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Whilst we await news from Penn, there is a study out today which shows the rapidly growing number of young people claiming disability benefits due to mental health issues.
It’s the sort of thing that should encourage government to invest greater resources to deal with the increasing costs.
https://www.bbc.co.uk/news/uk-politics-66592814
Great news out of Penn last Thursday evening;
https://www.governor.pa.gov/newsroom/governor-shapiro-signs-into-law-commonsense-budget-that-makes-historic-investments-to-create-a-stronger-economy-safer-and-healthier-communities-and-better-schools/
Prior to the sudden change in urgency the budget wasn’t going to be signed off until late September, now it’s done bar a handful of items. Happily the part relevant to Kooth has been approved;
“$100 million for school-based mental health counselors and resources for students.”
TBC how much of that goes towards any full statewide rollout of the Kooth service, however you’d have to think it would be 10-25% based on the pilot. I suspect a formal announcement on a long term contract could be imminent…
I think this has to be the most bullish IC article I’ve ever read on a small cap;
https://www.investorschronicle.co.uk/ideas/2023/07/13/a-small-cap-with-a-game-changing-us-contract/
I’ll post most later on but have to agree on the current valuation of 2x FY24 sales looking very cheap vs other listed AIM companies, never mind US comps…
A Midas Tip Update was the catalyst for todays flurry of buys.
hTTps://www.thisismoney.co.uk/money/investing/article-12277811/MIDAS-SHARE-TIPS-UPDATE-Boost-mental-health-firm-Kooth.htm
Additionally, I didn't call anyone a name?
But you just did..
Dom-Bella, presume you mean goad, unless you believe I'm God?
If calling our cross-rampers is goading, then so be it.
Bit of feedback from the Pennsylvania pilot study. The fact that 65% of the students used the service is a strong justification for its need.
https://www.the74million.org/article/report-thousands-of-pa-students-asked-for-mental-health-help-last-year/
Crawshaw name calling and no1 Goder
Hi Shearclass, yes, thank you for your response, I appreciate your input.
I’ll be interested to see how Kooth behaves over the next few months even assuming no further US contract announcements.
Stock is under pressure here with the ‘ highly oversubscribed placing’ so perhaps momentum will continue strongly.
I’ve kept a good core holding here in the ISA for the journey.
Hi Mozax, definitely a good call to take some profits - it's AIM after all. Not keen on Made Tech as an investment as gross margins are poor and public sector budgets are under pressure. Could be a good trade though based on historic movements - not one for me though. Good luck and obviously not investment advice..
Indeed, we’ll put.
I’ve taken some profits here as I bought a fair chunk sub 180p.
On a different note, Shearclass, I’d be interested in your take of Made Tech (MTec). It’s been on my radar for a while and I’ve plopped a fair whack in recently.
I’ve done a fair bit of research.
Hopefully they did - it was a long wait from the initial announcement so the lack of interest does make sense!
Here's a budget breakdown of the original $4.4b CYBHI masterplan, as you can see $561m was originally flagged for the 'Behavioral Health Services and Supports Platform'.
https://sbud.senate.ca.gov/sites/sbud.senate.ca.gov/files/Sub_3_Attachment_Children_and_Youth_Behavioral_Health_Initiative_Handout.pdf
We now know that Kooth has been allocated around 33% of this budget, with a similar amount likely going to Brightline who will be looking after the 0-12 age group. I presume that the remaining 33% of the original budget has been held is reserve to support additional platform growth in the future, or reallocated elsewhere given Cali's budget problems...
Note that Kooth announced today that they will explore opportunities to support the 0-12 age group moving forwards, this is notable because they would have very likely won the whole contract if they had been able to support this age group as the initial plan was for a single vendor solution, rather than the two vendor solution they ended up with.
Share price wise it's very difficult to call where this goes from here in the short term. It's arguably on the worst possible market for a growth stock, as liquidity is awful & many international investors simply aren't able to buy SETSqx (market maker driven) stocks. My suspicion is we'll see some drift due to an II or two taking profit & then the real rise will happen as new state wins are announced & particularly when revenues (and profit) starts rolling in.
Great to see a listed UK based small cap making global moves, it's very unusual in today's world!
A not so subtle cross-ramp Ria. Stick to TRAC.
Great RNS today on here and great news for TRAC worth buying as well.....massive contracts/ orders in today.....for both companies
Great info thanks
Some excellent posts from you Shearclass.
