I'll take the other side of this one! Half on half decline in revenue (first time in five years), expense growth outpacing revenue in 2H, G&S not hitting its earnout targets, no disclosure of order book...bit of a shitshow in my view.

The Pulse Mobile rollout over 180 US hospitals sounds very promising but it's not quantified so hard to guage impact.

They've been very professional operators for a long time so I think they deserve benefit of the doubt, but I think the market reaction is fair.

[Held]

Downgrade (1/6/26)

Today’s FY26 Trading Update amounts to a downgrade (welcome to confession season), and it concerns me that this is being hidden or avoided. My initial thought that this is an opportunity to top up didn’t last long as I walked through the details:

• Revenue: Now expected to be $90-95m +11-17% Vs FY25. However, this will include around 2.5m of acquired revenue from G&S Tech. So organic growth is more like 8-14% which is a shift down in their 10-14% guidance which they have avoided talking about.
• NPAT: $9.0-9.4m is up 52-58% Vs FY25. However, FY25 includes a $2.1m Fair Value adjustment expense and in fine print below the table in todays announcement the FY26 forecasts NPAT includes a $1m benefit of the writeback of G&S Tech contingent consideration. So on a “normalised basis” the NPAT increase is probably more like 4-9% when you take these out. Plus they are effectively saying the G&S Tech business is not going as well as everyone previously thought it would.
• Gross margin: the 0.8% lift is probably the only good news, but it may also relate to the under performance of the G&S Tech business which has lower margins (every silver lining has a cloud).
• Major US rollout: The Pulse Mobile contract is good, but some of this role out will be in the FY26 year already.

I am not completely dismayed by the announcement, I had expected sales around $96m and NPAT of $9.7m, so only a little short, but unfortunately they needed a one-off adjustment to get close. I also accept this is a lumpy sales business, so will be holding what I have but doubling down is a bit rich for me currently until I understand this more.

Disc: I own RL

Gotta love the brutality of the markets at the moment!

Take it out the back and shoot it. Then ask questions :)

Not a great second half to be sure. As noted when you strip out the G&S write-back the implied second half performance isnt awesome. It feels like margins could stay under pressure too given some of the issues they are facing..

Still, an 18% drop is a hell of a fall for a company that was trading on an underlying forward P/E of ~13x before today. Those kinds of plunges usually make more sense for "priced for perfection" growth stocks but here it feels a bit harsh.

Especially for a business that remains perfectly viable with a strong balance sheet. Growth matters a lot, don’t get me wrong, and I can see why there are some doubts over the company's growth ambitions, or at least the degree that they will be realised.

I guess its just as @Shapeshifter noted, the market currently just has very little tolerance for anything that falls short of the mark.

Yep, unfortunately despite seeing some silver linings I largely share @Noddy74's view. The 2H is generally stronger for AHC (though seasonality may be weakening given acquisitions brings more revenue from Aus/NZ now) so the half on half revenue decline is a concern. All of the headwinds seem completely legitimate but some spotty disclosures means it's hard to get real confidence that things will improve rapidly in the short term.

The sell-off does appear overdone given the fall prior to today, but unfortunately there are lots of charts like AHC's in microcap land at the minute and if you have to squint hard to see the improvement in the fundamentals the market is selling and moving on.

I don’t own AHC but I have it on my watchlist. I compared FY26 NPAT guidance ($9 million -$9.4 million) with analyst consensus this morning (11.35 million), a 20% miss . This might explain some of of the market reaction today.

Source: Simply Wall Street

Not held

They appear to be blaming AI and the war in the Middle East for increased logistics costs, and delays in securing key components which they say has pushed the timing of some projects into FY27. But I feel I may have heard that before somewhere....

As a rough exercise, if I adopt a 10% revenue growth from $92m this year, an NPAT margin of 9%, 10% dilution, PE of 13 and discount rate of 10, I get 25c, so about todays closing price.

Definitely not selling, but probably not jumping to top up either.

Held in SM and RL.

This may be weighing on sentiment too. Sector performance over 6 months.

I'm late to the Austco party (wake?) but I'll throw in my 2c. Yeah, I was disappointed. Rev guidance is below my bear case. After a very strong H1, I wasn't expecting a decline in H2 vs H1, and essentially flat v H2FY25.

Management was either surprised by H2 results, or oversold the impression at H1 that growth would continue into H2. Attributing some of the blame on Middle East and AI felt weak. I can't see how Middle East affects them much, and I can't see why AI would be so much more impactful on H2 results compared to H1 results. Given they've made a $1m adjustment in earnout for G&S, there's more story there than management is telling. So, a yellow card for management not being fully transparent with comms. But I've generally been happy with management in the past, so not yet a send off. Although clear some investors went straight for the red card.

On the plus side, margins were maintained. Even if we strip the $1m one-off revaluation boost from NPAT, they are still around 9% NPAT margin.

The >25% price drop in the last 2 days (40% decline this year) seems overdone. Current market cap is $88m, for a company delivering at least $8m NPAT = PE of 11. That's harsh if I look at the last 12 months as a whole, delivering 11-17% rev growth and >25% NPAT growth. On the balance of possible futures, I still see a strong investment case.