Thank you for standing by, and welcome to the ImExHS Limited Half Year 2023 Results Presentation. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Dr. Germán Arango, CEO. Please go ahead.
Thank you very much. Ladies and gentlemen, thank you for joining us today for the presentation of the ImExHS H1 FY 2023 results. My name is Germán Arango, CEO of ImExHS, and with me on the call is Reena Minhas, our CFO. I kindly suggest you to have the pack we released to the ASX yesterday in front of you. Turning to Slide 4 of the pack. At ImExHS, we are a company with two distinct businesses, both focused on democratizing access to medical expertise. Our first business is development of medical imaging software, where we provide innovative cloud-based solutions for medical imaging industry. The second part of our operation center on radiology services, offering outsourcing of imaging facilities and teleradiology to hospitals and medical institutions. On Slide 5, our reach extends across the globe.
In the software domain, we operate in 18 countries with 461 sites installed, and our software is used by a network of over 3,100 radiologists. Our presence is extended by 35 distributors spread across 15 countries. On the radiology front, we are active in Colombia, Spain, and Mexico, with 35 radiology centers and a team of more than 150 in-house radiologists. On Slide 7, we are showing the highlights of our recent performance. We have demonstrated the scalability of our business across diverse geographies with a compelling product and a disruptive business model. We are now directing our efforts towards generating positive earnings and cash flow. Our focus remains on Latin American sales and prioritizing the product development projects with near-term profitability. We have achieved our sales, revenue, EBITDA, and cash targets for the first half.
We have secured significant new contracts with first-year clients in both software and radiology segments. Our strategic product review is in progress, aimed at elevating our software's value proposition. Our enhancements are structured around four key pillars: functionalities, service quality, deployment efficiency, and security. Our H1 FY 2022-2023 revenue stood at AUD 8.8 million, representing a 7% decrease year-on-year and a 2% decline on a constant currency basis, despite transitioning away from a major customer in FY 2022. We have achieved an impressive annualized recurring revenue of AUD 24.4 million, up by 19% compared to the previous year, and a 15% increase on a constant currency basis. Additionally, our underlying EBITDA for H1 FY 2023 was + AUD 0.5 million, making a AUD 0.9 million improvement over the same period last year.
Turning to Slide 8, a snapshot of our operational achievements in H1 FY 2023. We have signed a new radiology services contract with Famisanar, Colombia's fifth largest insurance provider, with an annual recurring revenue of AUD 1.1 million. A contract with Grupo Avidanti was secured, projecting an ARR of up to AUD 1 million in the second year. An additional radiology services contract with Famisanar was signed in June 2023, with an ARR ranging from AUD 350,000-AUD 600,000. ImExHS Enterprise and ImExHS Cloud have seen installations in 461 locations worldwide. We have also sealed a five-year software as a service contract post H1, contributing approximately with AUD 430,000 in ARR through a collaboration with Grupo Avidanti-Zentria . On Slide 9, let's dive into the financial accomplishment of H1 FY 2023.
Our sales revenue witnessed a 7% decline year-on-year and a 2% decrease on a constant currency basis, amounting to AUD 8.8 million. The annual recurring revenue surged by 19% compared to the previous year, reaching AUD 24.4 million. This reflected a 16% increase on a constant currency basis. Our underlying EBITDA soared by AUD 2.9 million, reaching AUD 2.5 million for H1. Recurring revenue was 97% of our total revenue. 97% of our total revenue, amounting to AUD 8.6 million. Our closing cash balance as of 30 June 2023 was AUD 2 million. Turning to Slide 10, a breakdown of our business unit performance in FY 2023. The software division, comprising ImExHS and expanding ImExHS Cloud, witnessed a 25% revenue increase year-on-year, with a corresponding 22% rise in ARR.
