Doctor Care Anywhere Group — Growth company focused on profitability

Doctor Care Anywhere Group (ASX: DOC)

Currency in AUD

Last close As at 30/01/2023

AUD0.06

−0.01 (−14.29%)

Market capitalisation

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Research: TMT

Doctor Care Anywhere Group — Growth company focused on profitability

Doctor Care Anywhere Group (DOC) is a fast-growing telehealth company focused on the private healthcare sector. Following its successful IPO in December 2020, the group delivered a strong performance in its first year of trading and achieved several of the goals set out in its prospectus. At the end of 2021, management outlined its plan for profitable growth, underpinned by its new operating model and updated master services agreement with AXA Health. We have reflected this in our updated forecasts, where we expect DOC to generate positive EBITDA for H223.

Max Hayes

Written by

Max Hayes

Associate Analyst

TMT

Doctor Care Anywhere Group

Growth company focused on profitability

FY21 results

Software & comp services

24 March 2022

Price

A$0.29

Market cap

A$65m

A$1.78/£

Net debt/cash (£m) at xx xxxx

17.1

Shares in issue

329.8m

Free float

53.3%

Code

DOC

Primary exchange

ASX

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(25.0)

(41.8)

(71.8)

Rel (local)

(26.9)

(41.5)

(74.3)

52-week high/low

A$1.09

A$0.28

Business description

Doctor Care Anywhere is a fast-growing telehealth company focused on delivering high-quality care to its patients, while reducing the cost of providing healthcare for health insurers and healthcare providers.

Next events

FY21 annual report

30 March 2022

Q122 trading update

April 2022

Analysts

Max Hayes

+44 (0)20 3077 5700

Katherine Thompson

+44 (0)20 3077 5730

Dr Jonas Peciulis

+44 (0)20 3077 5728

Dr Sean Conroy

+44 (0)20 3077 5730

Doctor Care Anywhere Group is a research client of Edison Investment Research Limited

Doctor Care Anywhere Group (DOC) is a fast-growing telehealth company focused on the private healthcare sector. Following its successful IPO in December 2020, the group delivered a strong performance in its first year of trading and achieved several of the goals set out in its prospectus. At the end of 2021, management outlined its plan for profitable growth, underpinned by its new operating model and updated master services agreement with AXA Health. We have reflected this in our updated forecasts, where we expect DOC to generate positive EBITDA for H223.

Year end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

12/20

11.6

(3.5)

(7.8)

0.0

5.9

N/A

12/21

25.0

(19.3)

(5.9)

0.0

2.7

N/A

12/22e

36.2

(14.5)

(4.0)

0.0

1.9

N/A

12/23e

50.4

(1.9)

(0.5)

0.0

1.3

76.9

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

FY21 targets exceeded

In its prospectus, management set out its objectives for FY21, aiming to achieve at least 100% revenue growth, expansion into new geographies as well as increasing the number of services it provides. The group exceeded its revenue target with growth of 115.7% (114.6% organic), driven by a 94.3% increase in the number of consultations delivered on its platform. Consultations, the main revenue driver, grew 105% y-o-y to 440k, despite constraints on the UK’s clinical workforce. This increase was comprised of new patients and a consistently high level of repeat customers. Also in the year, the group entered the Australian market through its acquisition of GP2U Telehealth and expanded its operations in Ireland to self-pay patients.

Profitable growth now expected

In Q421, management transformed its operating model to match healthcare resources to a patient’s clinical requirements more efficiently. As well as the existing GP service, patients can be directed to advanced nurse practitioners or a ‘QuickConsult’ questionnaire. These new options have a lower cost of delivery and should allow DOC to facilitate a higher volume of consultations. While on a blended basis this will lead to lower average revenue per consultation, our updated forecasts show a gross margin expansion of 6pp in FY22/23. We also now forecast revenue growth of 45% for FY22 and 39% for FY23, reflecting the benefits of the updated service agreement with Nuffield Health and the new way of collecting internet hospital rebates. The recent A$11.2m placing should support DOC to EBITDA break-even in FY23.

Valuation: Upside potential

Looking at EV/Sales across FY22e and FY23e, DOC trades at a discount of 80% and 81% to the peer group averages respectively. We believe these discounts should reduce as the group moves towards EBITDA profitability in H123.

Investment summary

Company description: Technology-enabled healthcare

Doctor Care Anywhere Group (DOC) was founded in 2013. It is headquartered in London but listed on the Australian Securities Exchange (ASX). DOC’s telehealth services currently include virtual GP (VGP) and Internet Hospital, which customers can access through its channel partners. It aims to provide health insurers with a reduction in claims costs of up to 20% by combining primary and secondary care and, in doing so, reduce unnecessary appointments and diagnostic tests. Patients benefit from better and quicker access to healthcare, with fewer in-person appointments.

Several IPO targets achieved in 2021

In its December 2020 IPO, DOC aimed to achieve at least 100% organic growth in FY21, which it exceeded with group revenue increasing by 115.7% to £25m (+114.6% organic). Demand for telehealth has been consistently high, benefiting from the pandemic’s positive impact on consumer, clinician and payor realisations on the benefits of digital solutions in healthcare. DOC has been successful in onboarding clinicians across 2021 to meet this rising demand for telehealth, despite GP supply shortages caused by constraints on the UK’s clinical workforce. In addition to this revenue target, management completed several other targets by successfully growing the number of services it can provide on its platform and by expanding into new geographies with its acquisition of GP2U Telehealth in Australia.

Funded for profitable growth

Management’s short- and medium-term objective is to continue growing revenues at a high rate, while also delivering robust margin expansion. Its new operating model, announced in December 2021, should drive margin improvements through its ability to deliver consultations more efficiently via a greater range of clinicians, leading to a lower cost of delivery per consultation. This should support DOC’s margin recovery, which saw temporary pressures from the investment needed to onboard GPs. The group now expects to reach run-rate EBITDA profitability by the end of H123. Our updated forecasts reflect this, where we expect DOC will achieve revenue growth of 45% to £36.1m in FY22 (+2% on our previous estimate) and 39% to £50.3m in FY23. Gross profit should grow at a faster rate in both years at 65% and 57% respectively, leading to gross margin improvement of 5.8pp in FY22e (+4.6pp higher than our previous estimate) and 6.0pp in FY23. Supported by greater operational leverage, we believe DOC will be EBITDA positive in H223 and we forecast an adjusted EBITDA loss of £0.8m for FY23. The February 2022 capital raise of A$11.2m (gross) should provide sufficient funds to achieve this target.

