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Registered number: 07532879










HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2024

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
COMPANY INFORMATION


Directors
Philip Christopher McEwan 
Zoe Elizabeth Powell (appointed 18 December 2023)
Eamus James Halpin (appointed 18 December 2023)
Joseph Francis Holmes (appointed 18 December 2023)




Registered number
07532879



Registered office
Rhymney House Unit A, Copse Walk, Cardiff Gate Business Park
Pontprennau

Cardiff

CF23 8RB




Independent auditors
MHA Chartered Accountants & Statutory Auditors

Phoenix Way

Swansea Enterprise Park

Swansea

SA7 9FS





 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 

CONTENTS



Page
Strategic Report
1 - 4
Directors' Report
5 - 6
Independent Auditors' Report
7 - 10
Statement of Comprehensive Income
11
Balance Sheet
12
Statement of Changes in Equity
13
Notes to the Financial Statements
14 - 30


 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024

Visions and values
 
Our ambition is to be the most valued and respected full service market access agency. Our mission is to help improve human health and healthcare by demonstrating and optimising ecosystem value as the world’s leading disease insight and system value architects.

Principal activities
 
During the year under review we continued to expand and diversify our client base, securing six new master service agreements, three of which are with clients operating at a global level, and secured our position as one of the largest independent consultancies in our sector.
This focus enabled us to stabilise year on year revenue, following rapid revenue growth in the prior year, whilst improving our EBIT margin by 9% and generating a maintainable EBITDA FY2023-24 of £1.2m, up from £0.9m in FY2022-23. 
The HEOR brand continues to increase its reputation in the market and we are synonymous with problem solving and communications expertise, alongside a sensitive and nurturing partnership approach. We have strengthened our industry links through focused key account management frameworks, complemented by a more data driven approach to strategic business development, whilst leveraging industry recognised tools to enhance our market insights. This multi-faceted strategy has supported YoY sales growth of 26% and we continue to win and deliver compelling new and follow-on assignments for our worldwide clients. 

Page 1

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

Investments
 
During FY2023-24 we continued our investment in building a strong operational core to enable effective and robust service delivery for our global client base. Key value-creating investments undertaken included:
1. Investment in our human capital
• Successful implementation of a new integrated HRIS to increase speed of access to key workforce data.
• Increasing our investment in employee wellbeing through CSR activities and the introduction of a     certificated mental health first aid team.
• Building on our strategic learning and development programme with companywide, team specific and    individualised initiatives including design and delivery of Insights Discovery to enhance collaboration and    communication.
2. Investment in our organisational infrastructure and supply chain
• Transitioning to new cloud-based technology infrastructure and a new IT service provider to support the    provision of a robust environment to meet our evolving business needs.
• Developing our assessment and monitoring of our environmental, social and ethical performance, and    that of our suppliers, to enable identification of areas for continual improvement.
• Embedding policies and processes to support operating in a ISO27001 compliant environment to provide   strong, secure foundations for growth in data and technology services for our clients.
3. Investment in our intellectual capital
• Embedding our scientific approach to client solutions through capturing our organisational knowledge;    further enhancing our core models and materials, including modeling method templates and toolkits; and
 leveraging automation and technology solutions.
• Developing specific thought leadership materials, model structures and disease maps around our new,    holistic offering focused on total system value, to expand the definition of value for innovative products    developed by clients.
4. Investment in our client relationships and quality service offerings
• Integrating systems thinking into our service offering which, coupled with growth of our value     communications expertise, positions us ahead of the curve for value demonstration.
• Undertaking commercial activity to further diversify our client base and increase the number of long-term   partnership frameworks within our existing client base.  
• Continuing to invest in our value communications capabilities to embed a quality-focused approach with
          a robust QA/QC prcoess complemented by editorial and design functions.

