I thought it was a reasonable FY19 4C for the following...

I thought it was a reasonable FY19 4C for the following reasons:

Cash receipts

Let us bear in mind that things traditionally slow down towards Christmas. Company has alluded to this:

Q2 cash receipts are always impacted by earlypre-Christmas cut-offs in customer payments of invoices. This was reflected in a substantial increasein group debtors as at the end of Q2 compared to the end of Q1.

Further, the cash receipts for the quarter of $4.1 million was still wayyyyy better than the $528,000 reported for Q2 FY18 prior to the MKM Health acquisition.

Cash balance

In my view, management has done an admirable job in controlling costs. If we exclude the final $1.2 million payment made for the MKM Health acquisition, the cash balance as at end of Q2 FY19 would have been $2.7 million. 

No further cash consideration is required for the acquisition.

Sales update

Alcidion is continuing to make inroads into the NZ market. It was pleasing to know that all but one district health boards in the South Island are using Patientrack's electronic observations system.

For Q2 FY19, 12 significant contracts were signed or renewed for a total contracted value of $14.3 million. Who knows how many other contracts were not announced as they were deemed to be non-material by the ASX. From memory, the threshold figure of $300,000 were quoted previously.

Composition of total revenue

The new Alcidion continues to achieve progress in greater revenue stability. Recurring revenue has increased to $7.5 million in Q2 FY19, from $6.7 million in the previous quarter. A 12% increase!

As an aside, I do not believe the departure of Duncan Craig (a good bloke) should come as a big surprise given this was somewhat alluded to by Kate when she mentioned that the company was seeking to employ a new financial controller.

Given the dispersion of Alcidion offices, it makes sense to me to consolidate the various operational aspects of Alcidion where they best fit to achieve synergies.

What I would also like to see is for some upfront key points to highlight the achievements, for example: the positive upward trend in underlying revenue and continued penetration of Patientrack into the district health boards for the South Island, uplift in the recurring component of the revenue profile.