Orion Health

[Leftfield]

Good post Baa Baa, thank you. (Disc - watching but not holding.)

[mondograss]

There used to be in NZ, a company called Galen, which provided a green-screen Patient Admin System and also a clinicals product which shared its genesis with Orions Concerto product (they were basically created by the same guy that I believe went from one company to the other and took his IP with him). They got bought out by iSOFT, a UK company with an extensive suite of health software that decided to design a completely new product from scratch to service the NHS in the UK. They poured a lot of money into it, missed deadlines and eventually went bankrupt and were bought out by IBAHealth, an Australian company that had its own extensive suite of products. They kept pouring money into the new product and themselves went bankrupt and were bought out by CSC (American) and became that company's healthcare division. So you see how this could go for Orion, right?

The thing to be mindful of is that CSC finally finished off the new product, implemented it widely in the NHS in an as-a-service model, and are right now tendering it for contracts in Aus and no doubt will target NZ too. Since they are a much bigger company (and about to become even bigger as they merge with HP Enterprise Services) and have a lot of experience with Big Data and a-a-s stuff, I don't (myself) rate Orions chances if they take much longer about what they're doing. CSC also have software in every DHB in NZ and a lot of the private sector too, plus the vast majority of Aus. So they have the client connections as well and can (if they so choose) migrate clients on their existing products to the new product where appropriate.

One last point, Healthcare clients can't afford to just go out and get another product when it suits them. The software is hugely complex, expensive and time-consuming to implement, and there are all sorts of local statutory requirements that change almost annually which require updates. So, they almost always insist on a copy of the source code being put in escrow against the failure of the provider (thus if they do fail, they can take the source code to somewhere else and have it updated to meet new statutory guidelines for the few years it takes them to organise a replacement product). The financial health of the provider is also a major factor in deciding tenders, because the clients simply can't afford to deal with someone that might fall over. So the upshot of this is, if the market gets a sense that Orion is in trouble, their ability to sell even their existing products gets exponentially harder.

[kiora]

With respect Snoopy, a bit more research might be in order.

Orion Health were a solid privately owned profitable company who had grown nationally and internationally with their premier health sector products, simply put, in patient administration and clinical information systems. They are a dominant provider of these systems with implementations in every DHB (hospital) in NZ and many clients internationally.

There is no notion of 'seed capital' funding the business prior to listing, ergo an early startup or hi-growth company. Orion Health was a mature growing fully funded and profitable entity going into listing.

So what was the purpose of listing?

If I could be so bold as to summarise Ian McCraes vision and intent, he saw a global opportunity, to be at the centre of clinical health care records and patient health care administration, or in other words the aggregator of the health care information universe, internationally.

It is a bold and brave strategy but one borne out of many years of local and international successes and a genuine need, allbeit immensely challenging to create national sector unification of health care records in patient administration and clinical systems. However Orion do actually have viable and proven systems and solutions that go a long way, to achieving that vision.

But that's not the sole reason they listed.

The gist of it is that the vision and strategy required funding way beyond the ability of the company to fund its own strategy and growth, solely out of profits. Hence going public.

So where is the funding going? There are three main sink-holes sucking up the company funding. They are:

1. re-platforming the core technical solutions (this means moving them from a licenced software model to a Software as a Service [centralised] model = very expensive re-write);

2. putting in place the international marketing and sales capability;

3. ramping up support for the growing customer base.

Since then, with a small hundred million or so of investors capital, the company has made significant inroads into their target markets.

But that is all circumspect in the bigger picture that investors are interested in.

Despite growth in target markets, a compelling and viable suite of healthcare administration and clinical solutions, excellent progress in replatforming the solutions, increased effective sales channels and customer support, Orion have a big problem.

The problem is, they're running out of money and the market capital value is being decimated. The market does not like being sold a story without clear evidence (the IPO) and then delivery (the results) of worth, then gutting themselves with repeated naive disclosures that re-enforce the perception of the company's ignorance of investors objectives.

It is obvious that the transition from private ownership to public listing and ownership is difficult, unfamiliar and awkward.

In the medium to longer term my opinion for what it's worth, which may be very little, is that Orion Health are doing all the right things to be a dominant global provider of health care patient administration and clinical systems and perfectly placed as the aggregator of the holy grail of the universal health identity record which is the core of all health care systems.

But it will take a few more truck loads of money from investors and a great deal longer than many expect or hope for, before Orion emerges as the self funded profitable company that it once was and again seeks to be, in the global health sector, albeit a great deal larger if they are successful.

Kansas or bust, it seems to be a common theme with NZ techs.

Concur with BB & LF
Changes to their billing and distribution in USA resulted in cashflow stutering but will come right ,cash is king as they say.I wonder the terms of the ASB facility is?Hopefully for OHE shareholders better than WYN is what I would expect

[Valleytrader]

I see the price has fallen to $1.81 this afternoon. At what price does it become tempting for a small punt?

[BlackPeter]

I see the price has fallen to $1.81 this afternoon. At what price does it become tempting for a small punt?

From a technical perspective: As soon as it bottomed out and indicators confirm a trend change. Until than ... never try to catch a falling knife!

From a fundamental perspective: What is a loss making Software company which may or may not go bust worth to you? Take your answer - this is exactly the right amount to buy in for a small punt.

[percy]

I see the price has fallen to $1.81 this afternoon. At what price does it become tempting for a small punt?

They are in a very strong down trend.
No,and I mean no buying until the trend changes.
SP as I write is $1.80.
The 100 day EMA moving average is $3.51.
The 200 day EMA moving average is $3.76.
You will need to wait until the sp moves up above the 100 day EMA,and that will be a while yet.!

[peat]

They are in a very strong down trend.
No,and I mean no buying until the trend changes.
SP as I write is $1.80.
The 100 day EMA moving average is $3.51.
The 200 day EMA moving average is $3.76.
You will need to wait until the sp moves up above the 100 day EMA,and that will be a while yet.!

Percy you have officially moved to the TA dark side

[BlackPeter]

Percy you have officially moved to the TA dark side

I don't think percy moved to the dark side ... The OHE share price did!

[whatsup]

They are in a very strong down trend.
No,and I mean no buying until the trend changes.
SP as I write is $1.80.
The 100 day EMA moving average is $3.51.
The 200 day EMA moving average is $3.76.
You will need to wait until the sp moves up above the 100 day EMA,and that will be a while yet.!

Which is ?

[percy]

Percy you have officially moved to the TA dark side

Not completely.
On another thread, some one posted they lost a good deal ,buying a share against my warning about buying a share in a down trend.
So I thought I would try to warn Valleytrader who appears to be a "newbie".
And yes I use both the "dark side" and the "bright side".Both seem to work together??..lol.