NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

This announcement does not constitute or form part of an offer to sell or issue or a solicitation of an offer to subscribe for or buy any securities nor should it be relied upon in connection with any contract or commitment whatsoever in any jurisdiction. An admission document (the "Admission Document") may be published in due course in connection with the proposed admission of the issued and to be issued ordinary shares in the capital of Optima Health Limited, to be re-registered as a public limited company with the name Optima Health plc, and admitted trading on AIM, a market operated by London Stock Exchange PLC ("Admission"). Copies of the Admission Document will, following publication, be available during normal business hours on any day (except Saturdays, Sundays and public holidays) at the registered office of the Company and online at www.optimahealth.com, subject to applicable securities laws or regulations. Upon such publication the Admission Document will supersede this announcement and the information contained herein in its entirety.

Planned admission to AIM

LONDON, UK (12 September 2024), Optima Health Limited ("Optima Health", the "Company", and, together with its subsidiaries, the "Group"), the UK's leading provider of technology enabled corporate health and wellbeing solutions, today announces its planned demerger from Marlowe PLC ("Marlowe" and the "Demerger") and its intention to seek admission of its issued and to be issued ordinary share capital to trading on AIM, a market operated by London Stock Exchange.

Admission is expected to occur on 26 September 2024. The Company has no intention to raise new capital through an offer or sale of ordinary shares to institutional investors or the public in connection with Admission. Panmure Liberum Limited ("Panmure Liberum") is acting as the Company's nominated adviser and corporate broker in relation to Admission.

Jonathan Thomas, Chief Executive Officer of Optima Health, commented: "Optima Health is the UK leader in the management of workplace and employee health. Optima Health offers a comprehensive range of flexible and progressive occupational health services supported by statutory driven workplace health requirements, and we are proud to help people and the organisations they work for be the best that they can be, working across a range of sectors, both public and private, from manufacturing, construction, professional and transport and logistics services to the UK's Blue Light organisations, Civil Service and NHS.

"Optima Health is well positioned to continue to take advantage of the large and growing occupational health market in the UK. Our successful track record of growth, both organic and through the acquisition and successful integration of a number of transformational and bolt-on businesses, has provided us with the critical mass to provide an unrivalled breadth and level of service to our customers. We are excited by the prospect of an AIM listing for Optima Health, which we believe will give us an opportunity for us to build and deliver significant value for our investors and employees, as well as providing additional visibility and transparency to our business."

Information on the Group

Optima Health offers a comprehensive range of flexible and progressive occupational health services from statutory driven workplace health surveillance medicals to proactive and preventive interventions, through to workplace health advice and attendance management assessments, and ultimately rehabilitation programmes and pathways aimed at returning people to work. A comprehensive occupational health programme can provide a significant return on investment for an organisation. Through the Group's integrated delivery model and nationwide coverage, delivery of its services is facilitated via several channels, both remotely and on-site. Across the UK, Optima Health has an extensive network comprising four core hubs, a nationwide network of 48 occupational health clinics and over 30 mobile clinic solutions, with services delivered by a team of over 800 clinicians employed directly in the UK across a wide range of disciplines. In addition, Optima Health has a network of over 1,000 subcontracted associate clinicians providing resource flexibility to align with client needs.

Supporting the delivery model is Optima Health's substantial investment in digitalisation in which it has invested over £15 million in combined capital and operational expenditure in the last seven years. Digital tools including a proprietary workflow, case management, clinical intervention, and customer referral platforms (facilitated through Optima Health's myOH) enable the Group to deliver services efficiently, at scale and support future growth.

Further, the Group's proprietary and clinically validated digital triage and wellbeing tools reduce the need for clinical intervention and enable supported self-management, as well as self-referral. Through these tools and platforms, the Group has access to high-value data, which can be leveraged to enable proactive, preventive and predictive services.

Group key highlights

·      UK's leading provider of technology enabled corporate health and wellbeing solutions in the occupational health sector

o  1.8x times larger than the second largest provider by revenue

o  Underpinned by a robust clinical governance framework

o  Leveraging proprietary technology and flexible delivery platform to foster healthy high performance within its clients' workforces

·      Proven business model and track record of consolidation and integration

o  In the 12 months ended 31 March 2024, the Group reported revenue of £110.9 million (FY23: £115.3 million) and adjusted EBITDA of £18.0 million (FY23: £21.0 million)

o  Cash generative and profitable (on an adjusted basis) with contracted and recurring revenue

o  Optima Health has continued to perform strongly alongside the successful integration of several acquisitions, testimony to the Group's resilient business model and ability to consolidate its market leadership

o  Optima Health has a strong pipeline of new business, some of which has already been won and is in the process of being transitioned

·      Well balanced portfolio comprising over 170 large clients (contract size of more than £100,000 per annum) and over 2,000 clients in total across both the public and private sectors

o  Broad, well balanced, and diversified client base focused on large clients with high corporate health and wellbeing demands, through to efficient SMEs

o  Well-established and adhered-to strategy through which key sectors with predictable revenue streams are targeted

