Constellation Healthcare Share Discussion Threads

[saucepan] 10/2/2016 12:44

Yes, thanks, rivaldo; we just need the buying interest.

[deltrotter] 10/2/2016 12:30

Tx Rivaldo

[rivaldo] 10/2/2016 11:30

Finncap retain their 310p target for CHT:

[rivaldo] 10/2/2016 07:26

Good to see confirmation of the MDX acquisition - immediately earnings-enhancing, with a "pipeline" of likely further acquisitions:



CHT "will collect approximately $2 billion annually for physicians across the US.

This is now a significant player in the market in collecting recurring, repeatable revenues.

[battlebus2] 05/2/2016 10:29

As part of a balanced portfolio this has to be a great risk reward imv. We may be seeing a dip towards another placing.

[the prophet] 05/2/2016 10:17

Must admit I have also exited at a slight loss. Whilst I like the fundamentals on offer ,I found the ancillary info on Parmar slightly unnerving. There are a few other factors, but on balance happy to watch from the side lines. A small factor is that the shares will now not be covered by Techinvest as they will have dropped out on a stop-loss basis, think that was 160p. I expect confirmation in this w/ends edition.
Good luck to everyone, the business performance here suggests no luck will be needed!

[rivaldo] 05/2/2016 08:56

The CEO recently subscribed for £2.65m of new shares in the December placing. A pretty convincing commitment on top of his already heavy investment in CHT.

Saucepan has already covered the topic of the CEO in the excellent posts 349-352 above. There's really nothing more to say.

Given the illiquidity it would be irresponsible for anyone to have CHT as a large part of their portfolio. But the business model has obvious attractions, and the fundamentals are very good indeed - and have now enticed L&G as a 5% shareholder, alongside some of the good and the great on the Board.

CHT have delivered on everything to date, and have convinced the City to invest more in follow-on fundraisings for further acquisitions.

More to come hopefully.

[pj 1] 04/2/2016 16:22

For peace of mind I have exited here at a loss, whilst I review if I can trust this Parmar CEO. Did Sam Zaharis also,as well as the announced previous successful working relationship with Paul Parmar, have unsuccessful one's? It is hard to tell. Was he also a part in the fiasco highlighted more recently by Saucepan?

Just questions at the moment

I find it helps me if I have no position.

No doubt Ill be back in higher after paying the spread twice. :-//

Criticism welcome!

[rivaldo] 29/1/2016 14:26

Nice 22k buy at 155.3p just reported.

Latest forecasts:

- last year : 10.3p EPS
- this year : 14.3p EPS

There should also still be a decent cash pile to fund more earnings-enhancing acquisitions.

[rivaldo] 26/1/2016 08:58

RNS last night shows L&G buying and moving above 5% with 4.65m shares:



And good coverage here, including Finncap comments:

http ://www.proactiveinvestors.co.uk/companies/news/121699/update-constellation-healthcare-technologies-earnings-soar-121699.html

"UPDATE - Constellation Healthcare Technologies' earnings soar
15:48 25 Jan 2016

The company notched up year-on-year revenue and EBITDA growth of 35% and 62%, respectively

After doubling underlying earnings (EBITDA) in 2014, US healthcare services provider Constellation Healthcare (LON:CHT) saw another sharp increase in EBITDA in 2015.

The final numbers have not been totted up yet, but when they are, the company expects EBITDA for 2015 will clock in at about US$23mln, up from US$14.2mln the year before.

Revenue is expected to be around US$76mln, versus US$54.6mln in 2014.

It is little wonder that Paul Parmar, chief executive officer of Constellation, described 2015 as "a very busy and successful year for Constellation”.

“We have achieved year-on-year revenue and EBITDA growth of 35% and 62% respectively. We look forward to 2016 with confidence when we will continue to deliver on our strategy as we strive to become one of the largest scaled platforms in the US healthcare and technology sector," Parmar noted.

"EBITDA of c$23m compares with our forecast $22.6m," said house broker finnCap.

"Management looks forward to 2016 with confidence, and we reiterate our view that Constellation, operating in a large, growing, defensive and fragmented market, is building a leading provider of US medical billing services," the broker added.

Shares in Constellation were up 7.3p at 15.8p in lunchtime trading, almost exactly half finnCap's target price."

[pj 1] 25/1/2016 14:55

Hopefully there is an'under promise/over deliver'' management strategy beginning?

[rivaldo] 25/1/2016 14:41

Thx for the Finncap update GHF.

I agree Saucepan, the RNS should have made it clearer that these figures were ahead of expectations.

I suspect that the actual year end figures will actually be slightly better than even these increased figures,as CHT would likely be giving the market figures which are at the conservative end of the spectrum in today's RNS.

[saucepan] 25/1/2016 08:19

Yes, excellent numbers and it was perhaps a missed opportunity not to put an "ahead" angle on them.

