This morning medical software player Volpara Health Technologies Ltd (ASX: VHT) reported an operating cash loss of NZ$4.24 million on sales of NZ$4.89 million for the quarter ending September 30, 2019. The company flagged a ‘one off’ payroll timing adjustment for a blow out in staff costs that dragged the overall quarterly result lower.
It also completed the acquisition of Seattle-based breast screening business MRS Systems in the prior quarter to distort comparisons to prior corresponding quarters.
Volpara reported annualised recurring revenue (ARR) including the MRS acquisition was NZ$15.7 million (US$10.3m) as at September 30 2019. The group is now selling software to assist in the detection of both breast and lung cancer.
After a A$55 million capital raising in June 2019 the company has NZ$40.9 million cash on hand and is forecasting a cash outflow of NZ$8.97 million in the December quarter.
The CEO, Ralph Highnam, is confident of a big December quarter: “We’re very much looking forward to Q3 with the delivery of new integrated products at RSNA (Radiological Society of North America), our big trade show in Chicago; the publication of the DENSE results from the Netherlands after a 10-year randomised control trial using Volpara®DensityTM software; and a possible breast density announcement from the FDA (US Food and Drug Administration).”
Based on 218 million shares on issue Volpara is valued around $357 million based on a $1.64 share price.
We can see why it was keen to get a capital raising away at a $1.50 per share back in June and the company’s share price is perhaps flying higher than its financial results.