OHE
25/11/2015 08:30
HALFYR
PRICE SENSITIVE
REL: 0830 HRS Orion Health Group Limited
HALFYR: OHE: Orion Health FY2016 Interim Report and Results Announcement
Market Release
25 November 2015
Release: Immediate
Orion Health reports interim results, achieves 26 percent increase in revenue
on strong growth across key markets
> Results overview
Orion Health Group Limited (OHE:NZX/ASX) reported its interim results for the
2016 financial year today, with a 26 percent increase in revenue,
period-on-period, to $102 million. Recurring Revenue increased across the
same comparative period from 30 percent to 41 percent of total revenue,
tracking nicely towards the company's goal of 50 percent. Annualised
Recurring Revenue grew to $86 million.
The net loss before tax was $25 million, up from $21 million in the same
period last year. The net loss after tax for the period was $27 million. This
is in line with the company's expectations as it continued to invest in
research and development. Cash and deposit balances at 30 September of $77
million, representing an $18 million reduction in the past six months, were
also in line with company expectations. The company has benefited from
movements in the New Zealand dollar against other currencies.
Orion Health's software now manages over 90 million patient records around
the world.
CEO Ian McCrae said the company was pleased with performance over the period.
The business recorded strong growth in nearly every region it operates in,
managed costs, continued to invest in research and development and stayed on
track with its growth strategy. We see similar levels of growth in the
second half of the year.
It also ensured it was well placed to take advantage of an accelerating move
to "Precision Medicine". This is the emerging model of medicine where patient
care is customised based on complete patient information and is an area where
Orion Health technology is well positioned as a leader.
> Markets by region
North America enjoyed the strongest growth in dollar terms, with a 37 percent
rise in revenues compared to the same period last year. This was driven by
Managed Services growth of 138 percent, primarily the result of deploying
several new contracts and continuing to drive revenues from existing
customers.
The company secured notable new contracts, including with the United States
Department of Defense as part of the Leidos syndicate and enjoyed new
revenues from the state of Oklahoma, the province of Ontario in Canada and a
large integrated clinical network in Tennessee.
One of Orion Health's biggest customers, Cal INDEX, founded by two key health
insurers to manage a state-wide health information exchange across
California, also recently signed its first major customer, with more expected
to follow in the near term. This milestone is the start of the next phase of
the journey for Cal INDEX. It is important for Orion Health because our
business grows with Cal INDEX, as they increase the number of patient records
held in the health information exchange.
Over this first six months of the 2016 financial year, the company has
enjoyed strong sales in Europe, and in emerging markets in the Middle East.
EMEA revenue growth of 81 percent was largely derived from winning
significant contracts in the United Kingdom, including contracts with CSC for
the Trafford Clinical Commissioning Group in Manchester and Uniting Care in
Cambridgeshire. Orion Health also signed a strategic contract with the high
street retail pharmacy chain, Boots UK Limited, to deliver in-pharmacy care
coordination services across 2,400 outlets in the United Kingdom. The company
also won a contract to deploy its open platform technology to a large public
healthcare provider serving several million patients in the Castilla y Leon
province of Spain.
Operating revenue in the Asia Pacific region declined compared to the same
period last year, mainly as a result of the sale of significant one-off
perpetual licences in New Zealand in the prior period. In Australia, the
company's new leadership team focussed on customer deliveries and building
new business opportunities.
The company achieved strong sales growth across Asia, with a successful go
live of its Enterprise solution at The Medical City hospital in the
Philippines and securing a contract to provide a complete in-hospital
solution to the VINMEC International Group, which operates six premium
healthcare hospitals in Vietnam.
> Margin Improvement
Margin in the regions increased $3 million or 32 percent when compared to the
same period last year. Managed Services is the fastest growing area of the
business. In the second half of the last financial year, Managed Services
margin had fallen to 3 percent, however margins have started to recover in
this period. Orion Health is investing in new cloud based delivery models and
automated deployment to support this expansion and improve long term margins.
The cloud solution is expected to progressively provide a significantly
lower cost footprint per customer, a faster deployment and easier upgrades.
Investment will continue over the next 18-24 months whilst we host our
existing customers and migrate them to the cloud.
> Leadership
We are continually seeking to add to the breadth and depth of leadership at
Orion Health as part of ensuring we have the skillsets needed to drive a
rapidly growing global business. Across the business this year there have
been improvements in leadership capability and experience including the
addition of Darren Jones to lead APAC. Darren brings 30 years' experience in
Healthcare IT across APAC and EMEA and will be a valuable member of the
executive leadership team.
Another change is that Paul Viskovich, President for North America, is
leaving Orion Health and will be replaced by Wayne Oxenham. Viskovich has
worked for Orion Health for 18 years and has made a significant contribution
to the business, being instrumental in building Orion Health in the North
American, Australian, and European markets.
Oxenham, currently EVP EMEA, will assume the North American leadership role
early in 2016. Oxenham is a key executive of Orion Health, having excelled in
a wide range of roles across the business over the past 12 years, including
global services, product management and sales. He has grown the EMEA business
significantly since his time in that region. Oxenham will be replaced in EMEA
by Jonathan Selby, an experienced industry executive who was responsible for
leading InterSystems' business in the United Kingdom between 2010 and 2014.
In addition to this, the company has appointed Johan Vendrig as CIO and Susan
Nemeth has joined as VP Finance.
> Research and Development
Orion Health also ensured it is well placed to take advantage of a rapid move
towards Precision Medicine, the emerging model of healthcare where
personalised medical care is based on complete patient information. Orion
Health technology is well positioned as a global leader in this new area.
CEO Ian McCrae says, "we are continuing to invest in R&D to maximise the huge
opportunity we have identified for Orion Health. The healthcare industry is
quickly transforming and changing to keep up with technological and consumer
demand. Increasingly, the focus is moving from treating conditions, to
treating individuals and when it does Orion Health will have the modern,
scalable technology to deliver and enable it."
"We want to position ourselves to be at the forefront of delivering the next
step in population health management - Precision Medicine. Where population
health management is the "who"- defining which patients are high risk and
need particular attention, precision medicine is the "how", enabling the
determination of exact prevention and treatment plans that will specifically
work for an individual. This is an exciting new area of healthcare."
> Further comment from CEO, Ian McCrae
"We are really pleased with our progress in the first half of the financial
year. Our business is growing and new market segments are emerging that have
a need for our scalable platform."
"Signing with Boots and the Department of Defense are recent highlights for
us, but we've concluded a number of major contracts in Europe and other
regions, including with CSC for the Trafford Care Coordination Centre and
Uniting Care in Cambridgeshire. We've also deployed our open platform
solution in Spain and are working on implementation there. We're confident
the remaining half of this financial year will continue to reflect growth."
Ends.
Documents released today related to the FY16 Interim Results:
o Market Release
o Interim Report FY2016
o Interim Results Presentation FY2016
o Notice of Interim Results Announcement conference call at 11am NZT today
o Results announcement appendix
For more information contact:
Bridget Snelling
Investor Relations Manager
[email protected]
021414214
orionhealth.com
End CA:00274013 For:OHE Type:HALFYR Time:2015-11-25 08:30:38