Radiology services in RIMAB, with outsourcing facilities, experienced a 19% decrease in revenue year-over-year, countered by a 17% increase in ARR. On Slide 11, the achievements for H1 FY 2023 include processing over four million studies, equivalent to 712 million images, and integrating 1.3 million individuals into our patient portal. Our software solutions are currently deployed in 461 sites across 18 countries, empowering over 6,300 radiologists. Notably, our ARR reached AUD 10.4 million, making a remarkable 22% increase compared to the previous year. We have broadened our scope by engaging in software sales beyond Colombia, with 41% of our H1 software revenue being generated in U.S. dollars or other major currencies.
The focus remains on ideal client profiles and larger customers, evidenced by a recent subscription contract with Grupo Avidanti, contributing an ARR of AUD 434,000 . The pipeline for new opportunities remains robust, underscoring our dedication to innovation and growth. Turning to Slide 12, radiology services. We are the compelling provider for outsourced radiology services for for hospitals and other establishments. This includes administration, technical support, enterprise software, training, equipment, and on-premise and remote radiologists. Teleradiology services are becoming increasingly significant, granting remote access to top-tier radiology specialists. Our exclusive reliance on ImExHS software ensures quality and efficiency. We have solidified our position as a top five player in the Colombian market, with a strong academic profile for our radiologists. On Slide 13, we are significantly enhancing our value proposition with four key pillars: security, exceptional service and support, modernization of core products, and new deployment tools.
We have done significant upgrades and improvements in our software portfolio, constantly releasing new functionalities and maintaining our platform on the state-of-the-art, while keeping our cost structure under control. I will now hand over to Reena Minhas, our CFO, for the financial presentation.
Thank you, Germán. I will now run through the first half of FY 2023 financial performance of the company, starting on Slide 15, progress in ARR. ARR of AUD 24.4 million as at 30 June, was up 19% versus PCP and up 15% on a constant currency basis. ARR of 24.4 million consisted of AUD 14 million from radiology services and AUD 10.4 million from software. The software ARR includes AUD 3.9 million from ImExHS Cloud contracts and AUD 6.5 million from ImExHS Enterprise. The chart shows annualized recurring revenue, which is currently billing, as well as that which is yet to commence billing in a lighter shade. We've focused on getting this ARR billing as soon as possible. Turning to Slide 16, the income statement.
H1 FY 2023 revenue of AUD 8.8 million was down 7% versus PCP, and down 2% on a constant currency basis. The split of revenue is software of AUD 3.5 million, which was up 25% versus PCP, and AUD 5.3 million for radiology services, which is down 21% versus prior year. Recurring revenue of AUD 8.6 million represented 97% of total revenue in the first half. During the half, an impairment loss of AUD 1.3 million was recognized in relation to the RIMAB goodwill, principally as a result of the company choosing to exit a customer during 2022. Underlying EBITDA, which excludes costs in relation to share-based payment expenses, foreign exchange movements, and the impairment charge was AUD 0.5 million, which was up AUD 0.9 million versus PCP. Moving to Slide 17, the balance sheet.
At 30 June 2023, the company had a closing cash balance of AUD 2 million and net assets of AUD 16.7 million. Intangible assets of AUD 8.3 million consisted of goodwill of AUD 4.5 million, AUD 0.9 million of customer contracts, and software assets of AUD 2.8 million. Debt of AUD 0.9 million was down from AUD 1.1 million at 31 December 2022. Slide 18 summarizes the cash flow. The cash balance at 30 June was AUD 2 million versus AUD 0.9 million at the end of the prior corresponding period. Net cash flow from operating activity was AUD 1.4 million for the first half, versus cash flow used in operating activities of AUD 1.3 million in the first half of 2022.
Net cash flows used in investing activities include payments for software development of AUD 0.5 million and CapEx of AUD 0.5 million. A reduction in software CapEx has been achieved through a focus on near-term profitable projects. I will now hand back to Germán to take you through the strategy and outlook on Slide 20.
Thank you, Reena. On Slide 20, strategy and outlook. We anticipate FY 2023 revenue to be in the range of AUD 19 million-AUD 20.5 million, showcasing robust growth from AUD 17.1 million in FY 2022. This forecast implies a second half FY 2023 revenue growth of 16%-33% compared to H1 FY 2023, and a 33%-53% growth compared to H2 FY 2022. Our pipeline of potential businesses, business opportunities remains robust, reflecting the enduring demand for our solutions. We are crafting a new value proposition, strategically designed to serve a diverse market. Our development investment will experience a marginal increase, allowing us to effectively address the high-end market while maintaining traction in the low to mid-end segments. In conclusion, we are proud to present our H1 FY 2023 results, demonstrating our commitment to innovation, growth, and providing valuable solutions to the medical industry.
