RBC quick take on ALC 1Q25 Activities Report

1Q25 Activities Report - 1Q cash typically weak, positive FY25 EBITDA guidance reaffirmed

ASX: ALC | AUD 0.05 | Sector Perform | Speculative Risk | Price Target AUD 0.09

Sentiment: Neutral

ALC reported negative operating CF of -$3.9m (vs -$14.5m in 1Q24 and RBCe $1.1m). While we had been expecting ALC to deliver positive operating CF, we acknowledge our forecasts did not properly consider the typical seasonality of low cash receipts in 1Q. Therefore we do not view the negative operating CF in 1Q25 as a negative for ALC. Management said the 1Q25 cash receipts and operating CFs were in line with their expectations. The company announced new TCV sales of $5.2m in 1Q25 which exceeded our expectation of $2.9m, however we note the value of unannounced New TCV sales of $1.2m is below historical levels. Total contracted and scheduled renewal revenue for FY25 has increased slightly to $28.5m at Sep 24 (vs $28.0m at Aug 24) and management reaffirmed its target of being positive EBITDA in FY25 target. Overall, we view the 1Q25 activities report as neutral for ALC

DISC: Held in RL & SM