@Strawman I run some 5-year financial projections out to FY30 as part of my valuation.Here are the summary outputs.

In my scenarios they can get to anywhere from $5m to $17m NPAT by FY30, depending on how well costs are controlled.

A strategy focused on exploiting the full potential of the UK is likely more conducive with good cost control, as they won't need to add overheads, whereas in time regional expansion will inevitably drive increased overheads.

A steady rhythm of one NHS EPR award per year plus modest upsell to existing accounts can get them to $70-90m FY30 revenue.

The big question for me is, will they establish that ""steady rhythm" or will we see more of a stop-start flow. The track record hasn't been consistent, however, the pandemic and its aftermath impact on the NHS is not to be under-estimated. The institution is still struggling.

I am going to keep watching $ALC because Kate came across as more assured and measured, yet still consistent, potentially the result of experience in the UK market now over 5+ years, including through a challenging period.

I just caught up with the @Strawman meeting with Kate Quirk at $ALC. It is good to hear the consistency of approach and the continued progress of "land and expand".

Although @jcmleng has provided the usual dazzling array of trend charts (thanks!) I've pulled together a slightly different visualisation to help me understand the key question: is $ALC making sufficient progress to become investible? I'll give my interpretation of the chart and see if I can answer this question. (Spoiler alert: I'm still on the fence)

What I've plotted above is the trailing 12 months (TTM) cashflows from the 4Cs of Receipts, Payments and Operating Cashflow. (We don't need to worry too much above FCF because the investments are very modest, and there is only a steady Lease Payment of c. $0.2m per Q or $0.7-$0.8m p.a.)

My reason for showing the TTM picture is to i) deal with the clear seasonality of cash flows and ii) deal somewhat with the quarterly lumpiness, as capital payments land. On the latter points Kate said words to the effect that they give a lumpiness, but they happen more or less every year. So a TTM visualisation should help parse signal from noise.

To help with interpretation of the chart, I've run the trend lines for each data series only over the last 3 years (12 quarters).

So what the chart tell us in terms of the $ALC story?

Well, from 2019 to 2023, $ALC was in the mode of building up and - in particular - entering the UK and adding Extramed and Silverlink. Over this period, increasing receipts were pretty much matched $ for $ with an expanding cost base.

From 2023 to 2024 we had the perennial story of the NHS being slow in awarding contracts, with Kate being forced to address the issue of reigning costs, as well as the minor insto cap raise to fill the issue of delayed receipts.

But if we now look at the last 3 years, receipts have started expanding again while costs have been controlled, thus setting up the positive slop of the OpCF line (dotted blue trend).

With a stronger H2 (for receipts) seasonality and the prospect of a decent upfront payment from UHSussex EPR (Kate sounds pretty confident about this one, albeit one shouldn't count chickens before they've hatched), it sounds pretty hopeful that the current trend might continue.

On top of that at the recent 1H FY26 results presentation Kate said "But if you look at the TCV year-on-year over the last few years, it has been growing steadily year-on-year. We have got a very strong pipeline. And I can honestly -- hand on heart, it's the strongest it has ever been in terms of total value by a lot. And that is because there are a number of large opportunities in that -- in those processes at the moment."

Once UHSussex EPR is signed up, $ALC will have several UK NHS EPR reference sites, and I think that is meaningful. This allows potential future customers to go and visit mulitple sites to understand the customer experience to derisk their own decision. I am focused on the EPR sites, as they are the more material deals that $ALC needs to move the dial.

The timeline is showing momentum:

9 Nov 2020 — South Tees Hospitals NHS FT (first major Miya Precision EPR contract)

1 Dec 2022 — University Hospital Southampton NHS FT (foundation modules for EPR build)

26 Jul 2024 — North Cumbria IC NHS FT (preferred bidder)

24 Feb 2025 — North Cumbria contract signed (rollout 2025 → completion ~FY27)

2H FY26? — University Hospitals Sussex NHS FT (preferred supplier; in negotiation)

What about costs from here?

The UK sales and marketing team is being expanded again. And as discussed in the SM meeting, this makes good sense, because $ALC now seems to be reaching a critical mass in the UK, and now is a good time to press home any advantage it has.

Propsecting in the Middle East and Canada will also add some costs, but this is being done in a very careful way.

And internally, it sounds like the team are being more productive by using AI tools, so hopefullly, headcount growth will be modest overall.

Kate indicated in the SM meeting that this will add about $1.0m to the cose base annually, which is reasonable provided receipts continue to grow.

So, is $ALC Investible for Me?

This is a harder one to answer. If the trend is "real" and continues, then $ALC looks like it might be adding $5m of incremental operating cashflow per year. Rolling that forward, we could be looking at OpCF of $20m in FY30 or a FCF of, say, $12-15m.

This might be worth running a few scenarios on this. But any "investible thesis" is going to rely on $ALC continuing to maintain the deal flow of the last 18 months.

Disc: Not held