Ann: Q1 FY22 Quarterly Activities Report and Appendix 4C, page-21

Q1FY22 - 4C

Optics wise, the 4C does not look very positive. As some posters have already pointed out, free cash flow has been declining due to a combination of seasonal impacts, lower customer receipts and higher operating expenditure.

However, it has already been disclosed to the market that Q3FY21 was an exceptional quarter in terms of cash flow because the cash receipts of $11.5M included two receipts totalling $6.1M representing upfront payments against a major UK contract with South Tees Hospitals NHS Foundation Trust. Further, Alcidion has historically reported higher operating cash outflow in Q1 due to incentive payments, VATs etc. The combination of these two factors therefore has had the impact of skewing the trend downward trend.

Here also lies one of the issues with contract won by Alcidion. The timing of payment is in some sense dictated by the client, due to maybe urgency to spend the funds by the end of financial year or expiry of grant period, resulting in a much higher upfront payment as opposed to spreading the payments over time.

UK Budget

British finance minister Rishi Sunak's budget this week will include an extra 5.9 billion pounds ($8.1 billion) of spending for the health service over the next few years to drive down waiting lists. Of this, 2.1 billion pounds has been set aside to improve the technology behind the health service.

The total sum also comes on top of an 8 billion pound package announced in September to tackle backlogs built up over the COVID-19 pandemic.

Funding set out in the Long Term Plan also clearly shows continual increases in health funding.