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Health & Biotech
Visionflex (ASX:VFX) CEO Joshua Mundey admits that barely anyone has heard about the remote healthcare outfit, which listed in early 2022 via a back-door listing with patient booking portal 1st Group.
“I hadn’t heard of it, either. It’s been one of the best-kept secrets in Australian healthcare,” he says.
The Visionflex business is now far removed from that of 1st Group, which provided patient scheduling platforms – notably in optometry – but failed to fire.
Visionflex’s private equity owners bought in Mundey to do a strategic review, which resulted in the 1st Group businesses – including the vet booking platform Pet Yeti – being divested.
“They [1st Group] did a lot of talking and promising in the market but didn’t set out what it said it would do,” he says.
The private equiteers must have loved Mundey’s work, because he became CEO in January 2023.
Visionflex now focuses on providing its proprietary software and hardware – such as examination cameras – to remotely diagnose patients, typically in far-flung communities.
With governments keen to promote remote health to rein in costs and service more patients, the company is tapping a rich vein.
To date, Visionflex has won contracts with 15 of Australia’s mega primary health networks, which overlook not just GPs but pharmacy-based services, auxiliary healthcare and aged care.
While the hardware is on site – typically at a community health centre – the clinicians can gauge remotely bodily functions such as blood pressure and pulse rates, or manage wounds.
“This remote clinical capability makes it much more effective for governments to deal with issues such as the regional shortage of doctors and nurses,” Mundey says.
Visionflex is especially strong in residential aged care, with a circa 20% share of that market.
The company’s biggest contract to date is a $3.2 million contract with 180 aged-care facilities that are part of the WA Primary Health Alliance, which aggregates the three state’s health networks.
The company also covers 33 aged care homes under the Northern Queensland Primary Health Network banner.
Western NSW Health District is another client, with a central care team overseeing 24 hospitals including in Orange, Dubbo and Wagga.
“They are doing virtual ward rounds in these hospitals nightly. The doctor might be having an espresso in Bondi with his dog while running the hospital,” Mundey says.
Visionflex is also strong in Indigenous health, working with 20 Aboriginal community-controlled organisations in Cape York and the Kimberleys.
A deal with Woodside Energy covers isolated personnel on seven of its offshore platforms. Inmates of a literal kind are not overlooked either, with the company servicing Victorian prisoners via Justice Health.
This month, Visionflex unveiled a contract win with the Royal Flying Doctor Service’s Victorian division – a tender competed by global giant including Citrix, Oracle and Microsoft.
Mundey cites a $250 million-a-year market opportunity in Australia covering aged care, community hospitals, pharmacy and urgent care clinics.
About 93% of telehealth is still done via a video-less phone call, but that is changing as GPs become more digitally literate.
Visionflex also has been winning contracts further afield.
Device giant Siemens is trialling Visionflex software in ambulances in trials in Germany and Switzerland to quicken heart attack and stroke diagnoses.
The company last month won a deal with Kha Loc Medical, a Vietnamese medical equipment distributor.
“We are close to making good progress in announcing other regions that could be strong growth drivers for the company,” Mundey says.
In August Visionflex reported revenue of $6.95 million for the year to June 30, with a net loss of $1.83 million improving on the previous $3.65 million deficit.
Annual recurring revenue (ARR, the expected proceeds from known contracts) grew to $1.3 million from $400,000 previously.
As the clients pay 12 months upfront, revenue from these contracts will be recognised progressively in the year ahead.
“You only need 5000 licences to get to $25-30 million of ARR and we have shown we can get to the size over a reasonable time frame,” Mundey says.
While the company’s sales were oriented to hardware, recurring software now accounts for around 30% of revenue.
Given software attracts a 90% plus margin compared with 65% for hardware, management is keen to shift to the latter.
Mundey says the company hopes to be profitable in the current year, depending on the timing of contracts.
“We have a stable cost base and are very confident we can deliver profitability. It’s just a matter of timing with the cyclical tenders and when they are recorded.”
Mundey has a background in healthcare lending, having co- founded the healthcare lender Credabl.
During the pandemic he realised that digital healthcare would be a ‘once in a century’ transformation.
“The reason it hasn’t happened sooner is that healthcare is slow moving when it comes to change,” he says.
While Visionflex has kept a low profile, Mundey says it’s time for the $14 million market cap minnow to promote more actively to investors and the media.
“You can be great at PR but if you haven’t built up a profitable business it will blow up in your face.”
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decision.
Health & Biotech
Health & Biotech
Health & Biotech
