I've been kind of vacillating about whether Global Health's recent update was a good one or not. On balance, I've talked myself into believing it was, but it kind of needed to be - and they're not out of the woods yet with Q4 being critical if they are to stay on the narrow goat track that avoids a costly credit raise.

The good news is what appears to be the second highest revenue quarter in the company's recent history. However, they didn't exactly crow about it and that's probably because the highest revenue quarter was Q3 FY23. As a result there wasn't a lot of pcp comparisons, unless they were comparing YTD performance. Free cash flow was frustratingly close to turning positive, but the fact it wasn't meant their dwindling cash balance looks ever more meagre.

The Company's commentary focused on how a government-mandated move to use a single Prescription Delivery Service meant customer-funded delivery and the ongoing SaaS-ing of their products was delayed. DHS has mandated the use of a PDS operated by Fred IT, whose largest shareholder is Telstra. In a way that is also kind of a positive as if they can grow revenues as strongly as they have while having to use resources in an area that doesn't generate revenue, it bodes well once they can get back to the areas that add value.

Stuff I don't like so much:

• they've stopped reporting on ARR the last couple of quarters. It's not such an in-favor metric these days but anything that helps break down the split between services and software revenue would be helpful.
• they haven't been trumpeting major new deals of late. The move around 18 months ago to go from a direct sales model to a greater focus on reseller arrangements, has certainly saved on expenses but risks new growth. If that risk is realised it would take time to take effect as long lead time deals are actioned. Are they about to feel the impact of that and does the commentary that "the focus post-June will be on generating new revenue" suggest they are seeing this in the pipeline?
• borderline chart crime:

The reality is that this is purely a risk versus reward play for me - I suppose they all are but the risk and reward are both heightened in this case. Despite the structural tailwinds this has some hairs on it and that is reflected in the price the market has put on it. But at an Enterprise Value of $6 million, there is a lot of upside if they cross over into sustainable FCF.

A lot rides on this quarter. Q4 is generally a strong quarter for them and the gap between Q3 receipts and revenue suggests that may be repeated once again. However, it really needs to be as Q1 tends not to be with the timing of major licensing invoices skewed to other quarters. Hope is a valid strategy, right?

[Held]

Ditto an ASX release.

https://www.theage.com.au/business/companies/no-brainer-woolies-muscles-into-telehealth-20230320-p5ctno.html

Book ya GLH powered telehealth appointment here.

https://www.healthylife.com.au/telehealth/telehealth-appointment

21/1/22 Quarterly Activities/Appendix 4C Cash Flow Report

A solid quarter from GLH bringing in $2m in receipts and scraping through breakeven operating cash flow. Be aware there is lumpiness in receipts and the company notes 2Q and 4Q are the stronger ones (1Q receipts were only $1.3m in comparison).

It was pleasing to see management be controlled with costs, my fear was that after doing the large capital raise it would give them free rein to spend heavily but it is clear they have a strong focus on driving value from any costs.

The commentary suggests Covid will continue to slow down their ability to implement their contract wins (which makes sense given their customers are hospitals and health centres) but management have no fears revenues will be lost but only deferred until they are able to implement. Nonetheless it sounds like FY22 will still show solid ARR growth with more to come in FY23.

22/07/21 Quarterly Activities/Appendix 4C Cash Flow Report

A solid quarter from GLH, cash receipts of $2m roughly in line with prior quarters leading to a small positive operating cash flow of $300k.

FY21 unaudited revenue of $7m was slightly ahead of the $6.9m guidance given in the capital raise presentation.

The business continues to be profitable at the EBITDA level (~$1m) with $650k ARR pipeline waiting to be implemented.

31/5/21

New CEO Appointment

GLH announced founder and CEO Mathew Cherian will step back to an Executive Director role and focus on the business at a strategic level, including international expansion and M&A opportunities.

Michael Davies has been appointed to the CEO role and brings with him fantastic experience primarily in the telco sector, most recently as Head of Revenue at Macquarie Telecom. Shareholder returns at MAQ have been fantastic over the last decade.

Despite having no direct health experience, Michael clearly has a strong background in sales, particularly at an enterprise level and looks to be a great appointment at this point in GLH's life as the large investment into the product suite is largely complete and expanding sales is the next step to be taken.

Wolper Jewish Hospital to implement MasterCare for Patient Administration System

Australian Healthcare Software provider Global Health Limited (ASX:GLH) (“Global Health” or “Company”) is pleased to announce that Wolper Jewish Hospital (Wolper) has signed for the implementation of Global Health’s MasterCare Patient Administration System (PAS) for hospitals on a first year value of over $78,000.

Key Highlights:

•  Implementation of MasterCare Patient Administration System (PAS)
•  Projected $78,000 in revenue over first year of the contract

GLH have a very broad software platform, that would at face value appear to need a lot of investment to keep it competitive.  GLH appears to lack the financial capacity / scale to stay in the race.   

Glassdoor feedback is pretty attrocious.  2.3 star rating, with 7% recommendation.  

Little progress on the evenue front, although this is concealed somewhat by the transition to  subscription model.   

It is cheap for a reason. 

CEO owns over 50% of the business, so if he is the problem, it ain't going to be fixed by minority shareholders.