© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good morning, everybody, and a very warm welcome to this morning's presentation of Alcidion's 4C quarterly cash flow and business update for the fourth quarter of FY '22, which was released on the ASX this morning. For those of you who don't know me, my name is Kerstin Wahlqvist, and I am the Investor Relations Manager at Alcidion. I'd like to begin by acknowledging the traditional owners and custodians of the various lands on which we work and meet today, and to pay my respects to their elders past, present and emerging. I extend that respect to Aboriginal and Torres Strait Islander peoples who have joined us on the call today. Today's webcast will feature a short presentation by Alcidion Managing Director, Kate Quirke, who'll take you through the numbers and also the accompanying business update. This will be followed by some time for Q&A at the end of the session. Also joining us on today's call is Alcidion's CFO, Matt Gepp, who will be available for questions as well at the end of the session.
[Operator Instructions] Please note, we have received a number of queries in the lead up to today's session, but we'll hold all questions until the conclusion of the presentation. With that, over to you, Kate.
Thanks very much, Kerstin, and thanks, everyone, for joining us this morning. I'm giving this presentation from a not-so-sunny Melbourne, as you can see. So thanks -- as I said, thanks everyone, for joining and for your ongoing and continued interest in Alcidion. This quarter, Alcidion's delivered one of our strongest quarters yet. And this morning, I'll provide you with an update alongside the Appendix 4C numbers which were released earlier today, and I trust those of you who are interested have had a chance to peruse.
As I said, we've had a very positive fourth quarter to finish on a strong financial year as we've outlined today in the business update. Importantly, we delivered a positive operating cash flow for the quarter of $3.3 million, and the FY '22 -- and for FY '22, a full year positive operational cash flow of $1 million. This comes off the back of the strongest year of sales Alcidion has ever had in terms of total contract value, and demonstrates the evolving nature of our company.
This quarter we signed several contracts with both new and existing customers across all geographies and that was for TCV or total contract value of $14.8 million for the quarter, which actually is the second highest quarter we have on record. The next highest being that in Q2, where the contract for the Australian Department of Defense was signed. So this tops off a year or bridge will close a year where the new sales for FY '22 reached a total contract value of $57.7 million for the year, which is 96% ahead of the prior corresponding period or the prior financial year, and clearly demonstrates the market and customer interest in the Alcidion proposition. I'm very pleased with the uptake of our solutions by new customers.
And also the commitment demonstrated by long-standing customers such as Northern Territory Health and Western Health in Victoria, who have committed to new contracts, long-term contracts, to upgrade to the latest Miya Precision version, and they have been doing so to confirm their long-term commitment to our solutions. And it is these customers that I'm especially pleased about as they have been using our solutions for some time, and this demonstrates their understanding of the value that -- and the benefits that our solutions bring and they look forward to increasing those as I move to the Miya Precision platform. In Australia, we entered into an exciting new 5-year agreement with Alfred Health. Alfred Health is a well-recognized leading component of digital health, I think, fair to say in Australia, located here in Victoria. That was to implement Miya Precision, but the Miya Flow modules in particular, which are generally 1 of the first modules of Miya Precision that are implemented. And that, alongside the agreements for Northern Territory and Western Health have built -- continue to build on the value proposition that I have talked about in the last 2 quarterly updates about Miya Flow and our capabilities to support the flow and the efficient management of patients throughout the health care service at a time when the health care system is feeling particularly under pressure in regard to this. And we have similarly seen contracts -- large contracts signed in the United Kingdom.