Page 2

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

Opportunities and future developments
 
Key areas of focus will be on optimising the use of technology, including generative AI and other tools which support automation, augmented by our own staff insights, to increase our efficiency and development of our unique solutions to client challenges. Equally, building out our talent base with more operational researchers and systems thinking expertise will allow us to capitalise on some of healthcare’s ‘wicked’ problems such as decreasing drug budgets, healthcare delivery blockages, and optimising the uptake of novel drugs and technologies that make the biggest difference to human populations across the world.
Our enhanced approach to partnership is demonstrable by increased win rates, exemplary client feedback, and the creation of opportunities for co-design participation to support wider system stakeholder engagement which provides a win-win approach and embraces addressing client specific commercial goals.  Across the industry we are seeing increasing recognition that patient outcomes can be improved through a better understanding of system value drivers and how the evidence connects. We see opportunity in vigorously pursuing our offering in the value communications space to further encourage engagement and conversation around total system value over the next 12 months.
Finally, we see potential to leverage our acknowledged strength in the UK market, through working with partners to crystallise on opportunities globally as many of our offerings are disease, drug and country agnostic. 

Risk Management
 
The greatest risk for our business continuity continues to be a dependency on our people and their intellectual and leadership capacity.  Our investments in human capital and our employee value proposition are fundamental to mitigate this risk and ensure retention of key team members.
In parallel, dependency on IT necessitates resilient data governance, cybersecurity, and compliance to assure us against industry and client standards.  Phase two of our infrastructure roadmap was completed during the year, which enables agile response to changing client technological solution requirements, whilst continuing to preserve robust and compliant data security and governance.
Focus on quality will remain high priority, underpinned by QA/QC processes and editorial functions to ensure consistent high standards and, coupled with continuous training and development, will preserve client delivery expectations and our reputation.
We successfully established enhanced working capital facilities at the end of FY2022-23, complemented by a long-term loan facility secured in June 2023.  These funds combined with the actions taken to rebalance our cost base in FY2022-23 and the operational stabilisation in FY2023-24 have provided us with flexibility to continue investing in key value creating initiatives which will support continued sustainable growth.
At the start of FY2023-24 we established a wider Board to enhance risk oversight and strategic management, and mitigate leadership key person dependencies. We also appointed two experienced independent non-executive directors to the Board to broaden the Company’s expertise and provide advice to support the continued development of the business.

Page 3

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

Summary
 
FY2023-24 has endorsed our position as one of the largest independent consultancies in our sector competing in a global market.  The focus on stabilisation has enabled us to embed a strong sustainable platform from which to capitalise on global industry opportunities, leveraging our innovative value systems thinking approach to drive improved patient outcomes and value creation for our clients.


This report was approved by the board on 17 September 2024 and signed on its behalf.



Philip Christopher McEwan
Director

Page 4

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024

The directors present their report and the financial statements for the year ended 31 March 2024.

Directors

The directors who served during the year were:

Philip Christopher McEwan 
Zoe Elizabeth Powell (appointed 18 December 2023)
Eamus James Halpin (appointed 18 December 2023)
Joseph Francis Holmes (appointed 18 December 2023)

Results and dividends

The profit for the year, after taxation, amounted to £568,143 (2023 - loss £395,332).

Final dividends were paid during the year amounting to £519,000 (2023: £354,000)

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Matters covered in the Strategic Report

Included within the Strategic Report is a review of the business and a description of the principal risks and uncertainties facing the Company.

Page 5

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditors

The auditorsMHA Chartered Accountants & Statutory Auditorswill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 17 September 2024 and signed on its behalf.
 





Philip Christopher McEwan
Director

Page 6

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 

Opinion


We have audited the financial statements of Health Economics & Outcomes Research Limited (the 'Company') for the year ended 31 March 2024, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 March 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard 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


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.


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 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.


Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.


Page 7

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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 course of 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 this gives rise to 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.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.


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, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements 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.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 5, 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 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 Company or to cease operations, or have no realistic alternative but to do so.


Page 8

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD (CONTINUED)


Auditors' 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 Auditors' 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. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

- Enquiry of management and those charged with governance around actual, potential or suspected litigation, claims, non-compliance with applicable laws and regulations and fraud.
- Review of legal and professional fees for evidence of legal work undertaken or fines/penalties incurred.
- Enquiry of entity staff in compliance functions and external advisors to identify any instances of non-compliance with laws and regulations. 
- Reviewing of financial statements disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Performing audit work over the risk of management override, including testing of journal entries and other adjustments for appropriateness; 
- Discussions amongst the engagement team in relation to how and where fraud might occur in the financial statements and any potential indicators of fraud;
- Discussions with management over any potential or suspected fraud.
- Performing audit work over the recognition of revenue on deliveries of goods/income/services occurring at the year end to provide assurance over cut-off;
- Performing substantive tests of detail over the completeness/existence of income within the financial system.