Sensitivities: Customer concentration

The key sensitivity to our forecasts is customer concentration, with DOC’s relationship with AXA accounting for 85% of 2021 revenue. Additionally, DOC cannot provide any online GP services or facilitate diagnostics with any direct competitor of AXA in the UK. However, its plans for geographic expansion and existing relationships with large payors like Nuffield Health and Allianz should help diversify revenue in the longer term.

Valuation: Significant discount to global telehealth peer group

Looking at EV/Sales across FY22e and FY23e, DOC trades on 0.9x and 0.7x our revenue forecasts, representing a discount of 80% and 81% respectively to the peer group averages. We believe these discounts could be due to investor concerns around DOC’s loss-making track record and fast cash burn rate. We therefore believe they will narrow as DOC builds towards profitability. Were the shares to be priced at an average parity with peers across FY22e and FY23e, the implied share price would be A$0.75, suggesting significant upside potential.

Company description: Digitising patient care

DOC is a fast-growing telehealth company focused on delivering high-quality, effective and efficient care to its patients, while reducing the cost of providing healthcare for health insurers and healthcare providers. The company operates a business-to-business-to-consumer (B2B2C) model, using its relationships with health insurers, healthcare providers and employee benefits providers to offer its patients a range of telehealth services, which currently includes VGP and Internet Hospital.

Exhibit 1: Revenue (£m) 2018–23e

Exhibit 2: Annual consultations (000s) 2018–23e

Source: DOC, Edison Investment Research

Source: DOC, Edison Investment Research

Exhibit 1: Revenue (£m) 2018–23e

Source: DOC, Edison Investment Research

Exhibit 2: Annual consultations (000s) 2018–23e

Source: DOC, Edison Investment Research

DOC mainly services the UK’s private health sector but has plans to expand into new markets as well as growing its service offerings. In 2021, it expanded its operations in Ireland and entered the Australian market with the acquisition of GP2U Telehealth. Management’s new agreements with AXA and Nuffield Health, as well as its new operating model, provide good visibility on the company’s growth plans for 2022 and beyond.

Company background

DOC was founded in 2013 to provide better access to healthcare for patients by using technology, while saving costs for insurers and healthcare providers. At the end of 2020, DOC became a publicly listed company with its successful IPO on the ASX and has since delivered on several IPO commitments, including:

100% organic revenue growth in FY21.

Expanding its range of services.

Expansion into new geographies

The company’s track record of strong growth has been driven by new service offerings, the development of new partnerships and the expansion of existing relationships, both with large insurers and healthcare and benefit providers.

In 2015, DOC entered into its first strategic relationship with health insurer AXA Health to provide its virtual GP services. The partnership with AXA has been key to the company’s growth, with DOC and AXA establishing a UK JV in 2020. On 15 December 2021, management announced its Variation of Agreement with AXA Health, which we expect to contribute significantly to the group’s goal of delivering profitable growth from H123 due to a reduction in the cost of delivery per consultation.

Other important partnerships include Nuffield Health (2016), Perkbox (2018), HCA Healthcare (2020), Allianz Partners (2020), Boots Ireland (2021) and HCF health insurance (2021) via its acquisition of the Australia-based GP2U Telehealth.

A key element of DOC’s rapid growth has been the increase in its service offerings. In 2019, it completed a pilot of its Internet Hospital offering, which combines primary and secondary healthcare, leading to a full-service launch of Internet Hospital with AXA in early 2020. In November 2020, it expanded into mental healthcare services and in January 2021 it partnered with digital mental healthcare pioneers Koa Health and Kooth.

At the end of 2021, management announced its new operating model, where patients will now be able to see an advanced nurse practitioner or take a QuickConsult, adding to its existing GP option. The diversification of the offering and lower average cost of delivery per consultation should be key to DOC’s ambition of building on profitability and margins from Q222 onwards. In H222, the company is expected to launch its new service with Nuffield Health, which will establish the UK’s first digitally integrated virtual and in-person primary care service.

DOC made its first foray outside the UK in 2020, entering the Republic of Ireland using a team of doctors registered by the Irish Medical Council. Since then, it has built on its existing B2B operations through its partnership with Boots Ireland, expanding its service to self-pay patients. DOC also entered the Australian market in September 2021 through its acquisition of GP2U Telehealth, a leading provider of virtual GP services and telemental health services in the region.

Platform moving towards total digital care

Through the investment and development of its platform, DOC is implementing innovative new ways of connecting patients to doctors. Over 2021, management invested significantly in onboarding new GPs and retaining existing ones, which was crucial to meeting the heightened levels of demand for telehealth services over the life of the pandemic. At the end of the year, it announced its new operating model, which provides patients with options based on their clinical requirements. By expanding its range of services, DOC should be able to continue to scale in line with the demand for consultations on its platform where, according to management, there are twice as many advanced nurse practitioners in the UK as GPs.

Practitioners are either employed by DOC or self-employed and have a contract with the company, while specialists are all currently self-employed and have contracts with DOC that can be terminated at short notice. The medical practitioners are overseen by clinical leads, who are responsible for the recruitment, training, quality assurance and performance management of DOC’s medical practitioners. Notably, DOC can now accredit practitioners without needing a third-party, making the GP onboarding process more efficient.

Patient safety and service quality are a key focus for DOC’s senior management, with high standards of clinical quality governance integral to the company’s strategy. There is an independent Clinical Governance Committee (CGC), which reports to the board on matters such as effectiveness of clinical governance, quality and compliance arrangements and performance. DOC’s chief medical officer holds primary accountability for clinical governance, while the chairman of the CGC provides assurance oversight of the application and effectiveness of clinical governance standards and performance. Additionally, DOC is regulated by the Care Quality Commission (CQC) and obtained an overall rating of ‘good’ at its last assessment in September 2019.

DOC’s core technology platform is built in a modular and scalable manner, allowing it to be customised to clients’ specific needs. The platform is deployed over Microsoft’s Azure cloud service as well as the UK public health cloud – UKCloud – facilitating the launch of DOC’s services into new geographies as well as additional service offerings. Electronic health records (EHRs) are a key part of the platform. Both patients and medical practitioners can access records related to their consultations over the DOC platform online 24/7, thereby leading to more complete information for the practitioner to base their decision on. DOC plans to invest in further developing its EHRs to expand its functionality substantially.

Virtual consultations over the platform are encrypted to ensure patient data remain private as well as appropriately stored and used. Cyber security protocols have been embedded into the platform from its inception and DOC has been General Data Protection Regulation (GDPR) compliant since 2018, with a set of policies in place to govern data protection and breaches.

Route to market via partners

DOC’s route to market is through channel relationships, which provide a lower cost of customer acquisition than a direct business-to-consumer (B2C) model. The company has built up an impressive list of partners including major global health insurers such as AXA Health and Allianz Partners, and large healthcare providers like HCA Healthcare and Nuffield Health, among others, through which it provides its telehealth services. DOC currently services more than 1,500 corporate clients and had a base of 2.4 million patients at the end of 2021.

