another contract, page-19

wow!! what a great ann re its future!! price will ....rapidly.

1
Attention ASX Company Announcements Platform
Lodgement of Open Briefing ®
IBA Health Limited
Darling Park Tower 1
Level 8, 201 Sussex Street
Sydney, NSW 2000
Date of lodgement: 23-Mar-2006
Title: Open Briefing ® . IBA Health. Exec Chairman & CEO on Outlook
Record of interview:
corporatefile.com.au
IBA Health Limited has reported over $17.5 million in licensing and service
agreements with major hospitals and medical groups in Malaysia, Singapore,
the Middle East and Australia since the end of the December first-half
accounting period. How will these deals contribute to earnings in the current
second half and to recurring income going forward?
Executive Chairman Gary Cohen
We’ve had an excellent start to the 2006 calendar year. The deals we’ve
announced will contribute about $15 million to revenue in the second half at
very high margins. These deals will contribute recurring revenue of $3 million
per annum when the sites are all live.
corporatefile.com.au
At the first half result announcement you indicated you were preferred bidder
for more than $10 million of contracts that you expected to close in the second
half. To what extent have these contracts been closed to date and what is the
current sales pipeline?
CEO Steve Garrington
We’ve secured all the bids we were expecting to close as part of the $10
million. We’ve announced six new contracts, and most significantly we’re
winning business throughout our target regions.
In Southeast Asia we won two major deals in Malaysia and one in Singapore.
In Malaysia we secured a $6.84 million licence for a further two public2
hospitals that are part of a group of 13 hospitals being upgraded as part of the
government’s National Health IT Strategy. We’re also part of a consortium
that’s secured an $18.5 million contract for a comprehensive solution in a
Malaysian public teaching hospital with a value to IBA of $9.3 million plus
recurring licence fees of $1.1 million. The agreement is for one of a group of
eight University Teaching Hospitals managed by the Ministry of Higher
Education.
In Singapore we’re supplying our hospital patient management system to Johns
Hopkins Medical Centre in a deal valued at over $470,000 for software and
services.
In Australia we announced last week an agreement with St John of God Health
Care, Australia’s third largest private hospital operator. The agreement
comprises initial licences and services of $1.5 million plus recurring licence
fees with a five-year value in excess of $1.8 million.
We’ve also had successes in the Middle East. In Qatar we’ve been awarded a
$400,000 Hospital Information Systems project at the Al Amal Cancer
Hospital and in the UAE we’ve signed an agreement with the General
Authority for Health Services (GAHS) in the Emirate of Abu Dhabi with a
value in excess of $210,000.
In addition we’ve had a number of smaller but strategically significant wins
and projects go live in our New Zealand pharmacy business. These followed
on from our win in the first half of a substantial multi-hospital patient
management project with Southern Cross, New Zealand’s largest private
hospital group.
Overall our sales pipeline looks strong as we build towards the start of the 2007
financial year, when we anticipate further significant sales in our target region.
The most advanced deals we’re working on include significant projects in
Brunei and South Africa and we’re preparing the ground for further bids in
other Southeast Asian countries.
corporatefile.com.au
Your guidance for earnings for the full year to June 2006 is for a comparable
result, before one-off restructuring charges, to last year’s net profit of $13.7
million. In light of the strong sales so far in the current second half, do you
intend to upgrade this forecast?
Executive Chairman Gary Cohen
Since we issued our forecast we’ve secured additional sales over and above
those expected and the value of the contracts has increased. We’d forecast
sales in the second half of $29 million. If we continue to make sales from the
pipeline we have, we should easily exceed that number, and that would have a
favourable impact on the expected profit.
corporatefile.com.au
What contribution to the current second half are you anticipating from
MEDICOM, the Indian healthcare IT development company you acquired in
December?
