards granted to Dr. Stuart Quin and Richard Jones under the PSP were granted in respect of shares with a market value equal to
125% of base salary, determined using the average closing price of Medica’s shares for the three dealing days immediately preceding
the award date rather than the grant date (165 pence). The number of options granted was not amended for the change in share price
between award date (165 pence) and grant date (133.5 pence).
A summary of the performance conditions for the 2022 awards is included below and was previously disclosed in the 2022 Annual
report and accounts:
Measure Weighting Targets Performance measurement period
Absolute TSR
CAGR over three years to
31December 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
31December 2023
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
LTIP awards 2022 (with 2021 comparative) for executive directors
2022
Director Date of grant
4
Vehicle
Number
awarded
Exercise
price
1
Face
value
2
Vesting
date
3
Expiry
date
Dr. Stuart Quin 07-Nov-22 PSP – nil cost
share options
269,257 Nil £444 18-Apr-25 07-Nov-32
Richard Jones 07-Nov-22 PSP – nil cost
share options
190,064 Nil £314 18-Apr-25 07-Nov-32
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 26-May-24 28-May-31
Dr. Stuart Quin 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-32
Richard Jones 22-Jun-21 PSP – nil cost
share options
75,201 Nil £121 22-Jun-24 22-Jun-31
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 award, being the average closing share price for a share as derived from the
official list for the three consecutive dealing days immediately preceding 18 April 2022 (165p). ). The share price on the actual date of grant was 133.5 pence but no
adjustment was made to the number of options awarded to reflect a change in share price. The face value of the award 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.
4. Awards were agreed by the committee during the normal annual award window of 42 days following the preliminary results with the actual options grant date
taking into account restrictions on issuing options under MAR. The vesting date is therefore based on the date the awards were agreed and not the grant date and
excluded any adjustment in the calculation of the number of option awards for a change in share price between approval and grant date.
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Report of the remuneration committee
continued
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 31December
2022 and the prior year:
Director 2022 2021
Gordon Roy Davis £100 £100
Joanne Mary Easton £50 £50
Barbara Moorhouse
1
£60 £30
Dr. Junaid Bajwa
2
£50 £37
1. Barbara Moorehouse was appointed on 1 July 2021
2. 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 2022 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:
2022 2021 2020
Salary/
fees Benefits
Annual
bonus
Salary/
fees Benefits
Annual
bonus
Salary/
fees Benefits
Annual
bonus
Executive Directors
Chief Executive Officer 3% 16% (77)% 1% (4)% 155% 34% 225% 627%
Chief Financial Officer 3%
(32)% (77)% 48% 69% 511% 17% N/A 73%
Non-Executive Directors
Gordon Roy Davis 0% – – 0% – – 0% – –
Joanne Mary Easton 0% – – 0% – – 44% – –
Barbara Moorhouse
1
100% – – N/A – – N/A – –
Dr Junaid Bajwa
2
35% – – N/A – – N/A – –
Average of other
Medicaemployees
3
15% (53)%
1. Appointed July 2021
2. Appointed April 2021
3. Average comparable (FTE) Pay (salary only) of other employees = £47k (£41k, 2021). 2. Average comparable bonus (FTE) of other employees = £2k (£5k, 2021)
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
2022 Option A 15.9:1 12.3:1 6.8:1
2021 Option A 24.1:1 15.7:1 11.8:1
2020 Option A 18.4:1 15.7:1 8.7:1
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 annual pay, benefits and annual bonus as at 31 December 2022) because it is the most transparent method
available.
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Annual report for the year ended 31 December 2022
59
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:
2022
Salary Total pay
25th percentile
1
£58 £61
Median £32 £33
75th percentile £25 £26
1. Measured highest to lowest
2. Total pay = Salary + Bonus + Benefits
• The increase in the pay ratio from 2020 to 2022 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 or 2022 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 2022
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 £19,287 in 2022 (2021: £14,627).
2022 2021 Change YOY
Distributions to shareholders (£’000) 3,328 3,167 £161
Total employee pay
1
(£’000) 13,535 10,282 £3,253
Total employee pay as a % of distribution to shareholders 4.1x 3.2x
1. Total pay = cost of salary and bonus for the year
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.
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 2022. 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.
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Report of the remuneration committee
continued
Historical TSR performance
Growth in the value of value of a hypothetical holding since listing on 21 March 2017 to 31 December 2022.
75p
95p
115p
135p
155p
175p
195p
215p
235p
255p
Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22
Medica share price 4.3% FTSE All-Share 0.8% FTSE All-Share Healthcare 38.6%
FTSE AIM (10.3%) FTSE AIM Healthcare (10.4%)
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 relating to that year’s
performance and is also shown below.
2018 2019 2020 2021 2022
Dr. Stuart Quin (From 1September 2019)
Total remuneration (£’000) n/a £139 £464 £594 £851
Annual bonus (% of maximum) n/a 10% 32% 82% 18%
LTIP vesting (% of maximum) n /a n/a n/a n/a 50%
John Graham (Retired 30August 2019)
Total remuneration (£’000) £224 £143 n/a n/a n/a
Annual bonus (% of maximum) 5% n/a 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 2023.
