Some hastily written reflections on the Melbourne Investor presentation that was held today, apologies in advance for any typos and grammatical errors:
Overall
- Well-attended, unfortunately I couldn't mingle afterwards to get a sense of who was in the room as had to race off to another meeting. I would say there was a good proportion of LT holders there who already knew a lot about the company and some newer faces. A mix of retail and institutions/brokers.
- There were no juicy surprises to report. Kate largely covered what has already been presented at Techknow (watch the excellent video) and information in the slides. There was some time for questions (more on this below)
Investor slides
A few observations linked to slides that seem worth mentioning, in no particular order of importance:
- Future opportunities in home care and other parts of the health eco-system. The Cardiac home care trial in SA was mentioned and one of the investor slides shows an example of dashboard visual output. Interesting question was asked as well about potential to integrate with ambulances (not yet, but they have certainly considered the possibilities of leveraging this in the future).
- Market opportunity - along with AU, NZ and UK, Canada is certainly on Alcidion's radar as their health systems have the same needs that are driving market adoption of digital health solutions. BUT - they don't have the same big players that North America have. If I recall correctly, Kate mentioned she was over in Canada in February...doing a little reconnaissance and sales pitch I suspect, rather than holidaying. For now the big opportunities are certainly UK, but we could see something left field from Canada.
Competitive landscape - Kate had a fairly persuasive argument for viewing this as an opportunity, rather than a threat. Our differentiation is that we add value to existing larger transactional products and systems (e.g. Cerner, Allscripts) by providing the capability to draw insights from the data and link systems. Many other data-analytics providers are also retrospective, whereas we offer real-time information. Also on competition, it looks like we won't be on Nervecentre and System C's Christmas list having effectively bussled them out of the NZ marketplace and beating them on recent UK contracts
- Contracts in this space are very 'sticky' and rely a lot on reputation. I learnt for example that MKM's first contract, 17 years ago that continues to today was with ACT Health...and you know who was an early adopter and one of only 3 sites worldwide using the full Alcidion product suite.
Growth strategy - expect to see a new website that brings MKM and Patientrack under the one Alcidion banner soon. Re: international growth, Kate is very excited about UK potential (and so am I...). Also worth noting that they will be appointing a new 'country manager' in next couple of months for NZ so plenty of stuff will continue to happen across the ditch.
Questions/discussion and other bits and pieces
Sales cycles - typically 6-8mths and no concerns noted from hospitals etc, re: our 'low' cash reserves. Lot of behind the scenes work in raising visibility and so on in-between these cycles. We have the reputation and are trusted. Also the shift to SaaS in hospitals is coming slowly so the boom and bust risk of contracts is less a concern moving forward (see slides on roughly 50/50 split on recurring and non-recurring revenue).
Building the evidence-base - results should be out by end of financial year on CSIRO proof of concept re: third party algorithms. Very exciting...On the general question of research on efficacy and effectiveness, this is often something that hospitals and researchers will work with us on but Kate made an interesting point that in the health IT sector they are not that concerned with 'clinical trials' - they want to know if it has worked well in other places (so testimonials and track record count). Digital health CRC that we are part of with a range of academic institutions should yield further evidence over time...
Class B Contingent Shares - these have lapsed. On Blue sky, Kate just confirmed they are not in urgent need to get out. Has no idea of their price target. Wouldn't be drawn on many other potentially market sensitive questions (e.g. takeovers, tenders in pipeline, etc...). Joked that she looked at Hot Copper this morning so in any event, the questions were read.
UK panels - we are on about 3 of these under the banner of a larger 'catalogue provider'. If anyone can post more about this that would be helpful, as it seems to operate a bit differently to panels in Australia and NZ.
Alcidion has lots of 'big data' - but we don't own this. If we did then Patientrack would have been taken out years ago by a big US investor. Learnt that the R&D team sits not only in Adelaide but also a team in Auckland.
Hope these notes and reflections are useful - I didn't get chance to ask all questions I wanted but overall was very impressed with professionalism and knowledge of Kate and Collin, the new COO and CFO.
