Volpara Health Technologies Limited

FY 2018 Supported VolparaEnterprise: The management of Volpara Health Technologies Limited (ASX: VHT) reflected positive views about the performance in FY 2018. According to them, the favourable momentum was witnessed in the VolparaEnterprise as the company has been targeting higher ARPU or price per women as well as the contracts for a long period of time. Also, in the H1 2019, the company has witnessed favourable momentum with respect to the markets in the United States. Apart from that, the company has been targeting to enhance the footprints in Norway, United Kingdom, Netherlands as well as throughout Australia.

VHT’s key numbers (Source: Company Reports)

In FY 2018, the company generated total revenues amounting to NZ$2.8 million which implies the substantial YoY growth of 53%. This significant growth witnessed primarily because of the YoY growth in the SaaS revenues. Notably, the company generated total revenues from SaaS revenues, service maintenance agreement revenues, capital revenues as well as other revenues.

Improvement in key financial ratios: In FY 2018, the key financial ratios of Volpara Health Technologies Limited have shown a significant improvement on the YoY basis. The company ended FY 2018 with the gross margin of 76.5% which implies a rise from 66.8% in FY 2017. The company’s operating margin has also shown significant improvement on the YoY basis. In FY 2018, operating margin was -257% while in FY 2017 it was -480.7%.

Sales, Enhancing Footprints to Support VHT Moving Forward: When VHT reported the results for the six months ended September 30, 2018, the management reflected favourable views about the outlook for the company. As per the report, the company would be focusing on increasing the presence as well as it would also work towards the activities which would help in achieving the robust momentum in regard to the sales. The report also stated that, by FY 2019 end, the company believes that it would go for the initiatives which would help it in increasing the ARR to $9 million.

Additionally, the company would also be working towards improving the market share in the United States.

From technical analysis standpoint, on the dailychart of VHT, two technical indicators have been applied namely Moving Average Convergence Divergence or MACD as well as Relative Strength Index or RSI and default values have been considered. The MACD line has crossed the signal line and is moving downwards which indicates the bearish momentum. However, the 14-day RSI is about to reach the oversold region. Onceit reaches, an upward trend is expected. Therefore, the market players need to carefully watch the stock at the present market price of A$1.140 per share (down 2.564% on December 07, 2018) as any dip may lay down an interesting investment opportunity. 
 

Mayne Pharma Group Limited

Significant Deployments from Past Few Years: When the management of Mayne Pharma Group Limited (ASX: MYX) posted the FY 2018 annual report, they stated that robust deployments have been made from the past few years towards the company’s manufacturing units. The company stated that they have been making deployments to support the new capacity as well as capability. Moreover, these were made so that the company can achieve the growth in the medium to long term that they have been anticipating.

MYX’s Revenue Trend (Source: Company Reports)

The company incurred a net loss on the post-tax basis amounting to A$133.9 million because of the extra-ordinary adjustments as well as asset impairments.These extra-ordinary adjustments were done in the first half of FY 2018. Talking about the balance sheet of the company, in FY 2018 results presentation, the company that it has maintained its focus towards having a conservative balance sheet. Notably, the company’s net debt witnessed a decline in the second half of FY 2018.

Quick Look at Key Financial Ratios: Mayne Pharma’s gross profit margin stood at 48.4% which implies a fall on the YoY basis as in FY 2017 it was 55.1%. This YoY fall was witnessed because of numerous extraordinary items as well as price deflation with respect to generic market in the United States. However, the company’s EBITDA margin has also witnessed a decline from 35.5% in FY 2017 to 25.1% in FY 2018.

Pricing Environment to Support MYX’s Generic Products: In the FY 2018 results presentation, the management of MYX stated that, with respect to generic products, the retail pricing environment might encounter stabilization moving forward. Also, with respect to generic products, the FY 2019 is expected to witness more than six new product rollouts.

Additionally, with respect to Specialty Brands, the robust momentum in regard to Fabior as well as Sorilux would be witnessed in FY 2019.

From technical analysis standpoint, on the daily chart of MYX, two technical indicators, Moving Average Convergence Divergence or MACD as well as Relative Strength Index or RSI, have been used and default values have been considered. As per the observation, the MACD line has crossed the signal line and is moving downwards indicating the bearish momentum. However, the 14-day RSI is near the oversold region and once it reaches there, it might witness an upward momentum. The 14-day RSI has not yet reached the oversold region. Therefore, the market players need to watch the stock at the current price levels of A$0.940 (down 1.571% on December 07, 2018).  
 

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