Earnings Call: H1 2021

Feb 24, 2021

Good morning, everyone, and welcome to Alcidion's Half Year Results Investor Webcast this morning. All participants are currently in a listen only mode. Today's webcast will feature a presentation from Alcidion Managing Director, Ms. Kate Quirk, followed by a Q and A. Now if you do wish to ask a question, you can type it into the Q and A panel at the bottom of your screen at any time, but please note we'll hold on all questions until the conclusion of the presentation. I'd now like to hand over to Kate Quirk, Managing Director of LCN. Please go ahead, Kate. Thanks, Sam, and thanks everyone for joining us. I know it's a very busy time of year for many of you. So, I won't take up an enormous amount of your time this morning. But we will be talking this morning to the Alcidion's half year financial and operating update that we've lodged with the ASX this morning. And also we also launched the presentation I'll be going through. So if you want to use that or you want to refer to it later, it is also on the ASX platform. Joining me on the call today is Colin MacKinnon, our Chief Financial and Operating Officer, and we'll be happy to answer any questions that you have at the end of the presentation. So to kick off, I'm really pleased to report Alcidion made very solid progress in the first half of FY twenty twenty one. During that period, we delivered one of our strongest sales performances to date, All at the same time that we were also focusing on making continued improvements to the business to strengthen our operating capabilities and establish a foundation for rapid growth from here. So momentum across the business continues to accelerate, and that's enabled us to make important headway that positions us favorably for the remainder of FY 2021 and beyond. Looking in a little bit more detail at the financials as they've been lodged, I'm pleased to report Alcidion delivered Revenue of $11,100,000 in the first half of this financial year. This is a strong result. It's 36% higher than the 8 point €2,000,000 that we delivered in the first half of last financial year. Our gross profit was €9,800,000 at a Gross margin, we had a margin of 88.1 percent compared to $7,100,000 gross profit and a margin of 87.4 percent for the half last year for the first half of last year. As we foreshadowed and detailed in the FY 2020 results presentation. We have reclassified the way we report gross profit and we've done that to more appropriately align with other ASX Listed software companies that many of you will compare us to. I'll come back to this shortly on the next slide just to give you a little bit more detail. Those of you who have been following previous presentations will be aware of that change. Alcidion delivered an EBITDA loss in H1 1 of 900,000, which was a 47% improvement on the H1 last year, same period last year. From a cash perspective, receipts in the first half were $10,800,000 which is 17% higher than the previous period last year. As I mentioned on our last webcast for those of you that were on it and when we were doing the January quarter This figure excludes an additional $3,000,000 which was received from South Tees in the 1st week of January, which was due to be received in December. So we entered the second half of the financial year with a solid cash reserve of $12,500,000 and that's now been further strengthened with the receipt of that $3,000,000 from South Tees. Looking a little bit around the profit and loss now, just to give you a little bit more detail around that from a comparative perspective. This slide here is a pro form a profit and loss table that compares the first half of FY twenty twenty one to the first half of FY twenty twenty. Approximately $4,800,000 of the $11,100,000 First half revenue for this year is classified as non recurring. However, it's important to note that approximately 60% Of that non recurring revenue is for product implementation work that is actually sold at the time that we will They'll admire or a Myer Precision or Myer observations contract. And that revenue is important in that it supports the ongoing recurring licensees that come once we have implemented that. So they're very closely linked and that It's a significant contribution from a product perspective. During the half, we added $17,400,000 of contracted revenue, albeit not all of this We'll be recognized in FY 2021. Obviously, we need to deliver on some of those projects to recognize it all. However, our contract revenue to be recognized for FY 2021 now stands at 21,700,000 at 17% higher than our full year revenue for FY 2020. And we still have a further well, it's 6 months if you take it from the end of the report, but in reality, it's 4 months from where we are today remaining in this year. And any new sales that we make, a portion of those could further contribute to that revenue position as we head through the rest of this year. Of the £21,700,000 approximately $14,000,000 is recurring with $7,700,000 in non recurring. As the table on the right hand side here highlights, our recurring revenues almost all generated from products, be it Myer, Precision, Patient Track, which we obviously refer to as Myer, Observations and Assessment Now or Smart