Annual Results Investor Presentation. July 2013

Transcription

1 Annual Results Investor Presentation July 2013

2 Table of contents I. Business Overview & Highlights II. Financial Results III. Business Outlook IV. Appendices

3 Business Overview & Highlights Ian Bowles CEO

4 2013 Financial highlights Very strong H2 following slow H1 Revenue 37.1M; EBITDA 4.8M Recurring revenue up to 47% Cash generated from operations 8.7M Underlying bookings trend stronger then revenue UK Healthcare bookings exceed revenue by 5.5M Deferred income up by 2.0M to 14.6M 1

5 Revenue by sector in million Underpinned by growth of Healthcare revenue A 2010A 2011A 2012A 2013A UK Healthcare Other Healthcare Defence, Maritime & Other 2

6 Business highlights 16 NHS Trusts selected HealthRoster 151 Trusts are now using Healthroster (50+% of NHS) 19 NHS Trusts renewed their HealthRoster contracts in Trusts since 2010 a renewal rate of 100% The HealthRoster win rate this year was 88% 16 new wins included four competitive displacements. 13 NHS Trusts selecting a Medics Application for the first time 37 clients have HealthRoster v10 including 22 clients that have migrated from v9 3

7 Healthcare significant achievements 2013 Launched HealthRoster v10 & Allocate Cloud Provides customers choice; improves customer retention and recurring revenue Development (existing products) Medics: Provides an integrated solution; customer need for revalidation Clinical Activity Management: Developed in concert with HealthRoster and Medics SafeCare: Developed in response to Francis report on Mid Staffordshire Acquisition of RealTime Health Patient Flow: Will provide an holistic view of patent flow, bed management Emergency Department: A critical need for NHS Trusts 4

8 The Allocate Cloud Additional delivery model launched at the user group in June 2012 Incremental revenue stream 24 customers contracted average annual contracted value: 29k bookings 2,318k; billings 710k; revenue 269k in FY 2013 Enabling customers to overcome infrastructure complexity, security and performance issues removes sales barriers Faster deployment and upgrades margin enhancing Flexible commercial models offering more predictable costs overcoming capex objections Reinforce customer retention 5

9 Allocate International Nordics 7.4m of Revenue in 2013 (20% of total revenue) Predominantly providing Healthrostering solutions (Time Care), with circa 10% of solutions into non- Healthcare markets Continues to grow revenue and profits 22 new customers wins Australia 6.0m of Revenue in 2013 (16% of total revenue) Focus on Healthcare Acute (Healthsuite) Aged community care (Rosteron) Major multi year community healthcare deal secured Rollout of major Australian project behind original expectations Defence Royal Australian navy Australian army Royal Australian air force 6

10 Defence Enables the information management and analysis required to deliver military enterprise resource management Revenue in 2013 of 5.0m, representing c.13% of total sales Significant follow on order secured with the Royal Australian Air Force Proof of Concept received from the UK Army. The complex and high-profile restructuring issues in project Future Reserves 2020 (FR20) will be managed under a services contract using Defence Suite People 1. Resourcing: feeds from databases covering HR, equipment, ammunition and fuel providing constant real-time assessment of availability 2. Forecasting: provides a view on likely future requirements based on clear rules and conditions 3. Costing: measurement, extraction and manipulation of costs to support financial cost modelling Supports overall understanding 7

11 Maritime Revenue in 2013 of 2.8m, representing 8% of total sales Secured significant new Maritime Contracts in the Offshore Oil sector with McDermott and Technip based in the USA, and Subsea 7 an existing customer in the UK Technip is important as MaritimeSuite has been viewed as such a success that they plan on implementing the solution worldwide within the Offshore Group Both Allocate s Maritime and Offshore suites focus on: Scheduling Capability Operations 8

12 Financial Results Chris Gale CFO

13 Financial highlights 2013 sales and EBITDA of 37.1m and 4.8m respectively Revenue CAGR of 24% over last 4 years Higher than usual operating expenses, due to acquisitions and R&D expenditure, impacting on margins (falling to 12%) Broadly flat cost base going forward providing scope for margin enhancement Improving revenue quality, with recurring/repeat revenues now standing at 47% Evolution of business model and shift towards subscription rather than upfront licence understates the implied flat growth on prior year. Closing deferred income of 14.6m, up 2.0m on prior year Strong operating cash of 8.7m driven by working capital management and evolution of business model Net cash position of 9.1m versus 4.3m in