Base salary
Executive directors have been awarded an annual increase in basic pay of 4.0% from April 2023 in line with the wider workforce as
shown below:
£’000
1April 2022
base salary
1April 2023
base salary
Change vs
April 2022
Dr. Stuart Quin £355 £370 4.0%
Richard Jones £251 £261 4.0%
Pension
Dr. Stuart Quin received pension contributions of 10% of his salary in 2022. Richard Jones received pension contributions of 6% of his
salary in 2022. The pension contributions of the current executive directors will reduce from 1 January 2023 to align with those of the
wider UK workforce which is currently 4%.
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Annual report for the year ended 31 December 2022
61
Annual bonus
For 2023, 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 2023 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 prior year awards.
Performance share plan
In 2023, the executive directors will receive nil cost options under the Medica Group PSP, with face values of 125% of salary following
publication of the 2022 preliminary results. The 2023 PSP awards will vest after three years. For 2023 a new performance condition has
been introduced to further enhance the alignment of performance conditions with shareholder returns. This new measure is Return on
Capital Employed (ROCE) with the target set after considering the Company’s cost of capital and past ROCE performance. A summary
of performance conditions for the 2023 awards is as follows
Measure Weighting Targets Performance measurement period
Absolute TSR
CAGR over three years to
31December 2024
33.3% 0% vesting below 8% cumulative growth per annum
25% vesting for 10% CAGR growth
50% vesting for 12% CAGR
100% vesting for 17% 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 31December
2024
33.3% 0% vesting below 31 pence per share
25% vesting at 31 pence per share
50% vesting at 33pence per share
100% vesting at 37 pence per share
Straight-line vesting between these points
Cumulative
three years
Return on capital
employed- new Measure
33.3% ROCE is defined as total assets less current liabilities
divided by underlying operating profits.
0% vesting below 15% ROCE
25% vesting at 15% ROCE
50% vesting at 17.5% ROCE
100% vesting above 20% ROCE
Measured as average ROCE
achieved per year over the
three-year period
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. Vesting of awards is subject to overall committee discretion to reduce
or eliminate the awards if deemed necessary.
In line with our policy, PSP awards will also be subject to Medica’s malus and clawback provisions.
Implementation of non-executive remuneration policy for 2023
The fees payable to the non-executive directors, which have not changed since listing in 2019, were reviewed and will subsequently
be increased by 4% in line with the wider workforce, effective April 2023. During 2023 the Company intends to undertake a thorough
review of non-executive directors’ remuneration to ensure that the fee structure is reflective of the levels of responsibility and
commitment required, and a further adjustment may be made during the year.
Role Fee Number Appointed
Chairman £104,000 1
Senior independent non-executive director £62,400 1
Independent non-executive director £52,000 2
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Director’s interests (audited)
Director’s interests in shares as at 31/12/22
The table below sets out details of the current shareholdings of each director (and any relevant connected persons) as at 31 December
2022 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
2022 – Owned
outright or
vested
Beneficial
ownership
2021 – Owned
outright or
vested
Unvested
deferred
bonus awards
not subject to
performance
Vested PSP
and DBP
awards but
not exercised
Unvested
PSP awards
subject to
performance
Beneficial
ownership
2022 – Owned
outright or
vested
Shareholding
as at
31 Dec 2022
3
(% salary)
Shareholding
guideline
(% salary)
Dr. Stuart Quin 1 7 7,4 80 117,580 104,444 269,465 1,204,248 551,389 218% 125%
Richard Jones 25,156 25,126 66,710 nil 858,745 91,866 52% 125%
Gordon Roy Davis 132,726 137,726 nil – – 132,726 – –
Jo Easton 36,288 3 7,81 2 nil – – 36,288 – –
Barbara Moorhouse nil nil nil nil
Dr. Junaid Bajwa 17,241 17,241 nil 17,241
1. Current holding measured by reference to the shareholding at 31 December 2022, multiplied by the share price of 140.75p 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.
3. There has been no change in shareholdings of directors from 31 December 2022 to the date of this report.
Governance
Summary of shareholder voting at the 2022 AGM
Votes for % Votes against % Total votes Withheld
Remuneration Report 100,703,036 99.72% 279,222 0.28% 100,928,258 926,983
Amendments to the PSP 100,165,535 99.19% 814,918 0.81% 100,980,453 928,788
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/.
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)
Report of the remuneration committee
continued
STRATEGIC REPORT
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FINANCIALS
Meetings in 2022
The committee met five times during the year. The attendance at the meetings by committee members was as follows:
Total meetings 5
Jo Easton (Chair) 5
Junaid Bajwa 5
Barbara Moorhouse 3
Roy Davis 5
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 2022 as its independent adviser. This included advice
on 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 £41k, (excluding expenses and VAT) for the year to 31 December 2022 in their capacity as advisers to thecommittee.
Jo Easton
Chair of the Remuneration Committee
5 April 2023
Annual report for the year ended 31 December 2022
63
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64
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 2022.
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
trials. 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 18 to 21.
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 reportingstandards.
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 5 April
2023 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
otherjurisdictions.
Directors’ report
STRATEGIC REPORT
GOVERNANCE
FINANCIALS
Annual report for the year ended 31 December 2022
65
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.
Disclosure of information
under LR 9.8.4R
The information that fulfils the reporting
requirements under this rule can be found
in note 28 on page 111 in respect of details
of long term incentive schemes. There are
no other matters requiring disclosure.
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 18 to 21.
Principal and emerging risks
and uncertainties
The principal and emerging corporate
risks and uncertainties are set out on
pages 24 to 27 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 27 to the financial statements
on page 109.
Results and dividends
The results for 2022 are set out in the
financial statements on pages 79 to 115.
