Alcidion Group Limited

ASX:ALC

Alcidion Group Limited

ASX:ALC
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$0.064 (-3%)
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#24
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68
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110
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Reports (14) My Report Forum Investors
Forum Topics ALC ALC The bear

Pinned straw:
Seasoning
Added 10 months ago

Alcidion are an acquisition hungry company, they don’t really develop their products - they acquire them. We’ve seen this over the last few years with Silverlink and ExtraMed - if you scan back through their news stories on their own website you almost never see product announcements. 

I think the last update I saw was some time (years) ago with them upgrading Miya.

The acquisitions are a mix of bolting on capabilities and buying their way in the door to relationships, their lack of new contracts makes me think this part of healthcare tech is extremely sticky in general, and maybe Alcidion’s products aren’t any more sticky than anyone else's. It also means they have to take a lot of calculated risk on acquisitions that might not work out.

Alcidion dilutes like it’s free money. It hurts shareholders. Their most recent dilution was the most puzzling of all to me - a historically lumpy business blindsided by its own lumpiness. It feels like poor planning. They seem allergic to taking on debt - maybe that's a good thing? but raising at 7 ish cents when they've been sold at 33 cents in the past? ouch.

As others have mentioned based on my update on their last year's hiring - this is both a positive and a negative in my mind. It’s great they still have the growth focus, but they don’t have the momentum to back it up. They had this amazing year in 2022, then essentially fell off a cliff in 23. 

Lastly, Alcidion’s geographic focus is incredibly UK dependent (yeah I know Leidos is in there, but look at the amounts in the UK), getting in with Alcidion means you’re strapping yourself to the clusterfuck rocket going on in the UK to do with the NHS - I’ve posted in the past there’s a couple of podcasts you can listen to, to get the general vibe of the state of things up there and it ain’t pretty. 

Now you could argue that junior doctors in the NHS getting paid the equivalent of a supermarket checkout person up there is an opportunity for digital healthcare to smooth things over, or you could potentially look at it as there not being enough money to go around - despite the massive TAM being bandied about.

Disc: I hold IRL and in SM
Marsdrix
Added 10 months ago

@Seasoning I like your point that their software may not be stickier than anybody else’s software. There is some horrendous software that sticks in hospitals for a very long time.

Perhaps the opportunity for an edge requires:

  1. Being around at the right time of the procurement cycle (hence the troubles with UK slowing growth from delayed purchases) OR have technology that hospitals may want out of cycle such as Miya to facilitate patient flow.
  2. Having whatever the buyer decides is the minimum functionality (hence the Silverlink acquisition for a PAS - this was essentially being a catch up). This makes Alcidion more capital intensive than a regular software business.
  3. Having the best value for money, especially in public hospitals. This is harder when it’s capital intensive.
  4. Selling into American and private hospitals. Promedicus can charge more money because it saves so much time in radiology, which can be a bottleneck for everybody’s care in a hospital. UK hospitals don’t care about saving the time of a junior doctor because they just never pay them overtime.

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Marsdrix
Added 10 months ago

@Seasoning I like your point that their software may not be stickier than anybody else’s software. There is some horrendous software that sticks in hospitals for a very long time.

Perhaps the opportunity for an edge requires:

  1. Being around at the right time of the procurement cycle (hence the troubles with UK slowing growth from delayed purchases) OR have technology that hospitals may want out of cycle such as Miya to facilitate patient flow.
  2. Having whatever the buyer decides is the minimum functionality (hence the Silverlink acquisition for a PAS - this was essentially being a catch up). This makes Alcidion more capital intensive than a regular software business.
  3. Having the best value for money, especially in public hospitals. This is harder when it’s capital intensive.
  4. Selling into American and private hospitals. Promedicus can charge more money because it saves so much time in radiology, which can be a bottleneck for everybody’s care in a hospital. UK hospitals don’t care about saving the time of a junior doctor because they just never pay them overtime.

10
Bushmanpat
Added 10 months ago

It always bothered me that they started as a resource company (Naracoota Resources) who bought the Alcidion Group in about 2015, but I overcame my reservations and jumped in at $0.10 IRL last year. Probably should have stuck with my initial reservations.....

Naracoota in $12.4m backdoor listing (businessnews.com.au)


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