Alcidion Group Ltd
ASX:ALC
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
0.044
0.09
|
| Price Target |
|
We'll email you a reminder when the closing price reaches AUD.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Alcidion Group Ltd
You don't have any saved screeners yet
Good morning, everyone, and welcome to Alcidion's quarterly results investor webcast for Q4 FY '21, the period ending 30th of June 2021. [Operator Instructions]Today's webcast will feature a short presentation from Alcidion's Managing Director, Ms. Kate Quirke, followed by a Q&A. [Operator Instructions] I would now like to hand over to Kate Quirke, Managing Director of Alcidion.
Thanks very much, Amy, and good morning to everyone from -- I'm doing this from lockdown Melbourne, hopefully coming out soon, but thoughts are with everybody who is not freely moving around their state at the moment. Thanks for joining the call.The update this morning is to give you a direct update on the financials and operations for the fourth quarter of FY '21. Should you wish further information, please refer to the activities update in the quarterly cash flow appendix that were lodged earlier today on the ASX.Before I get straight into the numbers, I'd like to introduce you, for the first time, to our newly appointed Chief Financial Officer, Matthew Gepp or Matt Gepp. And also joining us on the call is our Chair, Rebecca Wilson. And we'll all be available to take questions at the end of the presentation. So thank you, everyone, for joining.Just moving through to some of the details now. Overall, FY '21 was a breakthrough year for Alcidion where we achieved several key milestones across all areas of the business. These milestones realistically further validate what has been a continued drive for us to be a global leader in health care technology delivery.From a financial perspective, we've reported -- we will be reporting, when we do the full year results, a record revenue for FY '21, which will be in the range of $25.6 million to $25.9 million, at this point unaudited, obviously, and we expect to release the full audited results later in August. Pleasingly, this represents an increase of 38% to 39%, depending on where we fall in that range, over FY '20 revenue. Also included in this FY '21 revenue is approximately 2.5 months of revenue from the acquired company ExtraMed, which equates to around $600,000 of that revenue reported range.Looking at the FY '21 revenue split by half, we continue to build on the strong momentum we had in FY '21, delivering in this half, the second half, an unaudited revenue in the range of $14.5 million to $14.8 million, which represents a 39% to 42% increase on the second half of FY '20. So in Q4 of this last financial year, we signed up $7.3 million in new contracts worth a total contract -- with a TCV of $7.3 million. And that will -- that consists of a combination of both newly signed contracts, along with ongoing renewals, and that quarter did have some significant renewals. Of that $7.3 million, a portion will be recognized in FY '21 -- or has been recognized in FY '21, but the majority of the balance of that will be recognized in FY '22.Pleasingly, Alcidion generated positive operating cash flow in Q4 of $1.6 million. And that was without having any one single customer contributing a significant inflow as we did in Q3 with the South Tees contract. And in fact, the cash receipts were spread across a large number of customers throughout the quarter. So driven by the Q3 and Q4 results, Alcidion has generated a full year positive operating cash flow of $1.1 million. And I'll touch a little bit more on the FY '22 contracted revenue where we start the next financial year as I move on to the next slide.So looking forward, Alcidion has got $15.1 million of contracted revenue that we'll be able to recognize in FY '22, which is an 18% increase on where we were starting at the same period in the last financial year. And of that $15.1 million, approximately $10.9 million of it is what we classify as recurring revenue with the balance of it nonrecurring.So in addition to that, we have $2.9 million of renewal revenue from existing customers who have already got a contract with us and who are expected to renew during FY '22. So we'd expect to anticipate that as well during the course of FY '22 on top of the $15.1 million we have already contracted.We included this graph here to highlight how our contracted revenue builds over the course of the year as existing contracts are renewed or new contracts are signed. So we reset or restart at the beginning of the quarter and start to measure and give an indication to our investors of how we started it, and then this demonstrates how year-on-year, we typically build that contracted revenue over each quarter.We had several operational highlights during Q4, the majority of which have already been disclosed to the market at the beginning of the quarter when we announced the ExtraMed acquisition. But it's definitely worth calling them out for the significance that they play in the forward-looking revenue and the activities of the quarter.In April, we announced that we've been selected as the preferred provider as part of a consortium for an enterprise health care knowledge management system for the Department of Defense for the Australian Government. This contract, when signed, represents a potential total contract value of over $21 million over the initial period of 5.5 years.The contract -- it was just as we've always indicated. It's still unsigned. It is subject to finalization and government approvals, which are still on track as expected in November, December later this year. The financial value