To our Alcidion Q4 FY23 webinar presentation for the three months ending June 30, 2023. Before we begin, I'd like to acknowledge the traditional owners and custodians of the various lands on which we meet and work today, and pay my respects to their elders, past, present, and emerging. I extend that respect to Aboriginal and Torres Strait Islander people who are on the call with us today. Today, presenting, we have Alcidion's Chair, Rebecca Wilson, Managing Director, Kate Quirke, and Chief Financial Officer, Matthew Gepp. Kate will take us through a presentation covering the commercial and financial highlights of the quarter, and there will be a Q&A at the end. If you do want to ask a question, please use the Q&A facility at the bottom of your screen.
In the interest of time, and just to make sure we can answer as many as possible, I may combine some. If your, if your question doesn't sound exactly the way you've wrote it, then don't worry. If we do run out of time, please send me an email, and I will come back to you as quickly as possible. My contact details are on the bottom of the announcement that went out this morning. With that, thanks again for joining, and I'll hand over to Kate.
Thanks, Hannah, welcome everyone to the call. As Hannah mentioned, I'll walk through a summary of the Appendix 4C and the business update that was lodged with the ASX this morning. At the outset, let me say, we're very pleased with the results that we've achieved in Q4. We've had a record quarter of cash receipts, which resulted in positive operating cash flow, not just for the quarter, but in fact, more importantly, for the whole financial year. This was one of our key targets that we set ourselves for the year, I am very proud of the work that the team has done to be able to deliver on this result. In Q4, we also delivered new sales across all modules to both new and existing customers.
That has helped to contribute to a strong revenue growth over the course of FY 23. While I am touching on revenue in this presentation and in the release today, it's worth noting that the full-year revenue and EBITDA are obviously subject to audit, we will report more formally on the full- year's results later in August. Just having a look at the financial highlights initially. During this quarter, which is actually the 4th quarter, I've already got my head wrapped around the quarter that we're in. During the 4th quarter of FY 23, Alcidion secured AUD 7.3 million of new sales, with AUD 2.3 million of that recognizable in FY 23.
The total new sales for FY23 were AUD 29.9 million, with AUD 9.9 million of that to be recognized over the course of the year, the rest, obviously in FY24 and beyond. The FY23 revenue is expected to be around AUD 40 million. Approximately 75% of that revenue has been derived from products, with around 30% coming from services. Q4 cash receipts were the strongest on record, with AUD 17.6 million, which subsequently delivered a positive operating cash flow for the quarter of AUD 6 million. We have a strong cash position of AUD 14.6 million, as at the end of the year, 30th of June, with no debt, the cash balance is 32% higher than it was at the end of Q3.
These very strong cash receipts have delivered FY23 cash receipts of AUD 46.9 million, which is up 13% on the prior corresponding period, and demonstrates the strong and consistent commercial growth of the business over the course of that of the financial year. The operating cash flow for the full- year is positive AUD 0.2 million, and we're very comfortable with the current cash levels being able to support ongoing operations as the costs have stabilized, as they have over a number of quarters, and we expect that to be maintained. Final earn-out of the Silverlink acquisition is now complete.
Looking at the trends, as you can see by the various graphs that we've got here, that given the length of contracts we sign and the size of those contracts being very different, depending on whether the customer is purchasing all modules, some modules, and so forth, you can see that cash receipts can be lumpy over time. As a result, the quarterly numbers do not always reflect the business's performance from one financial year to the next, and it is really important to be able to look at it across the course of the financial year. This quarter, we delivered AUD 7.3 million in new sales, and that came across a number of new customer contracts.
It comprised 59% or $4.3 million of recurring product revenue and $3 million of non-recurring services revenue, which includes the revenue associated with implementing our products as well. Of that $7.3 million, $2.3 million will be recognized in FY 23. As I pointed out on the last quarterly update, Q4 was expected to be our strongest quarter for cash receipts this year, with $17.6 million, we have instead had our highest quarter of cash receipts to date ever. The cash receipts for FY 23 were $46.9 million, which, as I said, is a 13% uplift on the prior year, FY 22.
