Its tax loss time, hence the larger parcels going through at times. They are happy to put on the market at a lower price than market and purchase back using an unrelated account.... creating a capital loss event. This type of activity will supress the share price up until the eofy.
Most of the smaller groups don't have the economy of scale to develop their own software. It is would be very complex to start from scratch for dispensary software that is unique to Australia. Symbion and Sigma's groups have been aligned to Minfos and Fred for years. API Groups has been aligned to Corum for years too. A lot of independents have been using the cheaper software that is getting very old. Only Chemist warehouse potentially has the IT resources to create its own dispensary software but it would be marginal so they will probably continue to use LOTs.
E-health connectivity will be an essential component for pharmacy software once the medical profession's insecurity and privacy issues are sorted. It will get very complex and the smaller software providers will not be able to manage this alone. Fred and Telstra E-health division are the best position. There will have to be a lot of merger and acquisitions over the next few years to gain sufficient critical mass to be in the E-health space. The electronic prescription exchange intranet is the simplest example of successful connectivity between pharmacy and doctors to this stage. Patients ordering repeat prescription online from the doctor using the various pharmacy apps has not gained a lot of success yet. Doctors don't like writing scripts without someone coming in for an appointment. Firstly it is not always good clinical practice and secondly it does not create a consultation scheduled fee for them. Maybe the gov't could create a small rebate for such a repeat script service for patients on regular medications and are very well controlled clinically that might help.
The gov't is putting up some funds recently for software suppliers to modify their programs to have generics selected by default. From time to time they dish out funding this and they will have to up this in future if they want E-health to really be successful.
The future longer term growth prospects will be good for Corum IF THEY ARE ABLE TO STABILISE THEIR CUSTOMER BASE and grow with the explosion in health care that will come with a rapidly ageing population. There are indications that their strategy to do this and pick up some new customers is working. 2nd half revenue growth is what we will all be looking for. If there is further declines they will have to revisit the strategy.
COO Price at posting:
4.2¢ Sentiment: Buy Disclosure: Held
