Adelaide, South Australia, 20 July 2018 – Alcidion Group Limited (ASX: ALC), today released its Appendix 4C Quarterly Cash Flow statement for the three-month period ending 30 June 2018.
Alcidion’s cash balance as at 30 June 2018 was $3.1 million, with a minimal net operating cash outflow for Q4 FY2018 of $70k compared to the prior quarter (Q3 FY2018 : $1,033k outflow), driven by a strong uplift in receipts from customers mostly covering the cost base.
Cash receipts from customers were $1.6 million, a significant improvement from the previous quarter (Q3 FY2018 : $519k) reflecting the higher volume of work with a completion deadline of 30 June 2018. Overall, total cash receipts for FY2018 were $4.2 million, a slight decrease from the previous financial year (FY2017 : $4.4 million).
Staff costs and corporate costs in Q4 FY2018 were $1.6 million, representing a small increase from the previous quarter (Q3 FY2018 : $1.5 million) mainly due to increased corporate costs associated with the completion of Alcidion’s transformative acquisition of MKM Health and Patientrack which occurred just subsequent to the reporting period. Alcidion incurred approximately $205k of non-recurring acquisition-related advisory and integration costs during Q4 FY2018.
Completion of MKM Health and Patientrack acquisition
Alcidion announced the completion of the MKM Health and Patientrack acquisition on 3 July 2018. MKM Health is a leading provider of IT solutions to healthcare providers across Australia and New Zealand, and UK-based Patientrack is a world leading supplier of healthcare software targeted at improving patient safety in hospitals.
This acquisition is transformative for Alcidion and creates a new and leading specialist healthcare IT solution provider focused on “next generation” decision intelligence and analytics technology with established customers across three geographic markets – the UK, Australia and New Zealand.
Consideration for the acquisition is comprised of a scrip component and a cash component. The scrip component was satisfied by the issue of approximately 198 million Alcidion shares at 5.05c per share (equivalent to approximately $10 million). The cash consideration of $2 million (subject to completion adjustments) is expected to become payable to the MKM Health and Patientrack shareholders during the second and third quarters of FY2019 and will be funded from Alcidion’s existing cash reserves.
Further contingent consideration of $4 million is payable in Alcidion shares in twelve months subject to the revenue and EBITDA performance of MKM Health and Patientrack over this period.
Patientrack announced in May 2018 that it had signed contract extensions for the continued and expanded use of its proprietary Patientrack software in four of its flagship National Health Service (NHS) Trusts in England and Scotland. The contract extensions are for between periods of one to three years and have a combined value of $890,000.
During the quarter, MKM Health also signed a three-year development & support contract with eHealth NSW, to supply development and support of integration services on the Enterprise Service Bus (ESB) and Enterprise Patient Repository (EPR) platforms, with a value of up to $3.8 million.
MKM Health also announced in May 2018 that it had entered into a global reseller agreement with NextGate Solutions Inc., a global leader in healthcare enterprise identification. This will enable MKM Health to extend its scope of system integration and data management services offered to the Australian and New Zealand healthcare sectors.
Additionally, Alcidion has also recently announced a significant contract win and a number of contract extensions, subsequent to the Q4 FY2018 reporting period.
On July 5, 2018, Alcidion announced it has signed a five-year contract with ACT Health with a value of $4.75 million to deploy an Electronic Patient Journey Board solution, that fully integrates the Miya Flow, Patientrack and Smartpage software components. The solution, which has been licenced Territory-wide, will initially be rolled out at the Canberra Hospital and the new University of Canberra Hospital with over 800 beds. The contract includes an initial services payment to Alcidion of $629k for installation, customisation, implementation and training.
Alcidion also announced on 19 July 2018, it has signed three-year contract extensions with the Northern Territory Department of Health for the provision of its Miya software across six hospital sites. The contract value is approximately $888k p.a, with a total contract value of $2.6 million, and two options for one-year contract extensions.
On the basis of the contract wins outlined above, and the full integration of the MKM Health and Patientrack business which has commenced in the current quarter, Alcidion expects to deliver continued growth in its customer and revenue base in FY2019.
As outlined in the Appendix 4C, Alcidion also expects its cost base to increase next quarter reflecting the increased scale of the business following the acquisitions.
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Kyahn Williamson, WE Buchan