Mach7 extends major Hong Kong contract, FY20 revenue to be up 90%

Australian medtech company Mach7 Technologies (ASX: M7T) has continued to strengthen its position in the Hong Kong market, securing new licencing orders of $4.8m, adding to their existing 5-year contract to supply medical imaging solutions to the entire territory of Hong Kong. 

The new AUD $4.8m is expected to be logged as cash collected within FY20 from Hospital Authority Hong Kong (HAHK) which should see Mach7 report more than $18m in revenue for the financial year, a rise of more than 90% on FY19 revenues. With the nature of this new revenue being for licensing, the receipts are expected to have a material impact on EBITDA. 

“We are pleased to see the progress and clinical value that the Mach7 Enterprise Imaging Platform, in concert with our partner Client Outlook (eUnity), provides the Hospital Authority,” said Mach7 CEO, Mike Lampron.  

“As our partnership continues to expand, it is our goal to ensure the Hospital Authority remains at the forefront of Enterprise Imaging in the APAC region.”

The initial 5-year contract awarded by HAHK for Mach7’s medical imaging, which will continue running to October 2023, was valued at $15m. 

Increased revenue from HAHK, Mach7’s largest customer, continued a strong pipeline of sales for the company which in March 2020, went live with its image archiving system for Sentara Healthcare, an American healthcare business with 12 hospitals and more than 1,000 physicians. 

For the quarter ending 30 March 2020, Mach7 reported a very strong financial position with more than $22m cash in the bank, no debt, and a cash flow positive year to date with $959k net cash from operations. This is expected to be further strengthened in their full year report for FY20 when the new HAHK revenue is added. 

Shared in M7T traded higher upon market open this morning reaching a high of $0.66 in the first 20 minutes of trade, a rise of 14.7% on their previous day’s close of $0.575.