Posting of Annual Report and Notice of AGM

5 August 2022

Totally plc

("Totally", the "Company" or the "Group")

Posting of Annual Report and Accounts and Notice of Annual General Meeting

Totally plc (AIM: TLY), a leading provider of frontline healthcare services, corporate fitness and wellbeing services across the UK and Ireland, announces that copies of the Company's Annual Report and Accounts for the year ended 31 March 2022 will be posted to shareholders by the end of the week commencing 8 August 2022, together with the Notice of Annual General Meeting ("AGM"). An electronic copy of the Annual Report and Accounts and the Notice of AGM will shortly thereafter be made available on the Company's website at  www.totallyplc.com.

The Company's AGM will be held at the Company's registered office address, Cardinal Square West, 10 Nottingham Road, Derby DE1 3QT at 10.00 a.m. on Monday, 5 September 2022.

Further details on the AGM and the business to be conducted 

In addition to the more usual business at the AGM, the Notice of AGM contains an additional special resolution in connection with the interim dividend made by the Company and paid by the Company on 4 February 2022 for the six month period ended 30 September 2021 (the "Interim Dividend"), where certain technical requirements of the Companies Act 2006 (the "Act") were not complied with. An explanation of the background to this matter is set out below.

The Group's historic reported trading results and financial condition, and ability to pay future dividends, including the proposed final dividend of 0.5 pence per ordinary share for the financial year ended 31 March 2022, are entirely unaffected by this matter.

The approach that the Company is proposing with regard to this matter is consistent with the approach taken by other UK quoted and listed companies that have, similarly, made distributions otherwise than in accordance with the Act. 

The Interim Dividend

In the process of finalising the audited annual accounts for the Company for the financial year ended 31 March 2022, the Directors became aware that the Interim Dividend was not made in accordance with the Act because the Company (on an unconsolidated basis) did not have sufficient distributable profits available prior to payment. 

There were sufficient reserves held in subsidiaries of the Company which could have been distributed to the Company. Therefore, had certain internal corporate transactions been implemented prior to the payment of the Interim Dividend, adequate distributable reserves would have been available to the Company.

These issues only affected the Interim Dividend and did not affect any other distributions made by the Company.

The consequences of the Interim Dividend having been made otherwise than in accordance with the Act

The Company has been advised that, as a consequence of the Interim Dividend having been distributed otherwise than in accordance with the Act, it may have claims against past and present shareholders of the Company who appeared on the register of members on the record date for the Interim Dividend and were recipients of the Interim Dividend (or their personal representatives (and their successors in title) if they are deceased) ("Recipient Shareholders") and against the Directors who were all directors of the Company at the time of payment of the Interim Dividend.

It is not the intention of the Company that any such claims should be made by the Company against either the Recipient Shareholders or the Directors.

Shareholder approval

In order to remedy the potential consequences of the Interim Dividend having been made otherwise than in accordance with the Act, and to put the Recipient Shareholders and the Directors, so far as possible, into the position in which they were intended to be, the Company is proposing Resolution 10 at its AGM as a special resolution.

Resolution 10 (which is proposed in four linked parts) asks shareholders to:

(a)          approve the appropriation of the historic profits of the Company to the Interim Dividend;

(b)          release the Recipient Shareholders from any claim by the Company for repayment of the Interim Dividend received by them;

(c)           treat any such release as being equivalent to the unlawful element of the Interim Dividend that was originally paid; and

(d)          release the Directors from any liability to the Company in respect of the payment of the Interim Dividend or any associated breach of their duties in that regard.

Should Resolution 10 not be passed by shareholders, there is a theoretical risk that the Company is entitled to make claims against the Recipient Shareholders and the Directors.

The authorisation of the appropriation of the Company's distributable profits and the Shareholders' Deed of Release

The approach that the Company is proposing involves the authorisation of the appropriation of the distributable profits of the Company to the payment of the Interim Dividend.  The Company has prepared interim accounts for the 16 month period to 31 July 2022 in accordance with the Act which were filed at Companies House on 1 August 2022 and show distributable reserves sufficient to allow for this appropriation. As a matter of common law, it is necessary for this authorisation to be approved by shareholders.

It is also proposed that the Company enter into a deed of release in favour of the Recipient Shareholders, as described in Resolution 10 (the "Shareholders' Deed of Release"). The consequence of the entry into of the Shareholders' Deed of Release by the Company is that the Company will be unable to make any claims against the Recipient Shareholders in respect of the payment of the Interim Dividend otherwise than in accordance with the Act.

The proposed authorisation of the appropriation of the Company's distributable profits to the payment of the Interim Dividend and the entry by the Company into the Shareholders' Deed of Release will not have any effect on the Company's financial position. This is because the aggregate amount of the Interim Dividend is equal to and offset by the release of each shareholder from the liability to repay the amount already paid and the Company will not be required to make any further payments to shareholders in respect of the Interim Dividend.

Accordingly, the Company's entry into the Shareholders' Deed of Release will not result in any decrease in the Company's net assets or the level of its distributable reserves.