·      Significant and growing market with multiple drivers for long-term growth, attractive dynamics and opportunity for consolidation

o  UK occupational health market forecast to grow to £1.4 billion in 2028 with the Group's ambition to capture a 25% share of this

o  Highly fragmented nature of outsourced occupational health market provides opportunities for growth through M&A consolidation

o  Growth opportunities in new and adjacent markets across additional services, care settings and territories

·      Delivery via flexible, leveraged, digitally enabled operating model

o  Well-invested technology architecture to support growth ambitions: over £15 million of capital and operational expenditure invested into its proprietary, bespoke occupational health and wellbeing technology platforms in the last seven years

o  Digitally enabled and scalable platforms enable efficient delivery across the nationwide offering and allow Optima Health to meet the evolving needs of its clients and increasing scale of the Group

On Admission, the Board will consist of six directors: Julia Robertson, Jonathan Thomas, Heidi Giles, Adam Councell, Simon Arnold and Mike Ettling; three of which are independent non-executives (including the Chair). Julia Robertson and Mike Ettling will be appointed to the Board as independent directors as part of the transaction. Simon Arnold and Heidi Giles will also be appointed to the Board as non-executive and executive directors respectively.

Optima Health is currently a wholly owned subsidiary of Marlowe. The Demerger is proposed to be effected by way of an interim dividend in specie, pursuant to which the ordinary shares will be distributed to the shareholders on the register of members of Marlowe shareholders as at 6.00 p.m. (London time) on 25 September 2024 (the "Record Time"), on a one for one basis such that each Marlowe shareholder will receive one Ordinary Share for each Marlowe share they hold at the Record Time. The Demerger will result in Optima Health being independent of Marlowe on Admission. Marlowe will not retain any beneficial interest in the share capital of Optima Health on Admission. For further information on the Demerger, including its tax consequences for Marlowe shareholders, please refer to the separate announcement released by Marlowe today.

Market Size

In the UK, the combined economic cost of ill-health related absence and lost output is estimated to be £150 billion per annum equivalent to 7 per cent. of GDP, with mental health, stress and anxiety contributing almost 50 per cent. of working days lost due to work-related injury and illness in the UK^[1].

Occupational health and wellbeing providers have clear responsibilities to actively help organisations and their employees in managing and monitoring health and wellbeing risks across the workforce. There is evidence that these risks are worsening, with long term absence increasing to 2.8 million people in 2024 (an increase of approximately 25 per cent. compared to pre pandemic levels).

The addressable corporate occupational health market in the UK was estimated at £1.2 billion in 2023, of which 44 per cent. was yet to be outsourced, leaving £670 million serviced by outsourced providers. The total addressable market is anticipated to expand to £1.4 billion through to 2028, as employers increasingly see the return of investment on their spend on occupational health and employers without occupational health services, currently estimated to be 80 per cent. of all UK employers¹, start to incorporate services within their workforce offering and organisations already providing such services expand their scope.

Current Trading and Prospects

Optima Health has completed the comprehensive integration of businesses acquired by the Group and the Marlowe group to build a robust scalable platform with a diversified client base providing recurring revenue and opportunity for further growth. To date the Company has focussed on growing both revenue and EBITDA with EBITDA margin improvements arising from synergies, good margins on new business opportunities and advancing the scope of customers/contracts.

Alongside the potential expansion of existing contracts, the Company has an active pipeline of potential new contacts, including those in active bidder status and those won but not yet implemented, both of which will underpin a portion of year-on-year core revenue growth. Core revenues are expected to grow from FY24 (excluding the impact of recent changes to two top 10 customers as summarised below) broadly in line with the Company's estimated UK market growth rate with potential upside from inter alia:

(a)   larger than average contract opportunities (for example, Optima Health is part of a bid to provide occupational health services as part of a large-scale public-sector programme (with any revenue arising likely to commence FY26) however the result of this bid is a binary outcome);

(b)   use of DART in the NHS;

(c)   mental health services expansion, such as NHS Talking Therapies contracts; and

(d)   expansion into adjacent markets such as community health services.

As noted above, a major longstanding customer gave notice to the Group in H2 2023 which unusually coincided with the timing of a second large public service contract significantly reducing the scope of the Group's services (as a result of the client deciding to take a number of occupational health services in-house). Notwithstanding that the Group has been successful in significantly offsetting these contract reductions by redeploying staff to other client revenue opportunities, winning a number of other contracts and increasing the scope of a number of existing contracts, total revenue (before the upside opportunities summarised above and before further acquisitions) for the year ended 31 March 2025 is expected to be lower than in the year ended 31 March 2024.

In addition to organic revenue growth, the Board believe there are significant opportunities to accelerate growth via further bolt-on acquisitions and continued consolidation in the market.  The Company is targeting 25 per cent. market share through organic and inorganic growth in the long-term. The Company is currently in exclusive discussions for a small acquisition which if completed would add single digit million revenue per annum. The consideration payable is low single digit millions.

