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Australian headquartered imaging SaaS and ancillary solutions provider, ImExHS Ltd (ASX: IME) provides scalable and flexible imaging solutions through its Hiruko (vendor-neutral, cloud based) branded suite of solutions for integrated Radiology Imaging System (RIS) and next generation Picture Archiving and Communications System (PACS). The RIS combines a workflow management system with an image distribution system and patient data, and the PACS enables a healthcare organisation to view, capture, share and store radiology images.
In addition, imaging technology and management systems can be provided on a Platform as a Service (PaaS) basis when packaged with equipment.
The company was founded in 2012 and is recognized for its innovation in the imaging services market. The products of the company are created to save money and enhance productivity for the users, with a scalable platform that is designed for the future, while improving patient outcomes.
The company is dedicated to executing high-tech solutions for the healthcare industry in order to deliver timely and high-quality service and fulfil the needs of its customers.
Recently, the company has released its financial report for the half-year ended 30 June 2019. Let us take a look at the financial and operational performance of the company during the half-year:
Financial Performance
The company recorded a good revenue growth of 36 per cent, with an increase in its revenue from ordinary activities to $2.8 million. The rise in revenue was driven by a rise in recurring revenue contracts, which increased by 97 per cent relative to the prior corresponding period (pcp) to $2.5 million.
During the period, the company continued to implement its growth strategy of developing into new territories and product lines, which led to a massive increase in its key Annualised Recurring Revenue (ARR) metric. The ARR of the company improved by 187 per cent to $8.2 million during the half-year (see figure below).
The net cash balance of the company improved substantially from $15k in pcp to $220k during the reported half-year.
Operational Performance
During the half-year period, the company primarily focussed on the development and sale of its Hiruko software platform and observed the following developments:
Acquisition of Imaging Experts and Healthcare Services Pty Ltd
ImExHS completed the 100 per cent acquisition of Imaging Experts and Healthcare Services Pty Ltd in August last year. Imaging Experts and Healthcare Services Pty Ltd, in turn, acquired a Colombian based company, Imaging Experts and Healthcare Services SAS during the first half of 2018.
With the completion of ImExHS acquisition, the companyâs name was changed from Omni Market Tide Ltd to ImExHS Limited.
Growth in Contracts
The Total Contracted Value (TCV) of the company increased by 120 per cent or $13.8 million over the prior year, to $25.4 million by the end of June 2019. The company secured several new contracts with Fundación Cardiovascular de Colombia, ClÃnica Los Valles, and RIMAB / Colsubsidio, along with major contract extensions and renewals for ClÃnica Las Americas and ClÃnica Nueva.
Expansion of Distribution Network
In line with its strategy of increasing geographic footprint, the company marked its entry into new territories including Nicaragua, Brazil, Panama, Uruguay, Honduras and the USA during the half-year.
Product Development
During the period, the Web Viewerâs translation of the module into Brazilian Portuguese was completed, and two new measurement tools - Bi-directional measurements (for tumour measurements and follow-ups) and Insall-Salvati (for orthopaedics) - were developed. The final demo trial in ClÃnica de las Americas and San Jose Infratil has been concluded.
The company has already completed the integration of the Business Intelligence module and the voice recognition functionality and is continuing with the development of its Pathology module.
Activities Subsequent to Half-Year
Subsequent to the end of the reported half-year, the company witnessed following developments:
Clearance from US FDA
The US Food and Drug Administration (FDA) provided clearance for the commercialisation of the companyâs Hiruko product in the United States, worldâs largest market for PACS and RIS software. The company mentioned that the approval paved the way for the completion of the companyâs trial in Puerto Rico with Rad One PSC, along with the potential integration of nine additional sites with Rad One.
Imaging Diagnostic Services Contract with RIMAB S.A.S
On 30th July 2019, the company notified about the signing of a new PaaS and imaging diagnostic services contract with RIMAB S.A.S. to provide services to Colsubsidio across 19 sites. The company mentioned that the contract offers an opportunity to develop its Machine Learning and Artificial Intelligence tools in collaboration with a large field team of Radiologists.
Non-Exclusive Distribution Agreement with IGMC MEDICAL TECHNOLOGY GROUP
A new non-exclusive distribution agreement was signed by the company in July 2019 with IGMC MEDICAL TECHNOLOGY GROUP in the US market.
SaaS Contract with Rad One PSC
In July 2019, the company informed about signing a 5.5-year US$ SaaS contract in Puerto Rico, with Rad One PSC, that marked its first step to enter into the US healthcare market.
Other Significant Developments
The company also observed the following developments that have considerably affected, or may substantially affect the operation of the company:
ImExHSâ Outlook
The company is continuing its investment in the development of Hirukoâs features and has planned for further expansion into new and its existing territories. Its network of experienced and domestic medical products distributors is providing the impetus for potential revenues.
The company believes that its decent level of contracted revenue will boost revenue for the rest of 2019. With the investment in product development and sales, the realisation of its weighted sales pipeline ($50 million at present) is likely to offer a baseline of revenue from which the company will be able to continue its growth.
Stock Performance
On 24th September 2019, the stock of the company is trading higher at $0.047, with a rise of 11.91 per cent (as at 3:39 PM AEST). The stock has delivered an enormous return of 75 per cent in the last six months.
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