of this contract, therefore, is not included within the contracted revenues we've reported in terms of the $15.1 million of contract revenue. So the defense force contract would be on top of that.As part of the consortium, we -- Alcidion will provide the longitudinal health record via the Miya Precision platform, which will aggregate the data from our consortium partners and other systems across the defense force environment. For us, this project is obviously very significant in the way -- in the positive way, it highlights our ability to interact with other solutions, which is really the premise on which Alcidion has developed in Miya Precision. And we do that to unlock and manage data that benefits clinicians to ultimately improve health care outcomes for patients.And it also provides really strong validation of Miya Precision's scalability as a platform that can support large-scale health care information management solutions across widely dispersed and multidisciplinary health care systems, which you can imagine, from a defense force perspective, is going to be about the coverage of wherever defense force personnel may be in the world.Also as part of the strategy that we have had to grow and accelerate our growth and capture the significant U.K. market opportunity that is growing, we completed the strategic acquisition of ExtraMed, which is -- which aimed to strengthen our patient flow capability and improve our market share across the U.K. and presence in the NHS.We've moved really quickly to integrate the ExtraMed capabilities and identify opportunities for Alcidion's product suite to be deployed into their customer environment. The integration process is progressing well. We've got all of the ExtraMed staff and team transferred across to our city infrastructure, and joint customer meetings have been progressing.In terms of what ExtraMed brought to us, there were 9 NHS trusts that they had contracts with, 6 of which were new to Alcidion. And that takes for us the total number of NHS trusts where Alcidion has some product installed to about 27 or approximately 19% market share as in presence in NHS trusts. The increasing size of that customer base in the U.K. is a really important driver to signal scale and intent to the NHS that we are a committed player to that market and see that as a very important part of our strategy.Another important part of the ExtraMed acquisition was their role in the rollout of U.K.'s first digital command center, which is a GBP 25 million large-scale IT project with -- being undertaken by a lead -- consortium lead or a contractor, which is Hitachi, and we're a subcontractor to that project.The initial phase of that contract is focused on Salford hospital or Salford Trust, but there's a potential for it to then expand to the other hospitals in that Northern Care Alliance once the first successful deployment has been done. And for us, this opportunity is particularly exciting because it provides access to and allows us to demonstrate our capabilities in an emerging area of health care IT, which is the establishment of singular command centers for hospital operations so that you can manage and look at the movement and flow of patients and activity through hospitals, but also in and out of the hospital from the primary care sector and out into social and supporting care.And we're really excited about being part of that project and being able to demonstrate that capability on a global basis. We also had a number of significant contract renewals during Q4, which is important because it allows us to increase market share across all geographies, builds on the foundation that we have established for the year and obviously provides our significant ongoing recurring revenue.During Q4, we added several significant contract renewals. I'll just call out a couple. One was the company signed a contract extension with eHealth New South Wales for the continued provision of our services to support and maintain their enterprise services bus, what is we call the ESB, but in fact, is their entire integration environment, so all the messages that go back and forth between every system. And this is really a core competency of Alcidion.It is very important to demonstrate your ability to actually deliver on the promise of your solutions. So not only do we have world-leading technology, we have the capability and skills to support deployment of these projects. During the quarter, that contract was not only renewed, but the scope of the services was extended to cover additional deliverables for eHealth New South Wales across a number of related areas.Also pleasingly, we renewed for a further year plus another optional year extension the contract to supply Miya to Western Health in Victoria. People who have been following the Alcidion story for a number of years will know that Western Health is one of Alcidion's longer-standing Miya customers. And I point out Miya separately because Miya is the preceding version to Miya Precision.So they have recently been involved in the last couple of years rolling out the Victorian state-directed electronic medical record, and Miya is continuing to run across that data. And we look forward to an opportunity to, in the fullness of time, move them to Miya Precision.The importance of contract renewals for us is that they signify customer satisfaction. And as you will see, renewals are an important part of the ongoing recurring and contracted revenue. So having our customers re-sign contracts is an indication of the positive relationship they have with us and their level of satisfaction with what we're providing.During -- we're very pleased, as I said earlier, to report a positive