Third Age Health Half Year Results

NZX Announcement


28 November 2022
Primary care provider, Third Age Health Services (NZX: TAH), has today reported its unaudited results
for the six months to 30 September 2022 (1H23).
During the first half of the financial year, we were pleased to have been able to successfully execute
on a growth strategy, while at the same time ensuring that our underlying work within the aged care
sector has increased. The growth strategy has, however, come at a cost through the direct and
indirect costs of both acquiring and consolidating business units, and this is acutely felt in the first half
of this year.
Financial summary
Our core business of providing primary medical services into Aged Residential Care (ARC) settings
saw strong organic growth with enrolled patients of 3,414, up 6.7% against the number of patients
during the prior comparative period (pcp) as at 30 September 2021, and up 3.0% compared with the
number of aged residential care patients enrolled with us at 31 March 2022. This increase drove
organic revenue growth for the period of 16.7% on pcp to $2.8 million.
We have focussed on strengthening key relationships with our current and potential aged residential
care customers and as a result we now have a large backlog of demand for our services. The future
rate of growth is dependent on our ability to improve productivity and utilisation, and to recruit
additional clinical practitioners.
General practices which we owned during the first half of the last financial year (1H22) experienced
strong organic growth during the first half of this financial year (1H23) with enrolled patients at 30
September 2022 of 3,425 up 14.2% on pcp, and 7.2% compared to 31 March 2022. General practice
revenue in total of $1.8 million is up 304.3% on pcp and 137.0% against the 6-month period ended
31 March 2022. Organic revenue growth was 23.5% on pcp, with the remainder contributed by
practices that were acquired. During 1H23 we completed the acquisition of an additional general
practice in Auckland and partnered to commence a new green fields general practice in
Christchurch.
While it has been pleasing to see the work of the team reflected in increased revenue as well as the
improvements made to our systems and processes, it is a disappointment to not yet see these
improvements reflected in net earnings. During this half our net earnings after tax decreased 51.8%
on pcp to $0.3 million.

NZX Announcement
There were three key factors which lead to this decrease:
First, we needed to front load resources to bolster capabilities and infrastructure that was not
previously in place but was needed to protect existing business and provide a platform from which
to grow sustainably and profitably.
Second, the integration of the practices acquired this year was slower than planned which
contributed to lower earnings. In addition, there were one off legal and acquisition related costs
incurred of $50k.
The third factor is that reported net earnings were impacted by an increase in the amount of non-
cash amortisation charges arising as a result of purchase accounting rules. Amortisation charges are
taken to reflect the decrease in value of intangible assets recognised when new businesses are
acquired. While appropriate in some cases, the concept of recognising these charges against
intangibles such as patient relationships and funding agreements does not, in our opinion reflect
economic reality. This amounted to a reduction in NPAT of a further $60K.
Shown below is Net Profit after tax adjusted for Amortisation (NPATA) which we believe better
reflects underlying earnings.


30 September 2022 30 September 2021

(Unaudited) (Unaudited)

$000 $000
Net profit after tax
324 672
Add back amortisation of intangibles
(net of 28% tax)
1

60 19
Net profit after tax and before amortisation
384 691

1. With the amortisation of intangibles of $84k for 1H23 ($27k for 1H22) there is a corresponding deferred tax credit calculated at 28%.

Challenging environment
Aged care is undergoing a challenging period over the short to medium term. The well-
acknowledged health workforce crisis, which has been compounded by the slow border
openings and immigration settings, combined with lower than needed funding outcomes for
aged care providers, continues to impact the sector. We are acutely aware that the nursing
workforce shortage has impacted some aged care clients, with several having to reduce bed
numbers. In some instances, this has had a flow on impact for us with a slowing of patient
enrolments from some facilities who are not able to operate at full capacity. While this
causes some issues in respect to contract rates and medium-term patient numbers, it does
need to be noted that all aged care providers must have a General Practitioner or Nurse
Practitioner available to their residents.

NZX Announcement
The workforce crisis also extends to clinicians, and the shortage of clinicians has impacted our
ability to grow in some regions where we have a backlog of demand.
Additionally, although we believe the business retains its longer-term pricing power it is not
completely immune to the effects of high inflation in the near term.
Despite these short to medium term sector challenges, the longer-term outlook for the
business remains positive as an aging population will continue to drive increased demand for
quality primary care medical services. Our business is well positioned to capture additional
market share due in part to the very strong relationships with existing clients, who
themselves have significant growth plans. In addition, we are forging new client relationships
in the sector.
Our people
Delivery of front-line clinical care during the pandemic has not been easy and our team
adapted well to the many challenges. We are grateful to have a high performing team with
many long-standing practitioners who are dedicated to providing the best clinical care.
Our people are our greatest asset, and we are working to equip them with the tools to
systematically focus on continuous improvement, customer satisfaction and profitable
growth.
Performance improvement
While we have outlined a number of factors that have influenced the results for this half
year, we do need to also state that we are not satisfied with the level of net earnings
achieved and are expending every effort to see them returned to a proper level.
A focus on operational efficiencies in our newly acquired general practices is showing
promising early results. Additionally, a plan to rebalance resources across the group will
deliver a reduction in annualised costs of at least $150k p.a. from January 2023.
We have several new clinicians starting in the second half of this financial year which will
enable us to increase patient numbers in general practice and share these resources to fill
unmet need with our aged care clients. Following further success in recruitment of clinicians
we will be able to meet the strong pipeline of new business which is expected to deliver
profitable growth.
We expect to achieve improved profit margins and net earnings in the second half of this
financial year with both expected to be well ahead of those achieved in the first half.
We do not measure success by the overall size of your company, or the total reported profit.
Our goal over the long term is to maximise both returns on capital and the average annual
rate of increase in intrinsic value per share.