You may be surprised how many people have observed your excellent research.
Amazing that nobody paid a single bit of attention to any of the last few items I posted, that’s AIM for you! Not often you see a premium raise like that and also very rare to see such a significant contract with a US government body. My negatives would be that we don’t know how much is usage based, what their commitment to promotional spend is & how the revenues are timed. Either way, a big step forward. Well done Kooth!
Disappointing delay, but at least they’ve kept market updated. Hopefully shortly does mean just that.
And further to that point there has been a notable increase in US job adverts, with the total now at 29;
https://www.paycomonline.net/v4/ats/web.php/jobs?clientkey=CA518AACD06747D958404929D26FA686
Most notably they are opening a Chicago office, i.e. this advert for an IT Director;
https://www.paycomonline.net/v4/ats/web.php/jobs/ViewJobDetails?job=70557&clientkey=CA518AACD06747D958404929D26FA686
"Set up Chicago based office with required IT infrastructure."
Additional Chicago adverts for a Financial Controller & Senior IT support.
So A LOT going on behind the scenes here.
Excellent quarterly CYBHI public webinar last Friday where Kooth's Tina Sanders presented their virtual platform solution to all interested stakeholders in the Cali health / youth system. There was also a presentation from a Californian teenager who was part of the youth focus group that assessed potential platforms, all focused around why they chose Kooth.
A replay should appear on this page in the coming days; https://www.chhs.ca.gov/home/children-and-youth-behavioral-health-initiative/
There was a similar webinar back on April 10th where Kooth got a brief introduction, however back then they emphasised that they needed to finalise a secondary provider for the 0-12 age group. On Friday it was announced that Brightline have been awarded this contract; https://www.hellobrightline.com/
With both platform providers now announced you'd think the formal announcement is imminent...
Very positive news out of NY yesterday / overnight which likely explains some of the buying today;
https://www.governor.ny.gov/news/governor-hochul-highlights-1-billion-plan-overhaul-new-york-states-continuum-mental-health
https://www.wkbw.com/news/local-news/governor-hochul-address-mental-health-concerns-and-allotting-50-million-to-be-spent-on-resources-in-schools
"BUFFALO N.Y. (WKBW) — Governor Kathy Hochul in the Queen City on Monday commits to address mental health concerns in the Western New York community. In her most recent budget, more than $30 million dollars is being spent on service expansions for school-aged kids mental health.
"We need to just embed this into our education system," Hochul said. "Something bad happening at home they have someone to talk to something bad happening at home there's someone to talk to. We catch them before they fall too hard because if they fall too hard we'll be spending a lifetime getting them back up."
FWIW I still think there is a very good chance that the solution which Kooth are going to roll out in Cali from Jan 24 (that currently has 70-75% of the required functionality) , ends up being adopted by NY too.
Ps. On the jobs in Kansas, that's where their current US head office is based, so a simple explanation there :)
I was looking at the jobs available in the US. I was expecting to see vacancies relating to California and Penn but was surprised to see remote recruitment jobs available in the Missouri/ Kansas area.
Anyone looked at this before? Any thoughts on this?
https://www.paycomonline.net/v4/ats/web.php/jobs?clientkey=CA518AACD06747D958404929D26FA686#
Yes I think the Penn state contract would have the potential to more than double revenues in its own right.
It’s worth emphasising the fact that per Kooths research each $1 spent on their services in the US saves ~$12, whereas in the UK it’s around £1 spent saves £3.14…
Consequently a $20m per annum investment in Penn would result in theoretical savings of around $240m whilst a £20m investment in the UK would result in theoretical savings of £62.8m.
So there is clear logic to back up higher contract values in the US (plus the fact that councillor salaries are around 2.5x those in the UK). Overall they should also be able to command higher gross margins (as they alluded to in the results release).
On Cali it’s 1 of 15 workstreams, not providers. Kooth are primary vendor so aren’t handling under 12’s, however the 13-25 bracket is surely the largest segment as parental permission is required for younger ages.
Some sleuthing on Google is worthwhile however I’ve resisted the temptation to post anything on here until the contract is finalised ;)
Kooths California contract covers the 13-25 age range.
By my estimate there are 6.5m people within that age range in California. Obviously as we are 1 of 15 providers we don’t know how many of them we will be serving yet.
The $3m pilot project for 150,000 pupils worked out at $20 per head.
The 500 school districts have 1,566,855 pupils.
Just saying.