Global provider of healthcare information technology Orion Health Group posted its interim financial results for the six-month ended 30 September 2018. The Group incurred a net loss of $17,378,000 for the six months ended 30 September 2018 compared to the previous corresponding period’s net loss of $25,933,000.
Orion Health Group Limited (ASX: OHE) has three areas of investment: Rhapsody (24.9% equity interest), Population Health (75.1%) and Hospitals (100%). During the reporting period, Rhapsody segment contributed NZ$13,231,000 while Population Health and Hospitals segments made a negative contribution of NZ$25,580,000 and NZ$4,066,000, respectively.
After period end, the Group has sold a majority position in the Rhapsody business and retained majority shareholdings in Population Health Management and Hospitals. Since Population Health Management lies in the loss-making category, the company has taken approximately $40 million in expenses out of the Population Health Management business over the last 18 months to drive the business towards profitability.
Orion’s management intends to bring further down its cost to experience d transition to profitability for both, Population Health Management and Hospitals. Moreover, the Group canceled its existing bank facility on 31 October 2018 and entered into a new agreement with the bank owned by Commonwealth Bank of Australia, ASB. The agreement provides a $3 million working capital overdraft secured by a $5 million deposit and continues to bank with ASB on a transactional basis.
Further, the Group has announced a share buyback for existing shareholders slated to be completed by 4 January 2019. Under this buyback program, Orion today announced the purchase of 7,597,610 securities at an acquisition price of NZ$1.224. So far, the company has bought back 49% of total Orion’s shareholdings including stakes acquired from major shareholder McCrae Limited, an entity associated with Orion’s CEO Ian McCrae.
On the completion of this buy-back programme, the group is expected to have approximately $10 million of cash that it intends to utilize for funding Hospitals and the Population Health Management segments.
Moreover, in a separate release to ASX, Orion today advised that conditional agreements to issue OHE shares under the Orion Health Restricted Stock Unit Scheme (RSUs) have lapsed. As at 30 September 2018, the Group had net cash and cash equivalents of $2,266,000 compared to the balance of $4,456,000 in the previous quarter ended 31 March 2018, excluding restricted cash held by the PDH Joint Arrangement.
OHE shares traded flat in today’s trading session, i.e., 27 December 2018. However, the stock last traded at $1.100 with a market capitalization of $120.11 million. Over the past 12-months, OHE stock price has massively gone up by 44.74% including a surge of 15.79% in the last month.
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