Thanks for the thorough post. I agree with many of your points but would like to add some additional insights and context.
Silverlink and the inability to sell to new customers - It’s true that ALC hasn't sold SL to new customers yet. However, this isn’t entirely surprising given the complexities involved in selling healthcare IT solutions. The integration and approval processes within the NHS can be particularly lengthy and fraught with bureaucratic hurdles, almost glacier melting speed. Especially with a new person offering modular.; This lag is not uncommon in the industry tho, and probably in hindsight was my mistake in thinking it would be quicker. So yep the opportunity cost is a pain
Purpose of acquiring PAS - while the $21.6 million contract expansion with South Tees is significant, it’s not just about immediate returns. The acquisition of SL was also about positioning ALC for future opportunities, expanding the total addressable market, and strengthening its competitive edge with a modular EPR solution. This strategic positioning is crucial for long-term growth, even if short-term gains seem modest imo
With competition in the EPR space, it is indeed intense. Incumbent players have established relationships and entrenched systems, which can make it difficult for a new entrant to gain traction. However, with ALC's modular EPR offering does give it a unique selling point. This flexibility can be a significant advantage as more trusts look for adaptable solutions that can integrate with their existing systems. We will need to wait for this one to bear fruit.
The NHS landscape is still ripe with opportunities, despite the high EPR adoption rate. Many trusts with legacy systems will eventually need replacements or upgrades, so that is agreed.
Like mentioned above, the speed of market penetration is a problem. Public sector procurement is bloody slow. The delays in seeing substantial returns from the SL acquisition are not necessarily indicative of failure but reflect the typical pace of this market. Patience is key here, and investors should be prepared for a longer horizon to see significant results. Again in hindsight i might have put my money elsewhere, but it's done.
For the future, healthcare IT market is continually evolving, so for ALC to stay agile offering new capabilities is no brainer. But all in all, i don't believe any fundamentals have changed (despite everything taking ages), so strategic rationale remains sound. Lots of positive indicators but it's up to management to drive that. We will never truly know how much is truly in their hands and how much is out of their control.
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