Orion Health shares gain on US deal, CEO eyes return to profit
UPDATED: Orion Health has also confirmed it has cut staff numbers in the US.
UPDATED: Orion Health Group [NZX: OHE] shares rose more than 4% after the Auckland-based medical software provider said it has signed a deal with a major healthcare insurer in the US, which will see its Amadeus platform rolled out for use with its three million strong membership base.
The agreement will allow the insurers' partners access patient information from across all the departments at which they've been examined instantly. The shares rose 13c to $3.25. Despite that gain, Orion's shares have fallen 33% from a year ago.
Orion Health has also confirmed it has cut staff numbers in the US, with 36 posts or just under 10% of its American workforce. Chief executive Ian McCrae said the redundancies reflected the company's move to make its software more efficient.
"Software that might have taken four months to install we can now do that in four hours," he said. "We've engineered a lot of cost out of the system, so we need fewer consultants. It's one of the toughest things I have to do. They are good people, they are nice people."
McCrae described the timing of the announcements as unfortunate but stock market rules meant the deal with the health insurer had to be announced immediately.
Orion will now set out a timetable for returning the company to profitability in May. "What we're saying and consistently saying is we're driving this company to make a profit", Mr McCrae said. "We've always run a profitable company, and we've had a bit of time where we've invested in R&D, and now we're focused on profit."
The company currently manages more than 90 million patient records worldwide.
In February, Orion announced an agreement with the US IT health company, Cognizant Group, allowing Cognizant to use the Amadeus platform.
(BusinessDesk)
Edwin Mitson
Wed, 30 Mar 2016
Wed, 30 Mar 2016
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