NZX Announcement

EastMed Doctors
The business acquired a majority share in EastMed Doctors, a key acquisition in St Heliers
Auckland, which was settled after period end on 3 October 2022, and early results are in line
with expectations.
EastMed Doctors is ideally located next to Ryman’s premium Grace Joel Retirement Village
and in easy reach of eight aged care facilities, representing opportunity for growth.
CFO transition
The Board is pleased to announce that Denice Bennett has been appointed as the new Chief Financial
Officer (CFO) and joins the company in January 2023. Neil Hopkins, who joined the business as Acting
CFO in mid-2021 has indicated he plans to reduce his work commitments next year. The Board and
management wish to thank Neil for his contribution in guiding and supporting the business following
NZX listing and through our period of growth over the past twelve months.
The transition of the CFO will take place in the early part of 2023, with Neil’s support. Denice is a
Chartered Accountant with over 20 years’ experience in a range of CFO and management roles and is
currently Acquisitions and Integration Manager at Tāmaki Health.
Release of results
Going forward, to ensure all shareholders have adequate time to read and thoughtfully digest the
progress of the company before the market opens, we plan to release half-year and full-year updates
post market close on a Friday afternoon.
Dividend
In line with our dividend policy the Board has declared a fully imputed dividend of 2.45 cents per
share.

John Fernandes Tony Wai
Chairman CEO
[ENDS]
For more information, please contact:
Ruth Morse, Head of Communications, Marketing and Engagement
Third Age Health
+64 21 263 1415
ruthm@thirdagehealth.co.nz

---

INTERIM REPORT
For the six months ended
30 September 2022

John Fernandes
Chairman
28 November 2022
On behalf of the Board and management of Third Age
Health, I am pleased to present the Third Age Health
Services Limited Interim Report for the six months
ended 30 September 2022.
CONTENTS
Chairman and CEO report
Interim financial statements
Notes to financial statements
3 - 6
9 - 12
13 - 24

CHAIRMAN AND CEO REPORT
During the first half of the financial year, we were pleased to have been able to
successfully execute on a growth strategy, while at the same time ensuring that
our underlying work within the aged care sector has increased. The growth
strategy has, however, come at a cost through the direct and indirect costs of
both acquiring and consolidating business units, and this is acutely felt in the
first half of this year.

Financial summary
Our core business of providing primary medical services into Aged Residential Care
(ARC) settings saw strong organic growth with enrolled patients of 3,414, up 6.7%
against the number of patients during the prior comparative period (pcp) as at 30
September 2021, and up 3.0% compared with the number of aged residential care
patients enrolled with us at 31 March 2022. This increase drove organic revenue
growth for the period of 16.7% on pcp to $2.8 million.
We have focussed on strengthening key relationships with our current and potential
aged residential care customers and as a result we now have a large backlog of
demand for our services. The future rate of growth is dependent on our ability to
improve productivity and utilisation, and to recruit additional clinical practitioners.
General practices which we owned during the first half of the last financial year
(1H22) experienced strong organic growth during the first half of this financial year
(1H23) with enrolled patients at 30 September 2022 of 3,425 up 14.2% on pcp, and
7.2% compared to March 2022. General practice revenue in total of $1.8 million is up
304.3% on pcp and 137.0% against the 6-month period ended 31 March 2022. Organic
revenue growth was 23.5% on pcp, with the remainder contributed by practices that
were acquired. During 1H23 we completed the acquisition of an additional general
practice in Auckland and partnered to commence a new green fields general practice
in Christchurch.
While it has been pleasing to see the work of the team reflected in increased revenue
as well as the improvements made to our systems and processes, it is a
disappointment to not yet see these improvements reflected in net earnings. During
this half our net earnings after tax decreased 51.8% on pcp to $0.3 million.
There were three key factors which lead to this decrease:
First, we needed to front load resources to bolster capabilities and infrastructure
that was not previously in place but was needed to protect existing business and
provide a platform from which to grow sustainably and profitably.
Second, the integration of the practices acquired this year was slower than planned
which contributed to lower earnings. In addition, there were one off legal and
acquisition related costs incurred of $50k.
3

*With the amortisation of intangibles of $84k for 1H23 ($27k for 1H22) there is a corresponding deferred tax credit calculated at 28%.

The third factor is that reported net earnings were impacted by an increase in the
amount of non-cash amortisation charges arising as a result of purchase accounting
rules. Amortisation charges are taken to reflect the decrease in value of intangible
assets recognised when new businesses are acquired. While appropriate in some cases,
the concept of recognising these charges against intangibles such as patient
relationships and funding agreements does not, in our opinion reflect economic reality.
This amounted to a reduction in NPAT of a further $60K.
Shown below is Net Profit after tax adjusted for Amortisation (NPATA) which we believe
better reflects underlying earnings.