Page. With the implementation of those products being a major part of the non recurring revenue component. Just going back to what I mentioned earlier about the classification of gross profit and how we report that and why we've done that to align better with industry practice and other ASX Companies. To put it simply, going forward, all salary well, not going forward, the way in which we're reporting in this Set of financials is that all salary related expenses for staff, be that product management, product development, sales and service delivery that were previously in the gross profit component have now been taken into operating expenses and they're shown in the salaries and wages line in this pro form a P and L you're looking at here. The cost of sales expenses now only consists of fees paid for resale products, So the reseller agreements that we have with Nextgate and Better and services associated, managed cloud hosting, where we're providing services to manage a cloud environment, sales commission and expenses such as travel and accommodation that directly relate to a project delivery. So if we were deploying people to Marumbidgee or Wagga Wagga Base Hospital, for example, then there are expenses related to that. They would go into this into that bucket. EBITDA for H1 FY 2021 was a loss of 900,000 or 900,000 or 600,000 if you add back in the non operational advisory services and the share based expenses. So you've heard me talk previously about the investment phase we've been in, in terms of building the capacity and the capability in the organization to support the growth profile that we plan to have. The investment phase in those key areas of our fixed cap cost base for areas such as sales staff, IT and people facing cultures now largely complete. And that will result in stabilization of the cost base and a move toward profitability from here. Albeit the second half that we're now in will incorporate The full year impact of investments made in H1 and some of those investments were made towards the end of H1 in terms of new people. Moving on just to look at some of the milestones that we achieved during the half. From a sales The U. K. Has been a significant focus for us and you've obviously heard me talk about it in the past and it has continued to be a focus over the past year and it's our largest market opportunity. Our performance in this market has been strong, notably the signing of a milestone 5 year contract and the extension for that came shortly after with South T's Hospital's NHS Foundation Trust For all the full suite of our products and services including MyPrecision, Better Medications, Smart Page, Cloud Hosting, Managed services and some business change management services as well. So the combined value of that contract and the subsequent extension was 11 point million which makes it Alcidion's largest MYA contract to date. And we certainly hope shapes some of the MYA contracts to come in the future. It's also strategically important in the U. K. As it's our 2nd Myo Precision reference site in this market following on from DAF and Gravesham Foundation Trust and the experience of these 2 early adopters and early implementations We'll establish a really strong reference point for the significant value Myo Precision can bring to hospitals in terms of their workflows, in terms of clinical decision making and supporting that clinical decision process. Patient management and flow and obviously bedside care at hospitals in terms of mobility and providing that access to critical information at the bedside and more increasingly in the home being managed from the hospital. In Australia, we saw important Myo Precision contracts signed here as well in this half with Murrumbidgee Local Health District And with Sydney Local Health District. At Murrumbidgee, the clinical staff there are using Mya Precision and Mya Memory to support better clinical decisions at the bedside, but we are also have also implemented COVID monitoring dashboard and monitoring capabilities for both in and out of hospital. Of course, in Australia, they don't have many COVID patients. So we're at Marumbidgee, we're actually using that for a range of patients being able to be treated in the home. And we will continue to see expansion of that as those capabilities that have been set up during COVID are now used to monitor patients with chronic conditions such as diabetes and monitoring people receiving palliative care at home. At Sydney LHD, Myo Precision has been deployed in their remote hospital monitoring capability, RPA virtual. And that's again to support remote care of COVID-nineteen patients who are isolating at home. So obviously, We have had some of that, but again, not as many as thankfully as perhaps I've had in the U. K. But Our discussions with RPA now are how we support that again moving into chronic care and other conditions that can be better managed in the home. So both of these initial contracts provide us with a really strong opportunity to increase the scope of work for those sites and also into New South Wales more broadly, where we've seen commitment from the New South Wales government to establish a virtual care panel so that Procurement of solutions like ours can be done more effectively