During the quarter, we also announced contract wins and renewals in the U.K., including the first upgrade of an ExtraMed customer to Miya Flow from the Inpatient Flow Management solution, demonstrating the benefits of some of the recent acquisitions that Alcidion has undertaken. So moving into a little bit more detail on the financial highlights. The operating team has bought FY '22 to close in an outstanding final quarter. If you look at the financial highlights for the quarter, we've delivered positive operating cash flow for the quarter of $3.3 million. And this results and contributes to a positive operating cash flow for the full financial year of $1 million. If you actually exclude the M&A costs, which often we do when comparing like with like, then the cash flow for the year would have actually been $3.1 million positive. Quarterly cash receipts for the quarter were $14 million, which is a record for any quarter for Alcidion, with the full year cash receipt sitting at around $14.4 million, which is up 29% on the prior financial year. If you look to the full year, the results of which, of course, we will fully report later in August. But just looking to the full year in terms of an indication of revenue, we expect to report at least $34 million of revenue, which is a 31% increase on the prior financial year. That does include $4.3 million of the Silverlink revenue, which is slightly ahead than what we indicated it would be when we did the acquisition, and that's due to some positive increase and some additional services work related to Silverlink during that time. Of the $34 million revenue for FY '23, around $23 million of that could be classified as recurring. Of the $34 million as well, $29.3 million relates directly to product, so either the licensing of those products, the support of those products or the implementation of those products, which is equal to around 84% of revenue of the $34 million coming directly from products. And I point this out because those of us or you who have been following us for some time will know that when we did the transformational acquisition of MKM Health back in 2018, the revenue split from products to direct to services, things not related to product, was probably about 60% service, and 40% product related. We're now looking at 84% product related, which is again, demonstrating the evolution of the company and moving in the direction that strategically we have indicated we will be moving. And all of this is based on unaudited results at this stage. We also -- obviously, we will do our full audited results later in August. But we will confirm at this point that underlying EBITDA will be positive for FY '22.
For me, the quarter results are a testament to the operational strength of the company despite continued uncertainty of the external business environment in all geographies, not also -- also mentioning U.K. politics at the moment. We signed several new contracts in both the Australian and the U.K. market, and also contracted to upgrade several strategic long-term customers to the latest version. And as I said, this resulted in new sales, $14.8 million for the quarter, with $2.7 million of that able to be recognized in this financial year. So of that $14.8 million that we sold in Q4, only $2.7 million of that has been revenued in the current financial year.
We also saw record new sales for FY '22 with TCV value of around $57.7 million, which is up 96% on the prior financial year. And to me, these recent contract wins are indicative of our customer's satisfaction because some of these are upgrades, but some of them are also upsells of additional modules. And it is a strong validation of the modular strategy that Alcidion has taken in respect of our product and the ability to buy the entire LCD and suite, if you choose to, as South Tees had done, but also to choose to enter in with combinations of modules and build on them over time. The company's cash balance was $17.3 million at the 30th of June with no debt. So as I've outlined and was certainly detailed in these graphs in the update published today, the trends across the board are all positive. You can see here we're ahead on the prior corresponding dependent period numbers in both new TCV and cash receipts. I think it's worthwhile noting the significant impact of the ABF contract on the Q2 sales, and that demonstrates the nature of our business where we can have a quarter where we have a significant individual contract, like we did in Q2, contribute significantly to TCV. But correlate that with Q4, where we've had a larger number of smaller contracts also delivering a significant TCV and contribution to the long-term revenue profile, and I think it's important for investors to understand that as we've demonstrated in this quarter, we're building a very healthy business off the back of multiple smaller contracts in as much as we are focused on [ larger products ]. We have a healthy cash balance and a strong and continuously developing pipeline. It does continue to develop and strengthen. And obviously, as we continue to [Technical Difficulty] not only the signing of new contracts, but where contract -- where customers go live and report positive results from implementation of our solutions, we continue to see that pipeline develop.
I'll give you a little bit more detail on some of the new contracts that were signed during Q4, which contributed to such a significant quarter of new sales. As I said earlier, some of these contracts were for customers upgrading and signing long-term commitments. Perhaps it's worthwhile noting and why I am emphasizing that is in health care, a lot of people when they come out of the 5-year or 3-year contract, will elect to sort of sign annual contracts therein. The fact that both of these customers have been prepared to sign up to long-term contracts, I think, is a very strong validation of their relationship with us and the benefits of our solutions.