Challenging environment
Aged care is undergoing a challenging period over the short to medium term. The well-
acknowledged health workforce crisis, which has been compounded by the slow border
openings and immigration settings, combined with lower than needed funding
outcomes for aged care providers, continues to impact the sector. We are acutely
aware that the nursing workforce shortage has impacted some aged care clients, with
several having to reduce bed numbers. In some instances, this has had a flow on impact
for us with a slowing of patient enrolments from some facilities who are not able to
operate at full capacity. While this causes some issues in respect to contract rates and
medium-term patient numbers, it does need to be noted that all aged care providers
must have a General Practitioner or Nurse Practitioner available to their residents.
The workforce crisis also extends to clinicians, and the shortage of clinicians has
impacted our ability to grow in some regions where we have a backlog of demand.
Additionally, although we believe the business retains its longer-term pricing power it is
not completely immune to the effects of high inflation in the near term.
Despite these short to medium term sector challenges, the longer-term outlook for the
business remains positive as an aging population will continue to drive increased
demand for quality primary care medical services. Our business is well positioned to
capture additional market share due in part to the very strong relationships with
existing clients, who themselves have significant growth plans. In addition, we are
forging new client relationships in the sector.
30 September 2022 30 September 2021
(Unaudited) (Unaudited)
$000 $000

Net profit after tax 324 672
Add back amortisation of intangibles 60 19
(net of 28% tax)*
Net profit after tax and before amortisation 384 691

4

Our people
Delivery of front-line clinical care during the pandemic was not easy and our team
adapted well to the many challenges. We are grateful to have a high performing team
with many long-standing practitioners who are dedicated to providing the best
clinical care.
Our people are our greatest asset, and we are working to equip them with the tools
to systematically focus on continuous improvement, customer satisfaction and
profitable growth.
Performance improvement
While we have outlined a number of factors that have influenced the results for this
half year, we do need to also state that we are not satisfied with the level of net
earnings achieved and are expending every effort to see them returned to a proper
level.
A focus on operational efficiencies in our newly acquired general practices is
showing promising early results. Additionally, a plan to rebalance resources across
the group will deliver a reduction in annualised costs of at least $150k p.a. from
January 2023.

We have several new clinicians starting in the second half of this financial year which
will enable us to increase patient numbers in general practice and share resources to
fill unmet need with our aged care clients. Following further success in recruitment
of clinicians we will be able to meet the strong pipeline of new business which is
expected to deliver profitable growth.
We expect to achieve improved profit margins and net earnings in the second half of
this financial year with both expected to be well ahead of those achieved in the first
half.
We do not measure success by the overall size of your company, or the total
reported profit. Our goal over the long term is to maximise both returns on capital
and the average annual rate of increase in intrinsic value per share.
EastMed Doctors
The business acquired a majority share in EastMed Doctors, a key acquisition in St
Heliers Auckland, which was settled after period end on 3 October 2022, and early
results are in line with expectations.
EastMed Doctors is ideally located next to Ryman’s premium Grace Joel Retirement
Village and in easy reach of eight aged care facilities, representing opportunity for
growth.
5

CFO transition
The Board is pleased to announce that Denice Bennett has been appointed as the
new Chief Financial Officer (CFO) and joins the company in January 2023. Neil
Hopkins, who joined the business as Acting CFO in mid-2021 has indicated he plans
to reduce his work commitments next year. The Board and management wish to
thank Neil for his contribution in guiding and supporting the business following NZX
listing and through our period of growth over the past twelve months.
The transition of the CFO will take place in the early part of 2023, with Neil’s support.
Denice is a Chartered Accountant with over 20 years’ experience in a range of CFO
and management roles and is currently Acquisitions and Integration Manager at
Tāmaki Health.
Release of results
Going forward, to ensure all shareholders have adequate time to read and
thoughtfully digest the progress of the company before the market opens, we plan to
release half-year and full-year updates post market close on a Friday afternoon.
Dividend
In line with our dividend policy the Board has declared a fully imputed dividend of
2.45 cents per share.
John Fernandes Tony Wai
Chairman CEO
6

FINANCIAL STATEMENTS

Third Age Health Services Limited and subsidiaries
Condensed Consolidated Financial Statements
For the six months ended 30 September 2022

8


Approval and issue of Condensed Consolidated Financial Statements

The Directors are pleased to present the Condensed Consolidated Financial Statements of Third Age Health
Services Limited and its subsidiaries (the “Group’) for the six-months ended 30 September 2022.
The Board of Directors of the Group authorised the Condensed Consolidated Financial Statements, set out on
pages 9 to 24 for issue on 28 November 2022.