and also funding available for virtual care in New South Wales as well. So although our goal is continuing to secure large contracts like Myo Precision, It's really important to point out the strategic nature and the success that we are continuing to have with MYRE observation and assessments, known to some of you as Patient Track and Smart Page. And those contracts are continuing. We signed 1 in January with The Isle of Man, who are an existing Patient Track customer, for example. Some other contracts beyond Myer Precision that was signed during the half include, As I mentioned, increasing opportunities for MYER observations and assessments. During that period, we signed a 5 year 1.5 $1,000,000 agreement with the NHS Lanarkshire in Scotland to implement MAIA of observations and assessments across that board. And that's our 2nd Scotland Board that has implemented my observations and assessments, the other one being NHS V. Also during the period, Smart Page was appointed to the NHS Clinical Communications Procurement Framework, which is a government led procurement in the U. K. That's been set up to help the NHS phase out pages by the end of this year. It was going to be the end of last year, COVID slowed that down a bit. And the framework is really important because it's an example of where and the UK government He's very innovative in doing this that they set up and commit to frameworks that enable procurement to happen more efficiently. And this then helps them to achieve their goal of digital maturity, which is a real focus of the NHS. And our appointment to that Contract allows trust to quickly and easily procure SmartPage without the need for going through a tender process. Since we've been appointed to that, we've signed Smart Page contracts with Lancashire Teaching Hospital as well as I've mentioned the Department of Health and Social Care for the Isle of Man. And both of those are existing Meyer observationsPatientrack customers. In Australia, we continue to see services contracts and extensions signed. Our affiliate has a very strong reputation for delivery of services in the Healthcare IT space, and this included contracts with Northern Territory Health for program management services. Additional integration contracts with ACT Health were signed. And with New South Wales Health, we signed some contracts for further technical services relating Child Data Hub, which has been a very successful project with New South Wales. Here in Victoria, where I'm based, we were appointed to a panel for the Victorian Department of Health as one of 2 suppliers that would provide implementation and support services to deploy the Victorian Health Incident Management System across the state and we're continuing to work with possible customers around using our services here in Victoria. As mentioned on our last call that I gave, in H1, we also expanded our reseller partnership with Nexgate to cover the U. K. And Ireland. So our relationship with Next Kate has been a very positive one. And it's Great that we're able to provide this type of capability to our customers. What they do is provide a market leading enterprise wide And provider registry for both patients and for providers of healthcare. And it's about overcoming the challenges resulting from duplicate records and and consistent data simply because many people will have multiple identifiers depending on how many hospitals they visited over a period of time. So that software complements the capabilities of our product suite and enhances our competitive position everywhere and now we're able to also provide that in the U. K. Overall, I'm very pleased with the headway we've made in all markets, both in terms of sales, but also in the operational improvements we've made to continue growing our product offering, service and delivery capabilities. We're entering this second half of the year in a very advantageous position. We're on track to surpass our FY 2020 revenue with the contracted revenue, as I said before, Already 17% higher than what the full year revenue was last year with still 6 months remaining from when this report It was a close off of this report. In addition to us over the next in addition to what I've outlined here in terms of current Yes. We also have revenue contracted out for the next 5 years because as many of you will know, contracts can be 3 to 5 years in term. So we have around $23,000,000 contracted revenue that will be recognized over that time period with 22.4 percent of that, the majority of it, as recurring product revenue, which we expect to be delivered at a gross Margin of 85% or plus there. Furthermore, what isn't in those numbers Is that during that time of that FY 2022 to FY26, a number of our contracts will come up for renewal and this happens quite regularly. And those contracts generally are just extended or signed in a fairly simple process. So we would expect to be continuing to add to that forward looking recurring revenue with very little impact on our sales team. It's usually handled by our customer advocacy team. From From a market perspective, the sales pipeline continues to grow and we're seeing healthcare procurement progressively return to pre COVID levels in all markets really as hospitals have