So a little bit more detail about some of those contracts. We signed an exciting new contract with Alfred Health to implement the Miya Flow module -- and access module from Miya Precision. And this is with a view to -- from Alfred Health's perspective, a view in improving patient flow and patient care across their 3 key hospitals. It will also include integration to the Cerner Electronic Medical Record, with which they've been one of the longest users alongside Sydney LHD, probably the second longest user of the Cerner Electronic Medical Record. And this contract with Alfred actually continues our relationship with Alfred Health, where we had previously been contracted and delivered a data warehouse and financial reporting system for them.
As has been previously announced in market, we signed a new 5-year contract with Northern Territory Health to upgrade the latest release to -- grade them to the latest release of Miya Precision, which extends [Technical Difficulty]. It's important because in the last few years, they've signed a contract with Intersystems for an electronic medical record. And what this contract demonstrates is the ongoing ability, and I have often talked about all the Miya Precision add value and extend and information that in the EMR, to focus on additional areas of engagement, deployment and analytics for health -- for the health sector. So they will be deploying flexible electronic journey boards, integrated bad management, hospital operations and command center and dedicated emergency department functionality.
We also signed a new contract with Western Health in Victoria to upgrade the previous Miya version to Miya Precision. This will also include integration to the Western Health electronic medical record platform, which is also Cerner, and they're in their second phase of rolling out. This continues a 16-year partnership we've had with Western Health, and the upgrade will also include a move to full cloud deployment in the Alcidion Cloud.
Looking to the U.K. market, we signed a 5-year contract with East Lancashire Hospitals NHS Trust, who we refer to as East Lancs. And that upgrade was -- that contract was the upgrade of ExtraMed Inpatient, which has been used there for almost a decade. This agreement is the first customer upgrade from the ExtraMed IPFM product to Miya Flow or Miya Precision for the purposes of Flow, following the acquisition we did for ExtraMed in April 2021. And it will also be the first deployment of Miya Precision integrated with Cerner EMR in the U.K.
And it's worth noting, this is in addition -- so this is an upsell to the existing contract, which was signed earlier in the year with East Lancs to deploy Patientrack or as we refer to as Miya observations these days, that has already been deployed at East Lancs working really effectively. And when Cerner EMR goes live, Patientrack will also be integrated into the Cerner EMR. So this demonstrates the Alcidion proposition of both upsell to existing customers, but in a modular manner and the value that the acquisitions are bringing to what we have and our opportunities in terms of growing our market and our total addressable market.
We also extended during the quarter, the contract with Herefordshire and Worcestershire. They last quarter acquired Miya Precision for the purposes of Flow. And they, in this quarter, procured -- extended that procurement to be Miya observations and assessments to support their requirement to electronically record patient observations. You may remember that this is our first mental health trust in the U.K. And so we're now extending our reach and our modules into that market, again, increasing the total addressable market available to us and allowing us to demonstrate the flexibility of our solution in new models of care.
We -- I've talked a lot about the product capabilities. I mentioned the increasing revenue pool that we are taking in relation to direct product, but there are still some very strategically important contracts that deliver significant revenue to us. And I'm pleased that New South Wales Health assigned again a further extension for Alcidion and our Alcidion team to provide the services to manage, develop and support to their enterprise services bus, which is basically the integration engine that manages every message that goes centrally through the digital health systems of New South Wales and is a very critical and integral part of New South Wales Health infrastructure.
And then finally, I just wanted to touch on our ongoing relationship with Calvary, which continued to progress during FY '22. And collectively, over a number of individual contracts, contribute a significant amount of revenue not just in this financial year, but going into FY '23 as well, where we are building a comprehensive enterprise data warehouse for Calvary Group of hospitals across their 14 hospitals, including bringing in data from their aged care facilities through the digital health solution they use to support that.
