Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Induction Healthcare Group PLC (LSE:INHC, Financial) has achieved a 30% reduction in missed appointments (DNAs) among its customer base, with some cases seeing up to a 50% reduction.
- The company has seen significant cost savings, including a 70% reduction in cloud hosting costs, resulting in approximately £2 million in annualized savings.
- Induction Healthcare Group PLC has a strong integration with NHS systems, including Oracle Cerner and the NHS app, enhancing its service offerings.
- The company has secured a £1.5 million contract to digitize diagnostic referrals in North Central London, showcasing its growth potential and strategic direction.
- The Zy portal business has shown strong growth, with a 51% increase in revenue in the first half of the year compared to the previous year.
Negative Points
- Revenue for the first half of FY25 was down to £5.4 million from £6.1 million in the same period last year, partly due to paused contracts following an early election call.
- The company has experienced a decline in video consultations by 70% since the pandemic, impacting revenue from its Attend Anywhere platform.
- Induction Healthcare Group PLC's share price has seen a decline over the past few years, attributed to low liquidity and small retail trades.
- The transition from centrally funded contracts to individual hospital budgets for video services has led to revenue churn.
- The company anticipates some revenue churn in NHS Wales as contracts transition from centrally funded to utilization-based models.
Q & A Highlights
Q: How are you thinking about AI and how it fits into your product strategy?
A: We are considering using AI tools internally and are looking at partnering with existing AI capabilities rather than building our own. We are exploring the use of large language models to create clinical letters from video consultations, which could save administrative time. We are also working on a proof of concept to integrate these transcriptions into clinical codings within electronic medical records, enhancing efficiency without becoming a medical device.
Q: How are you managing the threat of Microsoft Teams?
A: Microsoft Teams lacks certain functionalities like waiting room features that Attend Anywhere offers. Our team educates customers on these differences, emphasizing Attend Anywhere's security and efficiency. While some customers have switched to Teams, we've retained 64% market share. Our recent technical upgrades allow us to add features like recording and transcription, further differentiating our product.
Q: The share price decline over the last 3 to 4 years has been disappointing. What are your views on this and what are your plans to address it?
A: We find it puzzling that positive news hasn't moved the share price significantly. We plan to engage more with the retail market and provide tangible news demonstrating progress. Our institutional shareholder base remains largely static, and we aim to increase engagement to drive share price movement.
Q: How do you balance cost management and operational efficiencies to target profitability without impacting growth?
A: We aim to grow revenue without a proportional increase in expenses. Our improvements in gross margin have come from investing in technical infrastructure, which enables scaling. We are also considering reallocating headcount from engineering to sales to drive growth.
Q: For Zy, what competition do you see in the market?
A: Our main competitors are DrDoctor and Netcall, along with some regional portals. We differentiate ourselves through deep integration with Oracle Cerner and other systems. Our recent contract with North Central London and integration with Access Rio in mental health set us apart and provide opportunities to lead in the market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