An interim dividend of 0.93 pence (2021:
0.89 pence) per ordinary share was paid
to shareholders on 4 November 2020. The
board are recommending a final dividend
for 2022 of 1.88 pence (2021: 1.79pence) per
ordinary share taking the total dividends for
the year to 2.81 pence (2021: 2.68 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 27
including detailed commentary on the
position of the group as at 31 December
2022. This analysis includes comments on
the position of the Group at the end of the
financial period.
Significant events after the
balance sheet date
On 5th January 2023, the Company
issued and allotted 200,000 shares of
0.2pence each in the capital of the
Company to the trustee of the Company’s
Employee Benefit Trust and these shares
will be used to satisfy future awards and
options vesting in the Medica Group PLC
Performance Share Plan 2017. Following
admission, the Company had 122,633,635
ordinary shares in issue.
On 27 January 2023, RadMD LLC, a
Delaware limited liability company that
is a subsidiary of the Company, acquired
the assets of VoxelMetrics LLC, a North
Carolina Limited Liability company
engaged in the management of radiology
readers for clinical trials.
On 3 February 2023, the Company acquired
the entire issued share capital of JCA
Seminars Limited, an international radiologist
training company based in the UK.
Capital structure
As set out in note 24 on page 107
(as amended by note 31 above) the
Company’s share capital is divided into
122,633,635 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 35
on page120. Medica Group PLC is the
ultimate holding company.
Significant shareholdings
As at 31 December 2022 and 28 February 2023, 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 2022 As at 28 February 2023
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
Gresham House 23,604,885 19.3 24,056,337 19.6
Aberforth Partners 15,500,952 12.7 13,023,085 10.6
Lombard Odier Investment Management 8,915,178 7.3 10,147,181 8.3
BGF 7,471,904 6.1 7,601,904 6.2
Artemis Investment Management 6,125,677 5.0 6,125,677 5.0
GVQ Investment Management 5,911,910 4.8 4,761,910 3.9
Premier Miton Investors 5,857,955 4.8 4,757,955 3.9
Royal London Asset Management 5,304,957 4.3 5,304,957 4.3
abrdn n/d n /d 3,859,593 3.2
STRATEGIC REPORT
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66
Directors’ report
continued
Related party transactions
As detailed in note 29 on page 114, there
were no related party transactions other
than £56k of dividends paid to person
discharging management responsibilities
including directors.
CO
2
emissions
The Group’s CO
2
emissions are disclosed
on page 15 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
has entered 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.
Corporate governance
The directors’ statement on corporate
governance is set out on page 30 and
forms part of this report.
Viability statement
The group has considered the longer-term
performance over a period to December
2026, so that 45months remain at
the time of approval of this year’s
annual report.
The forecasts prepared over the longer-
term period reflect the continuing delivery
of the group’s strategy including the
consideration of:
• Ongoing growth in UK demand to
tackle the backlog of activity that
built up during the restrictions on
activity imposed during the Covid-19
pandemic and its aftermath, with the
key to growth in UK elective revenues
being capacity management and
increases noting the 16% increase
in capacity achieved by the UK
business in 2022.
• Underlying growth in demand for
both elective and urgent (NightHawk,
DayHawk and SameDay) 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.
Thisis 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 suitably qualified
reporters for UK and Irish clients
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 positive impact in
efficiency and productivity from
Medica’s 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 launch of telepathology
services in the UK also remains a
strategic objective for the group
in the near term and this new
organic development is expected,
to deliver positive revenues and
operating profits over the period as
a new source of revenue from UK
NHS clients.
• The positive impact from the two
recent small acquisitions made in the
UK and US and the positive impact
from any further M&A completed
during the period.
The impact from these additional
opportunities and from the two recent
acquisitions is not included in this baseline
forecast and is therefore likely to be a
credible upside over the 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 period ending
31stDecember 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:
• Impact of reduced revenue from
consideration of reduced radiologist
availability.
• Loss of certain material contracts.
• Further material inflationary pressure
on operating costs more than 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
21months 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 2023 and
beyond is set out in the CEO review on
pages 18 to 21.
Annual general meeting
Medica’s annual general meeting is
scheduled to take place on 30 June 2023.
Directors
The directors who served during the year
were as follows:
Roy Davis
Jo Easton
Dr. Stuart Quin
Richard Jones
Dr. Junaid Bajwa
Barbara Moorhouse
Four of the above directors are male,
two are female.
STRATEGIC REPORT
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Annual report for the year ended 31 December 2022
67
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);
(see page 25)
• an indication of exposure to price risk,
credit risk, liquidity risk and cash flow
risk required by paragraph 6(1)(b);
(seenote 27 on page 109)
• details of any events affecting
the Company and Group since
the reporting date as required
by paragraph 7(1)(a); (see note31
on page114)
• an indication of likely future
developments in the business of the
Group required by paragraph 7(1)
(b); (see CEO outlook statement
on page21)
• an indication of the existence of
branches outside of the United
Kingdom required by paragraph 7(1)
(d); (see note 25 on page 108)
• 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
note28 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 (2021: no
ordinary shares of 0.2p each), of which
34,064 (2021: 41,936) 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
5April 2023 and signed on its behalf by
Richard Jones
Chief Financial Officer
5 April 2023
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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 8 to 16. 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 18 to 21.
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 10 to 12.
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 employees. More information on
this can be found in the ESG report on
pages8 to 16.