So I just wanted to touch on that. A further point that I think is going to be important for our investors, many of our investors will note that these contracts have not been announced a separate ASX announcements, which they may have been in the past. And as our company grows and matures, the ASX threshold for announcement of new contracts also increases, and I alluded to this at the last quarterly update. As such, we've moved to collating the announcements that fall below 10% of total financial year revenue to these quarterly updates. In FY '23, we will announce contracts that are over the TCV of around $3 million as per the ASX guidance, and where they're considered to have a strategic enough impact that they -- impact investor decisions in a significant manner, which is what the guidance says. We think this is prudent at this point in our maturity and also protects some very commercially sensitive important information in respect of the type of pricing that we are engaging with our customers on.
So finally, we begin FY '23 in an extremely strong position with $28.3 million of contracted revenue, able to be recognized in FY '23. That's how we start without any more additional sales, and that is an 87% increase of where we started FY '22. With a further $2.9 million of scheduled renewal revenue expected to be converted to contracted revenue in FY '23, we're in a position where FY '23 contracted and renewal revenue is already at 92% of what we achieved in FY '22 revenue. So therefore, we head into the new financial year with $31.2 million of contracted and expected renewal revenue, which when combined with the continually maturing pipeline that we have in both the ANZ and U.K. and established cost base -- and our established cost base, I think this positions Alcidion for continued strong and profitable growth as we head into FY '23.
I thank everyone for attending today, and happy to move now to the Q&A.
Thanks, Kate. As I mentioned at the start of the call, we have received a number of questions in the lead up to today's session. So any that we haven't covered off as part of the presentation or in the Q&A that's now to follow, we always want to do separately in writing. And I'll kick off with the first question. Can you describe some of the operational and financial metrics used by the Board and management delight the execution against Alcidion's corporate strategy and give an overview of how the company is tracking to get some of those metrics?
Thanks for that question. Alcidion actually has a very well-defined strategic plan, and I'd probably referred to it in a number of my presentations over the years, that we are tracking against a strategic plan that has a 3-year horizon we regularly review and renew. And this is tracked at the Board level and at the senior leadership team level. The strategic planners is instilled into the annual business plan, which is executed on via the senior leadership team and reported to the Board quarterly. We have an annual budget that aligns to the annual business plan, and progress against budget is monitored monthly at both the board and SLT level.
Thanks, Kate. Okay. Next question. It's evident from recent postings on [ sec.com ] that Alcidion is continuing to seek more hires in different roles. Are these predominantly new positions due to expanded business requirements or natural staff turnover? And in relation to the latter, has Alcidion's road to benchmark its staff retention and turnover against other comparable peers?
Look, I think advertising for roles on SEC will, in some cases, be replacement and, in some cases, will be new hires. As everyone knows, the market is challenging for any hiring at the moment. And so some roles have been more difficult to fill than others. And in some cases, we've actually -- we may have adjusted the role description and readvertised because we've attracted not the right type of people that we were looking for. So I think it's a combination of those things.
We have actually seen a bit of a change in the last few months as we headed into the end of the financial year, and we've pretty well filled most of our developer roles now. We had a lot of roles related to the Australian Defense Force contract that needed to be filled. In terms of retention, we track retention and turnover, and I think we're tracking pretty well against our peers in current market conditions.
In respect of tracking our employees' feeling and so forth, we do have a very -- an employment engagement survey. It goes out every 3 weeks. We have a very high response rate to that. We're tracking in the top 25% of engagement across the tech market comparative to our benchmark peers. And we basically use that to continually improve on our employee value proposition and continue to monitor the culture of the business. So I think we're doing pretty well in respect of that, but we always have our eye on how we can continue to improve.
Thank you, Kate. This has been, to a degree, in the presentation, but it has been very quiet with no substantive contracts realized from December 2021. How is the pipeline progressing in the second half of the acquisition? And just if you can pair that with another question around pipeline, comparing current pipeline to what it was last year, what is the percentage uplift in potential TCV?