2
hospitals that are part of a group of 13 hospitals being upgraded as part of the
government’s National Health IT Strategy. We’re also part of a consortium
that’s secured an $18.5 million contract for a comprehensive solution in a
Malaysian public teaching hospital with a value to IBA of $9.3 million plus
recurring licence fees of $1.1 million. The agreement is for one of a group of
eight University Teaching Hospitals managed by the Ministry of Higher
Education.
In Singapore we’re supplying our hospital patient management system to Johns
Hopkins Medical Centre in a deal valued at over $470,000 for software and
services.
In Australia we announced last week an agreement with St John of God Health
Care, Australia’s third largest private hospital operator. The agreement
comprises initial licences and services of $1.5 million plus recurring licence
fees with a five-year value in excess of $1.8 million.
We’ve also had successes in the Middle East. In Qatar we’ve been awarded a
$400,000 Hospital Information Systems project at the Al Amal Cancer
Hospital and in the UAE we’ve signed an agreement with the General
Authority for Health Services (GAHS) in the Emirate of Abu Dhabi with a
value in excess of $210,000.
In addition we’ve had a number of smaller but strategically significant wins
and projects go live in our New Zealand pharmacy business. These followed
on from our win in the first half of a substantial multi-hospital patient
management project with Southern Cross, New Zealand’s largest private
hospital group.
Overall our sales pipeline looks strong as we build towards the start of the 2007
financial year, when we anticipate further significant sales in our target region.
The most advanced deals we’re working on include significant projects in
Brunei and South Africa and we’re preparing the ground for further bids in
other Southeast Asian countries.
corporatefile.com.au
Your guidance for earnings for the full year to June 2006 is for a comparable
result, before one-off restructuring charges, to last year’s net profit of $13.7
million. In light of the strong sales so far in the current second half, do you
intend to upgrade this forecast?
Executive Chairman Gary Cohen
Since we issued our forecast we’ve secured additional sales over and above
those expected and the value of the contracts has increased. We’d forecast
sales in the second half of $29 million. If we continue to make sales from the
pipeline we have, we should easily exceed that number, and that would have a
favourable impact on the expected profit.
corporatefile.com.au
What contribution to the current second half are you anticipating from
MEDICOM, the Indian healthcare IT development company you acquired in
December?
4
have a leading reference site that should help us win further business in that
market.
In India we already have a sizable business with over 150 people and some
good reference sites. We haven’t traditionally targeted the Indian market
however, we believe that the maturing of that market and the expanding private
sector focus offer significant opportunities.
corporatefile.com.au
Can you comment on your current strategic position in these targeted markets?
Executive Chairman Gary Cohen
Our product strategy provides us with the right integrated product for the South
African, Asian and Middle East markets. Our strategy recognises the different
adoption rates of health IT in a range of market conditions across the region,
ranging from high volume outpatient systems in China to enterprise-wide
hospital information systems in Malaysia.
We’ve underpinned this strategy with a significant competitive advantage.
We’ll leverage the lower development cost available from our Bangalore
development centre, bringing price competitive products and services to market
in the price sensitive developing countries, while increasing margins in
traditional markets.
corporatefile.com.au
You’ve highlighted China as a potential market for IBA. How is the company
positioned versus local and major international competitors in this market?
Executive Chairman Gary Cohen
For us, the good thing about China is that it’s an emerging market with many
new hospitals being built and many older hospitals with inadequate information
systems to cope with the demands being made of them. In Shanghai alone
there are over 200 hospitals and 33 Tier 3 or teaching hospitals. The market in
China is very young and there are no major international or dominant local
players. We believe that with the right strategy and the right product mix we
can position the company to become a leader in the Chinese market.
corporatefile.com.au
What is your strategy to penetrate the Chinese market?
Executive Chairman Gary Cohen
As we indicated at the time of the half-year result announcement, we‘ve been
working on entering the Chinese market over the past six months. We’ve been
helped in part by Kodak which has a very strong presence in China and
particularly in Shanghai, where Kodak has built a technology centre. We’re
planning to open an office in Shanghai and Kodak has committed resources to
assist us in this process.