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Australian Government has been embracing the technological advancement in the economy and reckons that economic prosperity depends on the ability to harness technology to improve businesses, innovation, and enhancing household lives.
It is committed to driving the opportunities of technological advancement by emphasising on, services, people, digital assets, and enabling environment. Australia has been leveraging technology in its economic growth engines, including agriculture, manufacturing, services, mining, health, tourism, education, transport, emergency services and everyday services.
In February, Australia markets witnessed the debut of the S&P/ASX All Technology Index at the Australian Stock Exchange. Minister of Industry, Science and Technology, Kate Andrews noted that the launch reflects a defining moment in the technology sector.
She said that Australian Technology sector has been booming and the launch of the index reflects the wonderful ecosystem for growing companies. The index made debut with 46 constituents with a market capitalisation of $104 billion.
PM Scott Morrison wants the country to lead the digital economy by 2030, which would need investments in innovative businesses, the transformation of traditional business to be equipped to the latest technology, and expansion of Australian businesses on the global stage.
In this article, we discuss three companies from the S&P/ASX All Technology Index, which closed at 1,422.5 points down by 1.7% or 25.6 points last Friday.
Alcidion Group (ASX:ALC)
Alcidion is a health-tech business based in Australia, leveraging technology mobilisation to deliver efficiency in the healthcare market. Healthcare, across the globe, is set to be one of the most debated topics over the medium-term – as the experience of the pandemic is likely to trigger some structural changes – driven by not only service providers, policymakers but customers as well.
In its last presentation, ALC notes that Australian public sector incurred a cost of $4.1 billion in hospital-acquired complications in FY18, equating to 8.9% of hospital expenditure. In the US, it says that adverse events in the hospital are the third leading cause of deaths.
Its technology platform is an alternative to EMR systems that have ineptness in scalable real-time Clinical Decision Support (CDS) & automation, which takes a toll on clinical productivity.
ALC believes its selling-points is real-time, clinical decision support system (CDSS) platform that empowers smart infrastructure for healthcare through integration with EMR systems. It says workflow automation improves productivity and ensures critical information is easily accessible.
Recently, Kate Quirke who is leading the Company noted that two ACT Health campuses were added to its customer base with a five-year agreement. She was on a trip to the UK recently to attend a conference on health tech systems where NHSX launched Digital Aspirant Acceleration Fund to funds health tech businesses.
A few days back, the Company signed and renewed contract with NHS five in the UK, which serves 370k residents in Scotland. ALC will deploy Patientrack in at least ten hospitals having about 1342 beds. Alcidion is serving NHS Fife since 2011, which reflects the business’ capabilities in long term retention and proposition for customers.
She also reckons that COVID-19 would add tailwinds for expanding the business. ALC has recently added the feature to its Miya Precision that identifies patients at risk of COVID-19 virus. And that the balance sheet is strong to sustain the volatile market presently.
On 3 April 2020, ALC last traded at $0.155, up by 6.8%. Over the YTD period, ALC is down by 21.62%, but over the past five days to 2 April 2020, it was up by 20.83%.
Class Limited (ASX:CL1)
Class Limited develops cloud software solutions for the wealth accounting markets. It intends to deliver solutions that automate manual workloads, drive efficiency, quality, and scalability.
Its service allows efficient delivery of client proposition to accountants, advisors and administrators. The Company notes that around 28% of the SMSFs is administered on its platform.
Recently, the Company convened Investor Day, highlight its execution on strategic priorities, which includes growing the number of Wealth Accounting clients on the Class Platform, extending product set, accelerating growth through acquisition and partnering, and improving product delivery capability and its ability to scale, both to world class standards.
Among its offerings, Class Super had 1500 clients and 3 products while NowInfinity had 2000 clients and 4 products.
Class Platform provides SMSF administration, trust administration, portfolio administration, corporate compliance, document suite, SMSF & trust compliance, portfolio reporting, managed discretionary accounts along with partner integration capabilities.
Source: Class Limited Investor Presentation
NowInfinity was launched in 2013, which offers documentation suite, corporate messenger, super comply, and trust register. These features enable customers to create documentation for entity creation, managing companies registers and lodgements with ASIC, undertake SMSFs compliance as well as trust documentation.
In the half-year ended 31 December 2019, the Company posted operation revenue of $20.5 million, up 8% on pcp. Its EBITDA was $8.1 million, down 7%, which included acquisition costs of $509k relating to NowInfinity. NPAT for the period was $3.1 million, and its product investment increased by 25%
It was noted that NowInfinity acquisition is highly complementary to the Class offering, placing the Company to realise the potential to grow revenue and accelerate the business expansion. CL1 also declared a fully franked interim dividend of 2.5 cents per ordinary share.
On 3 April 2020, CL1 last traded at $1.145, up by 4.09%. Over the YTD period, CL1 is down by 46.1%, but over the past five days to 2 April 2020, it was up by 3.27%.
Kogan.com Limited (ASX:KGN)
Kogan.com owns a portfolio of business which includes online consumer retail, and other offerings include mobile, internet, health, pet insurance, life insurance, travel. It has been expanding business to reach new areas.
Its other offerings also include energy, super, credit cards, and cars. In its half-year results, the Company noted that majority of its traffic continues to be driven by customer loyalty and brand recognition, and the business has experienced steady growth in customer orders and gross sales per customer.
Kogan’s proprietary technology is leveraged to achieve a leading personalisation and optimisation. Its proprietary technology mobilises recommendations on site and in outbound marketing, uses dynamic and personalised marketing messages and much more.
During the half-year period ended 31 December 2019, its exclusive brands recorded revenue growth of 17%, allowing to meet robust consumer demand across a range of products.
Its subscription based Kogan First grew rapidly through the period, showing that then customers are being attracted to the value-driven programs offered by the model. It includes benefits like free shipping, free upgrades, express shipping and exclusive deals.
At the end of the period, the company had cash of $34.1 million. Inventories were $94.7 million, of which 98% was less than a year old, and the business had no debt but an undrawn debt facility of $30.0 million
Cash flows recorded a net increase in cash of $6.62 million, after paying dividends of $7.70 million. Receipts from customers were $250.28 million. Over the course of next-half year, it intends to continue brand growth and market penetration.
Below is the snapshot from the Kogan website. The Company is experiencing high demand as a result of the COVID-19 outbreak in the country, but it is still operational and serving the needs of Australians.
Source: Kogan.com, 3 April 2020
On 3 April 2020, KGN last traded at $5.52, down by 0.54%. Over the YTD period, KGN is down by 23.83%, but over the past one month to 2 April 2020, it was up by 28.73%.