Yes. Okay. Thank you. I have probably touched on a lot of those things. As outlined in the presentation, we did sign a number of contracts in the quarter, but we have moved to not announcing those unless they meet the ASX threshold to hit to do so. Look, the pipeline continues to evolve. I don't view that percentage growth of pipeline because I think it doesn't -- it's not really necessarily an indicator of what we're doing. It's really about how much we convert and the types of contracts that we convert.
We -- I can confirm that the pipeline has increased in TCV value, and that is because we are now engaged or responding to tenders and requests for information for EPR replacements in the U.K., or engagements for an electronic patient record in the U.K., which we would not have been able to respond to fully prior to the acquisition of Silverlink. And by their very nature, those engagements are larger in size. But as I have pointed out, there are times when we will see those larger engagements, but there are also times when we will have quarters like we did in Q4, where a South Tees deal of $9 million is -- the equivalent TCV is $3 million or $4 million, $2.5 million deals, okay? So those -- one should not assume one or the other is better. They are all important in how we evolve and demonstrate the value that Alcidion brings to the health care market.
Thanks, Kate. Next question. Congrats to the good result and strong order flows. What you say is coming from the industry growth? In other words, accelerated transition to digital platforms in the public sector or Alcidion's market share gain. Any color on industry growth here in the U.K. and competitive [ landscape ] would be greatly appreciated.
I think what we're doing comes from a combination of all of those things. Our presence is growing. Our market share is growing. Our demonstration of benefits and marketing of those benefits into future customers is growing. At the same time, the industry is moving rapidly to deployment of digital health post COVID. That will be in different -- there will be different drivers from a market perspective at different times. But I think we have positive market conditions in health care for digital health. And we have Alcidion growing in presence and benefits realization that kind of map alongside that.
Alcidion see India as a target area. And if so, what is the total addressable market which Alcidion can penetrate? If yes, how can Alcidion contribute and benefit production in a new region will be beneficial, but with some technical issues? Will the system will be used in English or with the entire system need to be converted to a different dialect?
Lots of questions. I suppose a question about geographical expansion. We certainly now is turning our minds towards geographical expansion as part of our growth strategy. That is not limited to India. I did visit during the quarter, a trade visit to India that was supported by Austrade. It then resulted in someone from the Tamil Nadu government coming out to Sydney LHD, but that was -- and that was part of a planned study tour that, that minister was doing. And to me, this visit, along with many other visits I would probably do in the next 12 months is part of an ongoing assessment by Alcidion of new market potential. We'll continue to invest it as it progresses, and we'll certainly keep the market involved as that moves to some sort of maturity or decision-making. . So depending on the country we're talking about, it will be -- whether it will be in English or whether it will be -- require language changes, and that is all part of the assessment we make as to which are the correct geographies or the next best geographies to move to.
Thanks, Kate. Looking -- so next question, one for Matt. Looking at the recurring revenues, how much can be attributed to lead-off?
Thanks, Kerstin, and good morning to all the investors who joined us today. In the half year financial statements, we disclosed Leidos revenue, was $2 million contribution to the half -- to the first half. That was about 15.5%. Most of that was recurring revenue. We're expecting to disclose again in the full year report the Leidos revenue that will reach the 10% threshold. Much of the revenue in H2 will actually be on the services side as we've been deploying the solution in H2 rather than selling the software like we did in H1. So I can't give you exact numbers, but I've given enough detail there to work out backwards once you've seen the full year numbers.
Thanks, Matt. Okay. Next question. The [ in depth DSPs ] are being consolidated into larger health board. This comes with risks to the existing contracts and also potential benefits to potentially larger contracts. Will the larger DSP benefit Alcidion?