established protocols to deal with COVID cases and also have understood Far more the opportunity that digital provides them in the delivery of healthcare. We're very favorably positioned across all our markets. And in all of those markets, we're seeing a growing focus on government led adoption of digital healthcare and it's accelerating at pace. And As a result, it is a very exciting time for Alcidion. I'm very proud of our team, the achievements that they've made over this And I'm looking forward to continuing to share our successes in this coming half with all of our shareholders. At that point, I'm going to conclude going through the details of the update. And I'll stop sharing my screen and we'll hand over for some questions. Thanks very much, Kate. Yes, we'd now like to hand Open up the webcast to questions and we'll try to get to as many as we can. Just a reminder that if you do wish to ask a question, The first question is, Kate, congratulations on the first half results and execution of the strategy so far. Given the product set is in place now, what are the revenue targets for 3 to 5 years hence? Look, we're still in a and I think we're still in a part in terms of the evolution of the company and the way in which our Customers are procuring software that is difficult to predict kind of what the revenue target year on year is going to be. I'd probably like to wait and see what the next half looks like before we start considering kind of giving forecasted revenue about that. I am very confident that we're going to continue to see the sorts of increases on revenue that we're currently experiencing, and we will hope to be able to deliver that and update you more as the uptake becomes more steady in its nature. Thanks, Kate. The next question is, Colin, thank you for your clear reporting. Given the investment in operating expenses and as revenue grows, can you give us some information on how operating expenses will grow in line with that? Sure. As Kate has mentioned, I think and as explained In the announcement, we think we are sort of getting to a stage where the increased investment we've been making in both sales capability and the other overheads we need to support the expanded business are starting to get to a stage that we're now happy with, so it's labeling off, and we're getting a bit we therefore expect that to plateau. Having said that, I guess we will look for H2 to probably still see a slight Increase in the OpEx for H1 because there's still some investments that haven't come through to be fully booked in the half year. And there will be some there's still a bit of investment to go. And as COVID It starts to affect us less, then we will see a bit of an uptick in some expenses in the area of marketing, travel and other things, which Being suppressed to date. But certainly, we're looking for a leveling off, whilst we're obviously hoping that, as Kate just said, Revenue will continue to grow along current lines and that's what will drive us towards profitability. Thank you. I've got a similar question. Looking at the cost base, given the recent investments in new hires, How should we look at the expense base on an annualized basis? Well, I think when you look at OpEx, ignoring cost of sales, and that's as indicated in the table is about $10,500,000 per half. As I said, if we were to look for that to increase slightly in H2, then I think you're looking at Annualized OpEx around sort of $22,000,000 going forward, and we wouldn't expect a major increase in that. There's will inevitably be some increases to the business as revenue grows, but nowhere near the level of increase we've seen through recent investment. Thanks, Colin. We've had a couple of questions come in around reseller products. What percentage of revenue is our 3rd party products such as OpenAP? What margins do you make on them as a reseller? I guess, From my perspective, they've never been a major focus of the business. We do it for strategic reasons. Currently, they wouldn't represent more than about 10% of revenue that we make. And generally, our margins on that inevitably less than we ultimately make on our own licensed products, but that would be traditionally somewhere in the sort of 30%, 40% margin range. Thank you. Our next question is, which product offerings have seen the highest are seeing the highest level of demand at this point. And has it changed with COVID? I think it's pretty hard to say. It depends on what's going on in each territory. So for example, in the UK, Myer Precision is getting quite a lot of attention, but we still have a Steady interest in MYRA observations and assessments, which is the Patient Track equivalent. But as a result of the Smart Page framework, which is 1 year kind of money being made available. We're seeing a really significant interest and demand in that. So it will depend often on what's going on at any given time. Here in Australia, the focus is not on my observations and assessments at all because That is generally handled by the large EMR vendors like Surna or Ipic that have gone in. So we're seeing a lot more focus on Myo Precision from Australia perspective. And in New Zealand, the interest lies in Mya Precision, Medications And Smart Page. I don't believe there's been