When I last updated you in Q4 last year, I was reporting that progress at Home Instead Senior Care (HISC) had been slow but that we were seeing a seismic shift in attitude and approach to the national roll-out of our platform, branded Home Aware. I also reported that there had been significant progress in our Strategic Partnership discussions with AXA PPP Healthcare. On both fronts since the beginning of the year, we have maintained very encouraging forward momentum. At HISC, we have jointly developed a Strategic Sales Framework with a delivery plan, they have mobilised a team of 16 from the national office and we have agreed joint sales targets and incentives. At AXA PPP Taking Care (PPP TC), we have entered into a Strategic Partnership where the Anthropos platform will underpin a new “Connected Home” product that they will offer to corporate and consumer customers.
The world has changed in the last four weeks, and we face a crisis the likes of which none of us has ever experienced. Nobody really knows how COVID-19 will play out and how long it will take for things to return to some form of normality. While it is clear that many businesses will be unable to trade during the crisis, we see an opportunity through HISC, PPP TC, the NHS and other care providers for a version of our technology to make a huge difference to the most vulnerable people and their families.
“We are not just facing a little more demand. It strikes me, looking at the past few weeks, that there is fundamentally new unprecedented demand from citizens to use digital channels, which avoids the need to use the physical channel”
Sarah Wilkinson, CEO of NHS Digital
As you might have expected, we have the technology to allow us to work remotely so we introduced home-working as part of our COVID-19 policy very quickly to protect our team as much as possible. That team has responded brilliantly to the challenges and the opportunity presented by the anticipated spike in demand. We have mobilised to launch a new version of our product, Anthropos Essential, by the middle of April that contains a sanitised set of hardware delivered to the client’s home, can be installed without training by a family member or a trusted friend and offers the essential functionality required to provide reassurance to families and care providers isolated from the older person.
Every day, we are seeing challenges that threaten to overwhelm the healthcare system: the shortage of hospital beds, the infection of nursing and care staff, the escalating numbers of COVID-19 patients and so it goes on. We believe that our platform could help with some of these challenges, specifically our solution could provide a safe and monitored home environment for the faster release from hospital of older non-COVID-19 patients. This would make available much needed hospital beds, and the care of these patients could even be supervised remotely by nursing and care staff from their own homes.
I believe the launch of Anthropos Essential is a very exciting development for us, not just because we can support the healthcare system overcome some of the challenges it faces and it could keep us very busy and generate much needed revenue during the crisis, but also in the longer term it will be the basis of the new “Connected Home” B2C offering that we are planning to launch with PPP TC.
We have prepared the whole team to deal with the increase in demand and we are confident that we have the measures in place to ensure business continuity should we suffer absence of key people. We have raised sufficient funds to keep operating into Q4 this year at our current run rate. Should we not experience the anticipated increase in demand, we are developing plans to reduce our costs including the furlough of employees through the government’s Coronovirus Job Retention Scheme. It is important that we retain our critical software engineering capabilities, so in the most extreme case we would be able to extend our runway until Q3 2021. Until we can assess the demand situation more fully, we are taking no immediate cost reduction actions, but we continue to manage our cash prudently and will review the situation and our options on an ongoing basis.
Thanks to your support, our fund raising has been very successful. As we move forward, we do need further funds and we continue to explore different funding options. Our contract with HISC requires us to provide the hardware on a monthly rental basis alongside the monthly fee for the software. Anthropos is therefore required to purchase the hardware, and in return, HISC have contracted to pay at least 12 months rental of the Standard Package for each new set of kit installed, guaranteeing £600 of revenue, over the first 18 months, which more than covers the cost of the hardware. Our business plan (pre COVID-19) forecasts 2,900 installations for HISC over an 18-month period generating a funding requirement of £.61m in 2020 and £1.13m in 2021. Our preferred approach now is to fund the hardware through Loan Notes which would be issued in six quarterly tranches with the amounts based upon the business plan forecasts and committed orders from HISC.
We are in discussions with speciality brokers and our suppliers, and in due course we will circulate a proposal to you, our shareholders.
The coronavirus crisis will I believe stimulate the acceptance of the role of remote digital technologies in providing care for the elderly. It won’t be seen as a nice to have, it will be regarded as essential. There is heightened interest for our sort of tech enabled care in the media and amongst the general public, the care providers, care trade associations, government bodies and the NHS. It is just a question of time before that translates into demand. Anthropos is well placed to respond to that demand right now, but if it takes longer for whatever reason, we can “sit it out”.
Be assured, the whole Anthropos team is positively facing up to the COVID-19 challenges and preparing for the opportunity to make a real difference.
Thank you for your fantastic support.