The Alcidion Group Ltd (ASX: ALC) share price could be set to climb after the company posted its second consecutive quarterly positive operating cash flow in its latest quarterly results.
What were Alcidion's quarterly highlights?
The company delivered a net operating cash flow surplus of $566,000 in Q4 2019, the second consecutive quarter of positive operating cash flow.
The company delivered a net operating cash flow surplus of $2.1 million for financial year 2019, after three cash flow positive quarters and one quarter (Q2) with a small negative cash flow.
Cash receipts for the quarter were $6.1 million, in line with Q3 2019, while operational cash outflows for Q4 2019 were approximately $700,000 higher quarter-on-quarter.
This was primarily due to the payment of $400,000 in VAT on United Kingdom (UK) Q3 sales, sales commissions related to these two major UK contracts, and advance payment of superannuation contributions for Q4 2019.
Alcidion management said operational cash outflows in Q1 FY20 are forecast to be similarly higher than usual, due to the payment of annual performance bonuses and changed timing of PAYG payments.
Also impacting cash outflows for Alcidion are further planned investments relating to completing the operational integration of the businesses acquired in FY19, predominantly around branding and market presence.
According to Alcidion's release, the company signed 23 new contracts during the quarter, with a total contract value (TCV) of $1.8 million, capping off a strong year of sales and contributing to a pipeline of revenue to be recognised in future periods.
During the quarter, Alcidion announced the signing of a contract for the development of the national Child Digital Health Record (CDHR) which is to be trialled in two NSW Health Districts.
Alcidion says the CDHR initiative will provide a digital record of children's health and development information, currently captured in hard copy 'baby books', with the contract worth a total $700,000.
Where to now for Alcidion?
Management said the company enters FY20 with a positive outlook, given its $11.7 million in contracted revenue to be recognised in the next period.
Overall, the company quadrupled its revenue during the year, albeit off of a low base of $4.2 million in FY18, but this strong end to the quarter could see the company's share price climb higher in early trade this morning.
Revenue isn't the only thing that the company has quadrupled, with the Alcidion share price opening at $0.19 per share – nearly 4 times higher than its $0.05 valuation at the start of the year.