operating cash flow for both the quarter and the full financial year. The cash receipts from customers in Q4 were $9.7 million, which is a 27% increase on the same period last year. As I mentioned earlier, this is without the payment of the one-off large receipts as we saw in Q3 from South Tees, so it is a particularly pleasing result.Alcidion generated positive operating cash flow of $1.6 million in Q4, which resulted in a full year positive operating cash flow of $1.1 million. It's worthwhile highlighting just here though that Alcidion typically experiences a level of seasonality in our cash flows. Again, people who have been following us for some time will understand that. And Q3, Q4 are typically the strongest cash collection months for us across the financial year.The cash flows from financing activity for Q4 was $17.5 million net of costs. And that was based on -- off the capital raising activity, which we conducted during the quarter from institutional investors and a share purchase plan that was also conducted for retail investors with $9.5 million of that used on the acquisition of ExtraMed in this period. So our year-end cash balance as at the 30th of June was $25 million over the prior year of $15.9 million. And this was boosted, obviously, by the results of the capital raise that we did to support the ExtraMed acquisition.Also, during the year, as we've talked about a lot over the course of the last 12 to 18 months, Alcidion has been investing to scale our business, and we continue to make investment in our people across FY '21. And it's been critical to our success in being able to deliver on what we sell to our customers and therefore, sign up recurring contracts. So during the quarter, we expanded our management team with the appointment of Matt as Chief Financial Officer, which was effective from the 7th of June. So it's early days.So we're throwing him into his first quarterly call this morning, having only been with us for 5 to 6 weeks. But he does join us with 17 years' experience holding senior finance and leadership positions, including most recently as the CFO of the ASX-listed technology and software company MNF Group and prior to that, 10 years' international experience in financial roles in London and Europe. Colin, who will be known to many of you, Colin MacKinnon, who previously held the dual roles, remains in his role as COO and has passed CFO responsibilities to Matt.At the end of the quarter, Alcidion Co-Founder and Non-Executive Director, Raymond Blight, stepped down from the Board, which was in alignment with plans for a Board-led renewal and succession planning process. And the company is well advanced in appointing a replacement non-executive director. We have a strong pool of candidates that have been highly engaged and enthused about the prospect of joining us. And we've been going through a detailed process from a recruitment perspective. We look forward to being able to make more announcements about that shortly. I'd personally like to thank Ray for his many years of contribution to Alcidion as the Founder, as Executive Chair, CEO and Non-Executive Director, and we wish him well in all his future endeavors.So we started the year with a clear strategy and commitment to drive growth and scale through 4 key initiatives. We wanted to accelerate the growth and capture greater market share in our key markets -- sorry about that, a little bit of -- everything went black for a minute -- through both new customers and expanding our existing customer relationships. And we have done that consistently across the 3 geographies that we're working, but obviously, particularly with success in the U.K. adding to our customer base there.We wanted to identify acquisitions that enable greater market and all product penetration, and we've done that with the ExtraMed acquisition. We plan to present the Miya Precision platform as a compelling proposition to underpin digital health solutions globally. We're very excited about how we've expanded our presence in Australia and the U.K. And obviously, the defense contract, as we look forward to seeing that come to conclusion, will demonstrate even a wider capability for our platform.And we were really focused as well on being able to support an out-of-hospital care solution as we saw a more rapid move to considering virtual care or remote patient monitoring. We were able to deploy Miya Precision to support virtual care in Murrumbidgee and Sydney Local Health District. We're looking forward to continuing to position ourselves as a great provider of technology in this space is where we'll see more and more interest in this even moving outside of the COVID situation. There are a lot of uses for this type of capability for integrated care and for patients with long-term chronic conditions.I'm incredibly proud of what the team has done in progressing these initiatives, contributing to what has been an outstanding year of growth for Alcidion in FY '21. We've made important investments in our people and technology. We've proven the utility of our technology and our ability to cross-sell our product slate. We've developed new partnerships, and we've expanded into new areas such as virtual care.We finished the year with record revenue and a healthy cash balance. And I believe Alcidion is now very well positioned to continue to capitalize on the strengthening environment that we see for technology to solve many of the solutions that exist in health care today.So thank you for your time. I'd now like to open up for questions.
[Operator Instructions] Our first question is, how is the ALC sales pipeline looking besides the ADF contract, which is expected in FY '22?