14 Revenue breakdown Revenue by sector 2013 Revenue by geography 2013 Revenue by type 37.1 million 37.1 million 37.1 million 8% 5% 1% 13% 16% 55% 26% 26% 79% 23% 17% 31% Healthcare Defence Maritime/LG&E/Other UK Europe Australia USA RoW Licence Perm/Term Subscriptions/Saas Support & Maintenance Services 10

15 UK Healthcare revenue 2013 Other 7% of revenue Healthassure 10% of revenue Revenue model: subscription Key solutions: Compliance, Realtime Assurance Cloud 2% of revenue Key solutions: Allocate hosts and maintains software and associated data independent of provision of licence Healthmedics 17% of revenue Revenue model: licensing / subscription Key solutions: Service planning, Consultant job planning, Junior doctor rotas, Appraisal and Revalidation, 360 o multi source feedback Healthroster 64% of revenue Revenue model: Licensing Key solutions: Nurse Rostering, Locum/Bank management Integration of Patient Flow / ED and Safecare SafeCare/Patient Acuity 11

16 Total revenue and EBITDA Revenue and EBITDA in million % % 17% % % 13% H1 2012A H2 2012A FY 2012A H1 2013A H2 2013A FY 2013A Revenue EBITDA EBITDA Margin 12

17 Revenue by type and recurring revenue Improving revenue model in million 47% 42% 38% 30% % A 2010A 2011A 2012A 2013A Licence Perm/Term Subscriptions Support & Maintenance Services % Recurring Revenue 13

18 Income statement trend ( in 000) H1 2012A H1 2013A H1 Change H2 2012A H2 2013A H2 Change 2012A 2013A Change Revenue 16,016 16, ,632 20, ,649 37, COGS 5,541 5,142 (399) 5,727 6, ,268 11,197 (71) Gross Margin 10,475 10, ,905 14, ,380 25, Operating Expenses 9,091 10,579 1,488 10,278 10, ,369 21,467 2,098 R&D 3,333 3, ,597 3, ,931 7, Sales, Mktg, G&A 5,757 6,892 1,135 6,681 6, ,438 13,824 1,386 EBITA 1, (1,026) 4,627 4,050 (577) 6,011 4,407 (1,604) EBITDA 1, (1,012) 4,825 4,269 (556) 6,397 4,838 (1,559) Gross Margin as % of Revenue EBITDA as % of Revenue EBITA as % of Revenue 65.4% 68.0% 72.2% 71.2% 69.3% 69.8% 9.9% 3.5% 23.4% 20.3% 17.5% 13.1% 8.6% 2.2% 22.4% 19.3% 16.4% 11.9% 14

19 Deferred income trend 7,000,000 6,000,000 Balance deferred 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 Support and maintenance Subscriptions CLOUD 0 H1 FY12 Q4 FY12 H1 FY13 Q4 FY H1 FY12 FY12 H1 FY13 FY13 Change FY12-FY13 % Change FY12-FY13 Support and maintenance 3,413 5,869 5,499 6, % Subscriptions 2,841 4,217 3,565 5, % CLOUD (and external) % Sub-total 6,323 10,173 9,474 12,396 2,223 22% Services 1,389 2,019 2,311 1,946 (73) -4% Licence (and other) (154) -39% Balance sheet total 8,325 12,584 11,841 14,580 1,996 16% 15

20 DSO and receivables ageing Allocate Software PLC (Consolidated) Aged Debtors 31 May 2013 Q4 FY13 Q4 FY % 000s % Current 6,751 72% 7,777 64% 0 to 30 days 1,606 17% 2,119 17% 31 to 60 days 343 4% 1,204 10% 61 to 90 days 472 5% 466 4% 91 days % 557 5% Total 9, % 12, % Days Sales Outstanding 000 FY13 FY12 Q4 Q3 Q2 Q1 Q4 Trade receivables 9,426 5,306 7,907 4,940 12,123 Quarterly revenue 13,500 7,493 10,125 5,954 9,867 DSO at Qtr End

21 Business Outlook Ian Bowles CEO

22 Positive Healthcare market dynamics Demand Global and growing market UK A&E attendances up 50% on ten years ago Routine operations jumped by 60% since the mid 1990s Impact of rising life expectancies; 3 x more elderly people in 2050 than the beginning of century People over 85 now accounting for a quarter of hospital beds, typically spending 11 days (vs. 3 for under 65s) Supply Pressure to increase efficiencies and cut costs throughout the Healthcare process Quality of patient care and safe staffing levels a key area of focus A&E in crisis - issues with bed management and target wait times Importance of efficient patient flow getting patients firstly out of A&E and then back into care in the community quickly Innovation critical to addressing supply issues and providing Allocate with increased opportunity Source: EHI and NHS Information Centre for Health and Social Care. UK Healthcare IT market = approx. 1bn per year 17

