Hi @mikebrisy the slowdown isn't ideal, but I think there are genuine explanations. H1 Revenue amounted to $57.6 million with a corresponding H1 NPAT of $7.7 million. In H2, the revenue reached $59.7 million while H2 NPAT stood at $6.1 million.

The decline in NPAT during the second half is attributed to heightened staffing costs and an inventory build linked to the new distribution center in Melbourne. This was partially mitigated by cost savings from the closure of physical clinics. The efficacy of the strategy to shut down physical clinics and solely maintain an online presence remains to be proven. While in the short term, there might be a risk of losing customers who prefer in-person consultations, I believe that, in the long run, focusing on expanding the Canview network and distribution while retaining an in-house telehealth presence is the correct move.

The primary factor contributing to the deceleration in H2 can be attributed to the transition of patients to the newly launched app on February 23. This concern was acknowledged by the management. At the close of H1, there were 7596 patients utilizing Canview, but by the end of H2, this number dropped to 5683 as the company was still in the process of transitioning patients over, following the app release. It is important to note that according to the annual report as at the release date of August 23, 2023, the patient count has rebounded to over 8000.

Naturally, growth rates will taper as the low hanging fruit have already been attained. Nevertheless, the overall market continues to exhibit healthy expansion. Assuming Vitura can sustain its market share and dominance, I expect it to at least keep pace with the market's growth rates.

Should the growth rate not align with market trends in the upcoming two halves, it would indicate a potential loss of market share for Vitura. In such a scenario, I would reevaluate my perspective and thesis. However, at present, I am placing trust in the management's strategy.

@Vandelay thanks! I appreciate the detailed explanation. The reported rebound to 8000 is clearly significant.

Not knowing the company or the sector well I was concerned that something was happening competition-wise, as it is an emerging sector. But you have recognised this in your response.

On the face of it, this look interesting and reasonably valued. I'll add it to my "new ideas to research" list.

Disc: Not held

No problem @mikebrisy. It's no slam dunk, there are risks. But the valuation and profitability I believe makes it attractive risk vs reward potential.

@Strawman heard the latest baby giants pod and your Vitura discussion with Matt. I outline my understanding of the flat second half was the shift to the new app on February 23, acknowledged by management. Patient count was 7596 in H1, dropped to 5683 in H2 due to ongoing transition after the app release. Notably, the patient count has rebounded to 8000+ by August 23, the date of the annual report.

If growth doesn't rebound in the next half, this theory is wrong and I'd be worried.

Yeah @Vandelay I heard the pod too. Matt didn’t seem to be across that aspect of it. I’ve definitely decided to wait for the next result and not sure I understand the market well enough for it to be investable for me even then.

Ah, good to know. Thanks @Vandelay

I'm still trying to line up a chat with the management team. I'm open to understanding it better. At a quick glance the fundamentals seem to show potential. Certainly more than I initially gave it credit for.