Who they are and what they do
Talius is an internet of things company that produces personal emergency response systems (PERS) to the aged care sector. They were previously known as Home System Care (ASX:HSC) but changed their name in 2023 to reflect their strategy of being a SaaS-focused business.
This is (or was?) a poor quality company. In the past Talius sold the hardware but outsourced the software platform to a third party, meaning Talius earned none of the stable recurring revenue.
It was beholden to the ebb and flow of hardware sales, and even when they received significant orders, they would still operate at a massive loss. We'll get to capital management in a moment.
To change this, they have invested a lot of time and money into building their eponymous Talius platform to replace their third party platform. This means they can now charge a fixed fee per connected device, giving them both hardware and software sales. This platform now lets nurses monitor patients with real-time and predictive analytics for health and safety, with some AI features planned down the line.
They operate a B2B2C model with their primary customers being aged care providers, but you can also get a PERS for your own home. Talius is also hoping to expand their product suite to other sectors such as childcare centres and even construction sites.
New Taliuswinds
After the aged care royal commission, there were major reforms made to the aged care legislation coming into effect 1 November 2025.
The new legislation provides rebates for assistive technology, like PERS, for both at home care and for aged care providers which will benefit Talius’ B2B2C model. The legislation also enhances compliance requirements for aged care providers which means they'll need to seek efficient and cost effective ways of monitoring patients.
The company has seen an influx of interest from care providers as a result, with a respectable backlog of units to be installed. They now have surpassed 50,000 subscriptions with 11,000 on the backlog. Each device now adds approximately ~$31 in software recurring revenue.
The working capital trap
The most unappealing part of this company by far is how it seems unable to make sales without raising capital. Large bulky sales means inventory was needed, to get the inventory it would raise capital and then when the sale was done it would be left with not that much profit, meaning it needed to raise capital!
The hope is the new recurring revenue stream will smooth that out, removing the need for this cycle to continue but that is something time will tell. The 11,000 subscriptions in backlog represent $900,000 in revenue which should help plug the net negative cash outflows.
New boss, same as the old boss?
Given the above inventory issues, I would question how much you can trust management to grow your investment.
However, something very interesting has recently happened: the founder & MD has stepped aside and appointed a new Managing Director. He's still going to be on the board and an executive but will focus on growth and strategy and instead they've appointed a new Managing Director, Pat Howard.
Pat has previously run MSL solutions which was listed on the ASX several years ago before being bought out. I personally never looked too closely at MSL at the time, but I remember it being a truly exceptional company because it was the only tech company that was choosing to make a profit during COVID in the zero interest rate environment.
It's rare to see a founder step aside, especially considering the founder has a 45% stake. Pat Howard seems like an excellent pick as he gives Talius a lot of what they need. If he brings the same sort of fiscal discipline MSL had to Talius, this could be a game changer for the company.
Management are also currently making modest on-market purchases.
What I'm doing
Because it is Christmas I wanted to keep this short and sweet so I'm:
- Being lazy and not doing a valuation.
- Waiting till the new year when we get quarterly results and the annual report in February.
I'm quite happy watching and not touching this one until we see some evidence of the new strength of the business.
I think the management changes are key here and would form the basis for any investment thesis. If they can unlock sales into new sectors, there is a lot of potential but right now there's nothing substantial.
My guess is that it will take a solid 6-12 months for this company to really show some results.
Merry Christmas!