www.allocate-software.co.uk
Allocate Software plc is the leading workforce optimisation software applications provider for world-wide organisations with large, multi-skilled workforces. Using MAPS, Allocate Software’s workforce optimisation software application, organisations can deploy the right people with the right skills, to the right place at the right time, allowing Allocate Software’s customers to match operational demands with workforce supply.
With Corporate headquarters in London, regional offices in the UK, Sweden, USA, Australia, Malaysia, Allocate Software provide services and support to an international customer base across Europe, North America and Asia Pacific.
Allocate Software plc is quoted on the London Stock Exchange (AIM: ALL). For further information please visit www.allocatesoftware.com.
Health service pressures highlight opportunity for Allocate Software
Ageing populations, growing demand for treatment and cuts to healthcare budgets are problems that face hospitals all across the developed world.
The pressure is providing an opportunity for IT companies specialising in the health arena such as staff rostering specialist Allocate Software (LON:ALL).
Broker Brewin Dolphin recently included the firm in a group of healthcare IT firms that it says have a once in a lifetime opportunity because of the current environment.
Allocate is already a major supplier to the National Health Service in the UK, where it is has seen strong growth over the past four years.
Sales have risen from £8.3 million in 2007 to £30.1 million in the year to end May, with healthcare accounting for nearly 80% of that total last year. The remainder of sales are to established customers such as the British Army, Nato and Australia’s armed forces.
Profits have also picked up smartly, with the operating total before amortisation charges last year rising from £3.75 million to £5.77 million.
Brewin Dolphin expects underlying profits to rise to £5.9 million in the current year and to £6.6 million in the year after.
Debate has raged over the future shape of the NHS due to reforms proposed by the coalition government. But Allocate chief executive Ian Bowles argues that whilst there is still significant debate amongst Healthcare Professional as to the most appropriate way to evolve the service, those working within the NHS accept that it has to evolve to meet the challenge of delivering healthcare to an ageing, expanding and more demanding population, without compromising the quality of care.
He says these changes will help Allocate become stronger because its software helps health managers run their operations more effectively and efficiently and at the same time reduce costs
Allocate has four healthcare-focused products, but the two core products are HealthRoster, used to plan the deployment and training of nursing and other medical staff, and HealthAssure, for managers and directors to check they are compliant with current regulatory requirements and other rules set down by bodies such as the CQC, the UK’s healthcare quality regulator.
Out of 411 NHS trusts in existence before the onset of the recent reforms, 372 used at least one of its applications, Mr Bowles says.
Allocate signed on 26 new NHS trusts for HealthRoster in the last fiscal year with more expected in the current financial year. No customers stopped spending or suspended budgets despite the reform uncertainty.
future growth will come from increasing its presence further in the UK as more trusts sign up and also from cross-selling the different types of software to existing customers.
“There is lots more we can do to help the NHS and private sectors”, Bowles says, especially now that he believes that the NHS is settling down, with people understanding the future shape of NHS and priorities going forward under the coalition government.
He estimates about 50 per cent of hospitals in the UK are still to adopt an electronic rostering system, while about 75-80 per cent have a temporary staff management system and but probably no more than 30 per cent have a product similar to Health Assure.
The group is also starting to spread its wings overseas with the acquisition of RosterOn in Australia earlier in the year , which will make it the market leader in staff rostering systems in that country.
By combining the two companies and focusing more on healthcare, Bowles believes there is “a really good opportunity” in Australia. RosterOn has more expertise in private and age care, while traditionally Allocate has more expertise in acute, mental health and community environments.
In the UK, the group also recently bought Zircadian, which has developed a doctor’s job planningpackage, to complement HealthRoster. Allocate says the two products should be integrated by the end of next month.
“Zircadian had a great reputation within the NHS and bringing the two market leaders together forms a stronger company with a more compelling value proposition for healthcare organisations,” according to Bowles.
The group has just finished an upgrade of the core HealthRoster software that will enable it to be sold into non- English speaking countries, though in the short-term the focus is likely to remain the UK, Australia, New Zealand and Nordic markets.
The group also finished last year with an increased net cash balance of £8.5 million despite development spending of £4 million - about 15 per cent of turnover.
Bowles says that because of its strong cashflow the possibility of a dividend is discussed regularly, but at the moment institutional shareholders are happy for it to use its cash to grow and scale the business.
At 78.6p, Allocate is valued at just under £50 million.
