Careteq Limited is pleased to report that it recorded solid growth across its business in the six months ended 31 December 2021 (1HFY22) compared to the previous corresponding period (pcp), being 1HFY21.
SOFIHUB PLATFORM SUBSCRIBERS CONTINUE TO GROW AS HY REVENUE RISES
▪ Interim revenue jumps >6 times to $1.9m due to Ward MM acquisition and sharp increase in active SaaS platform users
▪ Number of users grows 579% pcp to >3k and Ward MM proforma revenue increases 6% pcp
▪ SaaS solutions gaining market share in Australia as the Group records its maiden earnings from the US as operations scale up
▪ Careteq in advanced stage discussions with several domestic and US partners, each of whom can significantly increase its subscriber base
▪ Positive outlook with multiple growth opportunities as Careteq holds a healthy balance sheet with $7m+ in cash to fund growth
Careteq Limited (ASX: CTQ, the “Company”) is pleased to report that it recorded solid growth across its business in the six months ended 31 December 2021 (1HFY22) compared to the previous corresponding period (pcp), being 1HFY21.
Interim Group operating revenue jumped to $1.9 million from $288,227 in the pcp while the net loss of $3.8 million was largely in-line with 1HFY21. Going forward, the company does not anticipate furtherance of one-off expenses of $2.3m pertaining to listing, capital raising and acquisitions as it does not have immediate plans to undertake such transactions.
Revenue was bolstered by the August 2021 acquisition of Ward MM, but even if the revenue from the Medication Management business of $1.6 million (representing four months contribution to group revenue) was excluded, Careteq’s revenue from its core Software-as-a-Service (SaaS) platform business would still have posted growth of 29.3% to $313,504 in the reported period.
The growth in Careteq’s SaaS business is driven by a 579% uplift in the number of active users to a record of 3144 on its Sofihub platform vs. the pcp as the Company’s Assistive Living Technology solutions are only just starting to gain meaningful traction in the underpenetrated aged and disability care market.
Just as importantly, Careteq has a healthy balance sheet to execute on its growth plans with $7.2 million in cash as of 31 December 2021.
Careteq is an early mover in the rapidly growing Assistive Living Technology sector, which is driven by aging demographic, chronic staff shortages and cost blowouts.
Increasing market share in Australia
The serviceable available market for Assistive Living Technology in Australia and New Zealand is estimated to be worth $1 billion a year1 with governments and care providers increasingly turning to technology to help improve productivity and the standard of care.
These factors explain the strong interest in Careteq’s solutions with the Company signing new enterprise agreements with two organisations this month alone. The first is with Baptist Care, which runs 160 facilities that cares for over 170,000 patients. The non-profit Christian care organisation will exclusively offer Careteq’s range of solutions as part of its home care assistance package.
The Company have also signed an agreement with Geohaven, a leading online smart technology retailer to the home care market.
NDIS and Hospital-In-The-Home
Careteq is also pursuing multiple opportunities that have the potential to add significant scale to its business.
For instance, Careteq is in late-stage negotiations with a number of National Disability Insurance Scheme (NDIS) providers to offer the Company’s solutions to their clients. Within the next four years, the NDIS will support an estimated 500,000 Australians with permanent or significant disability with funding for services 2. The government allocates an amount to each NDIS recipient to provide them access to Assistive Living Technology solutions. Careteq is a register NDIS supplier.
Another significant near-term opportunity is Hospital-in-the-Home (HITH). HITH services provide care in the home that would otherwise need to be delivered in a hospital. Against the backdrop of rising healthcare costs and chronic staff shortages, HITH often provides an alternative to admission to a hospital or an opportunity for earlier relocation to the home than would otherwise be possible 3.
Careteq is ideally suited to meet this market opportunity and is expanding its suite of solutions to enable a patient’s vital signs to be continually recorded and monitored in-home or at a medical facility through its Sofihub platform.
Careteq is currently in discussions with a major hospital group in Australia to commence trials using its solutions and the Company will provide further updates as the discussions progress.
Foothold in the US market Meanwhile, Careteq is also tapping into the global Assistive Living Technology market, which is forecasted to be worth US$32billion ($45 billion) by 20264, through its expansion into the United States.
Importantly, Careteq recorded its first revenue from its US operations in 1HFY22 through the sales of its products to Global Distribution. Careteq anticipates further growth from its US expansion, particularly given the opportunities that are ahead of the Company.
This includes, but is not limited to, the anticipated commencement of trials by the SiTa Foundation in March 2022, which is expected to be completed within a 3-month period. Careteq is developing a safety device for the anti-domestic violence non-profit organisation. There is an estimated 10 million Americans who are victims of domestic violence each year5 and Careteq will be paid a monthly fee for each active device that has to be connected to its Sofihub platform. Careteq is also in active negotiations with several large and established US channel partners and service providers to the aged and disability care market. A successful partnership with any one of these prospects can significantly increase Sofihub’s subscriber base.
Outlook for 2022 and beyond
Careteq is well placed to build on the growth momentum it has achieved as it has multiple avenues to add significant scale to its platform business in Australia and internationally.
Importantly, management estimates that it only requires around 15,000 subscribers for the Group to become cash-flow positive on an “as is” basis (excluding growth capex). Given the size of the opportunities listed above, the Company believes it can achieve this goal in the not-too-distant future.
Further, there are organic growth opportunities for Ward MM, which is one of the largest providers of medication management services in Australia with several competitive advantages to the competition.
Careteq is also cross selling its hardware and SaaS solutions to Ward MM’s clients, which includes some of the nation’s largest aged care providers such as Bupa, Japara Healthcare and Estia Health Limited (ASX: EHE).
This announcement has been approved by the Board of Directors.
About Careteq Limited
Careteq is an Australian-headquartered health-tech company that has developed and commercialised a suite of products that sit on its proprietary SaaS-based Assistive Living Technology platform for use by the elderly, disabled and vulnerable individuals. Its products and services, which improve outcomes for patients and their carers while increasing productivity, are sold in Australia and internationally through industry-leading distributors and specialist retailers. Careteq generates revenues from recurring platform subscriptions, contracted medication management services and sales of its innovated range of sensors and devices that detect falls or unusual behaviour, monitor patient health, provides SOS emergency call functionality and deliver medication reminders. Careteq is using its early mover advantage in the Assistive Living Technology sector to revolutionise aged and disability care. For more information about Careteq, visit https://www.careteq.com.au/.