Three Healthcare Technology Stocks Under Investors’ Radar – ALC, ANN, COH

  • Jan 29, 2020 AEDT
  • Team Kalkine
Three Healthcare Technology Stocks Under Investors’ Radar – ALC, ANN, COH

Healthcare sector is currently under a lot of pressure mainly due to the growing ageing population, healthcare systems around the world under duress, and healthcare professionals challenged with patient complexity and exponential expectations on their time.

The challenges that have plagued healthcare for years are not easing:

  • Preventable errors remain a leading cause of death, and globally the cost of this is estimated at US$1 trillion annually;
  • Hospitals are having to become more accountable, face financial penalties and are operating in tightening regulatory environments;
  • The ageing population and rise of chronic disease continues to increase pressure on the systems, many of which are already under great stress;
  • And the workforce – doctors and nurses – are increasingly disenfranchised.

While the challenges themselves aren’t new, the pressures they create are growing. Due to this there is a strong need of good and efficient healthcare technologies which could reduce the pressure on healthcare sector.

We have screened few companies that are involved in providing healthcare technology. Let’s take a look at these companies and their recent updates.

Alcidion Group Limited (ASX: ALC)

Healthcare technology company, Alcidion Group Limited, continues to witness strong uptake of its technology and services in FY2020. Further, the company is actively investing to accelerate growth and to further evolve the platform to ensure that it capitalizes on the rapid shift taking place in the industry, as global healthcare providers look to technology to improve the delivery of healthcare.

In a quarterly update provided on 28 January 2020, the company informed that so far in FY20, the company has already signed several significant contracts of strategic importance in the UK. As at 31 December 2019, the company’s total sold revenue for FY2020 is $15.4 million, compared to $16.9 million of total revenue reported for the twelve months to June 2019.

December Quarter Highlights

  • $16.2 million institutional placement in November 2019 enables accelerated investment for growth of the business and strategic expansion, both geographically and via acquisitions;
  • New sales and marketing appointments will capitalise on the advantageous market backdrop in all regions as healthcare providers globally look to technology to improve healthcare;
  • In the important UK market, the opportunity for significant growth is improving post the election with policymakers signalling increased investment in technology solutions for the NHS;
  • $15.4 miliion revenue already set to be recognised in FY2020, compared to $16.9 million of total revenue for FY2019 with total sold revenue of $37.2 million out to FY2025;
  • Recurring revenue component of sold revenue in FY2020 increased by 22.7% against Q2 FY2019;
  • New contracts sold in Q2 totalled $3.5 million; of which $2.1M revenue will be recognised in FY2020

“Our sales grew quarter on quarter, in a period where we focused on on-boarding new sales staff and invested in platform enhancements” said Alcidion Managing Director Kate Quirk while commenting on the results. He further added that due to seasonality in healthcare procurement, and the more certain position around the general market in the UK, the company is expecting stronger sales during the second half, for both the ANZ and UK region.

In the second quarter of FY20, the company reported a net operating cash outflow of $1.8 million in line with the increased investment taking place across the business and payments of deferred costs from the prior quarter. Further, the company paid $238K during the quarter as the final contingent payment for the acquisition of Oncall Systems in February 2018. The Company expects Q3 cash outflows to increase as a result of planned investments focused on accelerating growth, including product development, sales and marketing, and Group infrastructure to support planned growth, and UK market development.

By AEDT 2:25 PM, the stock was trading at $0.215 with a market cap of $213 million.

Ansell Limited (ASX: ANN)

Ansell Limited, a world leader in providing superior health and safety protection solutions, witnessed major transformation of the organization last year. This included a change of the corporate structure to one that is more efficient and focused in serving the company’s two remaining strategic business units, and an optimised manufacturing footprint.

Ansell as a company has survived through its 125 years due to a clear sense of purpose, quality products, sound professional values and an ability to look ahead and resiliently adapt to challenge and change.

The company has a strategy of principally growing its business organically through a parallel focus on innovation, emerging market development, building strong brands and forging close partnerships with leading distributors. The company’s strong FY19 results can be viewed the below image –

FY19 Highlights (Source: Company Reports)

In the last three months, ANN stock has provided a return 15.79% to its shareholders. By AEDT 2:25 PM, ANN stock was trading at a price of $32.360.

Cochlear Limited (ASX: COH)

Health care equipment & services provider Cochlear Limited recently announced the appointment of highly experienced Michael Daniell as the Non-Executive Director, a significant contribution to the Board.

Cochlear Limited has a wide range of fully-featured products and a broad patent portfolio that protects the company’s intellectual property. Since listing, the company has invested more than $1.9 billion, with 13% of sales revenue invested in R&D in FY19.

Cochlear Strategic Priorities include:

  • Retain market leadership
  • Grow the hearing implant market
  • Deliver consistent revenue and earnings growth

In FY19, the company reported a sales revenue growth of 7% in FY19. The company also earned a net profit (including the revaluation of innovation fund) of $276.7 million in FY19, an increase of 13% as compared to last year.

Sales Revenue Chart (Source: Company Reports)

Services revenue of the company increased by 20% over the period, with sound processor upgrade revenue increasing by 17%. Further, the cochlear implant business also witnessed a 2% growth in its revenue, but the total units declined by 3%. During the year, the company lost its market share in US and Germany due to a competitor product launch.

By AEDT 2:25 PM, COH stock was trading at a price of $240.170, close its 52-weeks high price.


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