Exhibit 3: Doctor Care Anywhere Group strategic relationships

Source: DOC

AXA Health is the company’s oldest partner, dating back to 2015, when it established a commercial relationship with DOC. This subsequently led to a UK JV between AXA Health and DOC in January 2020, with the JV partners launching their Internet Hospital in April 2020.

Given DOC’s participation in the UK JV, it has an exclusive relationship with AXA, which prevents the company from working with other health insurers in the UK. However, this does not prevent DOC from partnering in the UK with healthcare providers like HCA and Nuffield or potentially exploring other avenues such as retail pharmacies like Boots Ireland.

Business model: Capturing elements of the patient pathway

DOC’s business model is designed to capture revenue from different parts of the patient journey, where most of the revenue is generated through either a utilisation-based model or a subscription model for VGP consultations and specialist reviews. Licence fees are also charged to some channel relationships for development work and access to the platform. Revenue is largely generated from the provision of services in connection with:

VGP services, which are charged either based on the number of consultations performed (utilisation) or on a subscription basis; and

Internet Hospital services, which include the initial consultation with referral for diagnostics, a specialist diagnostic review and a follow-up consultation. These services are charged based on the number of consultations performed.

Until the recent agreement with AXA Health, all rebates earned from diagnostic referrals were paid into the JV. Following the recent agreement, AXA will now pay DOC’s share of the rebate directly to it and DOC will pay an annual licence fee to the JV for using its technology. We expect this to have a material impact from Q222 onwards, and we forecast an additional £3m in revenue in FY22 compared to our previous estimate. Previously, DOC was only entitled to receive a share of dividends paid by the JV, which has so far been loss making.

Group strategy: Joined-up care leads to better outcomes

DOC was founded specifically to address the fragmentation found in health systems globally, which leads to cost inefficiencies and poor patient outcomes. The company aims to provide health insurers with a reduction in claims costs of up to 20% by combining primary and secondary care and, in doing so, reduce unnecessary appointments and diagnostic tests. Patients benefit from better and quicker access to private healthcare, with fewer in-person appointments. DOC’s strategy is to move towards ‘total care’ by capturing a greater proportion of the care pathway. It plans to do this by developing and optimising treatment pathways across its seven medical specialties and expanding into other areas, combining primary and secondary care, acute and chronic conditions, and physical and mental health management.

The company has detailed five key areas of growth:

1.

Increase customer activation and consultation: DOC plans to boost revenue by expanding its marketing to drive customer activation and consultations, by working on joint promotional campaigns with channel partners and corporate clients.

2.

Develop new service offerings: DOC plans to promote its mental health services, which it launched in November 2020, to its channel partners and corporate clients. It also delivers mental health services in Australia under the Psych2U brand following its acquisition of GP2U Telehealth.

3.

International expansion: DOC entered the Republic of Ireland’s telehealth market in 2020 and has since expanded its service to self-pay patients, enhancing its direct-to-consumer model across Boots’ 89 stores across the country and Irish website. Additionally, its acquisition of GP2U gives DOC a strong foothold in the Australian market and the opportunity to build on GP2U’s existing relationship with HCF, Australia’s largest not-for-profit health insurer. DOC’s management has identified Australia as a largely underpenetrated and fragmented market, which offers the opportunity for consolidation, where demand for telehealth services far outweighs supply. In our initiation, we noted the potential for DOC to roll out its Internet Hospital service across various European markets, including Belgium, Germany, Italy, Spain and Switzerland.

4.

Develop the technology platform: DOC plans to increase the capacity of its technology platform to increase its ability to handle future volume growth. Additionally, it plans to invest in further developing its EHR to substantially expand its functionality and expand the range of services that can be conducted online.

5.

Improving operational efficiency: DOC has invested significantly in its automation technologies using the funds from its IPO. Its ‘health navigator’ automated triage system is an example of this, where more automation of workflows across its operations should increase operational leverage, helping to support its ambitions to scale more profitably.

Business description: Two services provided

DOC currently offers both primary and secondary clinical services, which are delivered through its proprietary cloud-based platform. It integrates virtual consultations with diagnostic reviews, resulting in time and cost efficiencies as well as an improved patient experience. An overview of its services is shown in Exhibit 4, highlighting how management efficiently uses varying types of clinicians within a workforce to treat a wide range of conditions at scale.

Exhibit 4: Doctor Care Anywhere Group services overview

Source: DOC

DOC currently has two established service offerings:

1.

VGP: a video or phone consultation with a GP or advanced nurse practitioner who can provide advice and guidance, medicine prescriptions, referral letters and sick notes. Recently, the service has been expanded to include a QuickConsult questionnaire for situations that do not need a real-time video or phone consultation.

2.

Internet Hospital: includes both primary and secondary care services, including video or phone consultations with a GP, diagnostic referrals and specialist diagnostic reviews across seven medical specialties (cannot be referred by nurses or QuickConsult).

Virtual GP service (launched in 2015)

Traditionally, DOC’s VGP services were provided by a doctor, involving a 20-minute video or phone appointment made available 24/7, 365 days of the year. In December 2021, management announced its new operating model, expanding its range of services and tailoring them to a patient’s clinical requirements, including:

a 15- or 20-minute virtual GP consultation;

a 20-minute virtual consultation with an advanced nurse practitioner; and

QuickConsult, a questionnaire to be reviewed by a prescribing clinician, resulting in written advice or a prescription without the need for a real-time video or phone consultation.

The new operating model should allow DOC to continue to scale in line with the demand for consultations on its platform where, according to management, there are twice as many advanced nurse practitioners in the UK as GPs. The 15-minute option will also enable GPs to deliver more consultations per hour, compared to the previous fixed 20-minute sessions.

The diversification of the offering and its subsequent lower average cost of delivery per consultation should improve margins, supporting management’s goal of delivering profitable growth in FY22 and beyond. The automated triage system, health navigator, should also help the company grow consultation volumes while minimising the impacts on its cost base. These implementations are expected to be rolled out gradually from Q222 and should start having a full impact from FY23 onwards.

Exhibit 5: VGP doctor interface

Exhibit 6: VGP patient interface

Source: DOC

Source: DOC

Exhibit 5: VGP doctor interface

Source: DOC

Exhibit 6: VGP patient interface

Source: DOC

Patients can also use the platform to access prescription medication, where prescriptions are automatically uploaded to their account for them to take to any participating pharmacy, which currently includes Boots, Tesco, Superdrug, Day Lewis and Rowlands. DOC can also liaise with non-participating pharmacies to ensure patients receive their medication.