a significant shift across the board in terms of COVID driving one particular product, but it is certainly shaping some of the ways in which our product, which is a platform that has a lot of capabilities offered in terms of the Myprecision platform, how it may be used. So here in Australia, for example, COVID is driving the virtual care component where we're now seeing not just the integration of hospital data, but how can we bring All of that additional data that could be captured in community care and in mental health and in the home and bringing that into a central area. That is a key driver for us in the Australian market. The driver in the U. K. Market for Miya Precision is very much around a way we have people Things starting to become or NHS Trust starting to become a little dubious about the return on investment that they are making in these very large EMR systems and what they're getting out of it. And so we're starting to see a wave of people questioning those approaches and moving towards a Best of breed solution as we have put it and my precision being the orchestration layer that brings that data from pathology medications and radiology together and then adds our clinical capability to that environment. So I'm sorry it's a long answer, but it's because it is quite different depending on which market we are talking to. Thanks Kate. The next question is what level that's a 2 part question. What level of sales and pipeline activity have you been seeing in the calendar year to date? And is there a pent up demand from that COVID period where healthcare IT procurement is focused on COVID related issues? Look, I think there will be some pent up demand. Although I have said before and I'll continue to say that we Have seen continued sales activity, continued significant pipeline growth, particularly in the UK through the COVID situation. And in the UK, They've had it, obviously a far more intense period around management of COVID. So and I think that comes from the fact that funds are available in the NHS and they need to be spent and they generally need to be spent within the calendar year in which they are made available. So COVID or not that those funds are available for digital health. So there is some pent up demand as we're getting in towards the end of the financial year for them. But we've just heard that Matt Hancock has announced the 2nd round of digital aspirate funding into the U. K. South Teas, for example, was someone that use that funding in order to see the funding of the purchase for Myo Precision. So that's where we're really focused. We're really focused on following the money in terms of Who's got the funds to make these decisions? I'm very happy with the pipeline growth. It is steadily increasing with my precision opportunities. But we are also, as I said before, seeing increasing opportunities around Smartpage and Meyer observations and assessments because of this funding being available throughout the NHS. Thank you, Kate. The next question is, thanks for a great half year for investors. What is the current sales pipeline in the UK look like for the second half? You have answered that a little bit. And the second part Our multiple NHS Trust will be over competitors. Sorry, I didn't hear that one, Sam. My question is, what is the current UK sales pipeline in the UK for the second half? Are multiple NHS trusts looking into WellCity and over competitors? Right. I think I've answered the first question in terms of pipeline. Yes, we have multiple we are engaged with multiple NHS trusts. And in some of those in most of those, they will be looking competitor as well because even when they use a framework, they generally need to be able to demonstrate that they are getting best value for money. But we are and have continued to be involved and with a growing number of trusts. In 2 weeks' time, the biggest Annual Digital Health Conference in the U. K. Is held, Digital Health Rewired. Some of you may know that I was over there 1 year ago And myself and Malcolm were doing a mad dash to get back before hotel quarantine when COVID commenced. And that's going to be a virtual conference this year, but it's very well signed up to and we're looking very much looking forward to continuing to demonstrate to the NHS market through that what we have to offer. So there are still lot there are lots of opportunities despite lockdown over there to continue to get our message out. And I'm very happy with how it's being received by those trusts. And yes, we will come up inevitably against a comparison to something like Surna, but I think The market is starting to understand that our proposition is quite different. Thanks, Kate. The next question is, can you provide some insight into the contract renewal process that occurs particularly for those contracts that are shorter in length? Look, it depends again on the contract. We often have 3 or 5 year contracts that have automatic extensions, so they can extend for another year or 2 and those ones are fairly simple. Our sales our support team, not even the sales team will make contact with them. Our legal team will check that everything's fine and a letter might be enacted to extend that contract, very straightforward. If it's come to the