Adjusted EBITDA margins (excluding the costs associated with the Demerger, Admission, reorganisation costs) are expected to remain in the mid tohigh teens for the medium term with opportunities to further improve margins in the medium to long term particularly through the increased use of technology throughout the Group.  

As part of the Demerger, the Group's accumulated cash balances will be paid to Marlowe plc via a one-off cash dividend of £20.8 million alongside write-off of all intercompany loans with Marlowe plc. The Demerger also allows for the management incentive plan "MIP" to be settled in cash by Marlowe plc with £3.95 million to be paid to the MIP subscribers shortly prior to Demerger and subscription by the MIP subscribers for shares in Optima Health. Whilst the Group expects to be cash generative for the year to 31 March 2025, the Company has agreed a £20 million committed revolving credit facility to provide working capital and cover transaction costs associated with the Demerger and Admission and a further £15 million accordion which can be used for M&A.

Trading for the period from 31 March 2024 to the date of this announcement was consistent with the Board's expectations. The Company expects to report its unaudited interim results for the six months ended 30 September 2024 by early December.

Enquiries

About Optima Health

Optima Health is the UK's leading provider of occupational health and wellbeing services, directly influencing and improving people's lives for 25 years. Optima Health's incredible team of professionals quickly and effectively encapsulate client's needs, supporting organisations of all shapes and sizes. Through tailored solutions and innovative systems, Optima Health offers unparalleled clinical expertise to its clients. These solutions ensure that processes are simple and allow its clients to spend more time focusing on their employees driving a healthy, high-performing workplace. For more information visit www.optimahealth.co.uk

Important Information

As set out above, upon publication, the Admission Document will supersede this announcement and the information contained herein in its entirety. There will be no offer or issue of Ordinary Shares in the Company in connection with Admission and the Admission Document will be published solely in connection with Admission.

There is no guarantee that an Admission Document will be published or Admission will occur.

This announcement does not constitute, or form part of, any offer or invitation to sell, allot or issue, or any solicitation of any offer to purchase or subscribe for, any securities in the Company in any jurisdiction nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with or act as an inducement to enter into, any contract or commitment therefor.

No reliance may be placed, for any purpose whatsoever, on the information or opinions contained in this announcement or on its accuracy, fairness or completeness. To the fullest extent permitted by applicable law or regulation, no undertaking, representation or warranty, express or implied, is given by or on behalf of Marlowe, the Company, Panmure Liberum, or their respective parent or subsidiary undertakings or the subsidiary undertakings of any such parent undertakings or any of their respective directors, officers, partners, employees, agents, affiliates, representatives or advisers or any other person as to the accuracy, sufficiency, completeness or fairness of the information, opinions or beliefs contained in this announcement and no responsibility or liability is accepted by any of them for any errors, omissions or inaccuracies in such information, opinions or beliefs or for any loss, cost or damage suffered or incurred, howsoever arising, from any use, as a result of the reliance on, or otherwise in connection with, this announcement.

Panmure Liberum, which is authorised and regulated by the Financial Conduct Authority is acting only for the Company in connection with the proposed Admission and is not acting for or advising any other person, or treating any other person as its client, in relation thereto, or giving advice to any other person in relation to the matters contained herein. Such persons should seek their own independent legal, investment and tax advice as they see fit. Panmure Liberum's responsibilities, as the Company's nominated adviser under the AIM Rules for Nominated Advisers and AIM Rules for Companies will be owed solely to the London Stock Exchange and not to the Company, to any of its directors or to any other person in respect of a decision to subscribe for or otherwise acquire Shares in reliance on the Admission Document. No representation or warranty, express or implied, is made by Panmure Liberum or the Company or their respective affiliates, directors, officers, employees or advisers as to any of its contents.

This announcement does not form the basis of or constitute any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any Shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or commitment therefor. No offer or sale of Ordinary Shares has been and will not be registered under the applicable securities laws of the United States, Australia, Canada, Japan or South Africa. Subject to certain exceptions, the Shares may not be offered or sold in the United States, Australia, Canada, Japan or South Africa or to, or for the account or benefit of, any national, resident or citizen of the United States, Australia, Canada, Japan or South Africa. There will be no public offer of the Shares in the United States, Australia, Canada, Japan or South Africa.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These statements reflect beliefs of the Directors (including based on their expectations arising from pursuit of the Company's strategy) as well as assumptions made by the Directors and information currently available to the Company. Although the Directors consider that these beliefs and assumptions are reasonable, by their nature, forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the Company's actual financial condition, results of operations, cash flows, liquidity or prospects to be materially different from any future such metric expressed or implied by such statements. Past performance cannot be relied upon as a guide to future performance and should not be taken as a representation that trends or activities underlying past performance will continue in the future. Forward-looking statements speak only as of the date they are made. No representation is made or will be made that any forward-looking statements will come to pass or prove to be correct.

Whilst the contents of this announcement are believed to be true and accurate as at the date of its publication, no representation or warranty is made as to such contents continuing to be true and accurate at any point in the future.

For the avoidance of doubt, the contents of the Company's websites and social media accounts are not incorporated by reference into, and do not form part of, this announcement.