Yes. So as we've indicated, there's growing activity around all of our solution capability. We're particularly focused on growing the Miya Precision pipeline in the U.K. for the alternative to the EPR, and we're seeing a lot of interest in that. And that's being supported by significant strategic changes from the NHS in terms of their interest in being able to look at modular electronic patient records. So we're seeing a growing pipeline for that capability.Here in Australia, we continue in the strategy of wrapping our capability around the electronic medical records that are in place. I think the Australian market has probably been a little slower in the last 6 months as a result of COVID opening, closing and a focus on vaccination. But we have continued to see a lot of engagement around the virtual care space. So I'm very excited about where the pipeline is heading. Certainly, you would expect to see activity above and beyond the ADF contract during the next 6 months.
Could shareholders expect more acquisition?
I think at the time that we did the ExtraMed acquisition, we indicated that M&A is still an active strategy for Alcidion, and we continue to look for the right opportunities that will align with our strategic intent, be that in growth in adjacent product, market share or capability.So we continue to look at that. There are a lot of companies out there. It's also a very active space. But we're very clear that we are looking at very specific capabilities to add to our positioning. So we'll continue to look, and we are well positioned if we wish to look at acquisition.
This next question -- hi, everyone. I'll start by saying you've all done a wonderful job and your communication with shareholders is incredible. How confident are you in the ADF contract being signed? And how vital is it to the growth of your business?
First of all, I think it's a very exciting contract for us, and we're very much looking forward to progressing. It is going to be important to us in terms of how we demonstrate the use of our technology in a federal sense. It is not vital because I think we have got a significant pipeline across all of the areas in which we work. But we're going to be very excited when it comes to fruition.In terms of -- I can't talk too much about it beyond what I was allowed to say at the time of -- during the release because the government obviously wants to control the process and timing, but we have not seen anything that indicates that they are either outside the timing they set themselves or not still progressing as they had planned. So we look forward to that, continuing on the time frame as indicated.
Thank you and congratulations on the developments over the past year. Can you tell us if and how Alcidion is contributing to the SPDR initiative for New South Wales Health?
So for those of you who are not familiar, that is New South Wales Health plan for a single patient digital record. At this point in time, it looks like they're looking at replacing or reimplementing all their core systems, the core EMR in a different structure. So we would still be positioned to sit alongside or on top of that single-patient digital record. We're not in a position to replace all of the capabilities that they currently deploy in their underlying patient record, and that's not where we position ourselves there.So we are continuing on to look at what we're doing in terms of adding value. We believe that the timing of that is still a long way off whilst they might be going through the process of selecting a solution. It could be 5-plus years before we see initial deployments of that. So we're very much focused on the proposition that we have, which is to wrap ourselves around their existing EMR.
Through contract renewals, is there a typical range of how much you can expand the TCV through expansion, pricing, et cetera?
Look, I wouldn't say there's anything typical. It depends on what the customer has bought, what they've deployed. We've recently had Dartford expand to take in Miya Memory, which, for example, they hadn't bought when they initially deployed or it wasn't even available at that time.So we could be expanding the contract by adding new capabilities. We could be adding new services. But each individual contract will depend on what they've actually got running at that point in time and what are the capabilities we have available to enhance.So South Tees, for example, have bought most of what we have at the moment. And yet, there are a number of sites in the U.K. that only have our patient track capability. And they're the ones where we may be able to upsell additional software capability.
Of the $7.3 million in new total contract value, what is the breakdown of new customers' contracts -- first renewed contract?
I don't actually have that information in front of me at the moment. I think we've got -- there were a number of new contracts, new services contracts as well and renewals, I actually don't have it. I'm sorry, but I don't even have a rough idea at the moment. I did not look into that. I would say my gut feel would be that it may be around half-half.
Matt, the 4C implies OpEx of $31 million for FY '21. Can you give us a flavor for the OpEx cost base moving forward?
Sure. Well, I can answer the question. We're not making forward-looking statements in this announcement, but I'll just comment on the question. So you have to remember, this is a cash flow, not a P&L. So the numbers we're looking at, for example, in revenue, our revenue includes the GST or the VAT depending on the jurisdiction the cash is received in.So you can see our receipts from customers of $32 million is a fair bit higher than what we've talked about in terms of the revenue for FY '21. Similarly, with the cost base, the cost that have GST or VAT applicable to them, that's in there as well. So you just have to be careful taking that number, adding up all the expenditure and extrapolating that.I'll also make the point that there are certain other costs we incur that won't appear in this cash flow. So there are noncash leave costs, LTI costs, accrued costs at the end of the year that don't -- or aren't reflected in the cash flow. So I wouldn't take that as a proxy for our roll forward for the future. And just wait for our P&L in a few weeks, and you'll get a better sense of where we've landed in terms of the OpEx for the year.