All records of consultations over the DOC platform are available to the patient 24/7. Private specialist referrals, diagnostic referrals, private in-person GP referrals and official statements regarding the patient’s fitness to work or sick notes are directly uploaded to the patient’s records.

The target segment for VGP services includes payors (healthcare insurers like AXA Health and Allianz Partners), healthcare providers (like HCA and Nuffield) and health services resellers (such as Perkbox) and corporates.

Internet Hospital (launched in April 2020)

DOC’s Internet Hospital combines primary and secondary care into a single seamless experience for the patient, while saving costs for the payor. A pilot of the Internet Hospital was launched with AXA Health in January 2019, with a full commercial launch in April 2020.

The Internet Hospital currently covers seven medical specialities: cardiology, ear nose and throat (ENT), gastroenterology, gynaecology, orthopaedics, spinal and urology.

Traditional versus Internet Hospital: Analog versus digital

The seamless proposition which the Internet Hospital provides to patients is best illustrated by an example of how a patient’s journey would compare to a traditional in-person solution.

Exhibit 7: Traditional versus Internet Hospital

Traditional

Internet Hospital

Step 1: GP > specialist > diagnostic tests

Patient visits the GP in person who examines the patient and refers them to the relevant specialist. The specialist refers them to a facility for diagnostic tests (such as MRI).

Patient has a VGP consultation over video/phone. The GP refers the patient to an in-person facility for diagnostic testing.

Step 2: Post-diagnostic tests

Patient visits the specialist in person, for a second time, to review the test results and agree a care plan.

Test results are saved in the cloud and reviewed online by a DOC specialist consultant, who provides a care plan that the GP can share with the patient during a follow-up VGP consultation. If needed, an in-person consultation can be organised.

Step 3: Expensive and time-consuming administrative process

Administrative process and cost for the payor to deal with the healthcare provider.

The DOC VGP arranges for approval from the payor for diagnostic testing. The approval request is sent to the payor through an application programming interface (API), a piece of software that allows two applications to speak to each other. The digitisation of the approval request system eliminates the admin process and costs at the payor’s end to deal with the claim.

Source: DOC, Edison Investment Research

Additionally, the number of in-person visits, in our example above, is greatly reduced by DOC’s Internet Hospital at just one versus three for the traditional healthcare set-up. This two-thirds reduction in in-person visits is a win-win, given it is both more convenient and faster for the patient, while reducing the cost of providing the care for the payor.

Financially, DOC benefits from an extended patient journey, where an initial consultation of £45 could grow into a total revenue per patient journey of £200 through additional diagnostic tests, specialist reviews and GP follow-ups. DOC collects a 100% gross margin on those steps of the patient journey that do not include a GP consultation, as none of the secondary care is provided on its platform and so it only collects a rebate for referrals for the amounts shown in Exhibit 8. As mentioned earlier, DOC will now be able to collect these rebates directly, where previously it Could only collect a share of dividends paid by the JV.

Exhibit 8: Internet Hospital revenue drivers

Source: DOC

Nuffield Health contract

In June 2021, DOC announced that it had strengthened its partnership with Nuffield Health with a five-year contract to deliver the UK’s first digitally integrated virtual and in-person primary care service. The partnership will combine DOC’s 24/7 VGP service with Nuffield Health’s national network of face-to-face GPs and facilitate a greater range of services that DOC can deliver, including in the areas of women’s health, travel and immunisation clinics and chronic disease management programmes.

It is due to launch in mid-2022 (delayed from Q421, as previously indicated) and DOC expects it to generate minimum revenue of £1.9m across two years post service launch, primarily through rebates collected from referrals to in-person care. There is growth potential above this, where DOC has scope to increase its volume of primary care consultations and offer a broader scope of services.

Management

DOC’s executive board (biographies on page 18) consists of co-founder and CEO Dr Bayju Thakar and chairman Jonathan Baines. Bayju is a medical doctor, specialising in psychiatry, and previously worked at McKinsey & Co. He co-founded DOC and has been key to the company’s growth into an integrated digital healthcare provider. Jonathan, who has been chairman since November 2018, has extensive board and governance experience. He had a successful career in the search industry, which included founding and selling his own firm and serving as chairman of Korn Ferry in EMEA. Bayju and Jonathan have built up a solid executive management team (biographies on page 18), which includes CFO and company secretary Dan Curran, medical director Dr Tim Bray, chief commercial officer Paul Tambeau, chief innovation officer Mark Findlater, and brand and communications director Leonie Foster.

The executive board and management team are augmented by five experienced, high-profile non-executive directors: David Ravech, Simon Calver and independent non-executives Richard Dammery, Romana Abdin and Vanessa Wallace.

Telehealth market: A service whose time has come

Telehealth is the provision of healthcare services at a distance, using information and communications technology (ICT), instead of traditional in-person treatment. ICT such as computers and smartphones with video calling, digital imaging and healthcare monitoring devices has made it possible for doctors and other clinical staff to monitor, diagnose and treat patients remotely. Telehealth is a broad term that covers any type of healthcare that is delivered remotely, including medical information provided online, calling a nurse hotline, apps that provide information and initial diagnosis, and sending data from a device like a heart monitor via the telephone to a cardiologist.

There are three ways in which telehealth can be delivered:

Synchronous: similar to visiting the doctor, the patient consults with the doctor in real time using a computer or telephone, which may or may not include video.

Asynchronous: the patient or physician collects medical history, images and pathology reports, which are then sent to a specialist for diagnostic and treatment expertise.

Remote patient monitoring: measurements such as weight or blood pressure are sent to the healthcare provider.

The healthcare services provided by DOC fall under the synchronous and asynchronous categories.

Advantages and limitations of telehealth

Without the effective intervention of digital solutions, the global healthcare market will continue to face unsustainable rising cost pressures and a shortage of clinicians. Telehealth providers benefited significantly from the pandemic due to restrictions limiting in-person doctor and hospital visits, with usage growing by 78x from February to April 2020 (source: McKinsey). Despite a fall from the highs seen in April 2020, telehealth use has stabilised at a level 38x higher than before the pandemic as of February 2021, with psychiatry seeing the highest penetration levels of any speciality at 50% (measured by percentage share of outpatient and office visit claims, source: McKinsey). This highlights that there has been both greater consumer and provider willingness to use telehealth, where the market has also benefited from certain regulatory changes designed to increase adoption during the pandemic.

