Adelaide, South Australia – Alcidion Group Limited (ASX:ALC) today released its Appendix 4C Quarterly cash flow statement for the three month period ending 31 December 2018 (Q2 FY2019).
Net operating cash outflow was $46K. Administrative and corporate costs for the quarter included a one-off cost of $40K, for the final costs related to the acquisition of MKM Health. The improved cash flow position, compared to the prior corresponding period (Q4 FY2018: net cash outflow $828K) is reflective of the benefit of the expanded Alcidion Group.
Cash receipts for the quarter were $4.1 million, compared to $5.0 million in the previous quarter and up from $528K in the previous corresponding period. Q2 cash receipts are always impacted by early pre-Christmas cut-offs in customer payments of invoices. This was reflected in a substantial increase in group debtors as at the end of Q2 compared to the end of Q1.
Alcidion’s cash balance as at 31 December 2018 was $1.5 million, compared to $2.8 million at the end of the previous quarter. This was primarily due to $1.2 million in cash consideration being paid in accordance with the terms of the acquisition of MKM Health and Patientrack businesses. No further cash consideration is payable in relation to this acquisition.
Q2FY19 Sales Update: Total contract value (TCV) of $14.3 million added in Q2
During the quarter, the Alcidion group signed or renewed 12 significant contracts, for Alcidion’s products (Miya, Patientrack and Smartpage) and specialist IT services, with a TCV of $14.3 million.
Material contract wins announced to the market during the quarter were:
- Queensland Health – Contract with MKM Health to supply NextGate’s Provider Registry solution to establish a Queensland wide Referral Service Directory (RSD); adding ~$12 million to Alcidion’s contracted revenue pool over five years;
- ACT Health – Two year extension of MKM Health’s ongoing support contract, valued at $1.3
Also during the quarter, the South Canterbury District Health Board in New Zealand, signed a contract to implement Patientrack. There are now six district health boards using Patientrack, and confirming Patientrack as the leading provider for the South Island, where all but one district health boards are using Patientrack’s electronic observations system.
Contracted Revenue: Revenue to be recognised in FY19 and beyond increases, in line with new contract signings
At the end of Q2 the contracted revenue which will be recognised in FY19 had increased to $14.8 million (up from $11.1 million at the end of Q1). This contracted revenue includes service and product related fees with $7.5 million being recurring revenue and $7.3 million non-recurring revenue.
A further $27.4 million of contracted revenue will be recognised over the next five years from these contracts.
The graph below shows Contracted Revenue to be recognised between FY19 and FY24, broken down by product revenue and service revenue.
Summary
“Our contracted pool of revenue has continued to grow this quarter, with several new major contracts and renewals secured, providing a solid platform for revenue growth – this year and beyond. We are seeing the benefits of the enlarged group, with smoother operational cash flow, and increasing the likelihood of delivering consistent positive quarterly cash flow,” said Kate Quirke, Group Managing Director.
“Operationally, our focus is on leveraging the cross-selling opportunity across our customer base. This has contributed to a healthy sales pipeline – we’re seeing the volume and revenue of potential sales continuing to increase.”
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