MIDAS SHARED ADVICE UPDATE: Boost for mental health firm: Kooth offers free online support for those who need help
Helping hand: Kooth is making a tangible difference, especially for young people
Not too long ago, mental health issues tended to go under the radar. Few spoke of them. And precious little resources were allotted to them.
Today, mental health problems are among the biggest problems in society. According to independent research, 20 percent of UK and US citizens are diagnosed with some form of mental illness each year. The cost of dealing with these problems is already in excess of £350bn and is set to get significantly worse by the end of this decade.
Conditions are even more dire in the United States, with more than 20 percent of students ages 14 to 18 admitting they have seriously considered suicide in the past year.
Faced with what appears to be a growing crisis, health services on both sides of the Atlantic are seeking answers, preferably at no cost.
target company kooth has devised a way forward: offer free online support to those who need help. Founded in 2001, the group has spent more than 20 years honing its services, from general advice to one-on-one chats with experienced advisors.
CEO Tim Barker launched the business in 2020 with a mission to expand both here and in the US.
When Midas recommended the shares at £3.19 last year, Kooth had already signed contracts with virtually every NHS Trust in the country to give young people access to Kooth’s free advice.
Last October, Barker signed his first contract in the United States, offering support to 150,000 schoolchildren in Pennsylvania. Last week, Kooth went much further, with a four-year, £150 million contract in California, providing digital mental health care to six million young people across the state.
The deal will not only transform Kooth’s fortunes, but also boost growth across the United States. California looked at 450 potential providers before choosing Kooth, a strong endorsement of Barker’s services. Other states should follow suit in time.
Analysts have already upgraded forecasts for this year and next, forecasting a 73% rise in sales to £34.8m this year, rising to at least £65m by 2024. The company will have They have to spend money on staff and technology up front so that a small loss is forecast for 2023. However, earnings of £3.6m or more are expected the following year, with further increases thereafter.
Traditionally, anyone with mental health issues would be referred to a GP, counselor, or some kind of therapist. But the demand for these services far outstrips the supply, they are expensive, and many young people, already glued to their phones for hours a day, would prefer to go digital.
Research shows that Kooth’s online services work and more than 70 percent of users feel better afterward.
The company also saves money. According to economists, every pound spent with Kooth saves the NHS around £3 and the benefits are even greater in the US, with every dollar spent saving local health services around $12.
Midas Verdict: The repercussions of mental illness spread far and wide. People are tormented, families are turned upside down, and fortunes are spent on treatment. Kooth is making a tangible difference, especially for the youth. The shares are up 5 per cent to £3.34 since Midas recommended them, but there is much more to come. Like Solid State, this is a UK business that punches above its weight here and in the US. A rewarding action for both existing shareholders and new investors.
Traded in: AIM Heart: KOO Contact: koothplc.com or 020 3398 9048