The board continued the process of
engagement with our employees through
the work of Jo Easton, non-executive
director responsible for workforce
engagement. During 2022, 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 strive always to lead all
customer interactions with our partnership
ethos and with our combined focus on
improving patient outcomes. To that
end, we take pride in producing regular
quality reports for each client with key
performance indicators, but also detail on
our quality improvement achievements and
areas for discussion. Meeting in person
with our clients to review these metrics and
assess how our services are impacting their
care for patients is a unique value add that
Medica offers.
Medica RadMD provides medical
expertise and oversight in support for our
clients by bringing new diagnostic agents,
therapeutic agents and advanced imaging
AI tools to our sponsors and patients
worldwide. We view our relationships
with our sponsors as partnerships
and work side by side to bring their
products to market. Our approach is
to deliver our high standards of clinical
excellence to every opportunity taking
a transformational approach that keeps
imaging and patients in the forefront of
all we do. We believe in full transparency
with our clients providing them not only
KPI’s and progress reporting but direct
access to our executive and medical team,
taking proactive measures to deliver
complete information in real or near time.
As a company we also support the
healthcare industry with sponsorship
and attendance at key events, promoting
innovation and collaboration with clients
and suppliers alike. Recent attendance at
the European Congress of Radiology saw
stakeholders from Medica UK, Ireland and
RadMD meet with Medica management
and each other, furthering cross country
and business relationships.
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
pages10 to 13.
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 the ‘community impact and charitable
causes’ section of the ESG report
on page 12.
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 30 to 33.
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 30.
Section 172 statement
STRATEGIC REPORT
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FINANCIALS
Annual report for the year ended 31 December 2022
69
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 2022, 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
31December 2022 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 2022 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 to current year performance and
historical budgets to actual performance;
• 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;
• considering the appropriateness of management’s scenario analysis, and applying our own additional sensitivities to consider the
impact on the model;
• considering of post balance sheet events and checking if any of these events have an impact on cashflow forecasts and
projections; and
• considering 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 the economic impacts of the cost of living crisis and corresponding cost pressures faced
by the business. 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.
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.
Independent auditor’s report
TO THE MEMBERS OF MEDICA GROUP PLC
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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 relation to the group’s reporting on how it has 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.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of
this report.
Our approach to the audit
Overview of our audit approach
Overall materiality:
Group: £465,000 which represents 5% of the group’s profit before tax at the planning stage.
Parent company: £465,000, being the lower of Group materiality and materiality determined
using the total assets of the parent entity.
Key audit matters were identified as:
• Improper revenue recognition (same as previous year)
Our auditor’s report for the year ended 31 December 2021 included Business combination
accounting as a key audit matter that has not been reported as a key audit matter in our
current year’s audit report as no acquisitions have been made in the year.
We performed an audit of the financial information of the parent company, Medica Reporting
Limited and RadMD using component materiality (full-scope). We performed specific audit
procedures of the financial information of Medica IT Services Limited using group materiality.
Component auditors performed specific audit procedures for Global Diagnostics (Ireland)
Limited. We performed analytical procedures on the financial information on the remaining five
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.
Audit
response
Description
Disclosures
Our results
KAM
Independent auditor’s report continued
TO THE MEMBERS OF MEDICA GROUP PLC
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71
In the graph below, we have presented the key audit matters, significant risks and other risks relevant to the audit.
Management override
of controls
Impairment of
goodwill
(Group)/Investment
in subsidiaries
Transition to NetSuite
Use of Alternative
Performance Measures –
disclosure risk
Improper revenue
recognition
Share based
payments –
valuation
Trade
receivables
Creditors
Completeness
Revenue recognition
occurrence of revenue
recognised in the year
Going concern
Low HighExtent of management judgement
Key audit matter Significant risk Other risk
High
Potential
statement
impac
Low
financial
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 scan 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 these 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;
Relevant disclosures in the Annual Report and
Accounts 2022
• The Group’s accounting policy on revenue recognition is
shown in note 3.2 to the financial statements on pages 84
to 86 and related disclosures are included in note 5 to the
financial statements on page 93.
Our results
• Our audit testing did not identify any material deficiencies or
misstatements in relation to manual adjustments to revenue.
No key audit matters were identified in respect of the parent company.
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Independent auditor’s report continued
TO THE MEMBERS OF MEDICA GROUP PLC
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 £465,000 which represents 5% of the group’s profit
before tax at the planning stage.
£465,000 being the lower of Group materiality and
materiality determined using the total assets of the
parent entity.
Significant judgements
made by auditor in
determining materiality
In determining materiality, we made the following
significant judgements: 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. 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.
In determining materiality, we made the following
significant judgements: We initially 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. This method produced a higher materiality
than for the Group, as such the engagement
team consequently reduced the materiality of the
Company to match Group materiality.
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
31December 2021 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
£348,000 which is 75% of financial statement
materiality.
£348,000 which is 75% of financial statement
materiality.
Significant judgements
made by auditor in
determining performance
materiality
In determining performance materiality, we made
the following significant judgements:
• 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 willingness 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 reduced to Group materiality if initially exceeds
this figure.
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
£23,000 and misstatements below that threshold that,
in our view, warrant reporting on qualitative grounds.
£23,000 and misstatements below that threshold that,
in our view, warrant reporting on qualitative grounds.