Thanks, Matt.
How do you see the U.K. market now they are coming out of lockdown?
I think that interestingly for us, the U.K. market has continued to be active during lockdown. We've still been able to engage. But of course, we haven't had those opportunities to meet face-to-face and network that you would expect to be just sort of the casual opportunities that create drive.So we're certainly seeing a lot of movement in the U.K. now and a lot of planning for conferences and getting back together. I just would say though that there has been significant engagement still ongoing. So our pipeline has continued to grow regardless of the fact that they have been in lockdown for quite some time.
Following the ExtraMed acquisition, what do you see in the cadence of U.K. account additions accelerating, which is a similar question?
Look, I mean, I think it's -- we certainly have engaged with the ExtraMed customer base and been talking to them about renewals and opportunities. It's still only a few months on. So obviously, in that time, we've been introducing ourselves to customers, getting to know those customers.So I think the opportunity is there. They're very interested in what we're doing. But as we know, it takes time to convert our opportunities. And we need to see that probably 6 months on to start to really see those turn into contracts.
Great. Does the management have a sense of the key reasons driving the uptake of Alcidion's products, for example, price, functionality, ease of use of the product or a combination of all of the above?
I'd say it was a combination of all the above, to be very clear. We are positioning ourselves at a price point that -- debt that comes in below the big -- great, big U.S. EMR engagement, but also at the same time, we're demonstrating -- and we've been really focused on the use of the product, and that's a driver for us. If you want greater uptake of your products now, you need to unlock the data and make it accessible. And at the same time, you need to make these systems easier for doctors and nurses to use.We've all heard about clinician burnout. It is an absolute fact. And we are really coming at it from a point of view of what we have done, which is -- we have taken the opportunity to build a system from scratch using all of the, obviously, knowledge that we had gained through previous years of Miya. But just remember that this system was built from scratch starting in '19 -- '17, in 2017. So we've been able to take advantage of all the current technology and all the current design thinking to make sure that this -- that our products are well positioned to be -- for a positive uptake from doctors and nurses.
Another U.K. question. Have you seen an improvement in inbounds following the recent NHS [indiscernible] guidance around the best-of-grade digital health tools?
Yes, we have.
Pipeline for next financial year, I presume, is reliant on tenders being released by prospective client. How many of the U.K. health alliances will you be going to tender this financial year -- or will be going to tender this financial year, rather?
When answering this specifically related to the U.K., it's a very interesting market dynamic in that we don't actually win most of our business in the U.K. via tender. They have the concept of frameworks, which some people have heard me talk about before, where you actually get onto a panel. You've probably -- you've gone through the process of answering what is the equivalent of a tender.Once you're on that panel, NHS trusts who are interested in your solution can either direct award from that or they can actually go and choose 1 or 2 people off the panel and get a mini -- have a mini competition going. So it's a real advantage to be on those frameworks, and we are on a number.So I'm anticipating that we'll see, as I said, off the back -- after the previous question, off the back of that change in strategy from the NHS, we should see heightened activity in that market, notwithstanding the fact that it's still -- our sales cycle is still 6 to 9 months in a speedy environment. So it's not something that somebody just wakes up and says, wow, I might go and buy Alcidion tomorrow. There's still a process that you need to go through and that they need to get access to those funds from NHSX.
Excluding the DOD contract, what is TCV booked now over 5 years?
Yes. We usually release that in every quarter other than the fourth quarter because we're just finalizing everything in terms of the numbers. And so we will make that information available when we've reconciled all the figures, and we'll do that at the full year presentation in late August.
For FY 2022 and beyond, should we now expect ALC to be a cash-generating business? Or is additional investment required in the products and people?
Yes, good question. So we are still continuing to finalize the investments we have had planned. And you will see, when we come out with our full year results, we will talk a little bit more about what our investments are still left. We haven't necessarily completed all of the investments we plan to make in FY '21, particularly in relation to onboarding of some staff. Many of you will know it's been a more challenging environment to hire staff with closed borders and so forth. So we're still working through that investment phase.I have always said and will maintain that FY '22 will be a breakeven year for Alcidion. In FY '23, we'll move into profitability. Obviously, there are some potential for contracts to come through more quickly than that. But we still do have some investments that we plan to make to scale the business. So that is still our intent.
How are sales of the OPENeP software going? What are your growth aspirations with selling the OPENeP software? And how much did this contribute to FY '21?
