Alcidion Group Limited

ASX:ALC

Alcidion Group Limited

ASX:ALC
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Reports (14) My Report Forum Investors
Forum Topics ALC ALC Q4 FY23 Results

Pinned straw:
Strawman
Added 10 months ago

Some notes after watching the business update presentation (thanks for sharing @Remorhaz )

  • Record quarter for cash receipts -- $17.6m, which account for 37% of the total cash receipts for FY23
  • Positive operating cash flow for quarter and the full year -- FCF +'ve for the quarter. (this was promised at the start of the year)
  • $40m in revenue (unaudited) for FY23 -- approx. 17% increase on prior year
  • $14.6m in cash with no debt. Cash balance up 32% since Q3
  • Costs stabilised. Expect no major changes. Staffing levels seem appropriate given growth expectations.
  • Silverlink earnout now complete
  • Level of engagement with prospects remains high
  • All legacy Miya contracts renewed and upgraded (shows how embedded products are, and also makes upsell & integration of additional modules much easier. Also there's less support work required -- ie less cost)
  • New sales of $7.3m for the quarter was ok, but unlike cash receipts far from a record. Some delays to EPR work in the UK likely having an impact here. Kate said sales will often be modular and staged.
  • Already $33.7m of contracted and scheduled renewal revenue expected to be recognised in FY24 (this time last year that figure was $28.3m, so a 19% lift). A good reminder of how much visibility there is in this business.
  • Kate didnt give guidance on what NPAT would look like in the current year, but said they expected continued strong revenue growth and stable costs -- so hopefully we should see a decent net margin start to emerge. At the very least, it seems they will be self-funding going forward. BUT things like geographic expansion or other investments could change that. More "colour" will be presented at the formal FY results


In general. I really like Kate's style. She's a straight shooter and I think she and the team are generating some tangible results in a sector that is notoriously slow and bureaucratic.

Rocket6
10 months ago

Some good commentary around Alcidion's results today. I have previously been critical of their progress, namely around their costs, particularly staff costs. That said, my interest in the business stems from the fact I think there is cracking potential here, I just hadn't seen enough to take the plunge. While staff costs are probably a little high for my liking, they have remained stable for over a year now. This suggests to me that if the business can bring in enough cash like this quarter, we will start to see operating leverage shine through. If we are looking at Q on Q, 11-12m cash receipts looks to be the break-even sweet spot. Additional revenue beyond this point, barring one-off costs, will likely flow straight through to the bottom line. We might be seeing a key inflection point.

Consequently I have taken a small entry position today (on Strawman). I look forward to seeing how the business continues to mature in the months/years ahead.

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RobW
10 months ago

The Webinar served as a reminder that their 'land & expand' strategy (modular offering) contributes significantly and increasingly to the financial result. New contracts are important but the scope for upsell / cross sell shares centre stage when measuring progress.

The $40m Revenue indication is light to the tune of approx. 10% (NHS Procurement delays) which will show in the Financials. Kate has previously indicated they are unlikely to be EBITDA positive.

Her update on the funding release to the NHS suggests that the H1 FY24 Financials will confirm why we should remain invested...strong run-rate and operational leverage to the fore.

RobW

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Remorhaz
10 months ago

and for what it's worth RBC Capital Market's quick take research update for Alcidion which came out early this morning...

4Q23 activities report - high level of contract sales and positive operating cashflows

ASX: ALC | AUD 0.11 | Outperform | Speculative Risk | Price Target AUD 0.20

Sentiment: Positive

Our view: ALC's 4Q23 activities report was positive with new sales coming in higher than we forecast, net operating cash flows were slightly above our expectations, FY23 revenue is expected to be in line with our forecast, and the company has a higher amount of contracted & renewal revenue for FY24 than we had been expecting

Key points from the 4Q23 activities report:

  • ALC achieved 4Q23 new sales with TCV of $7.3m (vs RBCe $1.0m), of which $2.3m is to be recognised in FY23. This included some module sales to both new and existing customers, as well as two Silverlink contract renewals
  • Operating cashflow was $6.0m for the 4Q (vs RBCe $5.4m), with record quarterly cash receipts of $17.6m (vs RBCe $11.4m)
  • FY23 revenue (unaudited) is expected to be around $40m (vs RBCe $39.7m), with ~70% recurring product revenue and ~30% Services revenues
  • Contracted and renewal revenue for FY24 is $33.7m (vs RBCe $30.7m)
  • The NHS digitisation program continues to move more slowly than expected
  • ALC's cash balance was $14.6m (vs $11.1m at 3Q23 and RBCe $15.7m)


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