John Fernandes
Independent Chairman
Wayne Williams
Independent Director and Audit Committee Chair

Third Age Health Services Limited and subsidiaries
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2022


9


30 September 2022 30 September 2021

(Unaudited) (Unaudited)
Notes $000 $000
Total revenues 3
4,578 2,840
Cost of services

(2,098) (1,187)
Gross profit

2,480 1,653


Other income

8 18


Employees and contractors 5
(1,139) (315)
Professional and consulting fees 6
(280) (262)
Other expenses 7
(374) (100)
Operational expenses

(1,793) (677)


Earnings before interest, tax, depreciation and amortisation
695 994


Depreciation and amortisation 8
(182) (56)
Finance costs 9
(48) (4)


Profit before income tax

465 934


Income tax expense

(141) (262)


Profit for the period

324 672


Total comprehensive income for the period

324 672

Earnings per share (note 11)

From continuing operations:

Basic earnings per share (cents per share)

3.26 6.89
Diluted earnings per share (cents per share)

3.24 6.84




These financial statements are to be read in conjunction with the accompanying notes.

Third Age Health Services Limited and subsidiaries
Condensed Consolidated Statement of Financial Position
As at 30 September 2022


10


30 September 2022 31 March 2022

(Unaudited) (Audited)
Notes $000 $000
Current assets


Cash and cash equivalents

934 1,124
Trade and other receivables
12
837 386
Loan receivable
13
313 313
Total current assets

2,084 1,823



Non-current assets


Property, plant and equipment

89 22
Right-of-use-assets
14
1,175 1,093
Intangible assets

2,276 1,902
Trade and other receivables

20 20
Total non-current assets

3,560 3,037



Total assets

5,644 4,860



Current liabilities


Trade and other payables

839 668
Current tax liabilities

(40) 55
Employee share purchase plan deposits

75 75
Lease liabilities
14
143 111
Total current liabilities

1,017 909



Non current liabilities


Trade and other payables

27 29
Lease liabilities 14 1,047 977
Deferred tax liability

334 249
Bank Loan 16 593 -
Total non current liabilities

2,001 1,255



Total liabilities

3,018 2,164



Net assets

2,626 2,696
Equity


Share capital
17
519 515
Share based payments reserve

648 643
Retained earnings

1,459 1,538
Total equity

2,626 2,696





These financial statements are to be read in conjunction with the accompanying notes.

Third Age Health Services Limited and subsidiaries
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 September 2022


11


Share
Capital
Share
Based
Payments
Reserve
Retained
earnings Total
Notes $000 $000 $000 $000
Balance at 1 April 2022 (Audited)

515 643 1,538 2,696



Profit for the period

- - 324 324
Total comprehensive income for the period

- - 324 324



Shares issued 17 4 - - 4
Dividend 18 - - (403) (403)
Share based payments

- 5 - 5
Balance at 30 September 2022 (unaudited)

519 648 1,459 2,626

Balance at 1 April 2021 (Audited)

173 607 1,196 1,976

Profit for the period

- - 672 672
Total comprehensive income for the period

- - 672 672

Dividend 18 - - (381) (381)
Share based payments

- - - -
Balance at 30 September 2021 (unaudited)

173 607 1,487 2,267




These financial statements are to be read in conjunction with the accompanying notes.

Third Age Health Services Limited and subsidiaries
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 September 2022


12


30 September 2022 30 September 2021

(Unaudited) (Unaudited)
Notes $000 $000
Cash flows from operating activities

Receipts from operating activities

4,321
2,803
Payments to suppliers and employees

(3,721)
(1,921)
Interest received

- 7
Interest paid

(44)
(4)
Income taxes paid

(260)
(514)
Net cash flows from operating activities 10
296 371



Cash flows from investing activities



Payments to purchase property, plant and equipment

(18)
(3)
Acquisition of general practices

(594)
-
Net cash flows used in investing activities

(612)
(3)



Cash flows from financing activities



Proceeds from issuing shares 17 4 -
Deposits received under share purchase plan

- 19
Principal elements of loan repayments

- 21
Payment of principal portion of lease liabilities

(68) (26)
Dividend paid 18 (403) (381)
Cash received under ANZ debt facility 16 593 -
Net cash flows from financing activities

126 (367)



Net movement in cash and cash equivalents

(190) 1



Cash and cash equivalents at the beginning of the period

1,124 1,829
Cash and cash equivalents at the end of the period

934 1,830



These financial statements are to be read in conjunction with the accompanying notes.

Third Age Health Services Limited and subsidiaries
Notes to the condensed consolidated financial statements
For the six months ended 30 September 2022


13

1. Reporting Entity

The consolidated interim financial statements for Third Age Health Services Limited and its subsidiaries (the
"Group") are for the economic entity comprising Third Age Health Services Limited (the “Company” or
"Parent") and its subsidiaries. The Parent is incorporated and domiciled in New Zealand and registered under
the Companies Act 1993 and is a Financial Market Conduct (FMC) entity for the purposes of the Financial
Reporting Act 2013 and the Financial Markets Conduct Act 2013. The Financial Statements have been prepared
in accordance with each of these Acts. The Company is listed on the NZX Main Board ("NZX").

The principal trading activity of the Group is the provision of medical services to the aged care sector. Those
companies included in the Group are disclosed in note 15. These condensed consolidated interim financial
statements are for the 6 months ended 30 September 2022. The Group’s current operations do not follow a
seasonal or cyclical pattern.


