Alcidion (ASX:ALC) share price jumps 14% on solid earnings

The Alcidion Group Ltd (ASX: ALC) share price is delivering gains to shareholders on Tuesday.

At the time of writing, the healthcare software provider’s shares are swapping hands for 40.5 cents, up 14%.

Why is the Alcidion share price surging ahead?

The release of the company’s fourth-quarter result has lit a fire under the Alcidion share price today. A big contributor to the excitement for investors is the record revenue for FY21, positive operating cash flow, and increased market share.

According to the release, the company achieved $25.6 to $25.9 million in revenue for FY21. This represents an increase of between 38% to 39% on the prior corresponding period. The company achieved this revenue growth despite challenges posed by COVID-19.

Additionally, the company achieved a positive net operating cash flow of $1.6 million in the fourth quarter. Likewise, full-year operating cash flow came out at $1.1 million.

New and renewed contracts during the quarter came to a total contract value of $7.3 million. Impressively, this reflects a 52% uplift from Q3 and nearly double that of the prior corresponding period.

Another positive was its 18% jump to $15.1 million in contracted revenue to be recognised in the coming year. Approximately 72% of this contracted revenue is recurring in nature – this includes subscription fees, product license fees, etc.  

Management commentary

Commenting on the record result, Alcidion’s Managing Director, Kate Quirke said:

Alcidion has delivered a strong final quarter to close an exceptional year of growth. FY21 revenue is expected to be in the range of $25.6M-$25.9M, a record result for the company despite being generated in challenging circumstances under the backdrop of COVID-19, particularly in the UK. Pleasingly, we delivered positive operating cashflow in Q4 and for the full year, highlighting the shift into a sales acceleration phase. ExtraMed contributed $600k to this revenue, being 2.5 months’ worth of activity

Quirke added:

We have been able to increase market share across all our core geographies, signing important new and renewed contracts that provide a solid foundation heading into the new financial year. It was particularly pleasing to extend the contract with Western Health for the provision of Miya and to sign contracts to continue to provide integration services to NSW Health. Contract renewals signify customer satisfaction and the positive relationship the company has with its customers.

Cash position

Thanks to a positive cash flow period, Alcidion finished the quarter with $25 million in cash on hand. This compares to $15.9 million in the prior year. Over the past year, the company has taken advantage of its spare cash to make accretive acquisitions, such as the ExtraMed acquisition in April.

At the time of writing, the Alcidion share price indicates a market capitalisation of $419 million.

The post Alcidion (ASX:ALC) share price jumps 14% on solid earnings appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Alcidion Group Ltd. The Motley Fool Australia has recommended Alcidion Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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