OPENeP, which is the medications management or Better medication solution, is really important for us in terms of it rounds out our offering to those customers who are interested in an electronic patient record that covers all of the capabilities. In many cases, sites in the U.K. in particular do not have a medication management capability. So we will still -- our intent is we sell OPENeP generally when it is part of an all Miya Precision patient track deal. So it's still -- it continues to be important for us in those accounts.It contributed -- I don't -- can't tell you the figure at the moment off the top of my head, but it certainly contributed to FY '21 revenue in South Tees and Dartford and a small amount from the New Zealand implementation, which is still in the pilot phase. And we need to move through that pilot phase in the next 5 or 6 months before New Zealand may continue to see whether they continue or want to expand its use.
What are the current challenges in the business? Is COVID still a hindrance to access to potential customers?
Look, I think -- yes, we've just come off the back of the most significant year that we've had during a time when the U.K. was fully locked down and we've had in and out of lockdowns in this market. So we've done very well in a COVID environment. And more often than not, it's presented us opportunities than it has presented concerns.However, I will not -- I won't say -- that doesn't mean that there haven't been challenges in a COVID environment, getting face-to-face access to customers. So I look forward to that opportunity to spend more time face-to-face with customers.In terms of -- I think the challenges for us are going to be continuing to scale, being able to deliver on the potential and the new contracts that we signed in the next year or so.
With the recent departure of U.K. Health Secretary Matt Hancock, how will this impact the future U.K. digital health adoption. Will there be any shift in terms of the policy?
It appears not. So Matt Hancock, before he had to move on, had put forward the concept of separating the data from the application layer. I mean the reality is that sort of policy is driven by NHSX, not by the minister. And the NHSX are still in play and they're still engaging across the whole of the market pursuing that strategy. So I don't think it's going to have any impact at all.
[indiscernible] on the wave of digital transformation, what additional investment does Alcidion need to make in its R&D? Or is this more likely to be applied by [indiscernible]?
We've got -- we have a plan -- we've got a development team allocated. We've got a 3-year road map for what we're doing in terms of the product and the evolution of the product. It's much more about evolution, I think, than it is any key functional area that we believe that we're missing or wishing to align in terms of that Miya Precision area.That doesn't mean that we won't look at areas where we might be able to build out adjacent to that -- to the EPR. And that, at this point in time, is likely to be more through acquisition than building another dedicated R&D team, for example.
Is the ExtraMed integration on track and time frame expectations on EPS accretive/upsell opportunities?
Yes, it's on track and continuing to -- that will deliver both positive EBITDA and revenue to us in FY '22. And as I said earlier, we're just beginning those engagements with the ExtraMed customers, getting them to understand what the Miya Precision offering is. And we look forward to keeping you up to date as they progress.
Can you expand on how Alcidion benefits the communities where its software has been implemented?
Well, that's a fundamental big question about what Alcidion does. I mean if I was just to sort of encapsulate it in a nutshell, we're very focused on using technology to transform health care delivery, to support it, to increase the safety and efficiency of health care delivery. And we do that really by supporting the decision-making of doctors, nurses and clinicians and our health professionals in health care, wherever that may be in hospital or increasingly outside of the hospital.So we're looking after -- solutions benefit by ensuring that patients get treated more quickly, get treated with less opportunities for adverse events. And so ultimately, they're restored to health more quickly than they otherwise would be.
Our next question, have you got any contact with COVID in terms of tracking, et cetera?
Look, we're not involved in anything to do with tracing, contact tracing or vaccinations. We have -- right from the very onset, the 2 areas where we have worked that are directly related to COVID was creating assessments particularly in the U.K. for COVID hospital -- patients presenting to hospital.And then secondly and more fulsome has been the work we've done with Murrumbidgee and Sydney LHD to actually monitor COVID-positive patients, be they in a hospital or in their home. And obviously, in Sydney and Murrumbidgee, up until 5 or 6 weeks ago, there was very few of those patients, but we've seen a significant increase in patients now co-opted into that environment as well.
Will your cash balance be sufficient to fund your expected investments in the next 12 months?
Yes. The only point that, that would maybe not be the case is if there was an acquisition that was in excess of what we had as a cash balance. But in terms of putting aside M&A activity, in terms of the plans we've got for investments, yes, we are -- we'd be well covered by the cash that we have. We certainly -- we have modest investments ahead of us, not something that would require that level of cash.