2. Significant Accounting Policies

2.1. Statement of compliance and reporting framework

These unaudited condensed consolidated interim financial statements have been prepared in accordance with
New Zealand Generally Accepted Accounting Practice ("NZ GAAP"). They comply with the New Zealand
equivalent to International Accounting Standard 34 ("NZ IAS 34") Interim Financial Reporting. For the purposes
of complying with NZ GAAP, the Group is a for-profit entity.

The interim financial statements do not include all of the information required for full year financial
statements and should be read in conjunction with the Company's annual financial report for the year ended
31 March 2022. Consistent accounting policies with the full financial statements for the year ended 31 March
2022 have been applied in preparation of these interim financial statements.

2.2. Basis of preparation

The financial statements for the six months ended 30 September 2022 and the comparative six months ended
30 September 2021 are unaudited. Remuneration of medical practitioners in general practice is now treated as
part of the cost of services in the statement of comprehensive income. Previously it had been treated as an
employee and contractor expense. This expense for the prior period ended 30 September 2021 has been
reclassified as cost of services.

2.3. COVID-19

The Company continues to monitor the impact of COVID 19 both locally and globally as well as the
recommendations from the New Zealand Government. The Group continues to operate through adoption of
recommended safety measures and utilising core infrastructures such as virtual meetings and collaboration
tools in place prior to the pandemic.

The Board note the level of business uncertainty that continues to exist in relation to the impacts of the
COVID-19 pandemic including the possibility of business disruption, shortage of recruiting new medical

Third Age Health Services Limited and subsidiaries
Notes to the condensed consolidated financial statements
For the six months ended 30 September 2022


14

clinicians and erosion of consumer spending. There are no provisions in these statements for the financial
impacts of COVID-19.


3. Revenue

Revenues from agreements and contracts with customers and public health organisations (PHOs)


30 September 2022 30 September 2021

(Unaudited) (Unaudited)

$000 $000
Capitation revenue

Aged medical care services 884 765
General practice medical services 1,065 334

Consultation revenue

Aged medical care services 1,800 1,576
General practice medical services 502 105

Other revenues

Aged medical care services 119 60
General practice medical services 208 0

Total revenue from contracts with customers and PHOs 4,578 2,840


4. Segment Information

Products and services from which reportable segments derive their revenue

The Group's reportable segments are as follows:
• Aged medical care services: the provision of medical care services to the aged care sector,
• General practice medical services: the provision of general medical care services to the community.

Segment revenues and profit before tax

The following is an analysis of the Group’s revenue and results from continuing operations by reportable
segment

Segment revenue
30 September 2022 30 September 2021

(Unaudited) (Unaudited)

$000 $000
Aged medical care services
2,803 2,401
General practice medical services
1,775 439
Total for continuing operations
4,578 2,840

Third Age Health Services Limited and subsidiaries
Notes to the condensed consolidated financial statements
For the six months ended 30 September 2022


15

Segment profit before tax
30 September 2022 30 September 2021

(Unaudited) (Unaudited)

$000 $000
Aged medical care services
410 761
General practice medical services
55 173
Total for continuing operations
465 934

Segment profit before tax for the General practice medical services includes $17,595 of finance cost from the
ANZ loan facility (note 16). This cost is allocated to this segment, as the loan facility was utilised to fund the
acquisition of general practices.

Segment profit includes the following items:

For the period ended 30 September 2022
Aged care General practice

medical services medical services

(Unaudited) (Unaudited)

$000 $000
Earnings before interest, tax, depreciation and amortisation
412 283
Depreciation & amortisation
(2) (180)
Finance costs -
(48)
Profit before tax
410 55
Income tax expense
(115) (26)
Profit for the period
295 29


For the period ended 30 September 2021
Aged care General practice

medical services medical services

(Unaudited) (Unaudited)

$000 $000
Earnings before interest, tax, depreciation and amortisation 761 233
Depreciation & amortisation - (56)
Finance costs - (4)
Profit before tax 761 173
Income tax expense (214) (48)
Profit for the period 547 125


Segment assets and liabilities

Segment assets
30 September 2022 31 March 2022

(Unaudited) (Audited)

$000 $000
Aged medical care services New Zealand 1,898 1,513
General practice medical services 4,516 4,014
Total assets by segment 6,414
5,527

Intercompany elimination (770) (667)
Total assets
5,644
4,860

Third Age Health Services Limited and subsidiaries
Notes to the condensed consolidated financial statements
For the six months ended 30 September 2022


16

Segment liabilities
30 September 2022 31 March 2022

(Unaudited) (Audited)

$000 $000
Aged medical care services New Zealand
1,471 922
General practice medical services
2,317 1,909
Total liabilities by segment
3,788 2,831


Intercompany elimination (770) (667)
Total liabilities
3,018 2,164


5. Employees and contractors

30 September 2022 30 September 2021

(Unaudited) (Unaudited)

$000 $000
Salaries and wages
991 147
Short term incentives
20
-
Defined contribution (KiwiSaver)
32 5
Share based payments expense
4 1
Employee benefit expense
1,047 153


Contractors
92 162

1,139 315

Total employee costs are split between costs associated with operations that existed in the prior period and
new acquisitions since October 2021.

