The Alcidion Group Ltd (ASX: ALC) share price has dropped 7% lower today following the release of the ASX tech share's 1H20 results.
Alcidion develops and licenses its own healthcare software products, and is also a reseller of selected healthcare software products in Australia, New Zealand and the UK.
What did Alcidion report?
For the six months to 31 December 2019, Alcidion reported $8.2 million of revenue, a 12.3% increase on the prior corresponding period (pcp) of 1H19.
The company noted this increase was a result of recognised revenue that was added from several significant customer contracts signed by the company over the prior 18 months.
Net loss on the back of major investment for new growth
Overall, Alcidion reported a net loss of $1.8 million in the first half. This loss reflected investments the company made during the period as part of its accelerated growth strategy that's currently in place. This strategy is seeing Alcidion expand its sales capabilities in the UK and Australia and New Zealand (ANZ) in order to capitalise on a rapidly rising digital healthcare market.
Alcidion has also continued to invest in research and development during the first half of FY20, further weighing down on its overall expenses.
Contract wins during the period
During the half-year period, Alcidion reported the signing or renewing of contracts for products and specialist services with a total value of $6 million.
One of the new contract wins was a project with Healthscope, which represented the company's first contract with a private provider in the data and analytics market segment.
With regards to contract renewals, a second data and analytics contract with Calvary Health Care was signed in January 2020.
Company outlook for remainder of FY20
Alcidion anticipates an increase of expenditure during the second half of FY20, driven by further investments in sales and marketing. The company expects these further investments will strengthen its infrastructure in the UK and ANZ as well as accelerate its product development pipeline.
Commenting on the results, Alcidion Managing Director Kate Quirke said:
"The first half saw significant contract wins contributing to a healthy level of sold revenue out to FY2025, as well as investments made in scaling up sales, marketing and product development to capitalise on an advantageous healthcare market globally."
"We are actively focused on ramping up sales and marketing investment in H2 as we accelerate growth and drive further adoption of our products and specialist health IT services," she added.
