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 Higham, 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.
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Tom Richardson owns shares of Pro Medicus Ltd and Dicker Data.
You can find Tom on Twitter @tommyr345
The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Pro Medicus Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Nanosonics Limited and VOLPARA FPO NZ. The Motley Fool Australia has recommended Nanosonics Limited, Pro Medicus Ltd., and VOLPARA FPO NZ. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.