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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
PM
£348,000,
75%
TFPUM
£116,000,
25%
FSM
£465,000,
5%
Profit before tax
£8.6m
TFPUM
£116,000,
25%
FSM
£465,000,
0.5%
PM
£348,000,
75%
Total Assets
£86.6m
FSM: Financial statements materiality, PM: Performance materiality, TFPUM: Tolerance for potential uncorrected misstatements
An overview of the scope of our audit
We performed a risk-based audit that requires an understanding of the group’s and the parent company’s business and in particular
matters related to:
Understanding the group, its components, and their environments, including group-wide controls
• The engagement team obtained an understanding of the group and its environment, including group-wide controls, and assessed
the risks of material misstatement at the group level.
• The Medica Group operates in the UK, US, Australia and Ireland. Irish entities were acquired by the Group in 2020 and the US
businesses in 2021. The majority of the trade in the entity occurs within the UK, however due to the acquisitions, the share of trade
generated solely in the UK has expectedly reduced which is a key factor in our risk assessment.
• The organisational structure of the group results in reliance on regional managers in the U.S and Ireland, with oversight from the
finance team in the UK which is considered as part of our risk assessment. The Group engagement team and our component
auditors have prior experience working with regional management as part of prior years’ audits. Towards the end of the 2022
financial year, the Group implemented the use of NetSuite, which standardizes financial reporting across all regions, to further
strengthen group-wide controls.
Identifying significant components
The significance of the Group’s components is determined by reference to the percentage of Group revenue, profit before tax, total
assets and other relevant benchmarks represented by the individual components.
A component is individually financially significant if the component exceeds a specified percentage of a chosen benchmark or
benchmarks.
Having assessed the significance of the Group’s components, the following components were considered ‘financially significant’ for the
purposes of our Group audit scope:
1) Medica Reporting Limited (UK);
2) RADMD (US)
Audit work undertaken included a full-scope audit with the use of component materiality. This was performed by Grant Thornton UK.
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Independent auditor’s report continued
TO THE MEMBERS OF MEDICA GROUP PLC
Type of work to be performed on financial information of parent and other components (including how it
addressed the key audit matters)
The consolidated Group, including the Parent Company, Medica Reporting Ltd and Rad MD, were subject to full-scope audit.
No other components were assessed as being individually significant to the Group. Global Diagnostics (Ireland) Limited was assessed
as being not significant but material and under our instruction, specified audit procedures on this component were performed by the
component auditor Grant Thornton Ireland. Specified audit procedures were also performed on Medica IT Services Limited by the
group engagement team.
None of the Group’s other components – Medica Reporting Services Ltd, Medica Reporting Finance Ltd, Medica Australia Pty Ltd,
MED-IDX Pty Ltd, Medica US Inc and Global Retinopathy Screening Limited were assessed as being individually significant or material
to the Group as a whole. Analytical procedures are performed over these entities as part of our audit response to identify whether our
risk assessment remains appropriate.
Performance of our audit
Our audit approach was a risk-based approach founded on a thorough understanding of the Group’s business, its environment and risk
profile, and 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 96% of Group’s revenue, 92% of Group’s profit before tax and 97% of Group’s total
assets; and
• performing specific audit procedures in: Global Diagnostics (Ireland) Limited 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, MUSI Inc, Global Retinopathy
Screening Limited
Communications with component auditors
Grant Thornton Ireland are engaged to perform statutory audits for the two Irish entities in the Group – Global Diagnostics (Ireland)
Limited and Global Retinopathy Screening Limited.
Group audit instructions and Group significant risks were communicated to Grant Thornton Ireland, outlining the requirement to
perform specified audit procedures on Global Diagnostics (Ireland) Limited. On completion of their audit work, this was reviewed by
Grant Thornton UK to ensure that a sufficient and appropriate level of work has been performed to support our audit opinion of the
Group accounts.
Changes in approach from previous period
Compared to the prior year, the only changes to our Group audit scope were the inclusion of RADMD as a financially significant
component due to contribution to the Group (which was only for 9 months in FY21, being the post-acquisition period). Additionally,
specified audit procedures were performed over Global Retinopathy Screening Limited in the prior year but this was not assessed to be
significant or material to the Group in the current year.
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 3 91% 78% 78%
Specified audit procedures 2 6% 18% 14%
Analytical procedures 6 3% 4% 8%
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Other information
The other information comprises the information included in the annual report , other than the financial statements and our auditor’s
report thereon. The directors are responsible for the other information contained within the annual report. 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.
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 themselves. 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 those reports have been prepared in accordance with applicable legal
requirements.
• the information about internal control and risk management systems in relation to financial reporting processes and about share
capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Rules and Transparency Rules sourcebook
made by the Financial Conduct Authority (the FCA Rules), is consistent with the financial statements and has been prepared in
accordance with applicable legal requirements; and
• information about the company’s corporate governance code and practices and about its administrative, management and
supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.
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 their environment obtained in the course of
the audit, we have not identified material misstatements in:
• the strategic report or the directors’ report; or
• the information about internal control and risk management systems in relation to financial reporting processes and about share
capital structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.
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; or
• a corporate governance statement has not been prepared by the parent company.
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Independent auditor’s report continued
TO THE MEMBERS OF MEDICA GROUP PLC
Corporate governance statement
We have reviewed 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 by the Listing Rules.
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
andstrategy;
• 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
As explained more fully in the directors’ responsibilities statement on page 64 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations.
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;
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77
• 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 reviewing related party transactions and associated disclosures;
– Assessing the extent of compliance with the relevant laws and regulations as part of our procedures on the related financial
statement item
• 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.
