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Orion Health shares rise on new deal

NZ Newswire logoNZ Newswire 14/12/2016 Edwin Mitson
The IT healthcare business said it had signed a new, expanded agreement with an American client. © AAP Image/Amanda Heppel The IT healthcare business said it had signed a new, expanded agreement with an American client.

Shares in outgoing NZX 50 member Orion Health have risen by 2.3 per cent after the IT healthcare business said it had signed a new, expanded agreement with an American client.

The stock has been extremely volatile in 2016, rising from $3.20 at the start of the year to a peak of $5.31 in June. Since then it's endured record lows of $1.65 earlier in December, before rebounding.

A short while ago shares were trading at $2.19, up 5 cents. It's due to leave the NZX50 at the end of the week.

Orion said on Wednesday it had reached a new, expanded agreement with Keystone Health Information Exchange in the US state of Pennsylvania.

It is an existing customer, but the company said the new agreement is subscription based and allows it to continue to use the Orion platform. The deal will contribute to Orion's outlook for the 2017 financial year.

The stock has suffered from negative sentiment towards technology stocks following the collapse of crime-fighting software company Wynyard, as well as concerns the company could have to raise further capital from investors.

As at Sept. 30, its cash balance stood at $24 million and its net cash outflow was $33m. Orion had cash and equivalents of $58.9m as at March 31.

Shares have fallen 33 per cent since the start of the year.

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