However, healthcare remains one of the few areas in which the prospect of digital transformation is so controversial, with concerns over an erosion in outcomes, digital exclusion, disruption to established healthcare structures and privacy all frequently voiced. Historically, medical training was based on the notion that physical examination (eg auscultation, palpation and percussion) was a necessary part of evaluating a patient. Additionally, every medical decision potentially carries a legal risk for the physicians. As a result, the medical fraternity pushed back against the adoption of telehealth, either because of dogmatic views gained during university years or simply due to fear of legal action. Patients still need to visit a diagnostic test centre for things such as x-rays or MRI scans, blood and other samples or for some diagnoses that require a more hands-on approach. Additionally, not all patients have the systems, broadband or ability to use such technology.

The telehealth market is forecast to grow robustly

Statista forecasts that the global telehealth market will grow at a CAGR of 25% from US$49.9bn in 2019 to US$459.8bn (8.2x) by 2030, primarily driven by COVID-19-related changes in the habits of consumers and providers. Despite varying industry estimates, the consensus that telehealth is poised for higher adoption and robust growth remains broadly consistent. For example, Global Market Insights estimates that the global telehealth market will increase by a CAGR of 25.2% between 2019 and 2026, from US$45.5bn to US$175.5bn.

Exhibit 9: Global telehealth market to grow at a CAGR of 23.1% between 2019 and 2024

Source: Edison Investment Research, Statista. Note: *Statista forecasts.

Key growth drivers for increased telehealth adoption include increased prevalence of chronic diseases, long waiting times at hospitals, greater need for cost-saving in healthcare delivery, a growing number of smartphone users, and advances in consumer information and communications technologies.

Telehealth has outperformed the market and FAANG stocks

Below we compare the average share price performance of DOC’s peers, representing the leading listed telehealth companies globally, with the major US, UK and Australian indices and with the Facebook (Meta), Amazon, Apple, Netflix and Google (FAANG) average. As expected, the peer average outperformed all the global indices in the exhibit, underpinned by the fact that telehealth providers were among the top beneficiaries of the pandemic. However, notably, the peer group has also outperformed the MSCI World Health Index (which includes all digital health services) and the average of the FAANG stocks from the start of 2020 to date.

Exhibit 10: DOC’s peer group average versus global indices and FAANG

Source: Refinitiv, Edison Investment Research

From the start of 2020, the average peer share price has risen by 72%, despite a de-rating from the highs seen at the peak of the pandemic (February 2021). This is 17% higher than the FAANG stocks’ average and 41% greater than the best performing global index (S&P 500: 31%).

Consolidation and deals following raft of IPOs

The number of telehealth companies listing globally continued to grow from the strong levels seen in 2020, following the robust growth in demand for telehealth since the start of the pandemic. The listings with the highest profiles in 2021 were in the US, including:

Agilon Health: raised US$1.2bn when it listed on 15 April and gained a valuation of c US$11bn in its market debut.

Doximity: raised US$494.3m when it listed on 24 June 2021 at a valuation of US$4.6bn.

Babylon Health: raised c US$460m when it listed via SPAC on 22 October 2021 in a US$4.2bn merger with Alkuri Global.

Following a strong period of growth, we believe that the global telehealth market is now undergoing a period of consolidation, underpinned by the typical behaviour of product life cycles. As shown in Exhibit 11, 2021 saw the highest level of M&A activity in the healthcare technology market in both deal volume and total value, and we believe this trend will continue.

Exhibit 11: M&A deals in healthcare technology, 2011–21

Source: Refinitiv, Edison Investment Research

A rapid scale-up in venture capital investment has catalysed growth in the market, demonstrated by investment in mental health in the UK reaching US$3.1bn in the first nine months of 2021, double the levels seen in 2019 and substantially higher than the US$90m spent 10 years ago (source: Edison digital health webinar). Our digital health webinar in December 2021 highlights the importance of scale for telehealth companies, so that they can provide the best outcomes by creating a one-stop shop for patients.

UK competitive landscape

Babylon has historically been the UK’s largest telehealth provider, but has switched its focus to the larger US market following its IPO at the end of 2021. Subsequently, the UK telehealth market provides a broad range of services but primarily consists of private companies, including:

Zava’s major clients include an unnamed leading UK pharmacy, as well as Shop Apotheke in the Netherlands and Noventi in Germany.

Square Health’s largest clients include major UK insurer Aviva and LV=.

Dr Morton’s sells its services directly to its end customer (B2C model).

Push Doctor primarily serves the UK’s public healthcare segment (NHS) and provides online GPs, physiotherapists and pharmacist consultations.

Telemedicine Clinic provides teleradiology services to more than 90 NHS trusts.

Medio.Link provides the NHS and private healthcare with a secure video and audio platform for calls.

Toothpic provides online dental consultations.

Financials

Key performance indicators

DOC’s financial results are accompanied by three main key performance indicators (KPIs):

Eligible lives refers to the total number of customers across all its partners, who are entitled to use DOC's services at the end of a given period. The partners need to onboard their customers onto the platform once.

Activated lives refers to the total number of eligible lives who have signed up for DOC's service at the end of a given period.

Consultations is the number of VGP consultations delivered to patients over a given period.

The company provides a further breakdown by utilisation or subscription for each of the three KPIs, as shown below:

Utilisation revenue is charged on a usage basis, that is the number of utilisation-based consultations in a period. Utilisation revenue includes cancelled consultations, depending on when they are cancelled, but the consultation is not counted. In addition to headline (total) consultations, utilisation consultations in a given period is an important KPI.

Subscription revenue is earned on a per-eligible life basis, irrespective of whether the customer has sought a consultation with a DOC GP or even if they are activated.

Financial goals exceeded in FY21

DOC’s FY21 results show that it has beaten its headline target of achieving at least 100% organic growth in the year, with group revenue increasing by 115.7% to £25m (+114.6% on an organic basis). Q421 was DOC’s strongest quarter to date, with the group reporting revenue of £7.9m, up 35.9% q-o-q and 107.7% y-o-y, benefiting from higher average revenue per consultation across its core business, as well as a c £100k contribution from the newly acquired GP2U Telehealth.

FY21 consultations, the group’s primary revenue driver, grew by 105% year-on-year to 440k. Consultations in Q421 grew by 23% quarter-on-quarter to 143.3k, representing a second consecutive quarter of record figures. Notably, the percentage of returning patients remained flat quarter-on-quarter at 65% and the remaining 35% equated to a record 50,600 first-time patients. The level of growth achieved highlights the success of the group’s GP onboarding programme, where competition to secure GPs has been high in 2021 due to the pressures faced by the UK’s clinical workforce relating to COVID-19 and the vaccine roll-out.

