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Orion Health first-half loss narrows

NZ NewswireNZ Newswire 27/11/2016 Jonathan Underhill

<span style="font-size:13px;">Orion Health has narrowed its first-half loss to $18 million, down from last year, thanks to rising sales and trimming back on operating costs.</span> © File photo Orion Health has narrowed its first-half loss to $18 million, down from last year, thanks to rising sales and trimming back on operating costs. Orion Health, the health software developer that gets two-thirds of its income in US dollars, narrowed its first-half loss after boosting sales of perpetual licences in North America and cutting operating costs such as administration, and sales and marketing.

The loss was $18 million in the six months ended Sept. 30 from a loss of $26.9m a year earlier, the Auckland-based company said in a statement. Sales rose to $104.2m from $101.7m.

The company affirmed at its annual meeting in September that it is still on track to return to profit in 2018, although it was facing the headwinds of strong kiwi dollar and burning through cash at a faster rate than expected.

It is chasing global growth in favour of profits after listing in 2014 and said on Monday that the number of patient health records it manages has risen above 110 million.

Its shares dropped 9.6 per cent to $2.26 on the NZX on Monday and have declined 24 per cent this year, while the S&P/NZX 50 Index has gained 9.2 per cent.

The narrower loss "reflects a big step up in performance in North America, a levelling off of investment in research & development at $32 million, while at the same time managing overheads," said chief executive Ian McCrae.

"After two challenging years in the US there is clear evidence of business improvement with a return to growth and a significant increase in contribution."

He said overall, "our outlook remains positive, although we are operating in a period of some uncertainty in the US as the Trump administration prepares to take office" with some commentators pointing to changes in the US healthcare regulatory environment with Donald Trump in the White House.

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