[glasshalfull] 25/1/2016 08:18

Strong update.

FinnCap say,

"Constellation has confirmed very strong trading in 2015, with sales up 35% and EBITDA up 62% on last year. EBITDA of c$23m compares with our forecast $22.6m. Management looks forward to 2016 with confidence, and we reiterate our view that Constellation, operating in a large, growing, defensive and fragmented market, is building a leading provider of US medical billing services. We maintain our 310p price target (109% upside) and will review our forecasts with the full-year results."

Regards
GHF

[kemche] 25/1/2016 07:35

EBITDA of £16m at $1.43 - cheap at circa 8 times.

[rivaldo] 25/1/2016 07:17

Excellent trading update today - the numbers are well ahead of expectations.

Revenues are $76m, compared to forecast $69.7m, and EBITDA of $23m is well ahead of forecast $22.6m:



Great stuff.

[rivaldo] 22/1/2016 15:09

Large trades gone through, and an immediate tick up. Overhang cleared perhaps.

[saucepan] 19/1/2016 14:58

Nice one, rivaldo; thanks.

[rivaldo] 19/1/2016 09:46

CHT were featured in this weekend's FT via the Director Deals section as follows:



"Parmar sees Constellation as a star

The capital requirements of Aim-listed US buy-and-build medical billings group Constellation Healthcare Technologies apparently know no ends. For retail investors, this comes with dilution and a largely static share price. The good news is that the money is being used just as Constellation promised, to acquire “mom-and-pop” outfits in the fragmented $37bn (£25.7bn) revenue cycle management industry.

Encouragingly, chief executive and majority owner Paul Parmar has repeatedly coughed up for those deals. He recently subscribed for £2.65m worth of new shares in a £30m placing partly to fund the purchase of Ohio-based hospital practice management group MDRX. Mr Parmar was joined by new and existing shareholders, including financial director Sam Zaharis and Capita founder and non-executive director Sir Rodney Aldridge.

Broker FinnCap expects adjusted pre-tax profit and earnings per share of $30.3m and 21.7¢ this calendar year, up from $15.6m and 15.6¢ in 2015. Buy."

[rivaldo] 18/1/2016 11:40

Nice coverage of CHT in the January edition of Finncap's monthly magazine out today:



"Constellation Healthcare Technologies Inc has acquired MDRX Medical Billing, which has led to a 10% upgrade in 2016 and a 9% increase in 2017 earnings estimates.

Constellation raised £9.6m at 135p a share when it joined AIM in December 2014 at a valuation of £75m. MDRX was the fourth major acquisition in 2015.

Constellation is a US medical billing services provider and its strategy is to
become a consolidator and improve profitability through the use of technology and moving some of the work from the US to India, where wage levels are around a quarter of US levels. The US medical billing market is worth £37bn a year and
it has been growing at 7% a year.

Less than 50% of the market is outsourced. This is a complex market because of the requirement for documentation, the large number of insurance companies and the fact that regulations are constantly changing.

Constellation will pay up to $30m (£19.8m) for MDRX, which provides outsourced hospital and private practice management and services in the US. The price is
around six times historical EBITDA. Constellation has not previously been involved in hospital practice management. The MDRX deal was financed by a placing raising £30m at 160p a share, which also left the company with additional cash to make further acquisitions. Last May, Constellation raised £12.9m at 140p a share. The company directors were major participants in each of these placings.

Group revenues are expected to jump from $69.7m to $121.3m in 2016 and pre-tax profit could nearly double to $30.3m. The shares are trading on 12 times 2016 prospective earnings, falling to 10 times the following year. The business is cash generative and net cash could be $15.5m at the end of 2016."

[the prophet] 15/1/2016 09:56

must be due a trading update soon, going on last year.

[rivaldo] 15/1/2016 09:37

Looking very cheap here now imo. Buyers can pay considerably less than the 160p placing price after tiny volumes have caused a disproportionate price fall in poor markets.

[saucepan] 11/1/2016 22:08

Cheers both - and we should not lose sight of the attractiveness of the business model, which is easy to understand. It involves buying up companies, stripping out expensive back office functions and replacing them with similar - but far cheaper - staffing and backup provided from India. In addition to that, there are all the efficiencies of increased scale and opportunities for synergies and multiplier effects between the businesses acquired. All of this makes the component businesses far more profitable and successful.

A listing on Nasdaq would be a great and logical development in time.

[mr_benn] 11/1/2016 19:54

Yes thanks for that Saucepan - the way I read this is that they have come over here to build the business up to sufficient scale so that they can list on Nasdaq without catching too much attention of the US competition. If you look at the listing requirements they are not far off reaching that point. Aside from Sir Rod, John Johnston is no mug and I'm sure all necessary checks were made before CHT's Aim formation, I mean it's not exactly hard to find the dirt on PP - is it?