Pleasingly, the level of engagement with prospective customers continues to remain high, the increasing reference ability of our Miya solutions, both in the U.K. and here, adds to the confidence and the outlook that we have for Alcidion Group through FY 24 in terms of new sales and continuing on this positive trajectory. I thought I'd take the time also to give you a bit of an update on the business throughout the quarter and the things that we have been proud of. At an operational level, we have had long-term customers that has been around since the early days of Alcidion, when Miya was first developed to what we refer to now as legacy Miya. Northern Territory Health and Western Health have been running that solution for some time.
MidCentral has been running the earliest release of Miya Precision since 2017. In 2017, we released Miya Precision, new version, fully cloud-enabled and cloud-native developed. It has been very pleasing during the course of this quarter to get all our sites updated to the latest version of Miya Precision. The reason that's very important, not the least of which it reflects the ongoing referenceability and value that those customers are getting from Alcidion and our products. It also allows those customers to now buy or purchase, as needed, or as they have interest in the additional modules that we continue to keep developed from Miya Precision. The most recent being the ED module, Emergency Department module, that's been released.
Also it benefits Alcidion in that it allows us to improve our performance margins and our ability and capacity as we only need to support one platform, and we're no longer required to support those legacy solutions. During the quarter, we renewed another 2 Silverlink PCS contracts at Royal Wolverhampton and University Hospital Dorset. Since acquiring Silverlink in December of 2021, we've now renewed 4 contracts for multi-year periods, which is a key validation point, I think, for the embedded nature of PCS with our customers. Also the opportunity that it gives us in expanding our pro-product offering, as we are able to confidently enter into tenders for the large EPR contracts, where having a patient administration system is a mandatory requirement.
We have seen some early success with the contract that we signed with one of the trusts in the UK, at the end of Q2, which allowed them an option to take PCS at a later date. We're seeing more and more of this engagement with customers, where they are purchasing Miya Precision as a platform and the initial modules, and then creating contractual vehicles that allow them to purchase other modules over time, as and when their budget and needs allow. I think that's a very positive thing for us because we're starting to see people convert and buy additional modules, you know, 1 and 2 quarters after the initial contract, as we have seen happen in Q4.
Just on this point, it is important to clarify that, you know, as we go forward, and I think I've said this before, you know, we will not necessarily announce a string of large EPR-type contracts with all modules included from the outset. Our sales strategy is one of looking at how we enter, this as I've indicated, in a modular nature, and we've had significant success with it recently, as we progressively upsell and add modules in into the engagement. We will, I believe, see that electronic patient record engagements in the U.K. start to come to fruition through Q2, Q3. That program of work, as I indicated previously, is delayed, and it was actually formally announced this week after the U.K. government released the annual infrastructure and projects review program, which they do every year.
They indicated they were not on track to have a full EPR in all sites by 2025, and that would more likely be 2026. That lines up with instinctively what we're seeing and certainly where we're seeing the trust in the process of procurement at the moment. Lastly, I'd like to touch on our work with Te Whatu Ora, which is the new the name for the Health New Zealand body. We have not heard a lot out of New Zealand in the last two years as they have done what has been a significant restructure.
It's very pleasing that during the year we signed a master services agreement with Te Whatu Ora for Smartpage, which allows those hospitals that do not have Smartpage yet to purchase Smartpage directly from that agreement without having to go to market. One of our customers, we recently published on our website a bit of a case study and a story about the success that Nelson Marlborough has had with the rollout of Smartpage for clinical communication. Smartpage is an electronic communication task management solution that helps improve communication between departments, without it always having to rely on phone calls and historically, pages.
Following that implementation, there's been some really positive feedback from the clinical staff about how much time it saves them and how better they're able to service their patients through having information available on their phone, rather than relying on, you know, a small number of letters in a page and having to phone around. As a result, Smartpage is now being rolled out to the non-clinical departments across Nelson. It is these positive case studies and stories that, whilst makes us at Alcidion very proud about the impact our solutions are having in healthcare, it also demonstrates tangible value to our customers, that other customers look to when they're beginning to make decisions about where they spend money to improve their ability to deliver healthcare.