30 September 2022 30 September 2021

(Unaudited) (Unaudited)

$000 $000

Existing operations 908
315
New acquired subsidiaries 231
-

1,139 315

The increase in costs in existing operations arises from increased general and clinical staff and management, to
support the growth in the business since listing and to enable the execution of strategy.


6. Professional and consulting fees

30 September 2022 30 September 2021

(Unaudited) (Unaudited)

$000 $000
Fees paid to auditor
46
23
Accounting and taxation services
22
84
Legal expenses
74
26
Directors' fees
78
63
Listing and share registry costs
26
19
CEO Recruitment
-
6
Other consultancy costs
34
41

280 262

Third Age Health Services Limited and subsidiaries
Notes to the condensed consolidated financial statements
For the six months ended 30 September 2022


17

Legal fees include $49,900 (2021: $10,010) of fees in respect of work undertaken on acquisitions including the
acquisition of EastMed settled after period end.


7. Other expenses

30 September 2022 30 September 2021
(Unaudited) (Unaudited)
$000 $000
Computer/IT infrastructure 167 43
Practice medical supplies 61 8
Professional operational services 43 21
Travel 27 6
Office and general 76 24
374 102

Total other expenses are split between costs associated with operations that existed in the prior period and
new acquisitions since October 2021.



30 September 2022 30 September 2021

(Unaudited) (Unaudited)

$000 $000

Existing operations 240 102
New acquired subsidiaries 134
-

374 102

The increase in costs for existing operations is due to essential upgrades to computer and IT platforms, travel
to support the nationwide growth of ARC and costs associated with recruitment of clinical resources.


8. Depreciation and amortisation


30 September 2022 30 September 2021

(Unaudited) (Unaudited)

$000 $000
Depreciation of right-of-use assets
88 28
Amortisation of Intangibles
84 27
Depreciation of property plant and equipment
10 1

182 56

The increase in depreciation of right of use assets and amortisation of intangibles arise from the acquisitions of
new subsidiaries since October 2022 (see note 15).

Third Age Health Services Limited and subsidiaries
Notes to the condensed consolidated financial statements
For the six months ended 30 September 2022


18

9. Finance costs

30 September 2022
30 September 2021


(Unaudited) (Unaudited)

Notes
$000 $000
Interest expense on leases 14 30 4
Fees and Interest on ANZ loan facility
16
18 -


48 4


10. Reconciliation of profit before tax to net cash from operating activities


30 September 2022 30 September 2021

(Unaudited) (Unaudited)

$000 $000
Profit before income tax 465 934

Adjustments to reconcile profit before tax to net cash flows:

Depreciation and other amortisation 182 56
Share based payments expense 4 1
Interest charged on loan receivable - (3)

Working capital adjustments:

Trade and other receivables (261) (37)
Trade and other payables 166 (66)

556 885
Income tax paid (260) (514)

Net cash from operating activities 296 371


11. Earnings per share

Basic and diluted earnings per share

30 September 2022 30 September 2021

(Unaudited) (Unaudited)

$000 $000
Net profit attributable to the ordinary shareholders of the
Group
324 672
Earnings used in the calculation of basic earnings per share
from continuing operations
324 672

Weighted average number of shares used as the denominator

Shares Shares

000's 000's
Weighted average number of ordinary shares used as the
denominator in calculating basic earnings per share
9,952 9,750

Adjustments for calculation of diluted earnings per share:


Employee share options 34 72

Weighted average number of ordinary shares and potential
ordinary shares used as the denominator in calculating diluted
earnings per share
9,985 9,822

Third Age Health Services Limited and subsidiaries
Notes to the condensed consolidated financial statements
For the six months ended 30 September 2022


19


From continuing operations:
Cents per share Cents per share
Basic earnings per share 3.26 6.89
Diluted earnings per share 3.24 6.84

Number of ordinary shares excludes shares held by the Third Age Employee Purchase Plan.


12. Trade and other receivables

Trade and other receivables

30 September 2022 31 March 2022

(Unaudited) (Audited)

Note
$000 $000
Trade receivables

440 330
Purchase deposit for acquisition
20
193 0
Prepayments and other receivables

124 42
Accrued revenue

80 14


837 386

Trade and other receivables (non-current)

30 September 2022 31 March 2022

(Unaudited) (Audited)


$000 $000
Deposit with NZX

20 20


20 20


13. Loan receivable

The loan receivable is due from Third Age Digital Health Limited (TADH), a separate entity that does not
provide any services to the Company. While it has a few common shareholders, and owes the Company, it is
not related in any other way.


30 September 2022 31 March 2022

(Unaudited) (Audited)

$000 $000
Current 313 313

313 313

Following the failure of TADH to maintain monthly repayments of the loan, during the period the Company
sought application to have TADH placed in liquidation and liquidators were appointed. The independent
directors continue to work with the liquidators to seek full recovery.

Michael Haskell is the Director of TADH, and its major shareholders are Michael Haskell & Associates Limited
and Bevan Walsh, both major shareholders of the Company. As such the loan is considered a related party loan
(note 19).

