Dismal result for former tech darling Orion
Orion Health Group continued an abysmal run on the NZX, announcing worse-than-expected annual results, and watching its share price sink to another all-time low.
The healthcare software developer blamed delays in finalising some large deals and promised a "substantial" restructure of global operations which, it said, could produce annual savings of up to $30 million.
The Auckland-based company's revenue was between $170 million and $173 million in the year ended March 31, missing already downgraded guidance of $175 million to $190 million, it said in a statement. The late transactions will be carried over into the 2019 financial year. Orion's operating loss narrowed in the second half of the financial year but not enough to reach breakeven, a target it was aiming to get close to.
The company listed at the end of 2014, with shares issued at $5.70. They rose to $6.27 after their first day of trading, valuing the company at more than $1 billion. Since 2016, the shares have been on a steady decline, and on Tuesday the shares fell 1.4 percent to 69 cents.
"The business is committed to right-sizing the cost structure of the company across all regions to drive sustained profitability," chief financial officer Mark Tisdel said. "We remain committed to building long-term value for our customers and shareholders."
Orion Health has been reviewing its business since May last year as it seeks to return to profitability having foregone short-term earnings in the hunt for global expansion since going public. That review was initially to source new capital, including minority investments in the company, but was later broadened to bolster the long-term structure of Orion Health.
Restructuring efforts already cut $10 million from annual costs, trimming 76 jobs from its 1,200-strong workforce, and the company today announced plans to remove between $25 million and $30 million of annual expenses in a major shake-up of the global business, shifting resources to where they're most needed.
Orion Health will reorganise its business into three units - Rhapsody, Population Health, and Hospitals - which Tisdel said would narrow the gap between customers and the research and development teams and support services.