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 Auditors' Report.


Other matters 
 

In the previous accounting period the directors of the company took advantage of the audit exemption section 477 of the Companies Act 2006. Therefore, the prior period financial statements were not subject to an audit.


Page 9

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD (CONTINUED)


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 2006Our 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 Auditors' 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.





Brian Garland BA ACA (Senior Statutory Auditor)
  
for and on behalf of
MHA Chartered Accountants & Statutory Auditors
 
Phoenix Way
Swansea Enterprise Park
Swansea
SA7 9FS

17 September 2024

MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313).
 
Page 10

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024

2024
UNAUDITED
2023
Note
£
£

  

Turnover
 4 
10,672,602
10,580,229

Cost of sales
  
(1,236,599)
(1,893,878)

Gross profit
  
9,436,003
8,686,351

Administrative expenses
  
(8,759,187)
(9,084,654)

Operating profit/(loss)
 5 
676,816
(398,303)

Interest receivable and similar income
 9 
4,418
676

Interest payable and similar expenses
 10 
(94,778)
(15,644)

Profit/(loss) before tax
  
586,456
(413,271)

Tax on profit/(loss)
 11 
(18,313)
17,939

Profit/(loss) for the financial year
  
568,143
(395,332)

Total comprehensive income for the year
  
568,143
(395,332)

There were no recognised gains and losses for 2024 or 2023 other than those included in the statement of comprehensive income.

The notes on pages 14 to 30 form part of these financial statements.

Page 11

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
REGISTERED NUMBER: 07532879

BALANCE SHEET
AS AT 31 MARCH 2024

2024
UNAUDITED
2023
Note
£
£

Fixed assets
  

Intangible assets
 13 
997,627
534,668

Tangible assets
 14 
347,659
403,780

  
1,345,286
938,448

Current assets
  

Debtors: amounts falling due within one year
 15 
2,320,060
3,208,351

Cash at bank and in hand
 16 
2,054,275
685,290

  
4,374,335
3,893,641

Creditors: amounts falling due within one year
 17 
(2,984,550)
(2,733,983)

Net current assets
  
 
 
1,389,785
 
 
1,159,658

Total assets less current liabilities
  
2,735,071
2,098,106

Creditors: amounts falling due after more than one year
 18 
(568,943)
-

Provisions for liabilities
  

Deferred tax
 20 
(51,860)
(32,981)

  
 
 
(51,860)
 
 
(32,981)

Net assets
  
2,114,268
2,065,125


Capital and reserves
  

Called up share capital 
 21 
1
1

Profit and loss account
  
2,114,267
2,065,124

  
2,114,268
2,065,125


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 17 September 2024.




Philip Christopher McEwan
Director

The notes on pages 14 to 30 form part of these financial statements.

Page 12

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 April 2022 UNAUDITED
1
2,814,456
2,814,457



Loss for the year
-
(395,332)
(395,332)

Dividends: Equity capital
-
(354,000)
(354,000)



At 1 April 2023 UNAUDITED
1
2,065,124
2,065,125



Profit for the year
-
568,143
568,143

Dividends: Equity capital
-
(519,000)
(519,000)


At 31 March 2024
1
2,114,267
2,114,268


The notes on pages 14 to 30 form part of these financial statements.

Page 13

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

1.


General information

Health Economics and Outcomes Resources is a private company, limited by shares, registered in England and Wales.The Company's registered number and registered address can be found on the Company Information page.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

Page 14

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.4

Operating leases

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.5

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.6

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.7

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.8

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

Page 15

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.9

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

  
2.10

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets. 
The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received. 
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits. 

  
2.11

Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. 

 
2.12

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Page 16

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.13

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed five years.

 
2.14

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Leasehold property
-
20%
Plant and machinery
-
25%
Motor vehicles
-
20%
Other fixed assets
-
20%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.15

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.16

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.17

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Page 17

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.18

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Deferred tax liabilities are also presented within provisions but are measured in accordance with the accounting policy on taxation.
 
Increases in provisions are generally charged as an expense to profit or loss.

Page 18

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.19

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the Company's Balance Sheet when the Company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Page 19

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)


2.19
Financial instruments (continued)

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.