Exhibit 12: Quarterly consultation, split between repeat and new customers

Source: Doctor Care Anywhere Group

However, the higher-than-normal rates and additional incentives required to secure GPs resulted in significant margin pressure in FY21. On an underlying basis, FY21 gross margin fell by 12.7pp year-on-year to 36.5%, with the greatest impact seen in Q321 when margins were 30.3%. There was a recovery in Q421 as a result of the updated agreement with AXA Health, and we expect margins to keep building in FY22 as the impact on the UK’s clinical workforce eases and DOC rolls out its new operating model.

Forecasts reflect profitable growth ambitions

After completing several of its IPO goals in 2021, management is now looking to achieve profitable growth and expects to reach run-rate EBITDA profitability by the end of H123. Its updated service agreement with AXA and new operating model should both allow for consultations to be delivered more efficiently and support margin improvements through a lower cost of delivery by consultation. Its investments in automating technologies, such as its health navigator, could also strengthen operating leverage as it will not need to scale staff costs in line with expected consultation growth.

Management guidance given in its FY21 results indicates that it expects revenue to grow by another 40–50% year-on-year in FY22 to £35–38m and to achieve an annualised revenue run rate of £44–55m by the end of H123. DOC also expects to achieve run-rate EBITDA profitability by H123 and a gross margin of 50–60%.

This is in line with our forecasts, where we expect momentum to continue with revenue growth of 45% to £36.1m in FY22 and 39% to £50.3m in FY23. Gross profit should grow at a faster rate in both years at 65% and 57% respectively, leading to gross margin improvement of 5.8pp in FY22e and 6.0pp in FY23e. Supported by greater operational leverage, we believe DOC will be close to EBITDA break-even in FY23, where we forecast adjusted EBITDA loss of £0.8m.

Exhibit 13: Summary of Edison’s forecasts

€m

FY21

FY22 (new)

y-o-y change (%)

FY22 (old)

change from old (%)

FY23 (new)

y-o-y change (%)

Revenue

25.0

36.2

45%

35.5

2%

50.4

39%

Gross profit

10.4

17.2

65%

15.2

13%

26.9

57%

Gross profit margin

42%

47%

5.9ppt

43%

4.6ppt

53%

6.1ppt

Adjusted EBITDA

(18.0)

(13.7)

(24%)

(13.8)

(1%)

(0.8)

N/A

Adjusted EBITDA margin

N/A

N/A

N/A

N/A

N/A

-2%

N/A

Adjusted net income

(19.0)

(14.7)

(23%)

(10.4)

41%

(1.9)

N/A

Adjusted diluted EPS (p)

(5.9)

(4.1)

(31%)

(3.2)

29%

(0.5)

(87%)

Net cash

17.2

7.3

(58%)

0.4

1730%

3.6

(50%)

Operational data

Eligible lives at period end ('000s)

2,440

2,691

10%

2,691

,0%

2,960

10%

Activated lives at period end ('000s)

610

991

63%

740

34%

1,562

58%

Consultations ('000s)

440

769

75%

600

28%

1,086

41%

Source: Doctor Care Anywhere, Edison Investment Research

Change in JV conditions to have rapid material impact

In the same way as before, DOC reports a cost recharge from the JV as other operating income. However, DOC is now entitled to collect rebates directly from AXA, providing an immediate boost to revenue as well as having a quick impact on cash due to the contract’s agreed cash conversion cycle of three months. Previously, all rebates were paid into the JV, with DOC entitled to dividends once the JV was in a position to pay them (the JV has been loss-making to date). DOC’s ability to renegotiate its existing contract with AXA highlights the importance of its model for payors, as it provides both potential cost savings and better clinician outcomes.

Bolstered financial position to support profitability

At the end of February 2022, DOC announced that it had successfully completed a capital raising of A$11.2m (A$10.5m/c £5.9m net) through the issue of c 36.1m CHESS depositary interests (CDIs), which is the primary driver for our FY22 net cash forecast increasing by nearly 4x from our previous estimate. Given the high cash burn rate of c £5m per quarter in FY21, management wanted to ensure that it has sufficient capital to fuel growth and achieve its target of run-rate EBITDA profitability by end-H123. The use of the funds is highlighted below:

A$7m: organic growth initiatives.

A$3.5m: working capital.

A$0.7m: capital raising costs.

Additionally, DOC is currently undertaking a security purchase plan with existing eligible holders in Australia and New Zealand, which could raise up to another A$1m.

Sensitivities

Our forecasts and the share price will be sensitive to the following factors:

Customer concentration: DOC’s relationship with AXA accounted for 85% of FY21 revenue, so a loss in some or all business with AXA would materially affect our revenue and profitability forecasts. Additionally, the company cannot provide any online GP services or facilitate diagnostics with any direct competitor of AXA in the UK. However, its plans for geographic expansion and existing relationships with large payors like Nuffield Health and Allianz should help diversify revenue in the longer term.

Growth assumptions: the pace at which the company grows its revenue may differ from our forecasts. Inherent in our forecast is that DOC’s new operating model and updated service agreement with AXA should enable it to scale more efficiently. However, future reported revenue and profitability could differ from our forecasts if this does not happen either according to the timeframe or the level we expect.

Growing consultations: there is no guarantee that DOC will either be able to increase the utilisation of its service from existing customers or attract new customers, which affects consultation growth and therefore revenue.

FX: DOC reports its financials in GBP as its revenue is currently almost entirely from the UK and most of its cost base is in GBP. It is listed on the ASX and its share price is denominated in A$. An increase/decrease in GBP versus A$ would imply higher/lower A$ earnings, and multiples related to revenue and profitability.

Valuation: Significant upside potential

Expanded peer group reflects new IPOs

As previously discussed, 2021 saw several IPOs across the telehealth market, which we have reflected in our peer table. EV/sales multiples form the basis of our valuation as the peer group companies are fast growing and pre-profitability. Across FY22e and FY23e, DOC trades at 0.9x and 0.7x respectively, representing discounts of 80% and 81% to the peer group averages in both years. We believe that these discounts could be due to investor concerns around DOC’s loss-making track record and fast cash burn rate. Subsequently, we expect the discounts to narrow if DOC delivers on its goal of expanding margins and achieving EBITDA profitability by H123.

Were DOC’s shares to be priced at an average parity with peers across FY22 and FY23, the implied share price would be A$0.79, suggesting significant upside potential from its current share price of A$0.29.