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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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 10 years, covering the
periods ending 31 December 2013 to 31 December 2022.
FY2022 is Grant Thornton UK’s 10th year of providing services to Medica Group Plc and its subsidiaries. It is a requirement that
companies considered PIEs put the statutory audit out for tender at least once every ten years. Members of the board have the option
to allow the period to be extended to 20 years, if a public audit tender is held after the first ten years, or to 24 years if there is a joint
audit arrangement.
All auditors in the UK are required to comply with the Auditing Practices Board’s Ethical Standard 3 on rotation. For listed audit clients,
engagement partners are required to rotate off after five years. Therefore, FY2022 is Chris Smith’s fifth and last year as the audit
partner for Medica Group plc.
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
5 April 2023
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Annual report for the year ended 31 December 2022
79
STRATEGIC REPORT
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FINANCIALS
31December 2022
£000
31December 2021
£000
Note
Underlying
£’000
Non-
underlying
(Note 7)
£’000
Total
£’000
Underlying
£’000
Non-
underlying
(Note 7)
£’000
Total
£’000
Revenue 76,9 79 – 76 ,97 9 61,913 – 61,913
Cost of sales (39 ,79 6 ) – (39 , 796 ) (30 ,519 ) – (30 ,519 )
Gross profit 3 7,1 8 3 – 3 7,1 8 3 31,394 – 31,394
Administration expenses (23,540 ) (5 ,1 8 8 ) (28,728 ) (19,316 ) (3,540 ) (22,856 )
Operating profit 13,643 (5 ,1 8 8 ) 8,455 12,078 (3,540 ) 8 ,538
Finance costs 8 (627 ) (213 ) (840 ) (550 ) (593 ) (1, 143 )
Finance income 8 – 1 ,1 3 8 1 ,1 3 8 – – –
Share of results of joint ventures 17 (1 1 2 ) – (1 12 ) (56 ) – (56 )
Profit before tax 12,904 (4,263 ) 8,6 41 11,472 (4, 133 ) 7 ,339
Income tax expense 9 (2 ,1 96 ) 755 (1,4 41 ) (2,0 7 9 ) 207 (1,872 )
Profit for the year attributable to
equity shareholders 1 0,708 (3,508 ) 7 ,200 9,393 (3,926 ) 5,467
Basic profit per ordinary share (pence) 10 5.8 8 4.56
Diluted profit per ordinary share (pence) 10 5.8 3 4.5
Statement of comprehensive income
Profit for the year 7 ,200 5,467
Other comprehensive income
Items that will be reclassified
subsequently to profit or loss
Foreign exchange translation differences 590 (124 )
Total comprehensive income for the year 7, 7 9 0 5,343
The notes and accounting policies on pages 83 to 115 form an integral part of these financial statements.
Consolidated income statement and consolidated
statement of comprehensive income
FOR THE YEAR ENDED 31 DECEMBER 2022
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STRATEGIC REPORT
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FINANCIALS
Note
31December
2022
£000
31December
2021
£000
ASSETS
Non-current assets
Goodwill 13 3 1 ,1 1 7 30,357
Other intangible assets 14 2 1,1 8 5 22,399
Property, plant and equipment 15 4,531 4,521
Deferred tax 23 556 186
Investments 17 57 –
Current assets
Trade and other receivables 19 1 7, 7 9 4 14,271
Cash and cash equivalents 20 11,004 9,6 1 6
Total assets 86,244 81,350
LIABILITIES
Current liabilities
Trade and other payables 21 (9 ,865 ) (9 ,576 )
Borrowings 22 (4,516 ) (5,73 9 )
Lease liabilities 16 (253 ) (28 0 )
Contingent consideration 22 (1,550 ) (5,335 )
Current tax (1,0 39 ) (880 )
(17 ,223 ) (21,8 10 )
Net current assets 11,575 2,077
Total assets less current liabilities 6 9,0 2 1 59,540
Non-current liabilities
Borrowings 22 (5,702 ) –
Lease liabilities 16 (701 ) (814 )
Contingent consideration 22 – (1,553 )
Deferred tax 23 (1,531 ) (2,270 )
(7 ,934 ) (4,637 )
Net assets 61,0 87 54,903
EQUITY
Issued capital 24 245 245
Share premium 24 30 ,330 30 ,324
Foreign exchange reserve 468 (122 )
Retained earnings 24
Total equity 61,0 87 54,903
The notes and accounting policies on pages 83 to 115 form an integral part of these financial statements.
