Alright, so basically everyone here is underwater, some more so than others.
But there is still potential here and significant potential at that.
The Annual Report has some observations that are worth noting (some of its rubbish as well), along with a few overlooked developments.
Here are some things that stood out to me.
CHAIRMAN'S REPORTThe Chairman's report doesn't really tell us much, most of it is corporate speak, which isn't surprising, but is worth noting, as results start at the top
CEO Move - Interesting that the CEO has moved back to Aus, I can't say I see this as a positive when the US is the monster market where a lot of deals and partnerships could be struck. Let's hope we have the leadership team in the US to keep the momentum going.
Shareholder value - Chairman also claims that partnerships are delivering shareholder value, which is the definition of the early crow from the Chairman. The partnerships are great, but very hard to claim they have created shareholder value at this point, let's see what 2022 brings us.
CEO REPORTA bit more relevant content in the CEO report, including on where things might be headed.
Running Lean - This is mentioned a few times by both Chairman and CEO, it's marketing speak for we haven't figured out how to produce enough revenue yet. If they were growing revenue quicker, running lean wouldn't be a consideration, they would have the confidence to invest in growth and their ability to raise additional capital to fund that growth. It's good that they can control costs, but don't highlight it too much, as simply reminds us that you can't get revenue spinning quick enough!
Recurring Revenue - They focus on this a bit, COVID was tough no doubt, let's focus on the run rate. Taking Q4 figures, we would be at $1.544m with no growth. Ideally they will make decent strides bumping this higher in the near future, the sooner they can get this growing 20%+ Qtr on Qtr, the better!
Partnerships Stryker - no mention, wonder why?
Medtronic - this is the big one, hugely important, the fact they have renewed across three separate agreements. Let's hope a decent deal can be done here and it underwrites most of the businesses operations at a decent margin.
QBE - Tipping this barely got into first gear with COVID, let's hope it can expand this year and potentially be taken overseas
Safety Culture - this ones doesn't exist yet and is speculation on my part, but it should be a high priority for Andrew now he is back in the country. He should really try to get SC to take DVL over. They could plug us into this division -
https://safetyculture.com/monitoring/sensors-and-devices/ - Reverse take over anyone? Prob not, they will list in the US.
ProductThe two key updates that stood out for me the most in the whole annual report were:
- Product updates now include data privacy and security features, important for large enterprises and their IT systems (ie: Medtronics and others)
- Unit cost of production now substantially lower and opens it up for DVL to sell online (ie: Hinge Health model) and also to target international markets where they don't have operations, namely to physios (and GPs) globally
Anyway, will need to stay patient (hard at this point, I know), but I do think this has potential in 2022.
