Qualifier: Bull case from these levels.

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02778239-3A637559

No real surprises in this announcment. Staff cost cuts were already in the pipeline, and there is "4m pa of additional cost savings" to come - I'll be very interested to see what these costs are and no doubt more will be said today.

At 1x sales, costs now coming under control, and arguably sector tailwinds with cashstrapped public health services in the Western world being reluctant to commit to a full EMR replacement, and the very not implausible chance of acquisition by one of the bigger players at these prices, the only thing pushing the price down now is sentiment.

A few contract wins, the timing of which is unpredictable, and Alcidion will be back above 10c soon enough.

Biggest sign to watch for is whether management put their money where their mouths are and start buying substantially on-market once the blockout period expires on 1 March, then I think we'll have found a floor for the price. If they don't, then that will be a red flag.

I was nursing a 75% paper loss IRL at these levels, and am confident enough to risk a bit more averaging down my buy-in price, with the upside outweighing the downside risk at the current price.

On top of the favourable NHS progress, there is likely to be reason for optimism closer to home. For those of you who don't know, there is an announcement imminent in NSW with the single digital patient record coming.

https://www.ehealth.nsw.gov.au/solutions/clinical-care/electronic-medical-records/sdpr

Rumour has it that EPIC is the contract winner - all the American staff in Canberra for the 2022 implementation of EPIC there were quite open with NSW being the next job for them. The successful candidate is still officially unannounced.

With 15 LHDs and 3 specialist networks in NSW, each of whom already run their own implementations of an EMR with Cerner and Orion the two most common systems and nobody in NSW using EPIC, it's hard not to think that this would not result in some flow through to Alcidion as there is a need it bridge the past and future.

@Seasoning @Marsdrix, I think you need to look at what Miya offers to see that it isn't a direct competitor to Orion, Cerner or Epic, because it isn't solely an EMR.

Miya can be a full EMR, but that's not what it's key value proposition is. It's in integrating the datapoints from various legacy systems (many of which are nearing 40 years old) to aid in patient flow and clinical decision making.

One of my jobs is in a health service that uses Miya Flow, and as I understand it was considering adding on more Miya modules to integrate a mind bending hodge podge of clinical systems. In the end, this service has decided to throw it all out and start again with Epic.

Counterintuitively, this is excellent news for ALC. Why? Because you have 30+ years of patient data already stored on the existing EMR, which needs to be available and integrated into any new platform, and there is only one real player in this space.

With NSW Health moving to a single digital health record in the near future (a little birdie tells me that a decision is imminent, but won't tell me who the frontrunners are), Alcidion's offering is, in my view, going to be in very high demand across the largest health service in Australia. Similar issues exist across the developed English speaking health world, so the runway is a long one.

The biggest risk to Alcidion at the moment is not competitors, it's from Governments choosing to tighten belts too much.

A little tightening is OK, and probably favourable for Alcidion, because the cost of chucking out an old EMR to move to new one is huge, not only in capex, but in retraining a huge workforce that has become accustomed to a way of doing things. They can save by not investing in a new EMR, and just keep the legacy ones going with new bits on top for a little longer. And longer. And longer still.

To give you a sense of how expensive an EMR investment is, guess which private hospital operator has large numbers of its hospitals still using largely on paper based records for most of its services? Ramsay Health Care. Why? RHC want some guidance on what the Federal Government's digital health strategy is going to be before committing the money to it. And they haven't had that for 15+ years.

The mind boggles that in 2022, I am using Epic and Alcidion modules in one public ervice, Cerner and Orion in another public service, and pen/paper in the most profitable private service.

Strong buy in my book.

Essentially a strategic acquisition at a terrible time for the share price and longer term retail holders, but I am very happy with the explanation that this was essential to get NHS contracts across the line.

Alcidion's directors have taken a major cut to their own holdings to get this over the line, so they are playing the long game. As long as they can demonstrate new NHS contracts over the next 12-18 months, this will be a genius move with the retrospectoscope.

VWAP of 10% above the CR price is a very good sign.

Disc: Held On SM and IRL, and topped up today with the price discount.