end of its extensions, we may need to look at the process of how that is further extended and a lot of People can just do that, can just go ahead and re sign another contract. Some might need to test the market again, but I can't even remember the last time But I've been in a market testing for a re signing up of a contract. Generally, if the software is already being used and the customer is happy. It's going to be very hard for anybody to displace us. Thanks, Kate. The next question is, given the shadowing of the cost base flattening out over FY 2021, is there a gross margin target Did you mind moving forward? Not really. I think we've been pretty clear about What we're looking to do, I mean, as we said through the presentation, we're anticipating that recurring revenue being at 85 plus above 85% gross margin. If you look at the gross margin, now the way we're reporting it, it's around 88 Percent, so I'd anticipated continuing in that manner. In terms of Moving towards profitability, I've always been pretty clear that I see next year as being a kind of moving towards Profitability maybe breakeven into the next financial year and growth from there. It's time to predict if sites come on board and we're revenue in that earlier than anticipated it could be sooner, but that's the plan that we have set for ourselves. Thanks Kate. We've just got one more sold revenue question before we move into some product questions. From the next for the report. Would you please break out sole revenue for FY 2022? We don't usually do that until the Q1 of the next year. That's right, isn't it, Colin? Usually, it's the last quarter of the year, Q4. We will give an initial view of sold work for the upcoming financial year. And the reason for that is that we won't have a solid position on that until we understand how much we revenue in the Q4 of the current year. And what impacts how much we can revenue It's delivery of project milestones. Thanks. The next question is a couple. Are there any key capabilities which you're focused on adding to the product suite? And do you have a new product pipeline? We are currently very much focused on delivering the depth across What we're doing. So the latest that we have added has been around the clinical noting and natural Language processing, which is just about to go live in Dartford. That is a key additional capability for us that and the way in which we're doing that I think is a big differentiator. So we don't have anything mapped out other than perhaps extending what we do. So for example, The work we're doing at Murrumbidgee, we may extend some of that capabilities we've talked about before into a consumer or a patient app. In terms of where we're at, I think we're really well placed. Our proposition is excellent. We've got a couple of strategic partners in Better and Nextgate. And as evidenced by South Teas, that gives them The old turn and Smart Page obviously gives them the opportunity to take our solution over these larger EMEPR vendors. Not saying we're not on the lookout for partners all the time and also for M and A opportunities. In terms of partnerships, I talk to people weekly about their ability to add to our to what we're doing. And there are some that we have loose alignments with. One is a company called Patient Knows Best, for example, we refer to as PKB in the U. K, who do a lot of work in the primary care and patient related app. We will bid with them when it's appropriate. So we have some longer term strategic ones and some more opportunistic alliances as well. Thank you, Kate. The next question is, does Alcidion have competitors in the UK and ANZ? What are the relevant market shares and how do Acinium's growth rates compare with those competitors? That's a good question. It could take me some time. I think I've kind of touched on this before in terms of Alcidion and its competitive landscape. What we do is quite unique. We are both an integration orchestration layer where you can bring a whole lot of systems together into a central standardized area. And then we also deploy capabilities of that platform. But we make that platform also available to others who might want to hook in to the ecosystem of our patient record or the customer who may want to connect some work that they are doing. That differentiates us quite significantly. The other differentiator we have and have always had is a design first mentality in terms of what we're doing. We think about what this solution needs to look like in order for As a nurse to be engaged and for it to make their lives better. And there are very few people even today that come at a System by deciding how it is our users are going to actually need to get access to that data. So I'm very confident The package of what we do is unique. That's not to say that we do not have competitors who do some of what we do who do what we do, but are tackling it in a very different way. Obviously, in the U. K, if we're going for EPR or an EMR engagement, People like Cerner and Epic and InterSystems are there as big players. There's a local player called Nervecentre, who is kind of trying to build out A full suite EPR. And here locally, we see Telstra Health come up in some of the conversations that we're having in that