Is telehealth services something ALC sees as a core service opportunity? If not, is it something it will consider in the future?
So telehealth encompasses a lot of things. For us, what I've just been talking about, and we certainly have been doing some -- we did a webinar in the last 6 weeks or so around it. Virtual care is where we are looking at settling on what we provide, which is really monitoring patients at home, providing that data to a central command center type capability and creating alerts around particular cohorts of patients.Part of our -- we are expanding in one of our areas of R&D is probably going to be in a patient-facing app that incorporates into that called Miya Care. We've certainly got that in a beta version at this point. And in that, there is a capability for communication between the patient and the central command center. So you could say that, that was telehealth. But we really -- we position it as virtual care.
Another question. Well done, Alcidion team, fantastic results. Is it too soon to ask at what stage we'll be paying dividends to be considered?
I should hand that to Rebecca. I don't -- obviously, we would like to look to a point where we are -- have sufficient cash at hand and profitability that we would be able to do that. But at the moment, we are very much in the growth phase. We are continuing to capitalize on the opportunity that is ahead of us. And so I'd have to say dividend is not certainly in the forward short-term thinking.
A question about security. With what Alcidion is doing in terms of cybersecurity to better demonstrate the security and product to support the customer, will that -- will any changes or work being done in cybersecurity affect the existing product at all moving forward?
Look, I think from our products' perspective and our customers, we've been focused on this for some time. So all of our software undergoes penetration testing. That is something that is absolutely forefront and been doing that for some time. Like all businesses at the moment, we are continually reviewing our position in relation to cybersecurity, strengthening the software that we are deploying, constantly educating our staff on the risks associated with opening phishing e-mails and so forth. So we have an active program of cybersecurity awareness and cybersecurity defense being rolled out across the whole of Alcidion.
Do you think virtual care as something that will give you exposure into the aged care segment?
I think it's definitely an opportunity for us to look at. And we certainly have that on our radar to explore a little more in the coming 12 months.
Just in terms of the U.K. market, are you able to clarify the number of NHS trusts that you -- that there are and that you have access to or are currently operating in?
So the -- 145 are the acute care trust. Those are the ones that are very much focused on patients that are getting acute care in hospital. The balance are actually mental health and community health trusts. And yes, whilst they present us -- the whole 220 present us an opportunity. The main activity we're seeing is in the 145. So we're really focused on that as our addressable market in the short term.
When is the company planning to run a profit breakeven? And will it remain free cash flow positive on an annual basis, excluding acquisitions?
So as I -- I think I said this earlier that our plans at the moment are FY '22 breakeven, profitability into FY '23 and beyond. We continue to hope that we will work towards that positive cash flow consistently. But as I indicated in my presentation, we still will see some lumpy cash flows quarter-on-quarter. But yes, as you can see, it's going in a far more positive direction and has been over the last 18 months.
Cybersecurity is increasingly important. How is cybersecurity incorporated into Alcidion's risk management framework? For example, how are cyber risks managed from vendors and third parties?
So again, yes, it's very much on our risk register. The Audit and Risk Committee are fully aware of it and get regular presentations from our team as to what we're doing. And we equally need third parties, vendors and people that are actually supplying to us or who we are supplying to others to go through the penetration testing. And the question is -- they required -- it is no doubt an increasingly area of focus for our customers.If you could see some of the hoops that we have to jump through for each customer implementation, you'd understand that everyone across the board is taking it very seriously. And I'm comfortable that we have a program of work that is in place to continue to address it and to change. You need to be very flexible and agile at the moment in this environment as most people would be aware.
How much of total revenue is invested in R&D/product development?
Again, I think -- I don't have that figure absolutely to hand. And I think that will be something that would be good to pick up when the P&L is released at the full year. You'll get a really good indication of what FY '21 has looked like and where those investments have gone.
There are no further questions. So I'd now like to hand back over to you for closing remarks.
So thanks, everyone, for that. And thanks, Amy, for handling all those questions and very good questions in that. I'd like to -- personally, on behalf of the Board, and I know Rebecca will support me in this too and the management, I'd really like to thank all of our investors for your continued support. You're supporting us on our mission that we're very, very much committed to, which is to improve patient outcomes through digitalization of health care. I'm very happy with the position we're currently in. Having now closed out FY '21, we are very much looking forward to continuing to drive shareholder value in FY '22.Thank you for your time, and I hope you all have a fabulous day.