Look, it's a bit too early to say what impact the consolidation we'll have, the timing really just start to move its way through. We expect it will ultimately present opportunities for Alcidion. A number of the existing contracts we have in New Zealand were renewed in the last year, so we don't see any short-term risks to the revenue coming out of New Zealand.
Right. Has the company provided any corporate roadshows to institutional investors in the financial year?
Yes, of course, we have. And I think there's also a sort of a semi-related question around marketing and how we go about our marketing. I believe that Alcidion investments what -- what's an appropriate amount in marketing for a company of our size. We are, of course, continually evaluating this and revising our strategy, particularly as we come out of COVID. Marketing changed during COVID. Now we need to reassess whether that changes again.
We do try to reuse all of our marketing investment to ensure that we are equally sharing that with the investment community. We do that through newsletters. We do that through presentations. We do that through marketing available webinars and so forth. So I think we will continue to do that. We regularly undertake corporate roadshows and investor meetings. That is a part of what we do in relation to continuing to ensure that investors are aware of Alcidion and our progress.
Next question. As the company moves into breakeven and hopefully, profitability, in the near term, does the company have any plans for cash reserves?
I'll try to answer this and pick up some of the other questions that I see around profit and so forth. In terms of the cash reserves, for a company of our size, it's prudent to hold a reasonable cash reserves. And we aim to protect those reserves by continuing to deliver a positive operating cash flow in FY '23. We have used underlying EBITDA versus EBITDA because there were M&A costs. We'll probably always call it out because we have long-term incentives that have an impact also on -- their incentives for customer -- for staff around contribution to the long-term position of the business that need to be taken into account, but don't actually have a realistic impact on available cash flows. So we will still call it out. But we are, as has been indicated here, planning to continue to produce positive operating cash flow and positive EBITDA.
One other thing just on that cash reserve is that, as I've previously stated, we remain consistent and we remaining consistent with this, we are not currently actively pursuing any new acquisitions. We do remain open to opportunities if -- in the current market something going forward that was compelling, but we are not actively pursuing that at this point in time.
Thanks, Kate. We've had a few questions on the civil integration. And in particular, can you provide an update on integration of 2 systems? Has the acquisition allowed for any tender opportunities previously not available? And are we starting to see more cross-selling and upselling?
I have touched on this a little bit, I think, in the presentation. But I -- it's obviously some people are interested, so I take a little time to update you around this. The acquisition and integration is going very well. I was recently in the U.K. It was the first time we had everyone together. So our whole team came together. There are stages in the integration of ready systems. So first of all, the company is integrated, right? Now we haven't done away with the Silverlink website yet, but we will be gradually over the next few months, you'll see that incorporated in some way. Silverlink still has acknowledgment and recognition within the U.K. So it is worthwhile continuing to use that for a period of time, but it will be known as PCS, which is what the product is known as going forward.
So the company has come together. All of that has done. Employees are all part of what we do. The systems are integrating. So we are already sending messages from PCS to Miya. That's the first phase of the integration. That's done in terms of the systems. We have the theoretical deployment of it in the cloud. PCS in the cloud. We don't have a customer yet that has requested to move to the cloud. So we'll continue, obviously, to support that. We are then progressively moving capabilities of modules into the Miya architecture, the first of which is emergency. Emergency department as a module of Miya Precision has actually already been purchased now by Dartford, and so that will be progressing in the coming months. So very happy with what's happening at a system and architectural level.
In terms of the opportunities it gives us -- before I touch on that, I know everyone's enthusiastic and wants to see tangible evidence of the contribution that Silverlink is making. And obviously, that's there in terms of revenue and profitability. But also it is important to know that we have been able to respond to larger EPR request for information and tenders that are coming out of the U.K. at the moment to support the strategy, the stated strategy of the U.K. that they will have an EPR or HIMSS Level 5 maturity EPR, and that's basically about how much of the EPR is rolled out by 2025. So there are actions happening, and these tenders are coming out. And we are now responding to them because we have acquired Silverlink. That would not have been possible without having that capability.