The Directors' Deed of Release

It is also proposed that the Company enter into a deed of release in favour of the Directors, as described in Resolution 10 (the "Directors' Deed of Release"). The consequence of the entry into of the Directors' Deed of Release by the Company is that the Company will be unable to make any claims against the Directors in respect of the payment of the Interim Dividend otherwise than in accordance with the Act.

Under the Company's articles of association, it is necessary for shareholders to approve the Company's waiver of any rights of the Company to make claims against the Directors in respect of the Interim Dividend, since the Board would itself have a potential conflict of interest in approving such a waiver. This is because the members of the Board are named as beneficiaries of the waiver.

The Directors have agreed that they will not vote on Resolution 10 in respect of their own shareholdings because, if passed, the resolution releases the Directors from any claim which the Company may have against them in respect of the Interim Dividend and they are therefore personally interested in the passing of such resolution.

The entry by the Company into the Directors' Deed of Release will not have any effect on the Company's financial position because, as with the position in relation to the Interim Dividend and potential claims against the Recipient Shareholders, the Company has not recorded or disclosed its right potentially to make claims against the Directors in respect of the Interim Dividend as an asset or contingent asset of the Company.

Steps to ensure that future distributions comply with the Act

To ensure that all future distributions comply with the Act, the Board has taken steps to ensure that adequate review procedures and processes are followed ahead of the declaration of any final dividend or interim dividend, in particular, to confirm whether the last set of accounts filed at Companies House show sufficient distributable profits to cover the relevant dividend or if interim accounts need to be prepared and filed ahead of any proposed dividend.

Related Party Transactions

Pursuant to Rule 13 of the AIM Rules for Companies, the entry by the Company into the Directors' Deed of Release constitutes a related party transaction with respect to the Directors, all of whom were in office at the time of the Interim Dividend.  In addition, the entry by the Company into the Shareholders' Deed of Release will also constitute a related party transaction with the Company's current substantial shareholders, as Mr Richard Sneller and Stonehage Fleming Investment Management Ltd are currently each interested in more than 10 per cent of the Company's total voting rights to be cast at the AGM and are therefore deemed to be related parties for the purposes of the AIM Rules for Companies.

In lieu of any independent directors' recommendation in relation to Resolution 10, in order to provide a statement as to what is fair and reasonable, and specifically due to all Directors being statutory directors at the time the Interim Dividend was proposed and paid, Allenby Capital Limited, in its capacity as Nominated Adviser to the Company for the purposes of the AIM Rules for Companies, considers that Resolution 10 (and specifically the entry by the Company into the Directors' Deed of Release and the Shareholders' Deed of Release) is fair and reasonable insofar as the shareholders of the Company are concerned.

For further information please contact:

Notes to editors

Totally is a leading provider of healthcare and wellbeing services across the UK and Ireland, working in partnership with the NHS, other healthcare providers and corporate customers to help address the challenges of increased demand for healthcare services.  

The Company is committed to pursuing a progressive buy-and-build consolidation strategy within the fragmented healthcare market and looks to capitalise on the attractive opportunities that its disruptive service model offers to generate value to shareholders.

Totally helps healthcare commissioners and hospitals ensure patients can access the most appropriate care quickly and efficiently by delivering quality urgent care services, such as NHS 111 and urgent treatment centres and elective care services, such as community dermatology clinics and first contact practitioner. Totally also delivers additional clinical capacity through insourcing and outsourcing arrangements to trusts and hospitals tackling growing waiting lists. Our corporate customer services also play a role in reducing reliance on healthcare by promoting healthy lifestyles and physical and mental health.

Totally Urgent Care

Totally Urgent Care is made up of Vocare and Greenbrook Healthcare. Both businesses have a strong heritage. Vocare was established in 1996 as Northern Doctors Urgent Care to provide urgent care services in the North of England and continues to deliver urgent treatment centres and GP Out of Hours services across the North of England as well as national support for NHS 111. Greenbrook was established in 2006 and cares for NHS patients across London and the home-counties through the delivery of urgent treatment centres.

Totally Planned Care

Totally Planned Care is made up of About Health and Premier Physical Healthcare. The businesses are focused on giving patients access to the right care quickly, reducing pressure on other NHS services and, ultimately, reducing waiting lists. About Health has been delivering community-based specialist care with a focus on delivering prompt assessment and treatment across the country since 2008. Premier Physical Healthcare, established in 2007, provides high quality physiotherapy and podiatry to NHS patients, often within a community GP practice, and to the prison service.

Pioneer Health Care

Pioneer Health Care was established in 2007 and has grown under the direction of three senior NHS consultants. Pioneer delivers a wide range of adult services to NHS patients, in partnership with independent healthcare sector private hospitals across England, to help the NHS reduce waiting lists whilst maintaining patient care and quality. Pioneer can offer services through insourcing and outsourcing agreements and through its Any Qualified Provider status. Totally Healthcare, Totally's insourcing business, which was launched in 2019 and previously made up Totally's insourcing division, was incorporated into Pioneer in 2022 following its acquisition.

Energy Fitness Professionals ("EFP")

EFP is a corporate fitness provider established in 1990 to address a gap in the market for workplace fitness, which has grown to offer a range of services covering workplace wellbeing. EFP manages 58 gyms on behalf of its corporate customers, with more than 11,500 members.

More information can be found at:

www.totallyplc.com