ASX:ALC
Alcidion Group Ltd
Investment Summary
The fund managers believe that Alcidion Group Ltd (ALC) presents significant investment potential despite past volatility. They note that the company has secured several substantial contracts, including a A$30-40m deal with North Cumbria and a A$4.5m contract with Northern Adelaide, which are expected to enhance recurring revenue streams and margins. In their opinion, Alcidion's current market capitalization of approximately $80m positions it favorably for upside, particularly given the anticipated $200m tender pipeline. While challenges such as the winning of investor confidence and seasonal cash flow fluctuations have previously impacted performance, fund managers remain optimistic about upcoming contract successes. With a current cash position of $7.7m and a focus on cost-cutting, they predict an ongoing positive trajectory for the company. Overall, the consensus highlights a promising outlook for Alcidion, reinforced by its recent contract wins and strong market fundamentals.
Commentary From The Managers
Cyan Investment Management
28 Feb 2025
$0.09
- Cyan Investment Management highlights significant performance from Alcidion (ALC +30%) following the announcement of a major contract with North Cumbria Hospital network in the UK.
- The contract is valued at A$37.5m over 10 years, with $8-9m expected to be recognized in the current financial year.
- This contract positions ALC to achieve EBITDA and cash-flow positive results for FY25.
- The company also secured its first contract in Wales, valued at $5.5m.
- Cyan Investment Management believes the recent price action is justified due to the significance of the contracts won by ALC.
- Alcidion is well-funded, with $7.7m in cash as of 31 December 2024.
- A strong billing cycle in this half is expected to improve ALC's cash position significantly by 30 June 2025.
- Overall, Cyan Investment Management sees a lot of reasons for optimism regarding Alcidion's growth and prospects.
Cyan Investment Management
31 Jan 2025
$0.07
- Cyan Investment Management continues to hold a positive view on Alcidion Group Ltd.
- Recent quarterly update revealed $13.1m in new contract wins, exceeding previous expectations.
- Two significant contracts of $4.5m and $3.7m were highlighted during the period.
- Alcidion further secured a new contract worth $5-$7m in Wales, enhancing its presence in the UK health system.
- The company's growth trajectory is supported by its increasing contract wins.
- Cyan sees potential for further expansion in international markets.
Cyan Investment Management
30 Nov 2024
$0.06
- Cyan Investment Management has updated its investment thesis on Alcidion Group Ltd (ALC).
- Alcidion experienced a 20% increase in stock value amidst positive developments.
- The company secured two new contracts: a $4.5m contract with Northern Adelaide Local Health Network and a $3.7m contract with Peninsula Health in Victoria.
- Despite the new contracts, there was an expectation for the stock to rise even higher based on the positive news.
- The recurring revenue for Alcidion has reached $30m per annum.
- Considering its modest market capitalization of approximately $80m and an EV/Sales ratio of 2.5x, there is significant potential for upside.
- The investment thesis reflects ongoing interest in the medical software sector.
Cyan Investment Management
30 Sept 2024
$0.06
- Alcidion Group Ltd (ALC) experienced a significant underperformance, declining by 14%.
- Cyan Investment Management notes two recent contract wins for Alcidion:
- Preferred Supplier status to North Cumbria UK, a 10-year deal worth A$30-40m.
- A 5-year contract with Hume Rural Health in Victoria valued at A$4m.
- Concerns regarding a seasonally weak Q1 cashflow report are expected at the end of October, possibly affecting investor sentiment.
- Cyan Investment Management anticipates that recent cost-cutting measures will have a materially positive effect on Alcidion's cost base and reported numbers.
Cyan Investment Management
31 July 2024
$0.08
- Alcidion Group Ltd (ALC) secured a major UK contract as their Preferred EPR Supplier to North Cumbria, valued at A$30-40m over 10 years.
- Additionally, a 5-year, A$4m deal was announced with Hume Rural Health in Victoria.
- The new contracts offer high margins and recurring long-term revenues, enhancing financial stability.
- No additional staff will be needed for the North Cumbria contract, leading to a large portion of revenues impacting the bottom line positively.
- Alcidion has shown strong positive cash flow of +$5.6m in the quarter.
- Cyan Investment Management anticipates more contract wins due to a $200m+ tender pipeline.
- The company is expected to experience significant potential for price appreciation moving forward.
Cyan Investment Management
29 Feb 2024
$0.05
- Cyan Investment Management updates its investment thesis on Alcidion Group Ltd (ALC) amid ongoing challenges.
- ALC has faced delays in winning investor confidence due to postponed contract awards in the UK NHS system.
- Management has reduced the cost-base following a significant cash outflow in the first half of 2024.
- Despite frustrations, Cyan Investment Management believes the company will achieve new contract success within the next 6 months.
- ALC is targeting a share of its $200m tender pipeline to bolster growth.
- Recently, ALC announced a $3.4m contract extension with Dartford and Gravesham NHS Trust.
Cyan Investment Management
31 Jan 2024
$0.06
- Cyan Investment Management highlights that Alcidion Group Ltd (ALC) recently detracted significantly from the Fund’s performance, dropping 24%.
- Investors have shown impatience awaiting new healthcare contracts in the UK.
- The first half of the calendar year is typically strong for ALC.
- Alcidion has confirmed over $35m in contracted revenue for FY24, contributing to total contracted revenue of $125m.
- With $8m in net cash and a market capitalisation of $70m, the outlook appears positive.
- Cyan believes that the recent price action seems overly pessimistic, especially with expectations for a stronger second half of the year.
- Cyan Investment Management continues to hold their position in ALC.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.