Consolidated statement of financial position
COMPANY REGISTRATION 08497963
Annual report for the year ended 31 December 2022
81
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FINANCIALS
31December
2022
£000
31December
2021
£000
Operating activities
Profit for the year 7, 200 5,4 6 7
Add back taxation 1,4 41 1,872
Profit before tax 8,6 41 7 ,339
Adjustments for:
Depreciation 1,920 1,67 2
Amortisation 2,991 2,816
Loss on disposal of tangible and intangible assets 29 55
Share based payments 1,6 98 682
Social security costs of share-based payment charge 92 78
Fair value movement on contingent consideration (1,01 7 ) –
Foreign exchange (252 ) (5 90 )
Finance costs 840 1, 143
Finance income (1 ,1 3 8 ) –
Share of results of joint ventures 112 56
Changes in:
Increase in trade and other receivables (1,91 5 ) (4, 725 )
(Decrease)/increase in trade and other payables (1,335 ) 2,811
Tax paid (1,923 ) (1,614 )
Cash inflow from operating activities 8 ,74 3 9 ,723
Investing activities
Purchase of subsidiary net of cash acquired – (11, 429 )
Purchase of property, plant and equipment (1,7 7 1 ) (1,310 )
Purchase of software intangibles (1 ,1 3 8 ) (763 )
Contingent consideration paid net of transaction
related costs (4 ,7 61 ) –
Additional investment in joint ventures (1 69 ) –
Interest received – –
Cash outflow from investing activities ( 7, 8 3 9 ) (13,502 )
Cash flows from financing activities
Repayment of lease liability (333 ) (407 )
Proceeds from borrowings 8,31 7 11,592
Repayment of borrowings (4,00 0 ) (23,522 )
Issue of ordinary share capital 6 16, 162
Costs to issue ordinary share capital – (537 )
Dividends paid to ordinary shareholders (3,328 ) (3, 167 )
Interest paid (350 ) (424 )
Net cash inflow/(outflow) from financing activities 31 2 (303 )
Net change in cash and cash equivalents 1,21 6 (4,0 82 )
Movement in net cash
Cash and cash equivalents, beginning of period 9,61 6 13,934
Increase/(decrease) in cash and cash equivalents 1,216 (4, 082 )
Foreign exchange on cash and cash equivalents 172 (236 )
Cash and cash equivalents, end of period 11 ,004 9,6 1 6
The notes and accounting policies on pages 83 to 115 form an integral part of these financial statements.
Consolidated statement of cash flows
FOR THE YEAR ENDED 31 DECEMBER 2022
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Note
Issued
capital
£’000
Share
premium
£’000
Translation
reserve
£’000
Retained
earnings
£’000
Total
equity
£’000
At 1 January 2021 223 14,721 2 21,507 36, 453
Issue of share capital 22 15, 603 – – 15, 625
Dividends paid 11 – – – (3, 167 ) (3, 167 )
Share based payments – – – 682 682
Deferred tax on share based payments – – – (33 ) (33 )
Transactions with owners 22 15, 603 – (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 ) – (124 )
Total comprehensive income for the year – – (1 24 ) 5,4 6 7 5,343
At 31 December 2021 245 30 ,324 (12 2 ) 24,456 54,903
Issue of share capital – 6 – – 6
Dividends paid 11 – – – (3,328 ) (3,328 )
Share based payments – – – 1,698 1,6 98
Deferred tax on share based payments – – – 18 18
Transactions with owners – 6 – (1,61 2 ) (1 ,60 6 )
Profit for the year – – – 7 ,200 7 ,200
Other comprehensive income
Foreign exchange translation differences – – 590 – 590
Total comprehensive income for the year – – 590 7 ,200
At 31 December 2022 245 30,330 468 30, 044 6 1,08 7
The notes and accounting policies on pages 83 to 115 form an integral part of these financial statements.
Consolidated statement of changes in equity
FOR THE YEAR ENDED 31 DECEMBER 2022
Annual report for the year ended 31 December 2022
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1 Medica Group PLC
(registration number 08497963) and is domiciled in the United Kingdom . Its registered office and principal place of business is
The consolidated financial statements of the Group for the year ended 31 December 2022 (including comparatives) comprise the
Company and its subsidiaries (together referred to as “the Group”). The Group’s principal activity is the provision of teleradiology
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 18 to 21. In addition, Note 27 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.
Notes to the financial statements
FOR THE YEAR ENDED 31 DECEMBER 2022
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Company statement of financial position
COMPANY REGISTRATION 08497963
AS AT 31 DECEMBER 2022
Note
31December 2022
£000
31December 2021
£000
Non-current assets
Investments 35 54,831 52,482
Debtors due after more than one year 37 11,833 8,808
Deferred tax
1
318 144
66,982 61,434
Current assets
Debtors 37 908 224
Cash and cash equivalents 4,566 1,709
5,474 1,933
Total assets 72,456 63,367
Creditors: amounts falling due within one year
Trade and other creditors 38 (14,800) (13,098)
Borrowings 40 (4,516) (5,739)
Contingent consideration
39 (775) (1,783)
(20,091) (20,620)
Net current assets (14,617) (18,687)
Total assets less current liabilities 52,365 42,747
Non-current liabilities
Borrowings 40 (5,702) –
Contingent consideration – (670)
(5,702) (670)
Net assets 46,663 42,077
Capital and reserves
Called up share capital 36 245 245
Share premium account 36 30,330 30,324
Profit and loss account 16,088 11,508
Total equity 46,663 42,077
Parent company profit and total
comprehensive income for the year 6,192 9,963
1
The prior year deferred tax balance has been reclassed from current assets to non-current assets in line with the correct presentation in the current year. However,
the restatement is not material in respect of prior year.
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 116 to 122 were approved and authorised for issue by the board of directors on 5 April 2023 and were
signed on its behalf by:
Stuart Quin Richard Jones
Director Director
Annual report for the year ended 31 December 2022
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Share
capital
£000
Share
premium
£000
Retained
earnings
£000
Total
equity
£000
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 1 January 2022 245 30,324 11,508 42,077
Issue of share capital – 6 – 6
Dividends paid to ordinary shareholders – – (3,328) (3,328)
Equity settled share based payments – – 1,698 1,698
Deferred tax on share based payments – – 18 18
Transactions with owner – 6 (1,612) (1,606)
Profit and total comprehensive income for the period – – 6,192 6,192
At 31 December 2022 245 30,330 16,088 46,663
Company statement of changes in equity
FOR THE YEAR ENDED 31 DECEMBER 2022
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33 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:
• Impact of reduced revenue from consideration of reduced radiologist availability
• Loss of certain material contracts
• Further material inflationary pressure on operating costs more than current expectations
Under these downside scenarios, individually and even in the implausible cumulative scenario, 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 3.19 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.
