Allocate Software reports fourth consecutive record FY performance

Healthcare workforce optimization sofware provider Allocate Software (LON:ALL) reported a strong set of full year results for the year to 31 May, which saw revenues jump 39%, trading profits up 38% and business expansion through the acquisitions of Time Care in Sweden and Dynamic Change in the UK.
Allocate’s revenues amounted to £22 million compared to £15.9 million in 2009, driven by a 56% jump in services and support revenues to £12.5 million and a 33% rise in healthcare revenues to £14.8 million. License revenues increased 22% to £9.3 million.
Trading profit improved 38% to £3.49 million and diluted adjusted EPS (earnings per share) increased 20% to 6.44 pence.

Operating cash flows nearly tripled from £1.8 million to £4.9 million, upping the net cash balance to £2.9 million.
The performance was helped by an increase in the customer base in Healthcare to 417, including 58 customers of Time Care. Healthroster gained 40 new NHS Trust customers, making 119 Trusts with Healthroster in total at the year-end, representing 29% of the 411 total number of Acute, Mental Health and Primary Care Trusts in England and Wales. Allocate Software won 14 contracts for its Healthroster application in Q4 alone.

Allocate has signed a contract with the Royal Australian Army to supply its Defence Suite and has also been selected as preferred supplier by the State Government of New South Wales, Australia to supply its Healthroster software across the entire state public health system, covering more than 90,000 staff. This contract, which could be worth up to A$10 million, will start to be delivered in the 2011 financial year.
The strong performance market Allocate’s fourth consecutive year of record results.
“We continued to strengthen our position in the UK Healthcare market with the acquisition of Dynamic Change and we now have a significant presence in Europe with the acquisition of Time Care in Sweden. In both Maritime and Defence we grew the business year-on-year and in Defence we secured a major order from the Royal Australian Army for £2m of licence revenue. I remain confident in our prospects and I expect 2011 to be a year of further progress,” said chief executive of Allocate Software Ian Bowles.
The company offered a positive outlook for the new financial year, saying that the expansion it went through last year offered it a “wide range of opportunities” and reduced its dependence on a small number of high value transactions.
“Our growing customer base will be fertile territory for us as we cross-sell our new applications

, both those developed within Allocate and those acquired...we will continue to win new customers, broaden our relationships with existing customers and invest in our growth markets and applications whilst producing results that will grow shareholder value,” added Bowles.
The acquisition of Dynamic Change in May 2010 expanded Allocate’s SaaS (Software as a Service) portfolio. Dynamic Change’s principal software is the Performance Accelerator SaaS platform, which is used to monitor and manage regulatory compliance, corporate governance, business objectives, risks and controls, performance indicators and financial targets.
Dynamic Change generates over 98% of revenues from the healthcare sector with approximately 70% of revenues contractually recurring from subscriptions.
The acquisition of Time Care has provided Allocate with a strong geographic footprint in the Nordic region, particularly in Sweden, where Time Care has customer relationships with some 58 hospitals and 110 of Sweden's 290 municipalities. Allocate said that this acquisition helped it develop into one of the leading providers of workforce management software for the healthcare sector in Europe.
HB Markets agreed that Time Care helped Allocate with developing its business in Europe, also noting the expansion of Defence, driven by the new contracts in Australia. The broker also commented that Maritime remained a “healthy growth area” with success both in the cruising segment as well as offshore rig management. The 67% exposure to healthcare was stated as a concern with HB projecting “some nervousness” ahead of the October UK budget.
Shares in the company rose after the report was released, and were up 5.5 percent in late morning deals.