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#Q3 FY24 update and 4C
Added 3 months ago

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:

40fb2acf8c2a3f409bf9ec407e7997de023af6.png

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]

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#Bull Case
stale
Added one year ago

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

ac49cb27fed7ed3aab96d46268282b50e1da5f.png

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#ASX Announcements
stale
Added 3 years ago

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.

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Valuation of $0.600
stale
Added 3 years ago
Downgrading price target to 60c (previously 90c). Same investment thesis as below, but adjusting for capital raise dilution. In an investor presentation today management gave ARR guidance through FY21 given the visibility they have of contracted customers yet to complete implementation. With ARR forecast to be at least $5.4m, I think GLH can attract a 7x multiple given they are profitable with strong cash generation and offer a great growth profile (targeting 20% ARR CAGR over the next few years) in the sticky med-tech sector.
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#ASX Announcements
stale
Added 3 years ago

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.

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#ASX Announcements
stale
Added 3 years ago

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.

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#ASX Announcement 26/3/21
stale
Added 3 years ago

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

View Attachment

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#Bear Case
stale
Added 4 years ago

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. 

 

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Valuation of $0.150
stale
Added 4 years ago
Global Health Ltd - Turnaround story, or Perennial Heart Breaker? With minimal revenue growth over the past 3 years or so, it has been tough going for GLH shareholders. No doubt, there is significant competition in this sector, and GLH remains a small fish. However, there is some light at the end of the tunnel: 1) Conversion to a more sustainable SAAS model is well advanced, with recurring revenue now well in excess of 65% of revenue. 2) Reported 32% growth in SAAS revenue over H1 2020. 3) Sticky product, which would be difficult to remove / replace once established. 4) Cross selling opportunity, across its health platform ecosystem. 5) Offering has network effect attributes, should the business grow. 6) announced contract win in March, for Bellarine Community Health, indicating their offering is competitive. Currently, GLH has a market cap of $6.5M, with revenue expected to be +$6M this financial year. GLH have less than $1M in cash on the balance sheet, with borrowings of around $900k. GLH is hovering around break even, and continued growth should enable the avoidance of another CR. Assuming mediocre revenue growth of around 10% pa, resulting in revenue of $14.6M in 2027, and a margin of 12%, I come up EPS of 0.02c per share, and a share price of 39c per share (PER of 20). Discounting this back to present value, at a rate of 15%, I come up with a valuation of 14.8c per share. However, if GLH has some success, and achieve closer to $20M in revenue by 2027, there is significant upside. DISC: - Hold a starter position.
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