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Orion Health whittling down options in strategic review

Article – BusinessDesk

Orion Health whittling down options raised in strategic review, sees first-half By Paul McBethOrion Health whittling down options raised in strategic review, sees first-half
By Paul McBeth

Sept. 20 (BusinessDesk) – Orion Health is narrowing the number of options on the table as it works through a strategic review, which shook out potential investors in the business.

The healthcare software developer raised $32 million through a rights issue earlier this year to put it on a healthier footing as it chases a return to profit in the current financial year after a challenging 2017 forced restructuring. In May, a strategic review to search for sources of additional capital, including minority investments in the company, was given a broader mandate to bolster the long-term capital structure of Orion, and chairman Andrew Ferrier told shareholders at today’s annual meeting in Auckland that the review is still going.

“The business has a number of options which it is currently in the process of narrowing down into a desirable outcome,” Ferrier said in speech notes published on the NZX. “Further updates will be provided to shareholders at the appropriate time.”

Orion affirmed its outlook for annual revenue of between $200 million to $220 million for the year ending March 31, 2018, and Ferrier said it’s on track to be profitable in the second half.

However, restructuring costs and “the variability of contracting in the business” have a cloudier first-half performance, which is expected to post an operating loss of $20 million-to-$25 million.

An operational review of the business in April cut 76 jobs at Orion, which employs about 1,200 people worldwide, saving an annual $10 million. Presentation slides accompanying chief executive Ian McCrae’s address show the company will retain a focus on cost and is currently ahead of target.

The shares last traded at $1.15, and have slumped 40 percent so far this year.


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