As we move into FY 24, we will continue to take to market the strategy that we exercised through FY 23, where we have the opportunity of taking the modular sell. Very much focused there on addressing some of the really crucial needs in healthcare around resource challenges. We know that there are not enough nursing staff or clinical staff available post-pandemic. Most studies around the world indicate that we are unlikely to ever have enough to meet demand and that we will probably operate at around 25% less capacity than we will need. The healthcare system is really looking at ways to be more efficient about the flow of patients, to look at how they manage those patients through the system.
We are obviously ideally positioned for that with our flow, access, and command capabilities. The Miya Central solution that we have been continuing to build out, creating an operation center that allows other partners to enter into our ecosystem, like we announced with Olinqua, to again broaden the information that is available to hospitals as they are challenged with their management of resources. Continuing very strongly into the NHS with our response to not only the electronic patient record opportunities, but a very strong push in that market around flow and bed management as well. We've just recently seen funds earmarked for that they want to address between now and the winter pressure timeframe that occurs in the NHS in our summer.
As I mentioned, we've, we have AUD 33.7 million in contracted and scheduled revenue to be recognized in FY24 before we make any other sales in FY 24. That visibility over the, this year and the next years, that really allow us to focus our resources to capitalize on the upsell and cross-sell opportunities we have. The cash receipts from Q4 are our strongest to date, even in the absence of announcing what some would consider major contract wins, we have been able to deliver attractive growth from existing customers and those new customers that are entering into the Miya Precision opportunity through purchasing one or two modules initially, that's very much what we have been seeing through the Q4 sales.
This highlights the strength of the modular set strategy, where we're able to win a customer with one module and then work closely with them to upgrade and upsell over time. That will remain a core part of our overarching growth strategy for FY 24. The cash position is healthy, and so we enter FY 24 in a very strong position. That's really all I wanted to cover off today. I am very happy. I'll stop sharing, and perhaps we can look to questions, Hannah.
Thanks so much, Kate. We do have a few that have come in. Starting from the top. It says: You have pretty sizable staffing costs of AUD 29 million. How many staff do you currently have? What do you expect the staffing costs to do from here?
We have just under 200 staff. I think it might be 192 or three at this point in time, and, you know, give or take a few. At any point in time, there might be two, you know, roles vacant. We expect those costs to remain steady as we enter into FY 24. We expect for the sorts of revenue growth that we've demonstrated over the last few years, that we can maintain that trajectory with that type of staffing and operational cost. Of course, were we to win two large EPR contracts, we might look at some increase in delivery staff to support that. Of course, there would be revenue associated with that.
Very comfortable at the moment that the operating costs are about where they need to be for us to start to deliver on that additional growth.
All right, thanks so much. We have two on the partnership with Olinqua, so I'm going to combine them. One is: Is Olinqua departing from the Microsoft Health platform? When do you think you may start seeing revenues from this product?
No, Olinqua is a solution that will be tapping into our operational capability, providing information to the Alcidion platform. They will still continue to do what they are doing. The partnership with Olinqua is strategic in nature, in that it expands the opportunity our customers will have to use Miya Central as an operation center. Not only will they look at the clinical data and bed management data that Alcidion provides, but Olinqua can provide information about security systems, nurse call systems, cleaning, facilities, and so forth. We're looking to bring strategic partners in that can broaden the offering. That means that our customers will look at Olinqua, and vice versa, Olinqua customers will be interested in what Miya Precision has to offer them.
All right, thanks so much. Are you aiming for the company to ac`hieve NPAT profitability and positive free cash flow in FY 24? If not, when do you think that will happen?
Look, I'm not going to get any into, I think, the FY 24 kind of, you know, forecast and positioning. We'll do that as part of the annual, as part of the release that we'll do in August and position where we're heading. Obviously, our aim will be to be continuing to move in that positive direction, because as I've said, the costs are leveling out, and we are expecting, you know, revenue growth to continue on this positive trajectory. That being said, if there are at any point, something that we're gonna do from an investment perspective, like move into new geographies or so forth, that would be something that we would identify and call out so that people would be aware of that.
I will sort of give more information and color to that at the full- year. As I said, operating costs are bottomed out, and we are continuing in this type of revenue growth.