We thank you for your attention and look forward to continued success together. I will now open it up for questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your questions. We'll just pause momentarily for any questions to enter the queue. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your first question comes from John Derrick, a private investor. Please go ahead.
Thanks, Germán and Reena, for the presentation. I'm just curious about the on Slide 10, you've got the radiology revenue down 31% year-over-year. Was that because of the exit from the unprofitable contract?
That's absolutely right, John. Hello, first of all. Yes, this decline is due to a decision to exit that customer in the first half, at the end of the first half of the previous year. We have been able to backfill at least at the level of the ARR and partially in the ARR, at the level of the revenues, the gap that was created, but this is the effect of that decision.
Right. So if that was excluded, what would the comparison year-on-year be?
Excluding, um.
Excluding the revenue from that, yeah. So was that.
Yeah.
Around the AUD 1.2 million or so that that amounted to?
Yes, more or less. Reena, do you have that number?
Yeah, yeah, that's probably around that one. Yeah, so.
Right. Okay.
Yeah.
The good thing on that regard, John, is that, the gap has been backfilled predominantly with software revenues, which are higher margin compared to the radiology revenues, which represents a benefit for the company.
Good. Thanks. Now, the other point was, when you're referring to the outlook and the new value proposition, do you want to drop any hints about what's involved there?
Well, first of all, this is, let's say, in terms of communicating this to the market, it's a very early stage. We have been working intensively creating a new value proposition. But we need to provide more details to the market that this is something that we are planning to do soon. This is something that we have been able to design, creating a very, well, with the expectation of creating a very, very attractive and competitive product in the high end, but not increasing significantly our costs.
So it's a marginal increase in the human resources of the software development front, but with the existing hands, we are able to develop this in a term or in a time horizon of nine to 18 months.
And this is aimed at your Enterprise customers, yes?
It's considering general fronts, mainly to address the enterprise front, the more complex hospitals, which is something that we are addressing, including several tools and functionalities, to make it very attractive and competitive and disruptive in that front in terms of functionalities. But we are also in parallel addressing to improve the deployment process, the help desk for sales service, and the security of our platform. Those three elements are also applicable for the low end, and are gonna be helpful to enhance our value proposition for the low to mid end as well.
Right. And one other question was about RIMAB and teleradiology. Obviously, you have an advantage from your location for servicing, for example, Spain, because somebody in late afternoon in Spain may not be able to get the local radiologist, whereas you can come up with an overnight reading for them that they will have available first thing next morning.
Mm-hmm.
Is that something that you're developing, that you mentioned you have one particular client there? Is that something that you see as expanding? Is that, d o you have a pipeline now?
Well, in fact, we have a customer already in Spain. It's a company that has a big number of imaging centers, and we are reporting for them under that modality. We are using cross time zones to improve the response time. This is in fact what we are currently doing. During the previous year and the first half, we took the decision to be very focused in the Latin American region, while achieving more financial stability, being positive in EBITDA and in cash flows. Now we have been able to implement fully our cost reduction plan and addressing a profitability direction. We are in a position to reassess the expansion, the geographical expansion.
One of the considerations in our plan is to, in the teleradiology front, to explore more teleradiology from countries like Spain and some other European and North American countries. It's something that we are exploring. We have a pipeline already. We have more opportunities from the Latin American region for teleradiology, but we are planning to get more from countries with hard currencies. It's part of the plan for the near future.
Good. Thanks a lot.
Thank you.
There are no further questions at this time. I'll now hand back to Dr. Arango for closing remarks.
Thank you very much. Well, thanks again for your continued support and for making the time this morning, and have a wonderful day.
That concludes our conference call today. Thank you for participating. You may now disconnect.