Third Age Health Services Limited and subsidiaries
Notes to the condensed consolidated financial statements
For the six months ended 30 September 2022


20

14. Right of use assets and leases liabilities

The following tables show the movement in right of use assets and lease liabilities which reflects an additional
lease arising from the acquisition of Devonport Family Medicine during the period (see note 15).

Movements in the amounts recognised in the statement of financial position as at 30 September 2022 and
the prior corresponding period

Right-of-use-asset

30 September 2022 30 September 2021

(Unaudited) (Unaudited)

$000 $000
Opening balance at beginning of period (Audited)
1,093
227
Additions and reassessments
170 334
Depreciation
(88) (28)
Closing balance
1,175 533

Lease liabilities

30 September 2022 30 September 2021

(Unaudited) (Unaudited)

$000 $000
Balance at beginning of period (Audited)
1,088
233
Additions and reassessments
170 334
Interest
30 4
Repayments
(98) (30)
Closing balance
1,190
541

Current
143 49
Non-current
1,047 492

1,190
541


Amounts recognised in the statement of profit or loss

30 September 2022 30 September 2021

(Unaudited) (Unaudited)

$000
$000
Depreciation of right-of-use assets property
88 28
Interest expense (included in finance cost)
30 4

The total cash outflow for leases in the 6-month period ended September 2022 was $98,017 (2021: $30,571).

Third Age Health Services Limited and subsidiaries
Notes to the condensed consolidated financial statements
For the six months ended 30 September 2022


21

15. Business combinations

Group composition

The parent entity is Third Age Health Services Limited, a company incorporated in New Zealand. The Group
had the following subsidiaries as of 30 September 2022. The current reporting period includes results from
three new subsidiaries that were not part of the group for the same period last year.

Subsidiary name Country of incorporation 30 September
2022 Ownership
31 March 2022
Ownership
Hawkes Bay Wellness Centre Limited New Zealand
100% 100%
Belmont Medical Centre Limited (acquired
11 October 2021)
New Zealand
100% 100%
Ponsonby Medical (Third Age Health)
Limited (acquired 31 March 2022)
New Zealand
100% 100%
Devonport Family Medicine (Third Age
Health) Limited (acquired 2 May 2022)
New Zealand
100%
-
Third Age Employee Share Purchase Plan
Trust
New Zealand
100% 100%
Phoenix Health Hub Limited New Zealand
10%
-

Phoenix Health Hub Limited (Phoenix) is an investment by the Company in a Christchurch based clinic to realise
a new integrated general practice and allied health clinic to support unmet health needs. The Company holds a
10% share in Phoenix and is treated as an investment, recorded at cost. As of 30 September 2022, the cost was
nil.

On 3 October 2022 the Company settled the acquisition of a 66.6% share of EastMed St Heliers Limited, a
company incorporated in New Zealand (note 20).

Acquisition of Devonport Family Medicine (Third Age Health) Limited

During the period ended 30 September 2022 the Company completed the acquisition of a general practice,
Devonport Family Medicine (DFM), to support the Group’s future growth strategy around providing a
consistent primary health service as people move from community living into the aged care setting.

The Group acquired the assets and business of Devonport Family Medicine on 2 May 2022, through a new
wholly owned Group entity. The results of the practice since acquisition are included in these Consolidated
Financial Statements for the period ended 30 September 2022, contributing $337,548 to Group revenues and
$11,684 to Group EBITDA.

Third Age Health Services Limited and subsidiaries
Notes to the condensed consolidated financial statements
For the six months ended 30 September 2022


22

Details of the fair value of identifiable assets and liabilities, acquired purchase consideration and goodwill are
as follows:

$000
Cash 401
Total consideration transferred 401

Non-current assets

Property, plant and equipment 59
Right of use asset 170
Intangible Assets 416
Total assets acquired 645

Non-current liability

Lease Liability (170)
Non-current liability

Deferred tax liability (117)
Total net assets acquired 358
Goodwill 43

Given the short timeframe since acquisition date and the complexity involved, the accounting for the business
combination under NZ IFRS 3 Business Combinations has not been finalised as at the date of this report.


16. Bank loan

The Company entered into a $3 million debt facility with ANZ Bank New Zealand Limited to provide capital to
support the Group’s planned acquisition strategy. The term is for two years with a covenant requiring Debt-to-
EBITDA ratio (based on 12 “months” results) capped at two times, tested at each reporting date. As at 30
September 2022, the Debt to EBITDA ratio was 0.356. Security for the loan is a first ranking security over the
Company and the Group which includes cross guarantees and indemnity of debt.

During the period, the loan was drawn to fund the acquisition of Devonport Family Medicine and a deposit
payment for the acquisition of EastMed (note 20). Total fees and interest charged on the loan in the period
was $17,595.

Subsequent to period end the facility has been restructured, see note 20.


17. Share capital

Share capital increased by $3,821 during the period as a result of the issue of 1,363 ordinary shares to
shareholders who opted to join the Dividend Reinvestment Plan, established on 19 May 2022. The shares
were issued at a price of $2.7805.