23 Market Environment The Francis II report on the Mid Staffordshire Trust Recommends evidence-based tools for establishing the staffing needs of each service The Keogh report on patient care across NHS Trusts Allocate products address many of the recommendations A&E departments are now stated to be in crisis RealTime ED & Patient Flow applications address many of the issues 18

24 Comprehensive product portfolio to address Healthcare SafeCare 19

25 Responding to customer needs Application Benefits Summary Patient Flow / ED Provides clinically informed patient flow Reduces length of stay, releasing capacity for NHS, saving costs and increasing income RealTime product 8 NHS Customers CAM (Clinical Activity Management) Revolutionary way to plan, manage & integrate medics with other teams Fully integrated with HealthRoster, it improves patient care and encourages medical engagement Internally developed Restricted release with 2 customers SafeCare Enables senior nursing staff to staff according to patient numbers an acuity Safer staffing for patients Internally developed Launched January 2013 High and predictable renewal rate 20

26 2014 Revenue predictability Revenue predictability FY14 Outlook (% total) Deferred revenue 28% Existing customers, Subscriptions and Support and Maintenance and Licence Renewals 56% Existing customers, from Purchase Orders in hand 59% Existing customers, existing products 73% New or existing customers, existing products 83% New or existing customers, new products 100% 21

27 2014 Outlook and key objectives Drive success of the RealTime products Maintain growth trajectory of Cloud and Medics Secure 100% HealthRoster licence renewals Maintain growth trajectory in Nordics Upgrade 40% of the HealthRoster installed base to HealthRoster v10 Drive margin expansion through operating efficiencies and improved return on investments 22

28 Company position and strengths Leading provider of Healthcare software to the UK market - Comprehensive and complementary product suite - Strong existing customer base around Healthroster Positive market dynamics - Growing demand and Healthcare sector efficiency needs - Technology change driving demand for cloud based solutions Powerful franchise in workforce optimisation - Dominant market position with the NHS with track record of displacing competition - Sticky model once embedded with a customer Continuous product innovation driving growth - Leveraging position as trusted advisor to upsell additional product (CAM, Realtime) - Improved delivery platforms (Allocate v.10; The Allocate Cloud) Management team with experience and ability to scale the business - Significant software and Healthcare experience - Proven track record of driving growth, both organic and through acquisition Attractive financial profile - Improving recurring revenue profile and margin expansion - R&D and acquisition investment in place to support future growth 23

29 Appendices

30 Allocate Vision 24

31 Allocate management team Significant software and Healthcare experience Terry Osborne Ian Bowles Chris Gale Allen Swan Title Chairman Chief Executive Officer Chief Financial Officer Business Development Director Experience Joined Allocate in 2005 VP roles at IBM (UK & US) between 1967 and 1985 Special Adviser to SSA LTD7 Joined Allocate in 2007 Previously COO of Clearswift Limited. Other senior positions held at Interwoven, Chordiant and Oracle Joined Allocate in 2010 Various previous senior financial roles held at Apple, Cooper and Chyan Inc, Cadence, Interwoven and Clearswift Martin Jeffries Jan Watson Chris Farnath Iain Bishop Prime Response and Oracle Previous senior roles at Chordiant, Joined Allocate in 2008, previously acting as an adviser Title Director of International Marketing HR Director International Support Director Chief Technology Officer Experience Joined Allocate in 2010 Joined Allocate in 2007 Joined Allocate in 2010 Over 20 years in technology services Joined Allocate on 2011 Over 25 years industry experience Hugh Ashley Peter Croft Erik Stone Title Director of Customer Services Regional Director Sales Director of TimeCare Experience Former founder of Dynamic Change Joined Allocate as of 1/6/2011as the Acquisition was completed Appointed to current role 1/9/12 Was appointed to the role of Regional Director Joined 4/8/2010 Formerly GM of Asia Pacific for Clearswift Erik was appointed to the role of Regional Director Nordics on 24/10/11 25