Exhibit 14: Global telehealth peer group

Price

Ytd performance

Market cap

EV

EV/sales (x)

Two-year sales CAGR

Company

(local CCY)

(%)

(US$m)

(US$m)

FY0

FY1e

FY2e

(%)

Accolade

US$16.40

(37.8)

1,098.1

664.2

4.0

2.2

1.7

52.1

Agilon

US$23.87

(11.6)

9,576.1

8,584.5

4.7

3.2

2.3

44.2

Amwell

US$3.93

(34.9)

1,034.8

288.4

1.2

1.0

0.9

16.3

Babylon

US$4.21

(27.8)

1,741.1

1,714.2

5.4

1.8

1.1

120.4

CareCloud

US$4.77

(24.5)

71.7

70.7

0.5

0.5

0.4

9.7

CloudMD Software & Services

C$0.80

(31.6)

183.2

142.1

1.8

0.9

0.8

48.1

Doximity

US$50.47

0.7

9,655.6

9,513.1

N/A

28.0

21.1

N/A

GoodRx

US$17.99

(45.0)

7,211.3

6,933.0

9.3

7.5

6.1

23.2

Hims & Hers Health Inc

US$5.28

(19.4)

1,038.6

791.3

3.0

2.1

1.7

33.4

Kooth

258.0p

(25.4)

113.1

102.4

4.7

3.8

3.1

22.0

NextGen

US$19.88

11.7

1,329.3

1,256.0

2.3

2.1

2.0

6.2

One Medical

US$10.29

(41.4)

1,976.6

1,832.8

3.0

1.7

1.3

49.2

OptimizeRx

US$40.16

(35.3)

717.9

633.2

10.4

7.7

5.6

36.2

Physitrack

SEK45.00

(22.7)

77.5

62.4

6.9

4.6

3.7

37.0

Teladoc Health

US$69.22

(24.6)

11,097.8

11,450.1

5.7

4.4

3.6

25.7

WELL Health Technologies Corp

C$4.68

(4.7)

775.3

725.5

3.1

1.9

1.7

32.9

Peer average

(23.4)

4.4

4.6

3.6

37.1

Doctor Care Anywhere

A$0.27

(57.5)

113.0

89.2

1.3

0.9

0.7

42.1

Premium/(discount)

(69%)

(80%)

(81%)

13%

Source: Refinitiv, Edison Investment Research. Note: Prices as at 24 March 2021.

Exhibit 15: Financial summary

£m

2019

2020

2021

2022e

2023e

31-December

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Total Revenue

 

 

5.7

11.6

25.0

36.2

50.4

Underlying Revenue

 

 

5.7

11.6

23.0

36.2

50.4

Cost of Sales

(1.4)

(5.9)

(14.6)

(19.0)

(23.4)

Gross Profit

4.4

5.7

10.4

17.2

26.9

Normalised EBITDA

 

 

(3.7)

(11.6)

(18.0)

(13.7)

(0.8)

Normalised operating profit

 

 

(4.4)

(12.6)

(19.1)

(14.7)

(1.9)

Amortisation of acquired intangibles

0.0

0.0

0.0

0.0

0.0

Exceptionals

0.0

6.0

0.6

0.6

0.6

Share-based payments

(0.1)

(2.2)

(1.0)

(1.0)

(1.0)

Reported EBITDA

(3.8)

(13.8)

(19.0)

(14.7)

(1.2)

Reported operating profit

(4.5)

(14.7)

(20.1)

(15.7)

(2.3)

Net Interest

(0.0)

(0.1)

(0.1)

0.0

0.0

Joint ventures & associates (post tax)

0.0

(0.8)

(0.0)

0.0

0.0

Exceptionals

(1.3)

(21.7)

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

(4.4)

(13.5)

(19.3)

(14.7)

(1.9)

Profit Before Tax (reported)

 

 

(5.8)

(31.4)

(20.3)

(15.7)

(2.9)

Reported tax

0.1

0.0

0.3

0.0

0.0

Profit After Tax (norm)

(4.3)

(13.3)

(19.0)

(14.7)

(1.9)

Profit After Tax (reported)

(5.7)

(31.3)

(20.0)

(15.7)

(2.9)

Basic average number of shares outstanding (m)

117.0

117.0

171.9

321.5

359.7

EPS - basic normalised (p)

 

 

(3.69)

(7.76)

(5.90)

(4.08)

(0.53)

EPS - diluted normalised (p)

 

 

(3.69)

(7.76)

(5.90)

(4.08)

(0.53)

EPS - basic reported (p)

 

 

(4.85)

(18.23)

(6.21)

(4.35)

(0.80)

Revenue growth (%)

184.2

102.1

115.7

44.9

39.3

Gross Margin (%)

76.1

49.2

41.6

47.4

53.5

EBITDA Margin (%)

(66.0)

(119.5)

(76.0)

(40.5)

(1.6)

Normalised Operating Margin

(76.9)

(108.5)

(76.7)

(40.6)

(3.8)

BALANCE SHEET

Fixed Assets

 

 

3.8

7.5

15.0

16.3

17.5

Intangible Assets

3.6

3.6

5.8

6.9

8.0

Tangible Assets

0.3

1.7

1.9

2.0

2.2

Investments & other

0.0

2.2

7.3

7.3

7.3

Current Assets

 

 

0.9

42.0

21.8

13.7

12.4

Stocks

0.0

0.0

0.0

0.0

0.0

Debtors

0.6

3.6

4.1

5.9

8.3

Cash & cash equivalents

0.3

38.4

17.2

7.3

3.6

Other

0.0

0.0

0.5

0.5

0.5

Current Liabilities

 

 

(2.1)

(3.8)

(5.9)

(7.8)

9.6

Creditors

(2.1)

(3.8)

(5.9)

(7.8)

9.6

Tax and social security

0.0

0.0

0.0

0.0

0.0

Short term borrowings

0.0

0.0

0.0

0.0

0.0

Other

0.0

0.0

0.0

0.0

0.0

Long Term Liabilities

 

 

(8.2)

(1.2)

(1.3)

(1.2)

1.3

Long term borrowings

0.0

0.0

0.0

0.0

0.0

Other long-term liabilities

(8.2)

(1.2)

(1.3)

(1.2)

1.3

Net Assets

 

 

(5.6)

44.5

29.6

20.9

40.8

Minority interests

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

(5.6)

44.5

29.6

20.9

40.8

CASH FLOW

EBITDA

(3.8)

(7.8)

(19.0)

(14.7)

(1.8)

Working capital

0.3

(1.2)

1.6

0.1

(0.5)

Exceptional & other

0.3

(1.6)

1.1

1.0

1.0

Tax

(0.1)

(0.0)

0.3

0.0

0.0

Net operating cash flow

 

 

(3.3)

(10.7)

(15.9)

(13.5)

(1.3)

Capex

(1.7)

(1.8)

(2.7)

(2.3)

(2.3)

Acquisitions/disposals

0.0

3.0

(1.8)

0.0

0.0

Net interest

(0.3)

(0.3)

0.0

0.0

0.0

Equity financing

0.2

31.2

(0.1)

