HSC Technology Group is pleased to provide the following business update alongside its Appendix 4C Quarterly cashflow report for the quarter ended 30 September 2020 (the “Quarter”).
HSC is extremely focused on execution of its growth strategy, with two new business development managers added in the Quarter. The Company also remains committed to delivery of its customer projects, with a number of enterprise customer projects underway delivering bespoke assistive technology. The Company has more than 4,500 active commercial subscribers in Australia and New Zealand, with further subscriptions to be added pursuant to committed contracts and projects.
The Board is closely monitoring the Company’s cash burn rate, which has increased this Quarter due to a temporary delay in invoicing for key project implementations, and further investment in stock to support the contracted sales orders, and an increase in payments to suppliers.
The Company was successful in securing a number of key sales for the Quarter, including the following strategic wins:
- St John’s Home for Elderly Persons in Singapore, as announced in September 2020.
- First purchase order received from Harvey Norman Commercial Division.
- Bolton Clarke has ordered additional 320 Assistive Technology solutions under their master contract.
- ACH contract: As previously communicated, HSC was awarded a tender to provide Nurse Call Systems in South Australia for Aged Care & Housing Group Inc (ACH Group). The project is for the delivery of assistive technology at nine residential aged care sites. The first site (Kapara) has been completed and is currently being handed over to ACH.
- Odyssey: In Q1 2020, the Company was awarded a contract for the delivery of assistive technology to a development by Odyssey Private Aged. The project successfully went live in July 2020.
- Enliven: Enliven Housing is delivering assistive technology to the disability sector, and HSC has completed the San Souci Project.
The Company had a strong September Quarter with $697,000 cash received from sales of assistive technology to enterprise customers despite the challenges of COVID-19 restricted access to many aged care facilities, and $59,000 in cash receipts from government grants.
The Company closed the Quarter with total cash of $1,482,000. The related party payments of $162,000 noted in Section 6 of the accompanying Appendix 4C during in the Quarter relate to payments for inventory, director fees, salary and superannuation. Please refer to the Company’s Appendix 4C for further details.
The Royal Commission into Aged Care, together with the impacts of Covid-19, has confirmed the need for innovative models of care. HSC notes that the final submission of Counsel Assisting the Royal Commission made a number of recommendations relating to the use of technology to support aged care, in particular the use of assistive and supportive technology. This confirms the opportunity for HSC and its data-driven platform that can aggregate insights from thousands of data points for improved care, lower operating costs and low-cost deployments of assistive technology to deliver real and tangible benefits for care to vulnerable people.
Commenting on the Quarter, Mr Graham Russell, Managing Director said: “Overall, I am happy with the Quarter, considering the adverse conditions all businesses are facing at the moment. The team has continued to focus on the delivery of projects, even with the challenging environment of limited travel, lockdown and restricted access to aged care sites. As each system is installed and each project is delivered, we are glad to see the subscription base grow and improve our annualised recurring revenue numbers.
“We are all excited with our recent win at St Johns Home for the Elderly in Singapore. This was a very competitive bid process with solutions offered by numerous global organisations to win the project. It is a very innovative scope as we are using next generation Real Time Location Systems (RTLS) to deliver data to the HSC TALIUS Platform and deliver proactive insights to the care and management teams, which will be revolutionary as the current solutions are all reactive. The project is sponsored by the Singapore Government’s National Council of Social Service, and they can see how our technology could be used across other sectors of the Singapore health system. It will definitely be a flagship development when completed next year.
“HSC have also implemented the next stage of our growth plan with the engagement of a business development team to continue and expand our partner program and develop the sector relating to the benefits of HSC Assistive technology suite. We welcome Gus Taddeo in Queensland and Andrew Kelly for NSW, who have significant experience in the sector. They will assist greatly to support and expand our IoT partner network plus identify new opportunities for the TALIUS platform. This has also coincided well with the continued lockdowns due to COVID which allows us to deliver sales and support where required.
“Finally, we have been very happy with the market support as investors now have a better understanding of what we do and how we are doing it, resulting in good volume and growth for our shareholders.”