Optima Health FY26 results: growth beats expectations as PAM integration begins

Optima Health has reported a strong set of full-year numbers, but these are also results that need reading with care.

Revenue and adjusted EBITDA both rose by around 15%, cash generation improved sharply and management says trading entered FY27 with momentum. However, adjusted earnings benefited from a £4.7 million procurement settlement, while the £100 million acquisition of PAM Healthcare has transformed the balance sheet.

The result is a larger business with a broader opportunity, but also substantially more debt and a major integration job ahead.

Investors can read the original company announcement for the complete audited results.

Optima Health's key FY26 figures

Metric	FY26	FY25	Change
Revenue	£120.6 million	£105.0 million	14.8%
Adjusted EBITDA	£20.1 million	£17.6 million	15%
Adjusted EBITDA margin	16.7%	16.7%	Flat
Statutory operating profit	£4.0 million	£3.2 million	23%
Statutory profit before tax	£2.5 million	£2.6 million	Down 4%
Cash generated from operations	£17.3 million	£5.4 million	Up £11.9 million
Net debt excluding leases	£94.4 million	£2.2 million	Up £92.2 million

Adjusted EBITDA means earnings before interest, tax, depreciation and amortisation, with certain exceptional and non-cash charges excluded.

The £20.1 million result came in around 10% ahead of previous market expectations. The 16.7% margin was also maintained despite higher employer National Insurance contributions and Real Living Wage increases.

That is a credible operating performance, although investors should note that adjusted EBITDA included £4.7 million of other operating income from the final settlement of a previously disclosed procurement matter.

Optima did not classify that income as an adjusting item because the related procurement activity arose through ordinary operations. Even so, it is a one-off cash receipt, with no further amounts due.

The underlying margin picture improved

There is useful evidence that profitability improved beyond the settlement benefit.

Excluding the £4.7 million of other operating income, second-half adjusted EBITDA was £9.4 million at a 15.4% margin. That compares with £6.0 million and a 10.1% margin during the first half.

This suggests the transformation programme and operational improvements gained traction as the year progressed. It also matters because Optima has set a medium-term target of a 20% adjusted EBITDA margin.

However, that target is not guaranteed. Management expects the acquisition of PAM to affect margins in the near term, with improvement dependent on integration benefits, operational efficiencies and maturing contracts.

The PAM acquisition changes the investment case

Optima completed its acquisition of PAM Healthcare on 26 March 2026 for total consideration of approximately £100 million.

Because completion took place just five days before the financial year-end, PAM made no material contribution to Optima's FY26 income statement. Its acquisition financing, however, was fully visible in the year-end balance sheet.

PAM generated unaudited revenue of £66.6 million and adjusted EBITDA of £8.2 million in its year ended 31 December 2025. Combining that scale with Optima's existing operations creates a clearer route towards management's medium-term ambitions of £200 million in annual revenue and £40 million of adjusted EBITDA.

Integration is progressing to plan. By 31 July 2026, Optima had delivered or started delivering £2.1 million of annualised cost synergies against a medium-term target of £5 million.

That early progress is encouraging, but the remaining work is substantial. Investors will want to see evidence that savings are realised without harming service quality, customer retention or organic growth.

For context on the company's development before this acquisition, see the previous analysis of Optima Health's FY25 results and strategic expansion.

Debt is the clearest financial risk

Net debt excluding lease liabilities rose from £2.2 million to £94.4 million, primarily because of the PAM acquisition.

The year-end figure included a £30 million related-party bridge loan. This was repaid after the period end using cash and proceeds from an underwritten Open Offer, which raised gross proceeds of approximately £35 million.

That repayment significantly reduced the position after year-end, although an updated net debt figure was not disclosed in these results.

Management intends to reduce net debt to below one times adjusted EBITDA by the third year following the PAM acquisition. Optima's improved operating cash generation supports that aim, but future deleveraging will depend on trading, integration and capital allocation.

The company also remains willing to consider further acquisitions. That could create additional value, but investors may prefer balance-sheet repair to take priority while PAM is being integrated.

Cash flow was a bright spot

Cash generated from operations increased from £5.4 million to £17.3 million, while net cash inflow from operating activities rose from £2.7 million to £15.2 million.

Before acquisition, integration and restructuring costs, cash generated from operations was £22.0 million, compared with £9.6 million in FY25.

This improvement partly reflected the £4.7 million procurement settlement, so it should not simply be treated as a new recurring run rate. Nevertheless, the figures show that the underlying business can generate meaningful cash.

Against that, Optima spent £101.8 million purchasing subsidiaries, net of cash acquired. Net finance costs also increased to £1.5 million from £0.7 million, reflecting its higher debt profile and a full year of financing costs following the demerger from Marlowe.

Organic growth slowed, but the pipeline remains sizeable

Optima secured £10.8 million of annualised new business wins during FY26, excluding PAM. This was down from £27.2 million in FY25.

The comparison is a weakness in the results, although the company reported a further £8.6 million of wins or preferred-bidder opportunities since year-end. The enlarged Group's pipeline stands at £33.9 million of annualised revenue.

A notable win was the Perkbox partnership, expected to generate approximately £6.5 million of annual revenue across its five-year term.

Meanwhile, mobilisation of the UK Armed Forces Recruitment Service contract remains on plan. The service is expected to go live during calendar 2027 and has a value of up to £210 million over its initial seven-year term.

The contract could become a major long-term revenue stream, but investors should remember that the stated figure is a maximum contract value rather than revenue already recognised.

What investors should watch in FY27

The positives are clear: double-digit revenue growth, adjusted EBITDA ahead of expectations, improving second-half margins, strong cash generation and early PAM synergies.

The cautions are equally important. Adjusted profit included a £4.7 million settlement, statutory profit before tax slipped to £2.5 million, new business wins declined and acquisition financing caused debt to rise sharply.

FY27 will therefore be less about announcing the PAM deal and more about proving that it works. The key markers will be progress towards £5 million of cost synergies, conversion of the £33.9 million pipeline, margin development and sustained deleveraging.

The Optima Health PLC company page provides further coverage of the business. For shareholders, the enlarged opportunity is meaningful, but execution and balance-sheet discipline now matter more than ever.