Third Age Health Services Limited and subsidiaries
Notes to the condensed consolidated financial statements
For the six months ended 30 September 2022


23

18. Dividend paid during the period

Dividends paid during the period ended 30 September 2022:
Cents per share $000
Final dividend for the year ended 31 March 2022 4.05 403

Dividends paid during the period ended 30 September 2021:
Cents per share $000
Final dividend for the year ended 31 March 2021 3.91 381


19. Related party transactions

Transactions with related parties

Name of related party Nature of relationship Transaction
30 September
2022
30 September
2021

(Unaudited) (Unaudited)
$000 $000
Bevan Walsh Director & Shareholder Director fees 12 18
John Fernandes Director & Shareholder Director fees 26 18
Norah Barlow Director & Shareholder Director fees 19 18
Wayne Williams Director Director fees 21 9
Diane Budres (resigned 19 July 2022) Director & Shareholder Director fees 1 1

Michael Haskell, CEO (resigned 30
September 2021)
Shareholder Contractor fee - 132
Bonus accruals - (23)

Directors’ fees for John Fernandes, Norah Barlow and Wayne Williams for the period ended 30 September
2022 also include fees as members of the Audit Committee. For the period, Wayne Williams (Chairman
effective 1 July 2022), received a fee of $3,125, Norah Barlow received a fee of $1,250 and John Fernandes a
fee of $1,875 (including fees as committee Chairman effective to 30 June 2022).

Loan receivable from Third Age Digital Health Limited (TADH) (note 13)

Bevan Walsh (Director and Company shareholder), Michael Haskell (former CEO, resigned 30 September 2021
and Company shareholder) and Diane Budres (former Director who resigned 19 July 2022 and Company
shareholder) are all shareholders of TADH which has a loan due to Company. Michael Haskell is also a Director
of TADH. Bevan Walsh resigned as a director of TADH on 20 December 2021.


20. Subsequent event

Purchase of EastMed

On 3 October 2022 settled the acquisition of a majority share of EastMed St Heliers Limited (“EastMed”) for
$1.9 million fully funded through the ANZ loan facility (Note 16).

Given the short timeframe since acquisition date and the complexity involved, the accounting for the business
combination under NZ IFRS 3 Business Combinations has not been finalised as at the date of this report. The
Company will report the impact of the acquisition on the Group in the annual consolidated financial
statements for the year ending 31 March 2023.

Third Age Health Services Limited and subsidiaries
Notes to the condensed consolidated financial statements
For the six months ended 30 September 2022


24


The EastMed acquisition has no impact on the performance of the Group for the period ended 30 September
2021 given the acquisition occurred after the end of the reporting period. A deposit of the acquisition price
was paid on in September 2022, funded through the ANZ loan facility (note 16).


Interim dividend declared

Subsequent to the period end, the Board have declared a fully imputed interim dividend of 2.45 cents per
share.


Variation and restructure of the ANZ debt facility

Subsequent to period end, on 24 November 2022 the Company completed a restructuring of the $3 million
ANZ loan facility in to 3 loan tranches each $750,000, on the following terms and conditions.

1. $750,000 term loan, fixed at a rate of 9.1% for one year on a term of two years with a 15-year
amortisation payment period of principal and interest.
2. $750,000 term loan, fixed at a rate of 9.36% for two years on a loan term of two years and a 15-year
amortisation payment period of principal and interest.
3. $750,000 term loan, fixed at a rate of 9.55% for three years, on a loan term of three years and a 15-year
amortisation payment period of principal and interest.

The balance ($750,000) will remain under the current facility arrangement (see note 16). At the time of the
restructure the Company had drawn down $2,329,719 of the facility to fund the acquisitions of Devonport
Family Medicine and EastMed.

www.thirdagehealth.co.nz
Third Age Health Services Limited
P O Box 303 387
North Harbour 0751
Auckland
investors@thirdagehealth.co.nz

---

Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Updated as at 17 October 2019

Results for announcement to the market
Name of issuer Third Age Health Services Limited
Reporting Period 6 months to 30 September 2022
Previous Reporting Period 6 months to 30 September 2021
Currency New Zealand Dollar
Amount ($000) Percentage change
Revenue from continuing
operations
$4,578 61.2%
Total Revenue $4,578 61.2%
Net profit from continuing
operations
$324 (51.8%)
Total net profit $324 (51.8%)
Interim Dividend
Amount per Quoted Equity
Security (net)
$0.02449413
Imputed amount per Quoted
Equity Security
$0.00952550
Record Date 6 December 2022
Dividend Payment Date 16 December 2022
Current period Prior comparable period
31 March 2022
Net tangible assets per
Quoted Equity Security
$0.069 $0.105
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
For a detailed commentary on the performance for the period please refer to
the attachment market announcement and Interim Report.
Change in net tangible assets per quoted equity security (NTA)
The NTA has decreased by 34.2% against 31 March 2022 with the impact of a
bank loan facility (see note 16 of the Interim Report) drawn to fund
acquisitions, increasing total liabilities. Intangible assets realised from
acquisitions are excluded in calculated tangible assets.
Authority for this announcement
Name of person

authorised
to make this announcement
Tony Wai
Contact person for this
announcement
Tony Wai
Contact phone number 021 739 199
Contact email address Tonyw@thirdagehealth.co.nz
Date of release through MAP

28 November 2022

Unaudited financial statements accompany this announcement.