Appendix 4C: Alcidion delivers positive cash flow for Q4 and FY19 overall

Highlights

  • Positive operating cash flow of $566K for final quarter
  • Cash flow surplus from operations of $2.1M for FY19 overall, improved cash position of $3.4M
  • FY19 final revenue likely to be in range $16.5M to $16.9M subject to final year-end adjustment
  • Strong start to FY20, with $11.7M sold revenue to be recognised in FY20 and a further $19.5M out to 2024
  • Strategic reseller agreement signed with Better by Marand for Medications Management

Tuesday 23 July 2019, Adelaide, South Australia – Alcidion Group Ltd (ASX:ALC) today released its Appendix 4C quarterly cash flow statement for the three month period ended 30 June 2019 (Q4 FY19).

The company delivered a net operating cash flow surplus of $566K in Q4, the second consecutive quarter of positive operating cash flow. The company delivered a net operating cash flow surplus of $2.1M for FY19, after three cash flow positive quarters and one quarter (Q2) with a small negative cash flow.

Available cash reserves are now $3.4M, up from $2.9M at the end of Q3.

Cash receipts for the quarter were $6.1M, in line with Q3. Operational cash outflows for Q4 were approximately $700k higher than Q3, primarily due to the payment of $400K in VAT on UK Q3 sales, sales commissions related to these two major UK contracts, and advance payment of superannuation contributions for Q4.

Operational cash outflows in Q1 FY20 are forecast to be similarly higher than usual, due to the payment of annual performance bonuses, changed timing of PAYG payments and further planned investments relating to completing the operational integration of the businesses acquired in FY2019, predominantly around branding and market presence.

Business Update Q4 FY19

The company signed 23 new contracts during the quarter, with a total contract value (TCV) of $1.8M, capping off a strong year of sales and contributing to a pipeline of revenue to be recognised in future periods.

During this quarter, Alcidion announced the signing of a contract for the development of the national Child Digital Health Record (CDHR) which is to be trialled in two NSW Health Districts. The CDHR initiative will provide a digital record of children’s health and development information, currently captured in hard copy ‘baby books’. Total value of the contract is ~$700k.

Other new contracts were renewals of annual support contracts, as well as short term services contracts, the revenue from which was partly recognised in Q4 and the balance to be recognised in FY20.

The company enters FY20 with a positive outlook with $11.7M in contracted revenue to be recognised in FY20. By comparison, it wasn’t until the end of Q1 FY19, that Alcidion had $11.1M in contracted revenue to be recognised that year.

An additional $19.5M of future sold revenue will be recognised out to FY24.


In April, Alcidion entered into a reseller agreement with European healthcare software provider Better by Marand, to sell its electronic medication management system, OPENeP, in the UK, Australia and New Zealand. This is part of Alcidion’s strategy to establish partnerships with complementary technology platforms, enabling the company to offer a best-in-breed solution that covers a wide range of clinical needs. The company was recently selected as preferred supplier of the OPENeP solution, to Dartford and Gravesham NHS Trust in the UK. This contract is still subject to negotiation and final approval.

Interest in the Alcidion platform continues to grow and future growth will be driven by Alcidion’s own Miya, Patientrack and Smartpage products, as well as continuing strong demand for Alcidion’s proven expertise as a health systems integrator.

Transformative year as expanded Alcidion quadruples revenue

The company will report its final revenue for FY19 with the release of the audited financial results due to be lodged with the ASX in line with reporting requirements. We expect FY19 revenue to be between $16.5M to $16.9M subject to any final year-end adjustments, which is approximately four times the $4.2M Alcidion Group revenue in FY18. It also represents a solid 30% increase in revenue over the unaudited pro forma FY18 revenue for the combined companies of $12.7M.

Managing Director of Alcidion, Kate Quirke said: “Alcidion has delivered on its promise that FY19 would be a transformative year. We have successfully integrated the acquired businesses, strengthened and integrated the product suite and enhanced third party relationships, expanded the customer base and built upon our UK market presence.

“Our commercial success demonstrates that we have been able to gain market acceptance for the combined Alcidion proposition in our three main territories. In particular, the signing of our first integrated Miya, Patientrack and Smartpage installations, with leading hospitals in Australia and overseas, also marks an important milestone and validation.

“We have achieved positive operational cash flow for the year and have used that to rebuild cash reserves, thereby strengthening our balance sheet, all whilst acquiring the Oncall Systems, MKM Health and Patientrack businesses over the last 18 months. We enter FY20 with a strong outlook based on the current contracted revenue and our healthy sales pipeline.”

New Non-Executive Director Appointed

During the quarter, Simon Chamberlain was appointed to the role of Non-Executive Director. An accomplished executive and business leader with a skillset that strongly complements Alcidion’s Board, Mr Chamberlain’s 20-year career spans executive roles at high profile companies including General Manager at Medibank Private, Executive Manager of Qantas Airways’ Hooroo business, and most recently in his current role as General Manager at MedAdvisor (ASX: MDR).

Company Secretary Resignation

Alcidion also advises that joint company secretary Michael Sapountzis has resigned. Melanie Leydin, currently joint company secretary, will be the sole company secretary.

Investor Conference Call
Alcidion Managing Director Kate Quirke is hosting a conference call with investors this morning at 9:15am Australian Eastern Standard Time (AEST). If you missed the conference call, you can listen to a recording at the link below:

 

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For further information, please contact:

Kyahn Williamson, WE Buchan

Ph: 0401018828

kwilliamson@we-buchan.com

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