Ann: Q4 FY2020 Business Update and Appendix 4C, page-34

I thought the quarterly reads okay to me. In fact, it has given me extra confidence that management is continuing to execute on their strategy, despite the current difficult times.

Key highlights include:

• Positive net operating cashflow - plus for me, wasn't expecting this
• Uplift in FY20 revenue forecast - from $17.2M (as at end of Q3 FY20) to the range of $18.4M to $18.7M (as at end of Q4 FY20). Also uplift from FY19 revenue of $16.9M. Bloody impressive in the context of Brexit and Covid19, if you ask me for the reasons Kate mentioned about resources being diverted to the front/last line!
• Continuing uplift in operating expenses - within expectations given management has reiterated this multiple times that the increase in sales and marketing investment/expenditure is to drive top line revenue growth. You have to be either living in lala land or not bother carry out some basic research before posting any criticism

Additional highlights for me include:

• Very low customer churn rate - Kate mentioned that she cannot recall a contract not being renewed once the product is embedded into the customer's system
• The is a level of pent up demand that will flow through
• Recurring revenues will continue to increase as contracts gets renewed based on a subscription model
• Developments in NZ as a result of the Simpson review. Well worth a read as it touches on digital and virtual care. One recommendation in particular caught my attention: 'priority for digital investment shouldbe given to initiatives that will accelerate interoperability'
• Alcidion currently in active discussions with a number of parties about their products
• Structural tailwinds remain intact or might have even accelerate - e.g. virtual care settings and ongoing increased focus on digitalisation in UK and NZ.

If I remember correctly, Kate also hinted at an uptake of Patientrack in NZ.

Based on 'current' operational performance and valuation, Alcidion's current market cap is probably about right or a bit tad higher.

But for some of us, we are investing in what Alcidion could be in 4 or 5 years time. For things to play out as we think it should, it requires a combination of luck, good execution by management etc. Things may either play out exactly the way we believe it should or turn shit house - all part of investing.

Everyone's valuation of Alcidion will be dependent on a number of factors, including: your investment horizon, confidence in management execution, view of structural tailwinds or headwinds, sustainability of growth rates, capacity of Alcidion to upsell and cross sell its products, etc.... hence my previous comment of Alcidion probably being a case of 'averaging up'...