Physitrack PLC: A Pivotal Moment for Profitability and Growth

Physitrack PLC (STO:PTRK) has announced a significant settlement with the Founders of Champion Health Ltd, Harry Bliss and Ricky Bailey, to terminate the Share Purchase Agreement (SPA). This strategic move simplifies the Company's financial structure, reduces future financial risks, and enhances its focus on profitability and future growth opportunities. Here's why investors should take note of this development.



Physitrack PLC, a global digital healthcare provider focused on B2B wellness and virtual-first care markets, has two primary business lines: Lifecare and Champion Health. The settlement over the Champion Health Share Purchase Agreement is expected to have a positive impact on the Company's financial health and growth prospects.

The settlement involves a sum of GBP 350,000, which will be repaid over a nine-month period commencing on 31 August 2025. This agreement resolves all obligations under the SPA, including the release of the deferred contingent consideration, which was previously recognized as a contingent liability by the Company at a value of EUR 2.1m. By resolving this agreement, Physitrack is not anticipating any further contingent consideration payments, thereby significantly de-risking the Company from future financial outflows.

As seen above, the release of the deferred contingent consideration will significantly reduce Physitrack's contingent liabilities, simplifying its financial structure and enhancing its focus on profitability and future growth opportunities. Henrik Molin, CEO and Co-founder of Physitrack PLC, stated, "This settlement represents a pivotal moment for Physitrack PLC, allowing us to streamline our financial obligations and focus fully on achieving profitability."

The termination of the SPA also allows Physitrack to redirect resources towards other areas of the business, such as investment in growth opportunities. The Company can now fully focus on achieving profitability, which is a crucial step in ensuring long-term success and sustainability.

As seen above, Physitrack's revenue growth has been volatile in recent years, with a significant decline in 2021. However, the Company's strategic restructuring of Champion Health Plus, announced in December 2024, is expected to improve profitability and position the Company for long-term growth. The restructuring involves a reduction in clinic footprint, the replacement of in-clinic services with AI-based triage via Nexa, and the integration of Champion Health's wellness platform with Physitrack's virtual-first care offerings through the Access ecosystem.



The strategic restructuring of Champion Health Plus is expected to result in a net annual profitability gain of €200k, with annual cost reductions of €800k and revenue reductions of €600k. Savings of €600k are anticipated in 2025, with a revenue reduction of €450k. One-time restructuring costs of €100k total are expected in Q4 2024 and Q1 2025.

As seen above, the strategic restructuring of Champion Health Plus is expected to have a positive impact on Physitrack's profitability and cash flow. The integration of Champion's wellness platform with Physitrack's virtual-first care offerings through the Access ecosystem is expected to open up new growth avenues in SaaS with substantial revenue potential.



In conclusion, the settlement over the Champion Health Share Purchase Agreement is a significant step for Physitrack PLC, allowing the Company to simplify its financial structure, reduce future financial risks, and enhance its focus on profitability and future growth opportunities. The strategic restructuring of Champion Health Plus, combined with the integration of Champion's wellness platform with Physitrack's virtual-first care offerings, positions the Company for long-term success in the global digital health market. We rate Physitrack PLC as a Buy.