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2022
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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.
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
In relation to the acquisition of GDI in the year ended 31 December 2020, up to €1,600m (€800k by the Company) contingent
consideration is payable in 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.
Iftherenewal of the contract is unsuccessful the full amount of contingent consideration, £775k will be credited to the income
statement. See note 22.5 for further details.
34 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 12 of the Group financial statements.
35 Investments in subsidiaries and joint ventures
Investments
Subsidiary undertakings
£000
Joint ventures
£000
Total
£000
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 2,292 169 2,461
Share of results from joint ventures – (112) (112)
At 31 December 2022 54,774 57 54,831
Additions in the prior year are made up of £3,208k in respect of the setup and subsequent acquisition of Medica US, Inc. and RadMD
LLC, discussed further in note 18; £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.
Additions in subsidiaries in the current year relate to share-based payment charges pushed down to subsidiaries of £1,177k and
payment of contingent consideration for the prior year acquisition of Medica US, Inc. and RadMD LLC, see note 22.5. £1,115k of the
£4,051k contingent consideration paid by MGP on MUSI’s behalf was capitalised in investments and the balance was recognised as an
intercompany loan to MUSI.
Additions in joint ventures in the current year relate to £169k of additional investment in Med-IDX Pty.
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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.
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 which concluded
during the current year.
Subsidiary audit exemption under parent guarantee:
For the year ended 31 December 2022, 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.
36 Capital and reserves
Ordinary share capital issued and fully paid
At 31December 2022
£000
At 31December 2021
£000
122,433,635 (2021: 122,428,836) ordinary shares of
£0.002 each 245 245
Total ordinary share capital of the Company 245 245
Issue of share capital during the year
The below shares were issued on the exercise of SAYE options:
On 1 July 2022, 3,999 ordinary shares of 0.2p each were issued for cash at par value.
On 15 July 2022, 800 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
£6k was recognised in share premium on the issue on ordinary shares for the exercise of SAYE options.
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2022
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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 3.18 and Note 28). 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.
37 Debtors
At 31December 2022
£000
At 31December 2021
£000
Current
Other debtors 41 8
Amounts due from subsidiary undertakings 506 19
Prepayments 151 77
Corporation tax recoverable 120 120
VAT reclaimable 90 –
908 224
Non-current
Amounts due from subsidiary undertakings 11,833 8,808
11,833 8,808
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 £12.2m ($14.9m) 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.
38 Trade and other creditors
2022
£000
2021
£000
Trade creditors 193 49
VAT payable 49 51
Accruals 1,194 1,180
Amounts due to subsidiary undertakings 13,355 11,776
Other short-term creditors 9 42
14,800 13,098
The creditor balance of £13.4m (2020: £11.8m) relates to amounts owed to subsidiaries. The balance can be called for repayment
on demand.
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39 Contingent consideration
Global Diagnostics
Ireland Limited
£000
As at 1 January 2021 2,655
Fair value adjustment (28)
Foreign exchange (174)
As at 31 December 2021 2,453
Fair value adjustment 47
Amounts paid (1,758)
Foreign exchange 33
As at 31 December 2022 775
Amounts due in less than one year 775
Amounts due in more than one year –
Global Diagnostics Ireland Limited
Contingent consideration reduced by £1,678k during the period mainly driven by payments of £1,673k and £85k on commencement of
a new contract and extension of the NSS contract respectively. Transaction bonuses of £23k and legal costs of £18k were offset against
these payments.
The balance increased by a £47k fair value movement in relation to the unwinding of the time value of money and £33k relating to
foreign exchange revaluation from Euros to GBP.
During the last quarter of 2022 the NSS retendered the contract held by MVI with the decision expected in quarter two of 2023. Due
to the delay in the tender process the contract was extended for a further three months. No changes in the fair value estimate of
contingent consideration were made following management’s review of the probability weighted expected future values under the
various possible outcome of the future contract events.
The balance on 31 December 2022 of £775k is disclosed under current liabilities on the statement of financial position. £88k of this was
paid in January 2023 and the remaining balance is payable in the first half of 2023.
During the prior 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 £28k in the fair value estimate of contingent consideration. Other movements related to a
decrease in the liability relating to foreign exchange revaluation from Euros to GBP of £174k.
40 Borrowings
Borrowings relate to the Group’s bank and other loans which are set out in note 22.
41 Related parties
See note 29 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.
42 Post balance sheet events
See note 31 of the Group financial statements for post balance sheet events information.
Notes to the financial statements continued
FOR THE YEAR ENDED 31 DECEMBER 2022
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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
30 Finsbury Square
London
EC2A 1AG
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 6th floor
One Priory Square
Hastings
East Sussex
TN34 1EA
Contact t: 033 33 111 222
enquiries@medica.co.uk
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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”
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.
Radiographer
A healthcare professional that is
highly trained to use medical imaging
equipment.
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GOVERNANCE
FINANCIALS
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”
medicagroupplc.com
MEDICA GROUP PLC
Sixth Floor
One Priory Square
Hastings
East Sussex
TN34 1EA
t: 033 33 111 222