 
2.20

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In the application of the Company's accounting policies, which are described in note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Page 20

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

4.


Turnover

2024
UNAUDITED
2023
£
£

Turnover
10,672,602
10,580,229

10,672,602
10,580,229


Analysis of turnover by country of destination:

2024
2024
£
£
UK

3,229,332

5,493,266

Europe

3,458,286

1,137,581

US

3,953,710

3,882,112

Rest of world

31,274

67,270

Total Turnover

10,672,602

10,580,229




5.


Operating profit/(loss)

The operating profit/(loss) is stated after charging:

2024
UNAUDITED
2023
£
£

Exchange differences
137,872
(32,294)


6.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2024
2023
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
10,000
-

Fees payable to the Company's auditors in respect of:

Taxation compliance services
750
-

All non-audit services not included above
1,250
-

Page 21

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

7.


Employees

Staff costs, including directors' remuneration, were as follows:


2024
UNAUDITED
2023
£
£

Wages and salaries
5,939,093
6,148,617

Social security costs
631,638
690,503

Cost of defined contribution scheme
298,564
205,879

6,869,295
7,044,999


The average monthly number of employees, including the directors, during the year was as follows:


        2024
   UNAUDITED
2023
            No.
            No.







Employees
116
128


8.


Directors

2024
UNAUDITED
2023
£
£

Gross wages
31,537
45,434

ER NIC
2,502
5,284

ER Pension
4,547
5,125

38,586
55,843


During the year, retirement benefits were accruing to 2 directors (2023 - 1) in respect of defined contribution pension schemes.

Page 22

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

9.


Interest receivable

2024
UNAUDITED
2023
£
£


Other interest receivable
4,418
676

4,418
676


10.


Interest payable and similar expenses

2024
UNAUDITED
2023
£
£


Bank interest payable
94,778
15,644

94,778
15,644


11.


Taxation


2024
UNAUDITED
2023
£
£

Corporation tax


Adjustments in respect of previous periods
(566)
(17,939)


Total current tax
(566)
(17,939)

Deferred tax


Origination and reversal of timing differences
18,879
-

Total deferred tax
18,879
-


Tax on profit/(loss)
18,313
(17,939)
Page 23

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2023 - lower than) the standard rate of corporation tax in the UK of 25% (2023 - 19%). The differences are explained below:

2024
UNAUDITED
2023
£
£


Profit/(loss) on ordinary activities before tax
586,456
(413,271)


Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 19%)
146,614
(78,521)

Effects of:


Fixed assets differences
1,013
(16,498)

Expenses not tax deductible
571
4,538

Other permanent differences
3,750
2,663

Remeasurement of deferred tax for changes in tax rates
-
(27,732)

Movement in deferred tax not recognised
(157,623)
115,550

Other timing differences
23,988
(17,939)

Total tax charge for the year
18,313
(17,939)

There were no factors that may affect future tax charges.


12.


Dividends

2024
UNAUDITED
2023
£
£

Ordinary Shares


Dividends
519,000
354,000

Page 24

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

13.


Intangible assets




Intellectual Property

£



Cost


At 1 April 2023
545,596


Additions
534,497



At 31 March 2024

1,080,093



Amortisation


At 1 April 2023
10,928


Charge for the year on owned assets
71,538



At 31 March 2024

82,466



Net book value



At 31 March 2024
997,627



At 31 March 2023 UNAUDITED
534,668



Page 25

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

14.


Tangible fixed assets





Leasehold property
Plant and machinery
Motor vehicles
Software systems
Total

£
£
£
£
£



Cost or valuation


At 1 April 2023
298,630
480,744
40,106
70,694
890,174


Additions
2,708
69,431
-
7,869
80,008



At 31 March 2024

301,338
550,175
40,106
78,563
970,182



Depreciation


At 1 April 2023
176,418
270,926
15,958
23,092
486,394


Charge for the year on owned assets
13,519
70,481
7,692
44,437
136,129



At 31 March 2024

189,937
341,407
23,650
67,529
622,523



Net book value



At 31 March 2024
111,401
208,768
16,456
11,034
347,659



At 31 March 2023 UNAUDITED
122,212
209,818
24,148
47,602
403,780




The net book value of land and buildings may be further analysed as follows:


2024
UNAUDITED
2023
£
£

Leasehold Property
111,401
122,211

111,401
122,211


Page 26

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

15.


