Allocate Software expands further in Australia with $6 million e-Rostering contract

Allocate Software (LON:ALL) has won a A$6 million (£3.3m) contract with the State Government of New South Wales (NSW), Australia to supply its Healthroster software across the state public health system, which covers more than 90,000 members of staff.

"This is a very significant contract for Allocate, enabling us to extend the knowledge and expertise we have gained by working closely with the NHS in the UK, to the Australian Healthcare market”, Allocate Chief Executive Ian Bowles commented.

“To be selected by the State Government of New South Wales, Department of Health is a positive reinforcement of our corporate goal of becoming a key partner to major Healthcare organisations around the world".

Allocate said that the contract will be delivered in the 2011 financial year, and through a potential A$4m services agreement, the total value of the deal could rise to A$10m. The company expects to agree and sign the service contract after it completes the initial planning phase of the project.

"Healthroster from Allocate provides a solution which is considered one of the best rostering programs in the world ... Healthroster was developed with the health environment specifically in mind. It is intuitive and easy to use, and most importantly doctors, nurses and allied health professionals who use it overseas report it takes the hard work out of rostering", NSW Health Director General Prof Debora Picone stated.

This latest contract win marks a considerable expansion in the company’s reach in Australia, following Allocate’s first Healthcare contract win in the country in Q3. The e-Rostering specialist also landed its first Healthcare contract in New Zealand in the third quarter.

So far this year, Allocate has been growing considerably both in terms of new contract wins and acquisitions.

In March’s Q3 interims, the company reported strong progress, highlighting its international expansion into Australia, New Zealand and in the Nordic region with the acquisition of Time Care AB. The company won several new contracts, landing its first e-Rostering contract award under LPP and eight NHS contracts for MAPS Healthroster, taking its total NHS e-Rostering customer base to 105 trusts - with 69 acute trusts, 21 mental health trusts and 15 primary care trusts.

The Time Care acquisition was closed in December, paying £8.7 million for the company. Allocate expects the deal to help achieve its goal of driving organic growth at over 20% per annum and to move operating margins towards 20%, which broker Edison Investment Research said could drive the group’s value through £50 million. Time Care AB has landed 17 new contracts during the third quarter.

Furthermore, Allocate has continued on the acquisition trail in the fourth quarter. Last month the company agreed a deal to buy UK-based Software as a Service (SaaS) provider, Dynamic Change, for up to £9m paid over three years.

The company will make a £5m upfront payment, £4.9m in cash and £100,000 in shares, which will be followed by contingent payments up to a maximum £4m payable in cash subject to certain conditions.

Staffordshire-headquartered Dynamic Change provides regulatory compliance, corporate governance, risk and performance management for the UK healthcare market.  In the financial year ended 31 March 2010 the company generated total revenues of approximately £3.2 million, and achieved EBITDA of approximately £0.5 million, representing an EBITDA margin of approximately 16%.