Alcidion (ASX:ALC) share price slumps despite ‘strong growth’

The Alcidion Group (ASX: ALC) share price is on the slide today following the company’s release of its Q3 results. Click on to find out more.

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Alcidion Group Ltd (ASX: ALC) shares are on the slide today despite the company reporting “strong organic growth” in its March quarterly update.  At the time of writing, the Alcidion share price is trading 2.6% lower at 37.5 cents. In comparison, the All Ordinaries Index (ASX: XAO) is currently sitting 0.02% higher. 

Let’s take a look at how the health-focused IT company has been performing. 

Quarter highlights

In a statement to the ASX this morning, Alcidion released its Q3 results for FY21. During the quarter, the company generated $2.8 million of positive cash flow. For the financial year so far, however, cash flow is currently negative $500,000.

Alcidion generated $11.5 million of customer receipts during the quarter. This constitutes just over half of the company’s entire revenue for the financial year up to 31 March. $6.1 million of the $11.5 million was generated by NHS Trust customers in the United Kingdom.

The group expects contracted revenue for the financial year to total $24.7 million, $15.9 million of which will be recurring and $8.8 million will be non-recurring.

This month, Alcidion announced it had acquired ExtraMed – a UK patient flow software company – for $9.6 million and won a $21 million contract with the Australian Department of Defence as part of a consortium. The announcements sent the Alcidion share price to an all-time high.

Alcidion says the ExtraMed purchase will add $2.7 million in revenue during FY22 and $500,000 in earnings before interest, taxes, depreciation, and amortisation (EBITDA).

The group has $15.3 million in cash reserves currently. It expects to bolster its stash by an extra $6.6 million from a proposed capital raising endeavour.

Management commentary

Alcidion managing director Kate Quirke said of today’s update:

Alcidion has delivered another quarter of strong organic sales growth in the UK, Australia and New Zealand, with contracted revenue of $24.7M expected to be recognised in FY21, excluding revenue from the acquisition of ExtraMed.

Having already surpassed our FY20 revenue figure by 33%, we now enter a new phase following the acquisition of ExtraMed, which strengthens our current patient flow offering and puts us into a market leading position in the UK, with 27 NHS Trusts as customers. We are already moving to integrate these businesses and engage with our expanded client base in this market.

Alcidion share price snapshot

Over the past 12 months, the Alcidion share price has increased by around 124%. In fact, just in the last month, the company’s value has appreciated by more than 20%.

Given its current valuation, Alcidion has a market capitalisation of $395 million.

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Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of 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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