Debtors

2024
UNAUDITED
2023
£
£


Trade debtors excluding factored debts
1,452,606
2,199,187

Factored debts
79,394
77,821

Other debtors
87,983
150,779

Prepayments and accrued income
271,189
219,596

Amounts recoverable on long-term contracts
428,888
541,393

Tax recoverable
-
19,575

2,320,060
3,208,351









16.


Cash and cash equivalents

2024
UNAUDITED
2023
£
£

Cash at bank and in hand
2,054,275
685,290

2,054,275
685,290



17.


Creditors: Amounts falling due within one year

2024
UNAUDITED
2023
£
£

Bank loans
106,723
-

Trade creditors
158,959
232,324

Amounts owed to group undertakings
6,938
558

Other taxation and social security
175,469
249,816

Obligations under finance lease and hire purchase contracts
742
13,650

Other creditors
87,182
100,089

Accruals and deferred income
2,448,537
2,137,546

2,984,550
2,733,983


Page 27

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

18.


Creditors: Amounts falling due after more than one year

2024
UNAUDITED
2023
£
£

Bank loans
568,943
-

568,943
-



19.


Loans


Analysis of the maturity of loans is given below:


2024
UNAUDITED
2023
£
£

Amounts falling due within one year

Bank loans
106,723
-

Amounts falling due 1-2 years

Bank loans
116,122
-

Amounts falling due 2-5 years

Bank loans
413,410
-

Amounts falling due after more than 5 years

Bank loans
39,411
-

675,666
-


The loan is secured by a fixed and floating charge over the fixed assets and intellectual property of the company. The loan is paid by fixed installments with a total interest rate of 7.92%.

Page 28

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

20.


Deferred taxation




2024


£



At beginning of year
(32,981)


Charged to profit or loss
(18,879)



At end of year
(51,860)

The provision for deferred taxation is made up as follows:

2024
UNAUDITED
2023
£
£


Accelerated capital allowances
(51,860)
(32,981)

Deferred tax
(51,860)
(32,981)


21.


Share capital

2024
UNAUDITED
2023
£
£
Allotted, called up and fully paid



1 (2023 - 1) Ordinary Shares share of £1.00
1
1



22.


Pension commitments

The Company operates a defined contribution pension scheme. The assets of the scheme are held seperately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £298,564 (2023: £205,879). Contributions totalling £57,089 (2023: £61,638) were payable to the fund at the balance sheet date and are included within creditors.

Page 29

 
HEALTH ECONOMICS AND OUTCOMES RESEARCH LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

23.


Commitments under operating leases

At 31 March 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
UNAUDITED
2023
£
£


Not later than 1 year
149,445
149,445

Later than 1 year and not later than 5 years
382,519
531,964

531,964
681,409


24.


Capital commitments

There were no capital commitments at the year end date (2023 - £Nil).


25.


Post balance sheet events

There have been no significant events affecting the company since the year end.


26.


Related party exemption

The company has taken advantage of exemption, under the terms of "Financial Reporting Standard 102 ' The Financial Reporting Standard applicable in the UK and Republic of Ireland, not to disclose related party transactions with wholly owned subsidiaries within the group. Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.


27.


Related party transactions

During the year, the company entered into the following transactions with related parties:
At the year end, a creditor of £2,400 (2022: £nil) was owed to Gambit Corporate Finance LLP, a company under common Directorship control. There are no fixed terms for the repayment of the amounts outstanding, all are repayable on demand and are interest free.
During the year, the company incurred costs of £685,874 to HEOR GmbH, £24,000 to Gambit Corporate Finance LLP, £59,954 to The OCM Group Limited and £67,817 to Red Crocodile Limited. These all share Common Directorship with Health Economics and Outcomes Research Ltd.
During the year, the company incurred costs of £24,748 for the salary and emoluments for persons connected by virtue of family relationships to the directors.


28.


Controlling party

The immediate controlling party is HEOR Holdings Limited, a company incorporated in England & Wales and registered at Rhymney House Unit A Copse Walk, Cardiff Gate Business Park, Cardiff, Wales CF23 8RB.

 
Page 30