All right. Thank you very much. Are all Silverlink payments now finalized, or are there other performance payments to come?
No, they're all formal, formalized now and complete.
All right. Can you give a breakdown by region of the AUD 7.3 million Q4 sales?
We don't typically do that. We will, at the full- year, give a breakdown of what, the by region of the full-year sales.
All right. Thank you. Interesting one here. Can you please define or clarify what pipeline means that you, when you refer to it in webinars? Does that term pipeline encompass all opportunities that Alcidion could potentially submit tender proposals for, or opportunities that you have already submitted tender proposals for?
Pipeline for us refers to all opportunities that we've logged within our system, where we have submitted a proposal or a tender to a customer. Not all are competitive. In fact, we win at least half our business from existing customers, direct awards, or framework contracts, where the requirement is to convince the customer to proceed and not necessarily to beat someone else. Items in the pipeline are converting all the time and being replaced with new opportunities. My comments in pipeline have been in reference to the range in value and diversity of the opportunities and how this sets us up well to continue to deliver quarter on quarter, even when large deals such as the U.K. EPR program are not moving as anticipated.
All right, Just a few more. Are you seeing bigger competitors moving into your space, eg, Oracle taking over Cerner?
No, I haven't seen a lot of change as a result of Oracle taking over Cerner, to be fair. I think the large players are struggling with the increasing pressures on healthcare and their ability to justify the sort of cost that Cerner and Epic are requiring to roll out their solutions. No, quite the opposite. In fact, we are seeing that Cerner and Oracle, certainly in our geographies, are being far more challenged than they have ever been before by players like ourselves.
All right. Thank you very much. one final one. It's actually kind of three questions in one. Are you able to provide more clarity on what is specifically causing the delays in the UK procurement because of the NHS? Do you think that those will rectify anytime soon?
Well, Look, as in all things, they're multifactorial. There is, first of all, resource challenges across healthcare, so they don't have as many people to deploy to actually get the procurement processes moving. There was like a lot of activity from a political nature in the first half of the financial year in the U.K., with changes to prime ministers and Chancellor of the Exchequer. It just delayed the allocation of the funds to the trusts. My understanding is the trusts now have those funds. They needed to have those funds in order to proceed with procurement. The procurements are now moving. Those trusts that have received funds will have to expend those funds by the 31st of March.
All right. sorry, we do actually have a few more that come in now. can you please clarify what portion of the pipeline is typically new customers versus existing customers? I think they mean in percentage terms.
Yeah, I don't have that allocation. I don't typically break the pipeline that way. You know, for us, I think we look at all of them as being opportunities that we wish to pursue. I'm very happy if it comes all from one component or if it's spread over over the rest. I can't tell you that sort of off the top of my head.
All right, One final one, I think. What % of new sales for Q4 were from contract renewals and existing customers?
I do not have that off the top of my head either. I think it came from a large number of contracts, and there was a combination of both new and existing customers. Yeah, I don't know, Matt, if I said 50/50, I might find that I'm off kilter on that, but.
Yeah, It's not 50/50. I was just thinking, you know, we, yeah, we didn't have a very high renewal number at the end of Q3, so, you know, the most it could be is like half a million AUD to a million AUD.
That's right.
renewal number. Yeah, yeah. It's largely new customers. Sorry, new sales, I mean.
New contracts, yeah.
Yeah.
All right. That's all the questions we have for today. If you do have one or we haven't addressed your question as thoroughly as you'd like, please do again, send me an email, and I will come back to you. Before we close the call, Kate, do you have any last remarks?
No, I mean, as I said at the outset, we are pleased with the Q4 results. Given the headwinds we've experienced in the UK with the NHS program, we're very pleased with the revenue that we've been able to achieve and the growth of the business. The business is very well placed in terms of scale and operational stability to really hopefully reap the rewards of a very strong FY 24. I'd like to thank the shareholders for their continued support and the Alcidion team and the board for the work that they continue to do to deliver for our shareholders.
All right. Thank you very much, Kate. Thank you, everybody, for joining us today. We look forward to updating you with more news as and when it comes out. Thank you.
Thank you.
Thanks. Goodbye!