Tunstall Healthcare (UK) and Group Holdings’ 2019 year end reports filed: highlights

October 8, 2020 | by

With all the changes at Tunstall Healthcare Group [TTA 2 Sep, 10 Apr], their Companies House filings due 30 September for the 2019 fiscal year might tell us more about their status prior to the entry of their new funders Barings, M&G, and a possible third investor. Tunstall files three main reports: one for Tunstall Healthcare (UK) Limited, for Tunstall Healthcare Group Limited, and Tunstall Group Holdings Limited, the holding company. The UK unit and Tunstall Group Holdings filed by the 30 September deadline; the Healthcare Group has not filed as of today.

Tunstall UK’s report is in PDF here. Revenue in the UK crested the £100 million level, up over £3 million from 2018. Of this, the core UK revenue amounted to £68.2 million, up 0.8%, with the remainder export trade with other Tunstall companies. Operating profit was, before adjustment for EBITDA, £27.4 million, adjusted to £16.8 million, down from 2018’s £19.4 million.

  • The report also notes revenue growth for Connected Care Managed Services and Group Living Services. 2019 was challenging for Group Living Installations and Digital Health with continued declines, though the report adds some optimism for 2020 due to cloud-based services, for customers to use their own devices, and–of course–to COVID-19 and remote monitoring’s rise in most areas.
  • COVID-19 rears its gloomy head here even though outside the report period. On page 5 is an assessment of the company as a ‘going concern’; even factoring in a gloomy second late 2020 COVID lockdown scenario, the directors believe that the company will continue to operate and comply with its covenants. On page 6 under ‘events after the financial period’ is a further explanation of this.
  • Finally, the new financing is referred to on page 7. Tunstall Group Holdings has been purchased by a Jersey-based group. It was restructured to reduce its existing debt and establish a new available loan facility of over €20 million.

Tunstall Group Holdings’ (TGH) report is in PDF here. Their global revenue amounted to £216.7 million with an operating profit of £47.9 million before adjustment for EBITDA, £19.5 million adjusted. Both were reduced from 2018. The consolidated income statement, as in 2018, shows a consolidated loss of £71.1 million, reduced by £15 million from 2018. An additional note on the restructuring is the forgiveness of the balance of £531 million owed to the financing arm TGH Acquisitions Limited (page 11).

  • The Americas sale is detailed on page 85. It is easy to see why the unit was sold, as in 2018 it had an operating loss of £4.3 million on £31 million in revenue. Factoring in asset disposal and other parts of discontinued operations, it’s fortunate it’s a one-time only event.

Jersey-based organizations, of course, enjoy far more favorable taxation structures. This Editor’s limited understanding of UK filings is that the Group will have to file with the Jersey Companies Registrar, but the UK group will have to file with Companies House as operating in the UK. If any Reader can clarify this, please comment below.

Charterhouse now finally lists Tunstall as one of their ‘realised’ exits. A long and unprofitable road from 2008 to 2020.

Hat tip on the reports to a Reader in the UK industry who wishes to remain anonymous.

Tunstall funding by M&G, Barings passes European Commission ‘concentration’ review

September 2, 2020 | by

The European Commission, in a brief filing on EUR-Lex, has stated their ‘non-opposition’ to the ‘concentration’ in Tunstall Group Holdings’ additional funding obtained by M&G Investment Management and Baring Asset Management via share purchase. Tunstall announced this funding in April [TTA 10 April] and filed with the European Commission on 3 June (prior notification).

The definition of ‘concentration’ in the EU is the legal combination of two or more firms by merger or acquisition. The prior notification from the Commission considers that this concentration may fall within the scope of the Merger Regulations but reserved a decision on this.

Charterhouse Capital Partners, the prior controlling investor, is not mentioned in the prior notification. Revealed in the notification is that Baring is actually controlled by MassMutual in the US, a surprise to this Editor. Hat tip to a Reader in the UK industry who wishes to remain anonymous.

Tunstall Healthcare secures funding from Barings, M&G

April 10, 2020 | by

Tunstall Healthcare announced on Wednesday that they have secured additional funding from Barings, M&G, and an unnamed lender group for growth. The funding amount was not disclosed.

The release is unusually terse in that the funding round, while the lead, is only briefly mentioned in the actual release at the beginning and end. What the funding will support is generic, which is not atypical: “a significant commitment from Tunstall’s lenders and will provide the Company with flexibility and improve the overall financial strength of the business” and that the funding will go towards developing new systems.

There is also no pro forma quote from the CEO, Gordon Sutherland, and no mention of Charterhouse Capital Partners LLP. which has controlled Tunstall since Tunstall is still listed on their website as a unexited portfolio company.

Perhaps clues to their future, or past, are here. An anonymous source advised this Editor to take a closer look at a company called TGH Acquisitions Limited. Their report on Companies House indicates that indeed it is a financing arm of Tunstall Healthcare Group with its last report for the year ending 30 Sept 2018–and showing an after-tax profit of over £75 million. Unfortunately, the parent company Tunstall Healthcare Group in the same period showed a consolidated loss of over £284 million. The good news in that red ink is that the loss was reduced by over £100 million. The report to 30 Sept 2019, which should have come out in mid-February, is not on Companies House.

Tunstall Healthcare remains a major global company in the telecare and remote monitoring field, with operations in 17 countries. In January 2019, they sold their US operation to Connect America, exiting the hyper-competitive US market [TTA 29 Jan 19]. Recently, they entered the complex care management (CCM, often called chronic care management) and transitional care management (TCM) fields.

Given the global spotlight on telehealth during the COVID-19 pandemic, the funding may be just in time to ‘catch a wave’, as they say on the Jersey Shore.