Highlights:
- Positive net operating cash flow of $2.8M for Q3 FY21
- Strong organic growth adding $4.8M of contracted revenue in Q3, of which $3.0M will be recognised in FY21
- Contracted revenue to be recognised in FY21 (excluding ExtraMed acquisition which occurred after Q3 end) of $24.7M at end of Q3 ($15.9M recurring + $8.8M non-recurring)
- Selected as preferred provider (as part of a Consortium) for a major healthcare IT project to capture data and support clinical decision making across the Australian Defence Force with potential Total Contact Value (TCV) of approximately $21M over 5.5 years
- Expanded UK market presence via acquisition of ExtraMed, a leading provider of patient flow management software for hospitals in the UK
- Cash balance as of 31 March 2021 of $15.3M, with a net increase of approximately $6.6M to be received subsequent to the end of the quarter resulting from net proceeds of the capital raise (Placement + proposed Share Purchase Plan (SPP)) less payments relating to the acquisition of ExtraMed
Alcidion Group Limited (ASX: ALC) today released its Appendix 4C for the three-month period ended 31 March 2021 (Q3 FY2021) and this business update.
Alcidion Managing Director Kate Quirke said, “Alcidion has delivered another quarter of strong organic sales growth in the UK, Australia and New Zealand, with contracted revenue of $24.7M expected to be recognised in FY21, excluding revenue from the acquisition of ExtraMed.
“Having already surpassed our FY20 revenue figure by 33%, we now enter a new phase following the acquisition of ExtraMed, which strengthens our current patient flow offering and puts us into a market leading position in the UK, with 27 NHS Trusts as customers. We are already moving to integrate these businesses and engage with our expanded client base in this market.
“Subsequent to the quarter we have also announced a capital raising of $17.9M to replenish our cash reserves following the acquisition of ExtraMed in April and to provide additional working capital and growth funding for the expanded Alcidion Group. We thank the new and existing investors who participated in the institutional placement. We are also pleased to offer our loyal base of investors the opportunity to participate in the SPP that is currently underway, providing them the opportunity to purchase shares at the same price paid in the institutional placement.”
Business update
During Q3 FY2021, Alcidion signed new contracts and renewals with a total contract value of $4.8M.
The revenue split between products, product implementation and services as at end of Q3 is as follows:
Major contracts signed during the quarter included a five-year contract, with a TCV of $2.2M with East Lancashire Hospitals NHS Trust in the UK to deploy Patientrack and Smartpage across five hospital sites. Additional contracts include three new Smartpage contracts in the UK, an expansion of the Dartford and Gravesham NHS Trust contract, and a six-month extension to the Miya Precision license with the Murrumbidgee Local Health District, as an interim measure until panel procurement processes are finalised.
Alcidion also announced the initial pilot of Better Meds and Patientrack with Te Manawa Taki District Health Boards in New Zealand. This is the first implementation of this medication management system in the Southern Hemisphere, which will be rolled out to up to five DHBs upon successful completion of the pilot.
After the end of the quarter, Alcidion announced that it had been selected, as part of a consortium, for a major healthcare IT project to maintain personal health records and support clinical decision making across the Australian Defence Force in all care settings. The initial TCV to Alcidion of this opportunity is $21M over a 5.5 year period. As this is still subject to final negotiations, Commonwealth funding approval and contract signing, this revenue is not included in any sold revenue projections.
Also subsequent to the end of the quarter, Alcidion announced the acquisition of ExtraMed, a UK based health software company specialising in patient flow software. ExtraMed currently services 9 NHS trusts, six of which are new customers for Alcidion. As well as increasing Alcidion’s presence in the UK market, the acquisition also positions Alcidion to be at the forefront of the UK deployment of Digital Control Centres which provide centralised co-ordination of patient flow initially through individual hospitals and eventually across multiple hospitals in a region. The acquired ExtraMed business is expected to add approximately $2.7M in FY22 revenue and $0.5M EBITDA from its existing contracts. It was acquired for £5.3M (A$9.6M) cash.
Cash flow highlights
Cash receipts from customers in Q3 were $11.5M, including two receipts totalling $6.1M representing upfront payments against a major UK contract with South Tees Hospitals NHS Foundation Trust that were received in early January and late March. Operating cash outflows were $8.8M, $2.3M more than the previous quarter, and this included advance payment of several outgoings normally payable in Q4. Overall, Alcidion had a net operating cash inflow of $2.8M in Q3.
At 31 March 2021, Alcidion’s cash reserves were $15.3M, with a net increase of approximately $6.6M to be received subsequent to the end of the quarter resulting from net proceeds of the capital raise (Placement + proposed SPP) less payments relating to the acquisition of ExtraMed.
As noted in Item 6 of the Company’s Appendix 4C Cashflow Statement, payments made to related parties and their associates totalled $306K for the quarter. The payments relate to Directors’ remuneration.
Investor webcast
Alcidion Managing Director Kate Quirke will host an audio webcast with investors via Zoom this morning at 11:30am Australian Eastern Standard Time (AEST).
To register for the webcast, please follow this link: https://us02web.zoom.us/webinar/register/WN_maTXlgiITbSSyT1Kr30lvQ
Registered participants will receive a confirmation email containing the Zoom access link and alternative phone dial-in details.