Consultations Dip as Doctor Care Anywhere Closes Secondary Care Pathways

Strong Financial Performance Despite Operational Challenges

Doctor Care Anywhere Group PLC (ASX:DOC) has reported a solid finish to 2024, meeting or exceeding key market guidance metrics for the second half of the year. The telehealth provider achieved underlying positive cash flow in H2 2024 and recorded a net cash inflow of £0.8 million (A$1.6 million) in Q4, marking a £1.7 million improvement compared to the same period last year. This milestone underscores the company’s ongoing progress towards sustainable profitability.

Revenue growth, excluding diagnostic pathways, landed at the upper end of the company’s 0-5% guidance range for H2 2024, reflecting resilience amid a challenging environment. The gross margin target of 55-60% was also met in Q4 following a clinical workforce restructure, highlighting operational efficiencies gained through strategic cost management.

Consultation Volumes Reflect Strategic Shift

Consultations in Q4 2024 totaled 159,100, down 2.2% quarter-on-quarter and 8.8% year-on-year. This decline was primarily driven by the phased closure of the secondary care referral pathway and a mild UK winter, which tempered patient demand. Excluding secondary care appointments, consultations showed a modest 0.5% increase QoQ but remained 3.8% below the prior corresponding period.

The company also experienced a reduction in new member volumes from AXA Health, attributed to price increases implemented by AXA in response to rising claims costs in 2023. Despite these headwinds, activated lives grew 12.7% year-on-year to 1.2 million, supported by new partnerships such as the one with Alliance Healthcare launched in H2 2024.

Leadership Refresh and Operational Transformation

Doctor Care Anywhere announced significant leadership changes post-year-end, appointing Laura O’Riordan as CEO and Andrew Bellingham as Chief Product and Proposition Officer, both commencing in January 2025. O’Riordan brings extensive digital healthcare experience from Babylon and other UK health providers, signaling a renewed focus on patient quality and commercial outcomes. Bellingham’s background in health tech product innovation is expected to accelerate the company’s proposition development.

The company is also progressing a transformation program aimed at driving further process efficiencies and cost reductions to enhance patient and client experience. Details on this initiative will be disclosed in due course, but it aligns with the company’s strategic objective to solidify its path to profitability.

Financial Position and Outlook

Doctor Care Anywhere closed the quarter with £4.4 million (A$8.6 million) in cash, sufficient to fund operations through to long-term profitability and net cash generation. The company holds £10.6 million (A$20.8 million) in convertible loan debt, with no immediate refinancing needs reported. Financial guidance for 2025 will be provided alongside the full-year results due in February.

While the closure of the secondary care pathway has impacted consultation volumes, the company’s focus on core telehealth services and operational efficiencies appears to be stabilizing its financial footing. Investors will be watching closely how the new leadership team navigates growth opportunities and cost discipline in the coming quarters.