They are probably moving a bit slower than the planned NHS did, but then I always knew they would. Because to actually roll out that many in that short period of time is very challenging for any large government environment, not to mention a few things happening at the political level that is slowing down releasing of funding. But I'm very confident that those opportunities will come to us. We are -- they are competitive in nature. So we will need to win those deals.
I do want to point out, though, that at the time of the acquisition in December, I did indicate very clearly, that the size and nature of these contracts do take some time to move through the procurement cycles and that we are only 7 months post the acquisition. And that realistically, we had -- did that acquisition in December and you're really getting into February before you start kind of actively marking that. So I am very comfortable with where we are and the contribution that Silverlink and the acquisition is making to the Alcidion business.
Thanks, Kate. Next question. The [ Worcestershire Trust's ] planning appears to be well underway. To what extent will Patientrack be deployed and will be ready for further opportunities?
So [indiscernible] will continue to roll out Patientrack as a new hospital is built. And we'll obviously then continue to talk to [ Mongolians ] and other boards in Scotland about the capabilities of the full Miya Precision suite. Both Scotland and Wales continue to present opportunities and Ireland, for that matter, for Alcidion. And our sales team are focused on those along with the opportunities in England.
Great. Thank you. Are any case study being undertaken to extract statistics, which can help us show the benefits of using Miya?
Yes, they are. We have some that are published that I've talked about previously. And certainly, there are a couple of those implementations that are happening at the moment where we are doing some targeted benefits realization case studies. We're also working with 2 similar LHDs and with 2 local health districts in New South Wales. The digital health CIC and some universities to also do a very detailed study on that. So there's lots of information available that we make available to our customers when they take it for their benefits or our business case.
Next question. Payments to suppliers and employees seem to be very well managed. How would you see the level of operational expenses going forward with the impact of inflation and considering operational leverage as more revenue continues to grow?
I mean I think we, like everybody, have had to consider what we're doing in relation to salaries that have moved to particular sectors. So there's been some impact of that. Operational expense, and as it looks at the moment, we'll still have -- there will still some increase around it as we continue to fill some of the roles I alluded to before that we haven't filled that were for the IDF and contracted a couple of those. But certainly, we will start to see it level out through FY '23. I'm not expecting a massive impact from the inflationary position, but there will be some because we need to be able to continue to maintain and attract our staff.
At East Lancs, they spent a considerable amount of time and money to implement the Cerner system and have now flexed with Miya over [ ladies ]. Does the Cerner system have the capability to do a similar role to Miya? Is it just exceeding Miya over Cerner for that role? Or is they undertaking other systems currently?
So we -- as I've alluded to, we've been selected as the flow solution for a number of Cerner sites, some of those are part of a competitive tender process. So that would indicate that what we offer is an enhancement of what Cerner is able to provide. I think I talked about this in the presentation. Alfred has been using Cerner for over 20 years, and Western Health are well into their implementation of the second phase of it. So I think we have always positioned Miya Precision as being something that adds value to the Cerner implementation rather than needing to be one or other, certainly in Australia. So I think it demonstrates that to be correct that what we are offering is above and beyond what customers are saying they can attract from Cerner EMR solution.
Okay. Next question. Could we please get a candid appraisal of the state of the end markets and strategic planning, given COVID now is likely going to be a fixture and health systems at near breaking point?
[Technical Difficulty] dealt with the core and the year intake, we are executing as planned. I think there are times when COVID has had and will have an impact, and we and the customers are constantly finding ways around that. But I'm comfortable with the current results and the pipeline development and that we are executing as planned.
Would it be reasonable to expect a shorter sales cycle now Alcidion has many hospitals using the software as reference sites?
Look, certainly, more reference sites. We have the A0 and it used to sell to new customers. Procurement cycles are impacted by many things, such as where do they define processes, have they've got budget availability, who's releasing the budget and what time. So as a rule, yes, but not always.
