I'll definitely try and get Kate lined up for another call. No promises, but will see if I can get her on the line so we can ask some more questions about the business.

After I was done shaking my fist over the dilution I went back to my valuation and saw I factored in a 20% dilution to get to my 12 cent valuation (which I probably need to redo now anyway), but feel a little more at ease to stay the course for now.

One last observation. I think it's interesting just how big the $ magnitude quarterly swings in reciepts have become compared to the relatively steady cash costs and the WC gap that is creating. My take would be they thought new contracts, and implementation revenue, would smooth out some of that whipsaw but the delays necessitated a cap raise to fund the gap.

I tuned in on to the conference call. Q1 was broadly in line with what management had internally forecast and were well aware of likely large outflows for VAT/GST and one offs (bonus, licenses, etc). Slow collections also impacted. Q1 was not the reason for the cap raise.

Sales have been slow so far in Q2, and some sales expected will likely push out to Q3 and Q4. Hence the company wanted to raise cash to reinforce the balance sheet to endure any future sales delays.

The big query for me, is how a company that is running 12% above contracted revenues of the previous year, get into a position like this. The only reason I can think of, is what @Solvetheriddle mentioned, that management is gambling on receipts coming in. More specifically, having receipts coming in from new contract win prepayments - not just business as usual recurring payments, or scheduled service work - to fill in and boost cashflows.

A few other things of note I picked up from the call:

• Kate mentioned that they’ll need to book around $30m TCV of new sales for the rest of the financial year, to meet the current guidance - EBITDA and Operating Cashflow positive. She reiterated that this is what they’ve done in previous years and it shouldn’t be a stretch. Having already hinted at a weak Q2, this might not be a full gone conclusion and the current FY24 guidance might be at risk.
• Mentioned the UK NHS EPR contract awards have started with 2 out of 70-odd contracts awarded. Both not bid on by ALC. She expects wins in the coming months.
• Kate’s understanding is that a portion of the UK NHS budget has been set aside for these contracts in FY24 - but not all of it. “They were never all going to be let in for FY24”. Does this contradict what she had said previously? I had the impression that all the EPR contracts were to be awarded in FY24 (30-Mar-2024 year end).

Attached is a slide presented. Weak Q1 sales, combined with a hinted weak Q2, will leave a lot of heavy lifting to be done for Q3 and Q4.