market space. And then if you break our products down into Smart Page, which The far more commoditized to that market, there are a lot of competitors in that market. Again, our differentiator in Smart Page is that we're not just a messaging tool. We've Actually embedded patient related data into it. So when you get a message through SmartPage about a patient, it's going to tell you Something about the patient rather than just can you come to ward 4A and check on this patient. So we have got differentiators in many of our markets. I can't tell you The market share of all of those competitors are, I'm sorry, unable to kind of answer that one in the detail. Thanks Kate. Now do you see the next question is, do you see similar opportunities like with the Myprecision platform sitting on top of an EMR in the UK market. We do. It shouldn't be any different than it is here, because what we're offering here is a mobile, easy to use front end to your EMR with decision support Capabilities that are not as readily available in those EMRs. Is it a focus for our sales team at the moment? Not so much. We have those conversations opportunistically when they come up. We believe the opportunity in the UK is so significant in those that do not have an EPR yet or who want to go down this best of breed market that the sales team are far better going after those opportunities more aggressively. Thanks, Kate. And we've just got time for 2 more questions. And if we can't get to everyone, I will make sure we get in touch after this webcast. The next question we've got here is with the reference sites you now have in the do you expect lead times to complete new NHS deals to shorten. And is it there any evidence of this today? Look, I think It's a possibility and it's again using the frameworks and I hate to get going back to them, but they're a very important part of how we do business in the NHS. The South Cheese deal was a pretty short process when you actually think about COVID hit in the middle of it. And so this will give you evidence of how these frameworks help. Most sales processes from go to work in the first engagement, Yes, that could be 9 months. We met South Tees in March. We did a demonstration. COVID hit and they were unable to do anything really and engage with us again until probably June, July when the UK came out of that first lockdown. We then went back into demonstrations with them. They had an external review done by the NHS because they were looking at something that was new and they wanted they didn't want to go to tender and they used can use wanted to use a framework to purchase us and that review but we took about 6 or 8 weeks, and they came out recommending the approach South Teas wanted to take. And then we had a contract signed by September. So that is a pretty speedy process in terms of the sorts of money we were talking about. So to me that evidences Exactly what we were able to do. We had great reference site in Dartford and there are opportunities and Procurement frameworks in the UK that allow us to speed that up. Will that be the case every time? I don't think so. But there are definitely opportunities to speed it up. Thank you, Kate. And our last question is, given the stickiness of customers witnessed by the ease of re contracting. How do you think about exercising the pricing power that evidently exists? Well, customers usually don't take too kindly to you using anything beyond what is a reasonable price increase over those extent is contract extensions if that's what you're getting at. So we usually have built into contracts the means by which A price increase will occur and we do have a price increase on recurring revenue every year as a standard contract term. It will go up by CPI over time. If anything has significantly changed though, if they're using in a different way or looking Any additional functionality, obviously, we can go back and talk to them about charging more for that capability. But typically, it's generally a good idea to keep faith And trust with your customers in terms of how we do that. So we tend to try to contract that into the reengagement. What is interesting from a Perspective though is if you'll see the difference between what the Dartford contract value and the South Tees contract value, we're clearly obviously marching that price to where we anticipate it should be. Dartford was early entry, early adopter price. South Tees is paying much more in the vicinity of where we As we prove that out even more, we will have opportunities to look at the value we are bringing and price that accordingly. Thank you. And that brings us to the end of today's Q and A session. So I'd now like to hand back to Kate Quirk, who will close today's session. Thanks very much and thanks everyone for your questions. Great set of questions and I'm as I said, I'm always happy to answer them. Just to finish off, I'd like to on behalf of Alcidion's Board and the management team, I really want to thank you all for your ongoing support of Alcidion. I get lots of very Good suggestions and comments from you and I really appreciate that. We really look forward to updating you on our progress throughout the second half of this year. Thank you very much and I hope you have a great day.