Induction operating losses widen as it completes first year of revenue

(Sharecast News) - Healthcare technology company Induction announced its first full year of revenue in its half-year results on Thursday, with revenue from contracts with customers coming in at £0.58m, compared to nil revenue in the first half of the prior year.
The AIM-traded firm said its gross profit for the six months ended 30 September totalled £0.28m, swinging from a loss of £0.05m a year earlier.

Its operating loss, however, widened to £3.19m from £2.23m in the first half of the 2020 financial year.

Induction said it saw "strong" momentum in sales and its annual recurring revenue run rate across all of its subscription-based software products during the period, with its revenue including the first generated by its 'Induction Switch' product.

The board described the balance sheet as "robust", with net cash standing at £5m as the company kept "prudent" management of costs and cash flow.

Deferred revenue stood at £0.6m, compared to nil a year earlier.

Looking ahead, Induction said its sales momentum and recurring revenue position provided a foundation for future growth, adding that it had a "strong" pipeline of orders with multi-year contracts.

It said it had a healthy acquisition pipeline, targeting new and complementary products and geographies, supporting its strategy to add solutions that deliver value to patients, doctors and other clinicians.

The company was seeing growth in registered users and user engagement across its product suite, adding that progress with key frameworks and collaborations such as the NHSX Clinical Communication Framework and Cerner created a "strong foundation" for continued growth in recurring revenue in the year ahead.

"The group has generated excellent commercial momentum in the first half of the current financial year and has delivered its first full year of revenues," said joint chief executive officer Dr Hugo Stephenson.

"I am particularly excited by our momentum with customers, such as the first NHS contract in south Wales for Induction Switch, and admission into the NHSX Clinical Communications Framework.

"We are proud to work in collaboration with Apple and Milton Keynes Hospital NHS Trust on a 'first of type' NHS innovation, enabling patients to view their health records on their own iPhone."

Dr Stephenson said the company's acquisitions continued to perform and integrate "well", as shown by MicroGuide achieving its earn-out ahead of schedule.

"We have an exciting and active pipeline of acquisition opportunities which will further enhance the product offering of the group.

"Ongoing growth in user engagement, amongst doctors and patients alike, is testament to the value healthcare stakeholders are getting across the range of Induction products.

"This progress, allied to our robust balance sheet, future contracted revenue, a major collaboration with Cerner and NHSX Clinical Communications framework , supports confidence of further progress in the remainder of the financial year."

At 1100 GMT, shares in Induction Healthcare were up 3.23% at 80p.