This is perhaps a more technical question. The open EHR seems to be gaining momentum, or mild share at least in the U.K. Are Alcidion experiencing any pushback at architecture level?
Not really. To be honest, there's synergy between our ability to coexist with open EHR. As indicated by the fact that better medication management is, in fact, based on an open EHR platform. So we've demonstrated and are currently live with -- running alongside open EHR. So if you want more information about that, though, there is a log on our website from our Chief Technical Officer, Vivek, where he talks about fire and open EHR and how they work together.
Another question I got here -- what comparison data do you have for patient outcomes for patients treated under your digital health system compared to traditional patient monitoring? Can this be made available?
Yes. I think I've answered that with the case studies in...
Yes, true. Yes. Now we've posted time for about a couple more questions. So I think I'll go with this one. Where does Alcidion see the biggest opportunities?
Well, I mean, I probably have touched on this. But certainly, Alcidion's really focused on 3 key market opportunities within the health care sector at the moment. But our ability to engage with customers is not limited to these, and there are wider opportunities in the mix, such as aged care. But where we're really focused is around the evolution of health care and how digital health can support that. So I think the 3 I'm focused on is the U.K. EPR market, where Alcidion's position as a disruptor and an alternative to the large monolithic EPR providers. But not only as an alternative, it's also a means to enhance existing investments and add value to those EPRs that they may already have.
Secondly, as a smart health care infrastructure platform that supports improved patient flow, analytics, clinical decision, support command centers. And that's where we're adding value and engaging -- providing a more engaging modern technology platform on top of some of these EMRs, also what we call systems of record, designed specifically for health, not just a system off the shelf that's being converted to a health care system.
And thirdly, with out of hospital care, we're seeing a demand -- increasing demand for new models of care from consumers driven by the necessity of health care providers to provide efficient care to meet the demand for consumers, and also to be able to meet the increasing patient need without being able to put everybody into hospitals. So a platform such as ours that can provide the longitudinal health record so a person's care is integrated no matter where they receive that care, which is what we're doing for the ADF, this can be applicable across all health care settings. And this is a pretty exciting proposition for us -- from Alcidion and for health care providers.
Great. Thanks, Kate. Next question. What part of the ALC Alcidion technology most excites you?
And maybe I'll finish on this one also in terms of -- I think I've touched on the technology question, but I think it's more around what are we excited about and where is Alcidion going? And maybe I can stop sharing as I finish this off. We are -- obviously, we've had, what I consider, an excellent quarter and a very good year in terms of FY '23. We are really well positioned in terms of starting the year with a significant book of contracted revenue and -- that to be delivered on.
What's exciting me the most is the demonstrable feedback, positive results we're getting from our customers that are not only demonstrated by go-live such as the ones we've had at South Tees, but by the renewed contracts, the customers that are prepared to sign contract renewals. All of that indicates that Alcidion is being noticed in the market, as in the customer market, and that the increasing sales and our team's ability to convert those sales is being supported by a very positive feedback from our customer market, and that's what excites me. At the end of the day, Alcidion's purpose is to improve people's lives through the deployment of better technology to support better health care outcomes and that is what excites us at Alcidion.
Okay. Thanks, Kate. Well, that brings us to the conclusion of our Q&A session, and obviously, to the shareholder update as well. As I mentioned, if there are any questions that have been sent through that we haven't covered off in the presentation or the Q&A, we'll just answer separately in writing. But it just remains for me to hand back to Kate now for closing.
Thanks, Kerstin. Thank you, Matt. I'd like to thank all of you that have shown interest in joining the call today and for our existing shareholders who continue to support Alcidion. We are very much focused on delivering on our proposition. I'd like to close by thanking the whole Alcidion team who've worked very hard, not only in the last quarter but throughout FY '22, to deliver what I think is being a very positive and attractive result for our business. And we are continuing to ensure that Alcidion has some best propositions for our customers in the market.