5.9

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

Other

4.0

16.4

(0.5)

0.0

0.0

Net Cash Flow

(1.1)

37.8

(21.1)

(9.9)

(3.6)

Opening net debt/(cash)

 

 

(1.7)

(0.3)

(38.4)

(17.2)

(7.3)

FX

0.0

0.0

(0.1)

0.0

0.0

Closing net debt/(cash)

 

 

(0.3)

(38.4)

(17.2)

(7.3)

(3.6)

Source: Doctor Care Anywhere Group, Edison Investment Research

Contact details

Revenue by geography

13-15 Bouverie Street
London EC4Y 8DP
United Kingdom
+44 (0)330 088 4980
www.doctorcareanywhere.com/investors/

Contact details

13-15 Bouverie Street
London EC4Y 8DP
United Kingdom
+44 (0)330 088 4980
www.doctorcareanywhere.com/investors/

Revenue by geography

Management team

Co-founder and CEO: Dr Bayju Thakar

Chairman: Jonathan Baines

Bayju co-founded DOC in 2013 and became CEO in 2020. He is a qualified medical doctor and an alumnus of consulting firm McKinsey & Co. Bayju has played a key role in DOC’s growth from its founding to becoming a vertically integrated digital health provider. He is a graduate from Guy’s and St Thomas’s Hospital Medical School, the medical school of King's College London, and holds a BSc in Philosophy from King’s College London.

Jonathan has served as chairman of DOC since November 2018. He has extensive board and governance experience in the UK, having previously served and advised both public and private company boards. Prior to this, he has three decades of experience in the executive search industry, starting his own company in 1986, which he sold to Whitehead Mann, becoming chairman in 2005. From 2005 to 2014, he served as chairman of Korn Ferry in EMEA where he was involved in chair and CEO succession planning at a number of the largest global financial services companies, including one of the leading banks in Australia.

Chief Financial Officer (CFO) and Company Secretary: Dan Curran

Medical Director: Dr Tim Bray

Dan joined DOC in 2016 as FD and was made CFO in January 2021. He has played a key role at DOC in all major corporate and commercial transactions including multiple fund-raises, the JV agreement with AXA Health and the company’s IPO. Dan has over a decade’s experience in finance, having started his career in public practice before moving into industry, where he has worked in sectors including software development, customer engagement and healthcare. Dan is a chartered global management accountant.

Tim joined the DOC team in 2018 and is a qualified and experienced GP, with an extensive background in healthcare delivery at scale, innovation and clinical research. He has particular expertise in the development and delivery of new models of high-quality, high-value healthcare. Tim has been clinical lead for the Internet Hospital since its inception and has recently taken on the role of medical director, accountable for clinical safety and service delivery as well as providing medical leadership for the organisation. He graduated from Cardiff University, with full membership of the Royal College of General Practitioners.

Management team

Co-founder and CEO: Dr Bayju Thakar

Bayju co-founded DOC in 2013 and became CEO in 2020. He is a qualified medical doctor and an alumnus of consulting firm McKinsey & Co. Bayju has played a key role in DOC’s growth from its founding to becoming a vertically integrated digital health provider. He is a graduate from Guy’s and St Thomas’s Hospital Medical School, the medical school of King's College London, and holds a BSc in Philosophy from King’s College London.

Chairman: Jonathan Baines

Jonathan has served as chairman of DOC since November 2018. He has extensive board and governance experience in the UK, having previously served and advised both public and private company boards. Prior to this, he has three decades of experience in the executive search industry, starting his own company in 1986, which he sold to Whitehead Mann, becoming chairman in 2005. From 2005 to 2014, he served as chairman of Korn Ferry in EMEA where he was involved in chair and CEO succession planning at a number of the largest global financial services companies, including one of the leading banks in Australia.

Chief Financial Officer (CFO) and Company Secretary: Dan Curran

Dan joined DOC in 2016 as FD and was made CFO in January 2021. He has played a key role at DOC in all major corporate and commercial transactions including multiple fund-raises, the JV agreement with AXA Health and the company’s IPO. Dan has over a decade’s experience in finance, having started his career in public practice before moving into industry, where he has worked in sectors including software development, customer engagement and healthcare. Dan is a chartered global management accountant.

Medical Director: Dr Tim Bray

Tim joined the DOC team in 2018 and is a qualified and experienced GP, with an extensive background in healthcare delivery at scale, innovation and clinical research. He has particular expertise in the development and delivery of new models of high-quality, high-value healthcare. Tim has been clinical lead for the Internet Hospital since its inception and has recently taken on the role of medical director, accountable for clinical safety and service delivery as well as providing medical leadership for the organisation. He graduated from Cardiff University, with full membership of the Royal College of General Practitioners.

Chief Innovation Officer (CIO): Mark Findlater

Chief Commercial Officer (CCO): Paul Tambeau

Mark serves as CIO of DOC, leading the onshore and offshore development teams and is responsible for architecting and delivering the company’s software solutions, as well as testing and quality assurance. He has 15 years of experience as a technologist, building robust and scalable IT systems. Prior to DOC, Mark worked for a number of large companies including Whitbread, Premier Inn and the BBC as well as co-founding his own data start up, Clarifi Media.

Paul joined DOC in February 2018 and is responsible for the delivery of strategic initiatives and business change projects across the company. He is also responsible for leading DOC’s business development activities across Europe. He led the development and launch of the Internet Hospital programme, as well as commercial negotiations for the JV with AXA Health. Paul previously served as VP strategy & growth for a Canadian digital health company. Prior to that, he spent 12 years in management consulting, including three years at KPMG’s national healthcare strategy practice. Paul has an MBA from the University of Edinburgh.

Principal shareholders

(%)

Perennial Value Management

14.7%

David Jeremy Ravech

13.4%

Caledonia (Private) Investments

9.1%

Vijay Patel

7.9%

BGF Investments

5.5%

Bayju Ashvin Thakar

3.8%

Patagorang

3.4%


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Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Doctor Care Anywhere Group and prepared and issued by Edison, in consideration of a fee payable by Doctor Care Anywhere Group. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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Witan Investment Trust — Strong absolute performance in 2021

Witan Investment Trust (WTAN) has used a multi-manager structure since 2004. However, it has continued to evolve as new opportunities and challenges emerge in investment markets. Performance was good in absolute terms through FY21 but lagged global markets, contributing to lower relative returns over the past five years. WTAN’s relative performance is still ahead over 10 years and 2021 saw the 47th consecutive year of dividend increases. The trust’s portfolio is well diversified and takes active positions versus stylistic, country and sector comparisons, so we believe there is scope for the recent underperformance to be reversed if the market direction becomes driven by a broader set of sector and geographical factors.

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