The latest numbers

Optima Health (LSE:OPT) issued a half-year trading update on 20 October 2026 that shows how the Business is absorbing PAM Healthcare, the £100m Acquisition that completed in March and significantly enlarged the group.

The company said Revenue for the six months to 30 September was expected to be about £96m, around 60% higher than a year earlier, driven by PAM and by organic growth. Net Debt at 30 September was £70.4m. Trading was in line with expectations, and the board expected full-year results to match market forecasts.

From £94m to £70m

The debt figure stands out when set against the annual results published on 17 August. Those showed net debt, excluding Lease liabilities, of £94.4m at 31 March 2026, up from £2.2m a year before as the PAM deal was financed. A reduction of about £24m in six months is substantial for a group of this size.

Part of the explanation is likely to reflect share issuance rather than trading cash. On 31 March, Optima launched an open offer of up to 20.0 million shares at 175p to raise as much as £35.0m, with net proceeds earmarked to repay a £30.0m bridge Loan from Deacon Street Partners, a company controlled by substantial Shareholder Michael Ashcroft.

How the business is performing

Occupational health providers such as Optima are hired by employers and public bodies to carry out medical assessments, health surveillance, absence management and wellbeing support for staff. Contracts are often multi-year, which gives revenue a recurring character but also means wins and losses can be lumpy.

In the year to March 2026, revenue rose 15% to £120.6m and adjusted EBITDA increased to £20.1m from £17.6m, a Margin of 16.7%. Statutory pre-tax profit, however, slipped to £2.5m from £2.6m, held back by £4.7m of one-off costs, largely tied to the acquisition and bridge loan fees, and by finance costs that rose to £1.6m from £665,000.

The October update reported new business wins worth £10.6m a year, including contracts with HMRC and the Home Office. In August, chief executive Jonathan Thomas said integration was progressing well, with cost synergies already being delivered; £2.1m of annualised savings had been achieved or were in progress by the end of July, against a medium-term goal of £5m. The annual results also cited a first full-year contribution from Optima Health Ireland and a new Partnership with employee benefits platform Perkbox.

Why it matters

Lower borrowing would reduce the interest bill that weighed on statutory profit last year and give management more flexibility as it pursues medium-term targets of £200m of revenue and £40m of adjusted EBITDA, a 20% margin. Public sector wins such as HMRC and the Home Office also add to the group's contracted base and help offset any slower Demand from private employers. LSE:OPT announced on 30 September that PAM would transition to the Optima brand, a step towards running the two businesses as one.

The debt reduction in context

Net debt of £70.4m at 30 September compared with £94.4m at 31 March is a fall of £24.0m, about 25%. Net debt of £94.4m against adjusted EBITDA of £20.1m for the year to March is about 4.7 times, though the figures are not on the same basis because the acquisition completed in March and the EBITDA reflects only a small contribution from PAM. At £70.4m, the same calculation would give about 3.5 times. With revenue for the half running at about £96m, annualised EBITDA is likely to be larger, so the true Leverage Ratio would be lower than either figure.

The open offer

The open offer of up to 20.0 million shares at 175p could raise as much as £35.0m, with proceeds earmarked to repay a £30.0m bridge loan from Deacon Street Partners, which is controlled by a substantial shareholder. The bridge loan was provided to finance the acquisition before longer-term funding was in place. If the offer raised close to the maximum, it would account for most of the debt reduction of £24.0m, with the balance coming from trading Cash Flow and other movements.

Growth and margins

Revenue of £120.6m for the year to March 2026, up 15%, implies a prior-year figure of about £104.9m. Revenue for the half of about £96m, around 60% higher than a year earlier, implies about £60m in the previous half, so the acquisition has added about £36m for the period, if organic growth is a small share. Adjusted EBITDA margin of 16.7% shows a profitable business before one-off costs. The gap between adjusted EBITDA of £20.1m and statutory pre-tax profit of £2.5m reflects depreciation, finance costs and the £4.7m of one-off costs.

Integration and wins

Annualised savings of £2.1m achieved or in progress by the end of July, against a medium-term goal of £5m, mean about 42% of the target has been reached. New business wins of £10.6m a year, including contracts with HMRC and the Home Office, show demand from public sector bodies. The business in Ireland and a new partnership with an employee benefits provider add to the revenue streams.

Why occupational health attracts employers

Employers use occupational health services to manage absence, which can be costly. Contracts that run for several years provide recurring revenue, and large public bodies have continuing needs for health surveillance and assessments. The risk is that a contract loss can remove a large share of revenue at once, which is why the company stresses wins and retention.

Contract wins and public sector customers

Contracts with HMRC and the Home Office are large and visible, and a business that serves government bodies benefits from long contracts but must meet strict service standards. New business of £10.6m a year is about 5.5% of the half-year revenue of about £96m annualised at £192m, which shows how meaningful the wins are relative to the group's size.

Risks and timing

Debt remains well above pre-acquisition levels, and the half-year figures were unaudited trading estimates. Rebranding and integration carry the risk of disrupting client relationships, and reliance on large government contracts exposes the group to procurement decisions and budget changes. Delivering the remaining synergies and lifting margins towards 20% are both management ambitions rather than assured outcomes. LSE:OPT's next scheduled disclosure is its interim results for the six months to 30 September.