32 UK Healthcare licencing scheme summary Allocate Software plc UK Healthcare Licencing Scheme Summary Licence/Subs Revenue streams Licence/Subs Services Support & Maintenance Licence type Delivery model Contract Period Lic Subs Serv S&M Revenue Recognition Revenue Recognition Revenue Recognition Healthroster (new customers) Permanent/Term Customer site/cloud 4-5 years X X X X Licence Upfront/Cloud rateable As delivered Rateable Healthroster (renewing customers) Permanent/Term Customer site/cloud 4-5 years X X X X Licence Upfront/Cloud rateable As delivered Rateable Real Time Patient Flow Permanent/Term Customer site 4-5 years X X X Upfront As delivered Rateable Real Time Emergency Department Permanent/Term Customer site 4-5 years X X X Upfront As delivered Rateable Clinical Activity Management (CAM) Permanent/Term Customer site 4-5 years X X X Upfront As delivered Rateable Bankstaff Permanent Customer site Permanent X X X Upfront As delivered Rateable E-expenses Term Customer site up to 5 years Upfront As delivered Rateable SafeCare Permanent/Term Customer site 4-5 years X X X Upfront As delivered Rateable Cloud Subscription Hosted 4-5 years X X Rateable As delivered Rateable Medics Subscription Hosted up to 5 years X X Rateable As delivered Rateable Health Assure Subscription Hosted up to 5 years X X Rateable As delivered Rateable 26

33 Balance sheet trend ( in 000) 2012A 2013A Change % Change Non-current assets 18,214 15,573 (2,641) (14.5%) PP&E (40) (4.4%) Goodwill 6,939 7, % Intangible assets 9,661 5,949 (3,712) (38.4%) Other financial assets 60 - Deferred tax asset % Trade and other receivable Current assets 23,211 26,114 2, % Corporation tax receivable Trade and other receivable 14,753 12,887 (1,866) (12.6%) Cash and cash equivalent 8,338 13,134 4, % Total assets 41,425 41, % Equity 15,760 14,199 (1,561) (9.9%) Non-current liabilities 7,939 4,266 (3,673) (46.3%) Borrowings 4,000 0 (4,000) (100.0%) Deferred tax liability 2,129 1,449 (680) (31.9%) Trade and other payables 1,810 2,817 1, % Current liabilities 17,726 23,222 5, % Trade and other payables 17,085 18,832 1, % Borrowings 0 4,000 4,000 Corporation tax (251) (39.2%) Total liabilities 25,665 27,488 1, % Total Equity and Liabilities 41,425 41, % 27

34 Cash flow statement 000 FY12 Full year FY13 Full year Change % Change EBITA 6,003 4,407 (1,596) (26.6%) Depreciation % Net result on disposal of fixed assets 12 8 (4) (33.3%) Working Capital Change in trade and other receivables (2,628) 1,619 4,247 (161.6%) Change in trade and other payables 1,604 2, % Operating cash flow (before acquisition costs) 5,385 8,743 3, % Acquisition costs (1,544) (703) 841 (54.5%) Operating cash flow (after acquisition costs) 3,841 8,040 4, % Tax (301) (721) (420) 139.5% Proceeds from disposal of intangible asset % Capital expenditure (753) (531) 222 (29.5%) Pre financing cashflow 2,837 6,880 4, % Financing Interest receivable (59) (54.6%) Interest payable (123) (115) 8 (6.5%) Revolving facility 2,000 - Investing Activities Acquisition of RealTime - (1,162) Acquisition of RosterOn (2,210) - Acquisition of Zircadian (6,454) - Cash acquired with RealTime - 85 Cash acquired with RosterOn Cash acquired with Zircadian 1,256 LTRP Share Purchase - (600) 1,985 (66) (2,051) (103.3%) FY12 Final Dividend (682) (682) Share issues (135) (69.6%) (6,628) (2,300) 4,328 (65.3%) Foreign exchange (255) (210.6%) Cash generated/(utilised) (1,805) 4,514 6,320 (349.9%) Opening Cash 10,398 8,338 (2,060) (19.8%) Closing Cash 8,338 13,134 4, % 28

35 Key statistics Shares in issue, May 31: 64,205,528 Share price close, July 19: 83.50p Major shareholders as of June 30: Name of holder Number % of issued share capital Herald Investment Management 11,736, % Artemis Fund Managers 8,650, % BlackRock Investment Management (UK) 7,196, % SVG Capital 5,841, % Hargreave Hale 4,749, % Kabouter Management LLC 3,697, % Jupiter Asset Management 3,304, % Henderson Global Investors 2,827, % Allianz Global Investors KAG 2,000, % 29